The Market vs. Rationing.

[elfs]

I'm with Jane Galt on this one:

If you cap the price (as some people are making noises about), rationing will take the form of queuing: people will have to wait in long lines for gasoline. This sounds just fine to some activists and academics, apparently ones with a lot of time on their hands. The rest of us, who do not think it would be fun to live in the Soviet Union, recognize that, painful as it may be, prices are in general a better way to allocate scarce resources than lines.

But it hurts! I hear you moan. "What about my Labor Day driving?" Let me translate. What you're really saying when you say "I don't want to pay more for gas" is "I don't want to either use less gas, or use less of anything else". But as a society, we have to use less gas. You, or someone else, is going to have to consume less of the stuff, because we have less than we used to. If you don't want to be one of the people using less gas, then you have to be one of the people using less of everything else. Thus will the market pretty efficiently strip out driving by those who value it least.

But high prices don't just make people want to drive less; they make people want to supply more.

Comments

[rapier.livejournal.com]

Psh, I vote for driving less. My commute isn't so bad, but public transport isn't really workable for me. The closest public transit station on the way to work is at the halfway point of my commute. As far as unnecessary trips, well, I've cut a lot of them out. Granted, this means I don't take that extraneous trip to Dairy Queen because I'm hankerin' for something sweet, but really -- is that such a bad thing?

[(Anonymous)]

You, or someone else, is going to have to consume less of the stuff, because we have less than we used to. If you don't want to be one of the people using less gas, then you have to be one of the people using less of everything else.

First "we have less of the stuff than we used to" isn't a very insightful description of the situation, either in Atlanta just now, or in general. But let's allow that simplification for the moment.

Her logic would only hold if everyone were required to spend everything they had on an annual basis. In other words, if all your money were converted to goods, then spending more on one would mean less of another.

That is hardly the case. What very high gas prices really translate to is a hardship for those barely getting by, and an inconvenience for those with a surplus. In a society like ours, as you folks know all too well, it is a real challenge to get around without a car in most places. For some non-trivial baseline quantities, gasoline (mechanized transportation) is a basic requirement to provide for one's basic needs. (Not a basic need itself.) And it's gone up far more than the cost of living in the past year. ;)

[riverheart.livejournal.com]

It's not about Labor Day pleasure trips, Elf. It's about the average Joe (or average Charles) being able to get to work. You don't have to worry; you probably earn at least twice what he does. He does have to worry.

We use as little gas as we can. You may have noticed that we don't get out much at all. That's part of why. We don't use much of anything else, either. We'll use less and cut more as prices go up. How much colder can we keep the house this winter? Last year the thermostats were set at 60. Do we set them at 50 this year?

It's about someone other than the wealthiest being able to go *anywhere* if they don't live on transit lines. It's about having any options at all other than starving, not having multiple options.

If it takes lines to ensure that there's enough to go around at a reasonable price, OK. Those who then want more than others can pay $10 a gallon. Provide a way for the average family and vital infrastructure (fire, medical, etc.) to get what they need at a price they can afford, and then make the rest available at true market prices with no caps.

[rapier.livejournal.com]

Well, yeah, I should amend my prior comment. With the gas prices getting the way they are, we're cutting back as much as we can, but there comes a point where you cut clear to the bone. The car is only so efficient, and there's a bare minimum I must drive to keep the family ticking along. I don't yet have enough clout at work to blithely say "I'm working from home today."

[elfs.livejournal.com]

But what is a "reasonable price?"

Take the photo I pointed you to. The guy who sells you that gasoline has to make sufficient money back on what he has in his tanks right now to make sure that he can buy more gasoline to fill them next week. If he anticipates a significant rise in the price of bulk gasoline, he needs to raise his prices right now to be prepared to buy that gasoline. If he can't, he goes out of business-- and then where will you go to get it?

