Economics Lesson
Two great Townhall contributors have written very good articles on prices and controls lately. Thomas Sowell and Walter Williams have produced some first-rate commentary on price controls in the US economy. With their usual skill, they break things down to make them as digestable as possible for the average citizen, not an easy thing to do with Economics. If you don't read their columns regularly, you should.
My own, less-informed view is pretty similar. Nowhere have I seen price controls work, anymore than I've seen wage freezes help anybody but the ones paying the wages, be it a corporation or government (mostly government). I was really young when the gas lines dominated the American landscape in the '70's, and I'm fairly sure I didn't notice what they represented at the time, but my reflection on them now was that an attempt to control oil prices failed miserably in the past, because those who owned the oil simply sold it elsewhere. How did that benefit us, and how would it have benefitted us, I ask those who called for price controls after Katrina, if Bush had done similarly? By reducing profits on an already scarce product, who would eat the costs?
What happened instead, Bush keeping his hands off the oil industry, has already allowed the regular laws of supply and demand in those short months since Katrina the price of gas to fall (locally at least) from a high of $3.19 to a current $2.05. That's lower than it was before Katrina. Do I have Congress, Bush, or Ralph Nader to thank for this? No, rarely does anyone have anything to genuinely thank such societal leaches for. I have the free market working the price back down to thank. Those other entities could have helped by making it easier to get gas to us, reducing gas blend requirements (which ok I owe Bush that one) reducing or eliminating gas taxes, even temporarily or creating new refineries (no one to thank there, didn't happen). But otherwise, most what else they could've done would have only hurt those who could least afford it. That'd be us average citizens.
The media should be blaring this loudly as an example of what the market can do when it's left to do it, but you won't hear that. If there's not a regular whipping boy of the press to blame, they won't cover it. Good things that don't come from the promises of government largesse aren't newsworthy. Perhaps that's why the news is usually so negative. Hmm...
So, my advice today is take some time to read the columns of Sowell and Williams, especially Williams. You'll be the richer for it.
Two great Townhall contributors have written very good articles on prices and controls lately. Thomas Sowell and Walter Williams have produced some first-rate commentary on price controls in the US economy. With their usual skill, they break things down to make them as digestable as possible for the average citizen, not an easy thing to do with Economics. If you don't read their columns regularly, you should.
My own, less-informed view is pretty similar. Nowhere have I seen price controls work, anymore than I've seen wage freezes help anybody but the ones paying the wages, be it a corporation or government (mostly government). I was really young when the gas lines dominated the American landscape in the '70's, and I'm fairly sure I didn't notice what they represented at the time, but my reflection on them now was that an attempt to control oil prices failed miserably in the past, because those who owned the oil simply sold it elsewhere. How did that benefit us, and how would it have benefitted us, I ask those who called for price controls after Katrina, if Bush had done similarly? By reducing profits on an already scarce product, who would eat the costs?
What happened instead, Bush keeping his hands off the oil industry, has already allowed the regular laws of supply and demand in those short months since Katrina the price of gas to fall (locally at least) from a high of $3.19 to a current $2.05. That's lower than it was before Katrina. Do I have Congress, Bush, or Ralph Nader to thank for this? No, rarely does anyone have anything to genuinely thank such societal leaches for. I have the free market working the price back down to thank. Those other entities could have helped by making it easier to get gas to us, reducing gas blend requirements (which ok I owe Bush that one) reducing or eliminating gas taxes, even temporarily or creating new refineries (no one to thank there, didn't happen). But otherwise, most what else they could've done would have only hurt those who could least afford it. That'd be us average citizens.
The media should be blaring this loudly as an example of what the market can do when it's left to do it, but you won't hear that. If there's not a regular whipping boy of the press to blame, they won't cover it. Good things that don't come from the promises of government largesse aren't newsworthy. Perhaps that's why the news is usually so negative. Hmm...
So, my advice today is take some time to read the columns of Sowell and Williams, especially Williams. You'll be the richer for it.
posted by Rob Beck | 4:08 AM
2 Comments:
In sum, the best remedy for price gouging, is price gouging.
:-)
The "visible hand" is all over the place, this just happens to be their latest foray. Corn, sugar, peanuts, gas, take your pick...the Byzantines are alive and well in the halls of this nations capitol.
Post a Comment
<< Home