Here’s a letter that I sent today to WAMU, a local DC radio station:
Dear Sir or Madam:
This
morning your reporter interviewed a resident of Galveston, Texas, about
the effects of hurricane Ike. The person interviewed said that she
went to the gasoline station before Ike hit to "top off" her tank. But
she was angry to find that gasoline prices had jumped 50 cents per
gallon from the day before. "It’s ridiculous," this woman opined.
"Ike hadn’t hit yet!"
Your reporter should have immediately asked this woman: "Well, why were you topping off your tank? Ike hadn’t hit yet."
Gasoline
became more scarce — more precious — in Galveston the moment Ike’s
arrival became likely. Gasoline retailers acted in anticipation of
the future no more or no less than did motorists (such as your
interviewee) who topped off their tanks.
Sincerely,
Donald J. Boudreaux
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Nice.
>> "Your reporter should have immediately asked this woman: 'Well, why were you topping off your tank? Ike hadn't hit yet.'"
LOL, perfect!
How can you be "gouged" if you choose to buy gas at the price offered? Mebbe I need to take another look at pricing theory.
Practical Libertarians are Keynesians in Drag
I don't say that sellers of gasoline anticipating decreased supply or increased demand or both "gouge" anyone, but that I'll pay the price is not the reason. I daily pay prices that are higher than they would be without massive state spending. I've agreed with Randy to call these prices "fair", since everything I'll do short of being shot is definitively "fair", but I haven't agreed not to call the statesmen "gougers", not yet anyway. They're just, right, proper and noble though.
Brilliant!
Here's how the Wall Street Socialist markets anticipate the future.
Paraphrased Headlines;
Stocks sink on News of No Fed Bailout for Lehman.
Stocks Stabilize on Word of Fed accepting lesser forms of credit.
Market rally as Fed infuses $70 billion of new paper.
AIG bailout raises hopes to Wall Streeters.
Wall Street slides Feds decide not to cut rates.
The handful of people writing headlines don't know what's happening any better than the politicians, bureaucratic department heads, central bankers and top executives of the largest corporations. If you imagine that one these groups has answers that another group doesn't have, you don't understand liberal economics.
Your reporter should have immediately asked this woman: "Well, why were you topping off your tank? Ike hadn't hit yet."
So brilliant that it provided my desk amusement for the whole day. I won't bore you with our variations on the theme.
You can be gouged if your only practical choice is to buy at the gouged rate.
Rewriting OregonGuy's statement to explain how it can occur.
There are willing choices, and ones made under duress. It may not be the end of a weapon, but it is one made out of a captive audience(which is a very good substitute).
Yes, there will be plenty of room for disagreement, but a shortage encourages preparedness while discouraging rip-offs in other areas during a disaster.
Bottom line is that the only ones ever "gouged" are the people who never prepare. They deserve it.
There are willing choices, and ones made under duress. It may not be the end of a weapon, but it is one made out of a captive audience(which is a very good substitute).
Well, that explains how I regularly get gouged by the government.
I think what Oil Shock is suggesting is that if it hadn't been for government financing the roads, the hurricane evacuees would all have left on electric trollies. Or something like that.
If the government never built the roads to the coast line in the first place, nobody would be living in hurricane zones. Since those in favour of government insist that things like roads and the internet would never exist unless government built them, I think that it's high time we start blaming government for the pain such inventions lead to. Makes as much sense as blaming the free market when someone decides to stick their hand in a flame and gets burned (who knew?).
If not for the practical libertarians, not many would be living in the direct path of hurricanes. How many people will be living in the Hurricane alley if they paid the market price for home insurance?
Bosco,
It is not complicated. I am suggesting that practical libertarians are Keynesians in Drag.
So what you're saying is that we now have a libertarian purity test put out by the Mises people. Cute.
No BoscoH. How else do I say this. Let me try again… "practical libertarians are Keynesians in Drag"
Hey apparently we all just bought some AIG stock. Well I hope it does well. Wonder what's in it? I'm guessing a lot of complex financial procucts that NO ONE knows the value of. I do know they sponsor Manchester United Soccer so they must have been too big or important to fail. Anyway thanks guys at the Fed!
You need to know everything? You believe that Henry Paulson or Barack Obama knows everything? I've got news for you. They don't.
What's the value of a Kindle? Do we really know yet? I bought a Rocket eBook several years ago, an earlier device sponsored in part by Barnes and Noble. It's still in perfect working order. What's it worth? Probably not a dime, because the venture failed, even though it was the best selling ebook of its day. Should it have failed? Yeah. The new technology is much better.
Does the government therefore take over the entire IT industry? Does it strictly regulate the variety of products on the market?
