Monday, July 28, 2008

Thank God We Haven't Considered Price Controls

You get long lines at the pump, like the one above in Washington, D.C. in 1973, with more than 30 cars waiting to buy gas. See more photos from the Washington Post here, taken during the oil crisis in 1973 when OPEC imposed an oil embargo against the U.S. and other nations, and the U.S. imposed price controls as a "solution."

We might complain about paying the market price of $4 per gallon, but at least gas is always available with no waiting. Market prices have significant advantages over artificial government prices. Sure gas remained cheap in 1973 in money terms because of price controls, but think of all the time wasted waiting in line! After accounting for the cost of time and aggravation, gas was surely no bargain in 1973.

14 Comments:

At 7/28/2008 11:50 AM, Blogger juandos said...

Well maybe the citizens of the state of New York might if Gov. Paterson's whinings have any weight...

 
At 7/28/2008 11:58 AM, Blogger Huntington Hartford said...

The speculators are doing a GREAT job keeping the price at a level such that supply stays up with demand ... all the way to the pump. Good job speculators (i'm not being sarcastic!).

---------------------
Slightly off topic...

Do you think CPI-U is influenced by politics? My old neighbor worked for the EPA and she said EPA enforcement was heavily influenced by whichever political party was in office. I wonder if CPI-U is influenced the same way, afterall, it is a sampling process. Data is sampled, scrubbed, manipulated, synthesized, etc.

 
At 7/28/2008 12:15 PM, Blogger juandos said...

"My old neighbor worked for the EPA and she said EPA enforcement was heavily influenced by whichever political party was in office"...

Well consider the following two web posting huntington hartford:

FORGOTTEN NATIONAL TRAGEDY: BILL CLINTON AND 1,000 DEATHS IN THE "CHICAGO HEAT WAVE" OF 1995

Spotted Howls

Well the possibility of which party is in power I do believe the odds that flawed data might make up a portion of policy is a definite possibility...

 
At 7/28/2008 4:15 PM, Anonymous Super-D said...

I worked at a Texaco station in MN during summer '79. Iran unrest caused "shortage". Price went up but we had plenty of gas. Then MN govt decreed 10 gal max purchase. Long lines appeared immediately. Economists later prevailed on gov to change to 10 gal min. Lines disappeared overnight!

 
At 7/28/2008 5:49 PM, Anonymous Norman said...

To much liberal hand wringing Ronald Reagan removed Jimmy Carter's price controls. That same day marked the exact top in oil prices. As Casey Stengel said, "You can look it up."

 
At 7/28/2008 7:02 PM, OpenID sethstorm said...

Yet another bad attempt to justify gouging. The issue is that the US(and its allies) did not take (enough) military action to secure that oil.

With the oil securely flowing to the US, it would then allow price controls to work. The crisis could then be safely averted, and then the market could be returned(with assurances of no post-crisis retaliation in oil prices).

Let loose on the speculators - it will eventually happen. Give the public what it wants, speculators on the proverbial perp walk. Then go out and drill.

 
At 7/28/2008 9:44 PM, Blogger bobble said...

i agree.

funny, it was Nixon, a Republican, that implemented wage and price controls.

LOL. so, was he a libtard?

 
At 7/28/2008 11:04 PM, Blogger bobble said...

forgot to mention that i voted for nixon and never forgave him for wage and price controls.

 
At 7/29/2008 1:43 AM, Blogger OBloodyHell said...

> but think of all the time wasted waiting in line!

More critically, gas got wasted, too. If the climate was hot, you didn't turn the car off all the time because you wanted the AC on.

 
At 7/29/2008 1:51 AM, Blogger OBloodyHell said...

juandos:

re: Spotted Howls

Have you read Michael Crichton's speech about much the same? That and his Cal Tech speech, Aliens Cause Global Warming and This One are all excellent.

