Friday, November 9, 2012

Price Gouging.

I have the solution to the gasoline shortage in the storm ravaged. NE: It's simple really. I'm not the first person to think of it, or to know it, but I have absolutely nothing to lose by saying it. That's the difference between me and the PhD economists who's income derives, in part at least, from not saying the unpopular. I'm already so unpopular that I can't get porn spam delivered daily to my inbox even if I request it. So here it is:

The way to get all the gasoline needed to storm ravaged areas is to simply allow suppliers to charge whatever price the market will bear. $10/gal. $15/gal. $20/gal in some cases I'm sure.

Oh, but that would be unfair averageguy. How would the poor and hard hit afford gas? Of course that's different than now..... where they can afford it but there is non

e. This is much more fair now in a situation where EVERYONE does without.

But look. If prices and profits are high.... sellers have a big incentive to move heaven and earth to try to restore supply links. The restoration of those links stimulates the restoration of OTHER links. As fuel supplies increase toward the center of the "zone" so do they increase at the outskirts...... suppliers are willing to accept less profit in exchange for less effort and prices begin to fall again.... from the outside in. It's as magical as watching someone pull a coin from behind your ear.

So think about this for just a moment. If you had a kerosene heater..... and your family was shivering in the damp cold which would you rather have: 1) Two gallons of kerosene that you had to pay $30 for, or 2) The satisfaction of knowing that you could buy that kerosene for $10 if they had any to sell?

But hey.... that just what an average guy thinks.

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