Posted on 11/03/2012 1:55:01 PM PDT by sickoflibs
In New Jersey there is a shortage of open gasoline stations not because of the supply of gas but due to lack electricity at gas stations. This has caused long lines due to form miles long and lots of frustration. The media is reported thousands standing in line waiting to buy gasoline.
So NJ Gov Chris Christie has just announced a form of gasoline rationing of odd and even buying days. At the same time he is prosecuting merchants for raising prices in response to the shortages; and I am sure this is very popular there: ' Procecute those greedy capitalists because price gouging is unfair' I can imagine them saying.
But suppose gas stations and stores selling generators were allowed to raise their prices legally. Wouldnt that not only reduce demand some but more importantly wouldn't it bring in a greater supply of generators from other parts of the country to NJ? I mean would you stop your life to buy up generators and drive them to ravaged NJ just to risk prosecution?
Would you rather buy more expensive gasoline, or have NO gasoline being sold to you if you are out of it?
The first time I read Thomas Sowell was about 1991 in the NY Post and he made this exact argument. I have tried it a few times a few times with real people and it always provokes anger. The rule seems to be that fairness trumps effectiveness.
Yet not one of those who got mad (generally libs or RINOs) ever suspended their own lives to buy supplies and bring them to hurricane ravaged areas. They just sit home comfortably and bask in their warm smugness of being for 'fairness'. Rationing+price controls=fairness
Three linked sources below :
According to AAA, 60 percent of the gas stations in New Jersey and 70 percent on New York's Long Island are closed. That isn't a result of gas shortages, but rather because electricity in the area is spotty and gas pumps require power to operate.
In New Jersey, about 100 consumers have called the attorney general’s office to complain. There are reports of gas stations raising prices by as much as 30 percent in a day and hardware stores charging twice as much for electric generators as they did before Sandy.
That would put merchants in violation of the state's anti-gouging law, which bars price hikes of more than 10 percent in an emergency. New Jersey's law is unusual in that sets a specific price increase threshold in defining gouging. Of the 30 states that have such laws, only seven set a specific level of increase — either 10 percent or 25 percent — that constitutes gouging.
After Sandy, allegations of price gouging (CBS News MoneyWatch November 2, 2012)
TRENTON, N.J. — Motorists in 12 northern New Jersey counties will be allowed to buy gasoline just every other day under an order by Gov. Chris Christie .
Gas lines were long at some gas stations Saturday morning with motorists trying to make purchases before the noon switch to a gas rationing system.
Drivers with license plates ending in an even number will be allowed to buy gas on even-numbered days, and those with plates ending in an odd number can make gas purchases on odd-numbered days.
Christie hopes the rationing will ease long wait times at gas stations and prevent a fuel shortage in the state hard-hit by Superstorm Sandy
Chris Christie Orders Gas Rationing In Some Counties (11/03/12 AOL News@Huff Post)
The New Jersey Attorney General’s Office has brought charges against 65 businesses accused of price gouging in the aftermath of Sandy, the office announced Friday.
Gas stations, convenience stores, restaurants, hotels and stores selling emergency supplies such as generators were among the businesses charged. The businesses are located across the state, but the charges were concentrated in Bergen, Essex, Middlesex, Monmouth, Ocean, and Passaic Counties.
“Fuel, electricity, food, and a place to sleep are not luxuries, certainly not for individuals who have been displaced from their homes and in many cases have limited resources at their disposal,” Gov. Christie said in a statement.
N.J. cracks down on price gouging, ( Philly.com NOVEMBER 2, 2012)
Yes, his hotel example is not as good as the gasoline-generator example. A hurricane rising hotel room prices will not cause more hotels to be build unlike the gas-generator example.
But he still makes a valid point. If I have to pay 2X now what I would pay pre- hurricane then I have more incentive to share the room with others than I would if I got it cheap because I got on that three mile line before the others.
Yes, this requires unfairness. But nature is unfair. Why cant same sex couples naturally reproduce by having sex when we hetros can?
No, I don't the gov. is always the best arbitrator of price in an emergency but controlling prices of gasoline as has been done in NJ may be seen as one way of preserving some order in a very upset population.