I never liked Crichton's NeoLuddite tendencies in his stories and movies, but State of Fear got a lot of respect from me. As he mentions in the Complexity speech above, he took a look at what was behind the enviro movement and realized it was such utter crap that he wasn't going to use it as a basis for anything, but to attack the basic problem that it represented instead.

 
At 7/29/2008 2:18 AM, Blogger OBloodyHell said...

> funny, it was Nixon, a Republican, that implemented wage and price controls.

LOL. so, was he a libtard?


1) That was when EVERYONE thought Keynes had a clue.

2) It was the peak of liberalism, you could not get anywhere expressing yourself to the contrary, not because it was "not PC" but because liberalism was so clearly "right". The whole of the 70s showed what resulted from liberalism -- the USSR in ascendance, democracy and freedom in decline, the oil crisis, US Foreign policy a complete mess, a general "malaise" (LOL) about our future and the future of the world. There's a reason there were so many disaster movies at the time, and it wasn't because they made for good FX, it was because they reflected the general mood of the populace. Remember that when you go to the polls. I'm not claiming it would be good for the conservatives to be fully in charge of things, but they are less likely to mess up a certain very important percentage of the daily lives of most people. As comedian and perennial PotUS candidate Pat Paulsen (also here) once said: "If either the right wing or the left wing of the country ever got fully in charge of the country, it would fly around in circles". Another nice quote which resonates today: "All the problems we face in the United States today can be traced to an unenlightened immigration policy on the part of the American Indian."

 
At 7/29/2008 3:38 PM, Blogger juandos said...

"funny, it was Nixon, a Republican, that implemented wage and price controls."...

Nailed in one bobble!

"LOL. so, was he a libtard?"

Of the very WORST sort bobble...

Just because one is a registerd Republican doesn't make that person a conservative...

Didn't George W's "compassionate conservative" crapola teach you that?

In George W's case, the apple didn't fall far from the tree...

Hey OBH, I've tried to read everything I can get my virtual hands on that Crichton has written or is available in pod cast format...

Your comment OBH: "I never liked Crichton's NeoLuddite tendencies in his stories and movies"...

Hmmm, I'm wondering how much rewritting went into those movies by the screen writers?

I mean did Crichton have total control over his material? I don't know...

Regarding this comment OBH: "That was when EVERYONE thought Keynes had a clue"...

AMEN!

What did Keynes care? He never had to pay the costs of his dumb ideas...

 
At 7/29/2008 4:55 PM, Blogger juandos said...

One more thing OBH that I forgot to mention to you...

This is from a site called: Babylon Today there was this nugget in a large basket full of them: INCOME TAXATION IS MARXISM THAT EMPOWERS PARASITES

 
At 7/30/2008 10:10 PM, Blogger OBloodyHell said...

> Hmmm, I'm wondering how much rewritting went into those movies by the screen writers?

I mean did Crichton have total control over his material? I don't know...


1) I haven't read his books except State of Fear, so I can't say, but I speak of the basic themes themselves, which have to be in the books, too.

2) After the first couple, he had quite a bit of control, since they were usually such successes (the only real exception I can think of is The Terminal Man) that later on he was often a producer as well. Anything since 1985 or so is sure to be true to his view.

> What did Keynes care? He never had to pay the costs of his dumb ideas...

Well, I think Keynes really believed in them, and there is a logic to them, and they did appear to work somewhat in the largely uncontrollable environment of the real world (i.e., other factors ar hard to eliminate).

I am also pretty sure that he'd begun to question them later on in his own life, hence his quote about changing your mind when the facts call for it.

I would not blame Keynes overmuch. Not like Marx, anyway, whose ideas are stupid on the surface and any rational consideration should show it. The idea that workers are utterly interchangeable, that talent and skill and training are irrelevant is inherently stupid. And if they are relevant, then the entire concept of Marxism fails, as it ignores the concept of scarcity of resources all around, both in the processes of creation of wealth as well as in the producers acting to create of wealth.

At some point, you have some resources which are scarce, no matter the system. How best to allocate those resouces is the heart of economics.

 

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