Thomas Sowell: Ignoring Economics II

RealClearPolitics Commentary ^ | November 15, 2005 | Thomas Sowell

[Puzzleman]

A newspaper headline -- "Lawmakers Struggle to Define Gasoline Price 'Gouging'" -- shows how phony the current Congressional jihad against the oil companies is. "Price gouging" is one of those phrases that evoke strong emotions but have no definition.

[Puzzleman]

Very clear statement of economic basics.

[TheGhostOfTomPaine]

[ConservativeBamaFan]

Very good post. Thank you.

[NCSteve]

Thomas Sowell, gas price-gouging ping!

[Tax-chick]

What do higher prices do? Force people to restrain their own purchases more so than usual. What do higher profits do? Cause more money to be invested in producing whatever is earning higher profits, and this in turn expands output. Isn't a larger supply of oil and a reduced consumption of it what we want?

Captain Obvious was here ...

[wideawake]

It's obvious to anyone who stops and thinks, yet countless morons on FR believe that there is such a thing as price gouging.

[Tax-chick]

As for oil company profits -- representing "greed," as the Barbara Boxers call it -- these profits per gallon of gas are much less than federal taxes per gallon of gas. But the government is never called "greedy" by liberals.

Zinger!

[MNJohnnie]

Captain Obvious was here ...

Pity he did not vist the US Congress since they seem completely unable to understand this.

[Tax-chick]

Captain Obvious would need to give most of the Congresscritters brain transplants, I'm afraid.

[Miss Behave]

A newspaper headline -- "Lawmakers Struggle to Define Gasoline Price 'Gouging'" -- shows how phony the current Congressional jihad against the oil companies is. "Price gouging" is one of those phrases that evoke strong emotions but have no definition.

The only thing that lawmakers struggle to accomplish daily is (properly defined) *gouge* American taxpayers.

[dsc]

"Isn't a larger supply of oil and a reduced consumption of it what we want?"

Well, no, I don't want to reduce consumption. I want to burn as much gas as I want going anywhere I want, and I want it to be cheap -- and I don't care if it short-d!cks every camel jocky in the Mideast.

[Tax-chick]

LOL! Good point!

[clyde asbury]

Dr. Sowell makes similar points in Basic Economics in abstract and colorful language:

While causation can sometimes be explained by intentional actions and sometimes by systemic interactions, too often the results of systemic interactions are falsely explained by individual intentions. Just as primitive peoples tended to attribute such things as the swaying of trees in the wind to some intentional action by an invisible spirit, rather than to such systemic causes as variations in atmospheric pressure, so there is a tendency toward intentional explanations of systemic events in the economy, when people are unaware of basic economic principles. While rising prices are likely to reflect changes in supply and demand, people ignorant of economics may attribute the rises to ¨greed.¨