Re: End Gasoline Price Gouging

egusenet@xxxxxxxxxxx (Eric) writes:

> <jmhall@xxxxxxxxxxxxx> wrote:
>
> > egusenet@xxxxxxxxxxx (Eric) writes:
> >
> > > cas <casindigo2000@xxxxxxxxx> wrote:
> > >
> > > > Is that the most thoughtful opinion supported by points and facts that
> > > > you can come up with Eric?
> > >
> > > Certainly.
> > >
> > > Gouge On
> > > http://www.nationalreview.com/comment/taylor200509022359.asp
> > >
> > > From CATO:
> > > http://www.cato.org./dispatch/09-01-05d.html#2
> > >
> > > (excerpt)
> > > "Gougers are sending an important signal to market actors that something
> > > is scarce and that profits are available to those who produce or sell
> > > that something. Gouging thus sets off an economic chain reaction that
> > > ultimately remedies the shortages that led to the gouging in the first
> > > place."
> > >
> > >
> > > But, if you want to work towards massive shortages, horribly long lines
> > > in which people are murdered, this is a free country where people are
> > > allowed to work against the common good of all.
> >
> > But the oil and gas markets are very heavily regulated. Why should
> > one think free-market theory would apply to the existing market
> > structure in gas?
>
> Why make things worse then they already are?

Since no on has fully articulated the response to thus particular
supply shock and we know that the oil markets are not free-market
but highly regulated markets I just don't see that particular
value to the suggested links.

Yes, prices are a rationing mechanism in society and in within
a very large number of settings it's a fantastic social insittution.
But the current setting was not initally a free-market setting but
an administered market and with the catastrophy a rather unique
situation. Social institutions arise to address common and frequently
occurring situation, not really these life-boat cases.

I'm just pointing out that the basic assumptions regarding the
market staructure of the theory you're presenting in the links
is not consistent with the actual market structure of the oil
markets.

jmh
.

Relevant Pages

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