Wednesday, November 07, 2012

Prices and supply and power

Cafe Hayek on "gouging":
Prices kept artificially low – prices forcibly kept from reflecting the reality that gasoline and other staple goods are in unusually short supply – discourage the extra efforts required by suppliers in times of natural disasters to bring much-needed inventories to market. And in return for this dampening of efforts to increase supplies, New Jerseyians receive no off-setting benefits.
Prices being a reflection of scarcity, legislating low prices is sort of like legislating that you can't use the information available to you to make rational decisions about the world. But of course, people like such laws because they don't think, and politicians like such laws because, well, let's just provide a link and a quote to that too:
The candidates would surely reject the claim that they are motivated by power, but the premise wields considerable predictive power, which is to say Presidents and aspirants to the White House display a suspiciously consistent tendency to describe the office in terms conducive to enhancing their power.
Such laws serve the dual purpose of making it look like the government is doing something to help people while simultaneously hurting people and making them more dependent on external aid to be provided by, surprise, that same government. A win-win-lose-lose scenario.

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