“What actually constitutes ‘an extreme pricing practice,’ typically referred to as ‘price gouging,’ has nothing to do with sound economic theory and shows no consideration of what constitutes efficient price formation or the role of prices in an economy.”
“A year ago it was toilette paper; today it’s gasoline. The products that are hoarded may differ, but the cause of these shortages is ultimately the same: price controls.”
In the wake of the cyber-attack on the Colonial Pipeline, Southeast public officials at all levels of government are pleading with consumers not to hoard gasoline. Yet consumers are topping off the tanks of every car they own, even if those cars will ultimately be sitting in the driveways.
And with widespread hoarding comes shortages and long gasoline lines, which, in turn, incites more hoarding….…
Continue Reading“Classical economists used to list among the virtues of the price mechanism that it avoided social strife…. It has worked so smoothly we did not understand what the classical economists meant; today we see. In addition to its economic virtues, the price mechanism is a vital buffer of civility.” (WSJ editorial, 1979)
For many decades, the opinion-page editorials of the Wall Street Journal have informed the public policy debate. This was certainly true during the 1970s energy crisis, and it remains so today amid climate alarmism and the nostrums of forced energy transformation.
With the gasoline lines on the East Coast, some marred by temper tantrums and fisticuffs, I am reminded of perhaps my all-time favorite WSJ energy editorial. “Buffer of Civility” was published during the dark days of energy violence in summer 1979 (yes, the U.S.…
Continue ReadingEd. Note: From time to time, MasterResource reaches back in energy history to document bad governmental ideas. The example before is surprisingly recent–just before the shale revolution destroyed the case for synthetic oil and gas (not to mention wind, solar, and even nuclear in power generation) as market-competitive.
“In March [2006], the [U.S. Department of] Energy Secretary, Samuel K. Bodman, said in a speech that making diesel fuel or jet fuel from coal was ‘one of the most exciting areas’ of research and could be crucial to the President’s [George W. Bush] goal of cutting oil imports.” (below)
Synthetic oil and gas: World War II, Korean War, postwar, 1970s. All projects a failure, completed or suspended-in-construction. But a last hurrah came in 2006, a period when none other than George W.…
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