Or does the government let producers like Nuvomedia and Gemstar and Barnes and Noble and RCA and consumers like me learn a lesson and move on. The companies can perish for that matter. Who cares? I've worked for half a dozen companies as well as the Federal government. The failure of my employer is no catastrophe, and the worthlessness of some product I've purchased isn't either, even if I've banked my entire life savings on it.
methinks: "If the government never built the roads to the coast line in the first place, nobody would be living in hurricane zones."
We rarely disagree, methinks, so permit me to be a little bit nitpicky here.
Galveston Island was home to native Americans – the Akokisa tribe – for centuries before Europeans arrived. I've never read anything about them building roads. They may have maintained footpaths to canoe departure points for travels to the mainland.
The pirate Jean Lafitte maintained a slave trading and gambling community on Galveston Island not long after he helped the U.S. government defeat British near New Orleans. Perhaps some could describe Lafitte's local rule as government, but I'd think it more like a profit-seeking corporation. In any case, Lafitte did not need to build roads to attract settlers and visitors to Galveston.`
The Galveston, Houston, and Henderson Railroad, a private company, built a rail line from Galveston Island to the mainland in 1878. I'm not sure this was the first railroad line, but it was one of the early ones.
Perhaps the more risk-averse among us would never consider settling in hurricane zones. But the proximity to water transport lanes guaranteed that seafront locations would always thrive.
John Dewey, what I wrote was purely sarcastic. I'm sorry for the confusion, but I thoroughly enjoyed your short history of Galveston (no sarcasm this time).
It's eerie how similar the current fiasco is to the events leading up to the great depression.
Then, as now, the Fed created money with reckless abandon leading to asset bubbles. In the meantime the government meddled in the economy as part of a social engineering scheme.
Eventually a political limit was hit, and the Fed slowed money creation. The bubbles start to burst since they required people buying stuff with the newly created money to maintain themselves. Prices start to fall as market starts to adjust to actual demand causing politically connected speculators to panic.
The Democrats (and many Republicans) have concluded that what the U.S. needs is another New Deal. If Rothbard's economic analysis of the New Deal is correct, the Obama/McCain programs will have the same effect as FDR's programs, taking a downturn and prolonging it indefinitely by confiscating wealth and redirecting it to unproductive enterprises. Hello Great Depression II.
I hear this story every decade or so, and it's always true!
I don't see any Great Depression on the horizon. I see inflation, because we're expanding entitlements to consume without producing. Maybe GDP will fall in real terms because so many people produce less by writ of their entitlements to consume without producing, but this fall, if it occurs, won't be terribly steep, and it doesn't portend mass unemployment. Unemployment occurs only if we don't quickly reorganize idle sources into new productive organizations that might or might not profit. We will.
You coulda fooled me. Did the Fed slow money creation before or after bailing out Bear Sterns and AIG?
Some prices are falling. Others are rising. The falling prices don't surprise me, but I don't see any 30s-style deflation on the horizon.
We don't need another New Deal, because the Old New Deal never much left us. I'd rather bankrupt the Federal government further with a progressive consumption tax, but no one ever listens to me.
I'm in Houston, and the talk of gouging is everywhere. 50 more cents a gallon for gasoline = gouging. 2 more dollars a gallon for milk = gouging. Cancellation of the buy 3 get 1 free deal on batteries = gouging. MSRP for electrical generators = gouging. Everyone's being told to save their receipts because they can use them in lawsuits later to recoup punitive damages from the gougers. It's killing me because I need supplies for my family, and I know if I had an opportunity to bring resources into this market right now I wouldn't do it.
I know it's just the same old story, but it is even worse to live it than to talk about it.
Martin, how do you plan to persuace politicians to relinquish control of revenue to consumers?
You gbonna hold a gun on em?
You are experiening the problem£ ereryone is right and everyone else is wrong.
Ths might be an opportunity for a review of the ex-famous line: "like hauling coal to Newcastle".
Who said I have a plan, Sam? It's more like wishful thinking.
Sometimes everyone else is wrong.
My apologies for the misspellings, I was working on my little Nokia internet tablet screen.
The comment is about attitudes. Typical among humans: I'm right, you're wrong, therefore I see no point in listening to you. This makes it very difficult for those who are right, usually a minority, to be heard.
I agree that perhaps a consumption tax would be better than a production tax, but I also hold that the power to tax, being a one sided power, will always enable those with the power to feed themselves at the expense of others.
Here's how the Wall Street Socialist markets anticipate the future.
– Posted by: muirgeo | Sep 16, 2008 3:01:57 PM
That's actually a very good example muirgeo.
Central planners are like hurricanes!
Excellent, I like it.
The three month Treasury yield actually touch zero percent today. If markets predict the future … oh shit!
"Oh shit" is exactly what the markets are predicting.
…and the regulators are working overtime to make the "oh shit" even worse.