[riverheart.livejournal.com]

The guy who owns a nearby gas station charges $.08 to $.09 per gallon over his wholesale cost. He's got the lowest gas prices in Port Orchard, and somehow, he's able to continue to buy gas and keep his tanks full. There is absolutely no need or excuse for price gouging.

Many of these stations aren't charging based on what they need to make to keep their tanks full; they're basing their prices on what they think the market will bear. Witness the $3.19/gallon prices all over Bellingham. Then look at the $2.60-$2.65 prices we have over here from the same big oil company. Look at the ten-cent-per-gallon higher price that a different station using the same big oil company has in town. Tell me how, when both stations buy from the same distributor for the same big oil company, and when Bellingham is a good bit closer to refineries than we are, just how these price differentials are justified?

The local station doesn't need to raise his prices right now to $4/gallon. He can do it on $2.60-ish a gallon, and I can prove it by pointing out that he's doing exactly that.

Most stations don't take fills once a week, by the way. In the case of a busy station, it's often refilled several times a day. In the case of this local one, it's about once a day. The wholesale prices go incrementally up, but they don't skyrocket overnight.

The free market is not the only or even the best solution here, especially to deal with price gouging. Laissez-faire economics will put every poor and middle-class American into dire circumstances in the next few months. A laissez-faire evacuation plan saw the poorest and most fragile of New Orleanians left to die.

[auroramama]

About how many decades after the demise of the Soviet Union do you figure people will stop accusing "activists and academics" of wanting to live there?

I'm not in favor of a cap, by the way. But if we're going to let gas become a luxury, we need to provide public transportation to the people who will otherwise lose their jobs, their child care, or their access to goods and services. I don't give a damn about Labor Day driving, but I'd prefer not to strip out driving by those who don't have any money to spare.

[antonia-tiger.livejournal.com]

It's not just personal transportation.

Everything you buy has to be transported. Even your water supply depends on pumps. This doesn't depend entirely on petroleum, but everything will cost more.

You can't give up on food and water, just as you can't give up on getting to work.

And, most places, the amount of fuel you need doesn't depend on how much money you have.

No system is perfect, and sometimes you have to choose the least bad. And the least bad system here and now may be the one which buys time to set up useful public transport. It takes time to build the buses.

[valarltd.livejournal.com]

I live in an area where I have exactly two options for public transportation: a bus that leaves at 6 AM and gets me to my workplace at 8 AM, and one that comes back at 4 PM and gets me home by 6. With a transfer each way. Those aren't the hours I work.

My commute is 15 miles. On the freeway and a Mississippi River bridge, so a bicycle is out of the question.

We walk more and I'm going over my bike this weekend to see what it needs so I can run local errands.

I'm lucky

[dakiwiboid.livejournal.com]

I CAN take public transport. I do take it home every night that Moose is working, and to get around on weekends when he's working as well. We've canceled a camping trip we had planned for weekend after this in favor of staying in town and going to an art show.

I suspect that public transport is suddenly becoming more popular in St. Louis. I had to go to two grocery stores before I could buy a new monthly pass today. The first one was sold completely out!

Bleh, I love how stuff like this gets so twisted up

[kyriani.livejournal.com]

My current commute is 58 miles one way, there is no bus system or any kind of public transit (besides Greyhound) that goes between Toledo OH and Dearborn MI. >_<; I would take a bus or ride my bike in a split second of a heartbeat, but its just not an option. We are looking to move, once I finally get a job, though its looking less and less like moving to Seattle in the immediate future. But for those of us who have no other options than drive (and I got as gas-efficient a car as was in my price range), this just kills us. I can't even imagine the what the low income people who have to commute are doing, for me its just eating up all my luxury budget currently. But if I don't get gas (and waiting in line is definitely not an option around here where my commute can be anywhere from 1.25 hours to 3 hours), then I don't have an income.
Maybe, just maybe (though I doubt it), this will make this area that is so dependent on the car industry and cars, think twice about its completely shoddy public transit system.