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Hawaii comes to its senses

Hawaii has removed the price controls on the wholesale price of gasoline. From the AP story:

Hawaii’s gasoline price controls have sputtered to a stop. The island
state whose drivers pay the highest pump prices in the nation has given
up on price caps after an eight-month, first-in-the-nation experiment.
Some complained that the restrictions actually led to higher prices,
because oil companies knew they could charge up to the maximum allowed.

If the price control did cause higher prices, I don’t think it had anything to do with informing oil companies but rather from discouraging supply.

Of course, there was some dispute over the true effect of the wholesale caps. More from the AP story:

One study by an economics professor showed the gas cap cost consumers 5
cents more per gallon. An analysis by the state Department of Business,
Economic Development and Tourism estimated that island motorists paid
$54.9 million more than they otherwise would have in the first five
months under the cap. But research by cap supporter Rep. Marcus Oshiro
indicated the limits saved drivers $33 million.

Always good to hear both sides, isn’t it? Research by an economics professor and research by a politician. Six of one, half dozen of another!

But here’s the best part:

At the same time, the new law provides for the computation of a
hypothetical gas cap to let customers know what gasoline would cost if
there were price controls.

That’s like telling consumers the velocity of a flying pig.

(HT: Peter St. Onge)