Adam Smith, The Wealth of Nations
The invisible hand is the marketplace.
Smith (and many, many others) argue that it is best to let the marketplace find its natural level. That artificial manipulation causes more harm. I agree with them. I suggest reading Milton Friedman in addition to Thomas Sowell, as they can can explain far better than I.
Then you and I get three other people and rent the room at five times what the price is and more than the rich guy offered and we fill it up with people, versus the one guy who got in line first.
NJ voters need to pass a law against ‘no vacancies’ and 'no gas' signs. That is what causes the real suffering.
More typical would be the attitude, I paid for it by myself, I'll use it by myself.
Sowell always makes valid points but anytime a hypothetical example is used certain things are assumed that may not be the case. Like the willingness of the moneyed renter to rent just one room when he can afford two.
You go on without me, I don’t want to room with four other people....ever.
Additional rooms and gas would remove those signs. Make it easier to open a business, modernize the grid, etc.
Market place, yes, more particularly people acting in their own interests end up benefiting society as a whole without intending to. The man who works for a living helps the economy which helps all when all he wanted was to feed himself.
Because it isn’t always obvious, it’s invisible.
I’m off for a bit. I’ll continue in the morn.
Cheers!
You pinged me stating that you never heard Sowell lecture about the benefits of gouging as if his opinion meant something to you(claiming you read his books) .
What books of his have you read?
I “pinged” you in response to your post to me.
Well if the rich guy has 4X the money I do to rent the room and I come up with more than that amount then I have a big incentive to find four other people to chip in with me. At least on the average.
Versus we all pay the same lower price. At a forced low price I as owner am more likely to rent it out to my own employees instead. More like ' to hell with you all deadbeats who think I owe you something'.
Sowell was brilliant in this case.
Let the legal price match the black market price. Sheesh. Did I wake up in Cuba?
It was your intellectually dishonest comment.
You said you read Sowell’s books and never saw him write against gauging laws as if his opinion mattered to you.
Then when I showed you the light and his actual writing you ignored what he said and acted like you didn't see it.
If you disagree with Sowell then explain exactly what he said and why you disagree with it. I am not demanding that you take any specific position.
NJ is Cuba. The Fairness State.
You are better off with NO gas after waiting in line four 3 hours then gas at $6 per gallon. That is called fairness.
Enjoy your vacation at home with no power and about 40 degrees.
A spot of good news in NJ:
From Jersey Hurricane News’ Facebook:
“#njsandy Richard Ellis reports: “Huge thank you to the gentleman in front of us at Costco in Brick today that got the last generator and then handed his ticket to us instead. While we waited in line we were talking about what had happened over the past few days. Our house is flooded and our friends were kind enough to let us stay with them even though they have no power. Tonight there are 14 very happy people in a house with lights thanks to you.”
It’s a natural disaster. You’re seriously saying that all food, clothing, shelter, gas, transportation, heat, etc. should be allowed to be priced at market prices during a natural disaster? There’s neither a head nor a heart behind that idea.
The National Guard is in NJ passing out free gasoline with a limit of 10 gallons per person. This is the proper response in a disaster. The idea that someone would be allowed to turn around, resell and profit off that gift is ridiculous. I guess you also think that when the Red Cross shows up, they should auction off their food and clothing to the highest bidder at the disaster relief site?
This article represents the kind of rigid ideological thought that is utterly divorced from reality.
Free?? You really think the gubment handouts are free?
Well it sounds like Obama has won.
Then when I showed you the light and his actual writing you ignored what he said and acted like you didn’t see it.
Intellectually dishonest, huh. Cute. Name caller when all else fails.
Yes, and you have posted nothing since that contradicts that fact.
You make believe you are a follower of Sowell then you post opinions 180 degrees apposite of him and then refuse to explain exactly what you disagree with him on.
You offer NOTHING! You are not serious and you deserve no respect..
Or maybe you buy the whole chain and fire the managers for turning you away once. Sounds like a deal.
Yeah, I like to read Sowell. Too few like him around.
i would only add to what I’ve said already that in the situation with Sandy there is no real market place. And no one seems to have a clear idea of what to do.
Actually, rising prices or really higher prices, WHETHER LEGAL OR NOT, always work better than rationing.
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