Gas Rationing

Conspiracy of Silence?


One key point of pride that we have in the United States is our free market -it gives us variety, and this competition gives us innovation, and with innovation comes a raised standard of living. Of course, as our culture has increasingly turned to government as the solution to the problems that we face, we have become more accustomed to regulation of that market. In the series of articles “History of Fascism in America” (Part 1, Part 2), I’ve been covering different stages of that transition from a freedom loving nation to one that has gone in nearly the complete opposite direction over the past century, and then some -How, in modern America, can we say we value the free market when we obviously don’t allow the market to operate?

I’m always frustrated by this, but my fire was recently stoked by the gas rationing laws initiated by some north-eastern states in the wake of Hurricane Sandy and the subsequent gas shortages in those areas. I’m not disillusioned about this -I am well aware of the reasons that bureaucrats employ those who justify command economies versus the free market option… the primary reason being the mutual job security (yes, the Boogieman is hiding under my bed, as well…), so I was only slightly surprised by this article that I read from the Wall Street Journal about the gas rationing laws that completely ignored the possibility of (dundun dun duuuuuuu) price gouging as an alternative to the rationing laws.

They asked 10 economics professionals from both the private and education sectors what they thought about the rationing laws imposed to reduce lines at the gas stations. The responses were both positive and negative, ranging from “no rational downside” to “no real impact”. Two of these “experts” did point out the inability to completely regulate the market, noting that people will always find some way around the laws, but I would seriously question the credibility of any of these 10 people as “economists” without further inquiry… the WSJ, I’m not surprised by, though.

Dilip Soman, a professor of Economics at the Rotman School is the “expert” who said the rationing had “no rational downside”. He even went as far as to glorify the rationing for it’s restriction of freedom, calling it “encouragement”. At least another of the chosen “experts”, Bob Noland at Vourhees Transportation, called it “discouragement of topping off from fear of not having gas”, though if he had any further criticism, it went unpublished. However, Myron Hlynka, Professor of Statistics at the University of Windsor, did note that it may disadvantage some drivers who needed gas on a particular day… though, he still didn’t use words like “restricted access”.

A spokesperson for Gov. Chris Christie, of New Jersey, actually admitted that there was no science behind the rationing -it was just a simple solution to a immediate problem. Larry Rosin, from the Edison Research Center, said it had a psychological impact, while Warren Powell, a Professor of Economics at Princeton, said that there was not enough information to determine it’s affect -though he doubted it had any real impact. Gail Tom, professor at California University, said it at least shows that the government is responding… oh, joy. Even their “expert” from George Mason University, a school notably favoring austrian economics, conceded that it did help with the long lines…

What in the hell is going on here? I know price gouging is a nasty word to most people, but these men are “economists”… worse, most of them actually TEACH economics. Gas rationing laws don’t even really concern economics -it’s policy justification, plain and simple. The only reason we had to impose rationing laws is because we would never even consider allowing the price of the gas to increase (naturally, BTW) as the supply fell in a damaged market. I went over some of the benefits and other reasoning behind allowing “price gouging” in “Rationing VS Gouging: Why Not Let the Market Work”… if you have any counter-points, I’ve heard more than enough, but the comment section is available.

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