Posted on 09/07/2005 6:21:03 AM PDT by 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.
(Excerpt) Read more at nationalreview.com ...
That's an odd first sentence.
Not so. Nixon put wage and price controls into place August 15, 1971, and the gas lines did not begin until early in 1973 when OPEC cut off oil to the US. Additionally, price controls on oil and refined products remained in place until January 21, 1981 when President Reagan canceled them. During that time there were no gas lines until May 1979 when the seven sisters (majors)got together to try and force the government to cancel the controls. They manipulated the supply for a time to let folks know who was in charge. So price controls do not necessarily produce either shortages or lines. Nor am I proposing any type of price controls now. They are not necessary.
There was no shortage of gas during the Carter gas crisis. Gas Companies were holding tankers off shore so they wouldnt have to deliver it. Tanks in storage were full to the brim.
The gas companies held back fuel to get the price up.
It was Carter against the gas companies and the gas companies won.
We are being raped now by those same gas companies and oil Cartels and they are so strong we cant do anything about it. Now thats the fact. Spinning it is just BS.
Price controls will cost a rise in prices because the gas companies simply will not supply oil till they get the price they want.
What a bunch of Marxist drivel.
"Now thats the fact."
Why? Cuz you said so? Got any evidence?
Welcome to the new United Socialist States of Amerika. Here's your socialist paradise, complements of 40 years of indoctrination and dumbing down the publik education system.
BTW, didn't you get sgtbono2002's memo? It's all about him and his wallet...
While I know that the oil companies did manipulate the supply in May 1979 which produced the gas lines, those lines soon abated. And while there were many rumors of tankers sitting offshore, and gasoline being stored in abandoned tanks, every investigation I'm aware of produced no results vindicating such rumors.
Well, other than the fact that ENRON et al were intentionally manipulating the market to rape the energy consumers.... As much as I dispise Davis, he was absolutely right about that.
The blackouts weren't from price controls, they were from intentional racketeering.
Strong feelings count as evidence in this era's courts and legislatures. Fortunately these are the last days of that era, or maybe even the first days of the new.
The price controls and racketeering were two halves of the same coin.
Not hardly... Racketeering to intentionally drive up prices is not the same. The Governor for as pathetic as he was, rightly stood up to these bastards and said, no you aren't going to rape the state any longer.
I hate Davis, but he was absolutely right about ENRON et al.
Sometimes you have to look at who did the Investigating, Such as Gorelick investigating 911, and Voelker investigating, "Oil for Food". Sometimes the investigator has a vested interest in the result of the investigation.
I have got plenty of evidence . Go out and look at the price of fuel at your local station.
It isnt only my wallet pal , Yours is a little lighter these days too. Taxes will raise as schools and Government buildings pay more for fuel. Prices of everything wll raise as truckers put high priced fuel in their trucks. Consumers wont buy as many things they used to because their spare money is going into their fuel tanks.The prices of tires rugs and anything else made of fuelk products will rise.
Yes it isnt only my wallet its everybody's wallet. Glad you enjoy it.
Those big, bad oil companies are just making too much money. Since they have so much control over pricing (forgeting for a moment the sub-$20/bbl prices of not too long ago), maybe a guy ought to invest in them. Or maybe buy a gas station since they are making so much money.
Well, I was one of the investigators, and just as we asked then, any evidence?
And in California price controls and a lot of the regulation was immoral to some extent and to a great extent both unwise and endangering in a pure economics and business sense. That is the law would have killed legitmate businesses.
Further, the business law in California and the US consisting of the accounting practise, case law and regulation has in recent era drifted far afield of traditional business accounatbility, and in many regards has tossed or nullified in all effect that keystone concept of business and stock markets: fidcuiary duty.
What arises in such circumstance? Chaos and anrachy. Rule of the strong and ruthless. Competition between one gang and another.
On one side we have a gang called the government of California on the other a gang called Enron. And other gangs. The "racketeering" Enron engaged in -- immoral and illegal both, I agree -- was a development in lockstep growth with the racketeering going on by the government.
Which came first? So closely linked the two, so intimately linked, so tightly dynamicall coupled, that it can not be said.
Two sides of the same coin.
Blaming California Government for the rise of ENRON is quite amusing, given they were not based in Cali. I am not going to say government is without corruption, but the RISE of ENRON had more to do with complete breakdown of oversight at the national level of business...
Business can only exist in a capitalist society, without becoming an oppressor itself, by legislative and prosecutorial oversight of government. The "don't rock the boat" attitude of the Clinton Administration let to more corporate malfeasance in american business since the 20s.
They operated in California. And I blamed national governmental establishments as well as state. California is one among many of thug-affine states, business-wise.
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