Gouge On....

NRO ^ | 09/02/05 | Jerry Taylor

[StatenIsland]

Price controls, however, come at a cost. Lower prices result in more demand for fuel than do higher prices. That’s why the first thing we notice about price controls is that they lead to shortages. Price to the left of the intersection of the supply-and-demand curve and you are guaranteed to vaporize whatever you are attempting to keep inexpensive. It happened in 1973 when President Nixon imposed price controls on oil — gasoline lines were the result. It happened in 2000/2001 when California Governor Gray Davis refused to lift retail price controls on electricity — blackouts soon followed. Empty shelves are the defining feature of markets where price controls are in place. It’s a law of economic gravity.

Many American politicians seem to vaguely understand this, so instead of ordering price controls, they criminalize excessively high prices (leaving ambiguous just exactly what qualifies as an “excessively high price”) or, alternatively, they inveigh upon the industry to voluntarily price gasoline below what the market would bear. But the effect is the same. The reason that gasoline is disappearing from service stations across the nation is because station owners aren’t gouging with sufficient gusto. Whether out of a misguided sense of kindness, concern about what politicians might think, fear of bad press, or the desire to keep customers happy, they are pricing below what the market would otherwise bear and, as a result, their inventory has disappeared.

[BJClinton]

Go out and look at the price of fuel at your local station.

So a lack of refined petrol raising prices gets twisted in your mind to a grand conspiracy by oil companies to inflate prices? Please tell me you smoke lots of pot, I'd hate to think you arrived at that conclusion unaided.

[sgtbono2002]

Yeah me and Congress , they started an investigation. I guess they smoke pot too.