Will on gouging

Politicians must read a lot of Oskar Lange - a "free market" but more "efficient" because the [redundant] central planning board will magically make it so. It worked so well for Russia! I know because John Kenneth Galbraith told me so in a 1984 New Yorker article and I'm fully willing to suspend my own memories of waiting in a queue for an hour to get my ration of two potatoes in Moscow.

Anti-gouging laws are price controls, pure and simple. These laws will ensure that people who are in desperate need of supplies will not be able to get them – at any price. I hope everyone enjoyed Jimmy Carter’s gas lines in the 70’s. Nancy Pelosi thinks we need a return to those golden days

This is great. I had pretty much written Will off for (it seemed to me) his increasing Mrs. Grundy-ism. But this shows that he still can make real contributions.

A much fairer measure of the price of a commodity is the number of minutes (or hours) the average worker toils to purchase it.

By this measure a gallon of gas today is certainly cheaper than in the early 80s. I'm sure there's a graphic somewhere to make it clear.

True_Liberal, I'm a fan of that metric. But I'd recommend a critical adjustment: it should add in how many hours a worker must work in that area simply to participate in the society. That is, if a worker must own a car to function, that should count against the cheapness of goods. Similarly, land/rent prices would have to be included.

To get an accurate picture, then, you would have to do something like, "To live, transport himself around, and purchase commodity X, a worker would need to work Y hours in 2007, compared to Z hours in 1957."

Otherwise, you miss other ways in which purchasing power is erased.

Anti-gouging laws are almost worse than price controls because they are always written to be so vague that their enfocement becomes directly related to the political influence of the gouger and their competition.

There is no "closed form equation" to define gouging in a free market system.

I agree with Mr. Will's point, but I wonder if the numbers he presents are a little misleading.

"While oil companies make about 13 cents on a gallon of gasoline, the federal government makes 18.4 cents (the federal tax) and California's various governments make 40.2 cents (the nation's third-highest gasoline tax). Pellosi's San Francisco collects a local sales tax of 8.5 percent -- higher than the state's average for local sales taxes."




What does he mean when he says oil companies/government "make" X cents per gallon of gasoline? I'm pretty sure he's using a net income number for companies but a gross revenue number for government. If so, this is a bit of an apples and oranges type comparison, no?

Whit_Stevens: Are you saying that the figure is misleading because you should deduct the government's collection expenses? I agree, but how big do you really think that is? The government doesn't have to do all the stuff the oil companies do.

"I agree, but how big do you really think that is? The government doesn't have to do all the stuff the oil companies do"

Yeah, like take the massive risks that oil companies take to find and extract oil from the ground. Then there's the expense oil companies incur to extract, refine, transport, etc.

None of these risks and costs are incurred by the government. The government just comes along, like the mafia, and demands its cut. The oil companies are accountable to investors. Has anyone ever been successful in holding the government accountable for the money it forces out of our hands? Considering that the government routinely collects $100 in taxes to do a $1 job, I doubt it.

Like all good racketeering operations, the government threatens the oil companies with more robbery in the form of a "windfall profit tax" when oil prices are high and the oil companies make a profit. The oil companies are then obliged to fork over their investor's money as "political contributions" the the threatening politicians so that the politicians back down - until the next session. Funny, when I was covering the oil industry in the mid-90's and the oil price touched $10/bbl, I never heard a peep out of congress about providing subsidies to keep the struggling oil companies afloat (not that I would have supported that, mind).

That's our government hard at work to "protect" us. From prosperity.

"Some Wisconsin legislators are considering changing the Unfair Sales Act to allow retailers to discount gasoline to benefit things those legislators think should be benefited."

Proving that Wisconsin is seriously racing toward that goal of regulatory nirvana: all that is not prohibited is mandatory.

Actually...the other way around: what is not mandatory is prohibited. Forgot where I first heard it. Anyone know?

Person: Yes, I think I may have out-thought myself a bit on this one.

The EIA has a helpful breakdown of gasoline price components here: http://www.eia.doe.gov/bookshelf/brochures/gaso...>

Dr. Williams wrote a great column on "gouging": http://www.gmu.edu/departments/economics/wew/ar...>

One more time: http://www.gmu.edu/departments/economics/<br>
wew/articles/04/gouging.html

person: "To get an accurate picture, then, you would have to do something like, 'To live, transport himself around, and purchase commodity X, a worker would need to work Y hours in 2007, compared to Z hours in 1957.'"

Please help me understand what you mean by this. How do we compare hours required to buy a gallon of gasoline? One only needs the change in real prices and the change in real wages, right? All the other differences in how we live seem irrelevant and unnecessarily complicating.

M. Hodak, I think that it was Winston Churchill, talking about Nazi Germany before the War: "Anything that isn't forbidden is compulsory."

I'm afraid I can't provide a reference, though; sorry.

JohnRDewey: If you're still reading:

No, and that's my point. If they costs of *just the good* requires 1 hour less of labor to buy, while the society requires 100 additional hours of labor per month, just to live in, it may actually take more labor to get that good, and you need to account for that in standard-of-living calculations.

Well, Person, I disagree a little. "Society" doesn't require workers to live 20 miles from their place of employment. Workers make their own choices about what environment they wish to live in and about what locations they wish to work. We shouldn't say that the cost of living in the U.S. has increased just because workers desire larger yards located in less hectic suburbs. We also shouldn't say that the cost of living has increased because workers rejected government-imposed bussing plans to achieve racial "balance" in public schools - and showed that rejection by moving to independent school districts in the suburbs.

JohnRDewey:

"Society" doesn't require workers to live 20 miles from their place of employment. Workers make their own choices about what environment they wish to live in and about what locations they wish to work.

Correct. But even so, going back to the earlier point, you have to account for the changed circumstances. The reason the worker moved 20 miles away from his place of employment is because it got so expensive to live nearby. So again, if Good X requires 1 hour less to obtain, but the worker must work 40 additional hours to be in the place where he can obtain it for that effort (either through rent or interest costs in buying), you have to factor that in before you conclude he's getting the good for less labor.

We shouldn't say that the cost of living in the U.S. has increased just because workers desire larger yards located in less hectic suburbs. ...

I agree, but again, you can't seriously maintain that ALL of the cost of living increase is from extravagances. Partly it's from real estate's "base" price simply being bid up. Plus, there arise certain goods that MUST be purchased to interface with that environment (like a car) whether or not one has any particular affinity for it. For a fair comparison, you can't simply look at how much labor it costs you *once you've covered the costs of gaining access to the goods*; you have to factor in changes in the costs of maintaining the condition that allows you to get the goods for less labor.