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Merged Economics, politics and the election

acbytesla said:
I agree with your Attorney General.

The problem with your story is that it doesn't mean what you seem to think it does. If one is worried about a shortage people are likely to stop whenever they could regardless of the price. You're suggesting the service stations should have been allowed to take advantage of the shortages so they could make obscene profits.
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People will only respond like that to higher prices when they think even higher prices are coming down the road (as was observed in the late 1970s and early 1980s). In this case it was clear that the shortage was temporary. In fact, it might have been even more temporary if prices had been allowed to rise, because it would have encouraged refineries to send tankers from California.

But I guess the horror of somebody making obscene profits is all that matters.
 
Brainster said:
People will only respond like that to higher prices when they think even higher prices are coming down the road (as was observed in the late 1970s and early 1980s). In this case it was clear that the shortage was temporary. In fact, it might have been even more temporary if prices had been allowed to rise, because it would have encouraged refineries to send tankers from California.

But I guess the horror of somebody making obscene profits is all that matters.
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I bought gas during the 1970s gas shortage, so don't give me a lecture on it. We could only purchase gas on odd or even days depending on your license plate. Service Stations were threatened then on price gouging.

And no industry can hardly be compared to the manufactured shortages the oil companies have used to increase profits.
 
Brainsters story demonstrates exactly what he thinks it is.

Keeping prices artificially low meant folks bought more than they needed because were worried about shortages. Let prices rise, folks buy only what they need and suppliers are encouraged to provide more supply. They might ship it from a refinery that is farther away and not worth shipping from at lower prices for instance. The classic example is anything in a hurricane. You let folks' gouge and some guy three states away is going to think, I can make some money and start driving with a truck load of water. Don't let the prices rise and there will be no additional supply and no reduction in demand. Demand will probably go up in most cases.
 
ahhell said:
Brainsters story demonstrates exactly what he thinks it is.

Keeping prices artificially low meant folks bought more than they needed because were worried about shortages. Let prices rise, folks buy only what they need and suppliers are encouraged to provide more supply. They might ship it from a refinery that is farther away and not worth shipping from at lower prices for instance. The classic example is anything in a hurricane. You let folks' gouge and some guy three states away is going to think, I can make some money and start driving with a truck load of water. Don't let the prices rise and there will be no additional supply and no reduction in demand. Demand will probably go up in most cases.
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They wouldn't have been artificially low. And you don't get it. Each station was limited in distribution. They were likely to get exactly what they got. Rising prices simply because they could is hardly justified.
 
ahhell said:
Its not that they don't work very well, it that the evidence strongly suggest they make things worse. In some cases, they make the thing they are meant to improve worse. Rent control is the classic, pretty much always results in reduced housing availability.
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Which is another way of saying the same thing.
 
If you want to ration a good, ration it. Don't screw with the prices in the hopes that "the market" will somehow distribute it fairly.
 
acbytesla said:
And yet we have price controls on all kinds of things. The price we pay for certain medications. The price of milk is regulated. The price we pay for a KW of electricity is highly regulated in many parts of the country. I'm not saying it's the same on every product. It's not. Generally, I oppose price controls because they can have adverse effects. But in certain markets, they might be a good solution.
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Yes, they can work in specific cricumstances. I am rteally skeptical about theri working on such a broad thing as "Groceries" though.
 
Irony is a great deal of how the economy performs is really beyond the power of the POTUS to control.
As a result, the POTUS gets the blame for things they could not have fixed.
But also they get credit for things they had little do wo with in the economy.
But that is fact of life: If you are POTUS you get both blame and credit when you really don't deserve it. I don't see that changing.
 
Tero said:
It's all about corporations for Trump. The Trump crowds just get a guarantee of "no money for foreigners." Other than the cost of the concentration camp. For millions.

Now we are in a democratic term. Inflation did happen. Big corporations, two or three of whom control any particular product category (phones, diapers, toilet paper, baby food). Would they hesitate to raise prices? No. It will be blamed mostly on the current president. They want the republican elected, so that he can reduce corporatre tax. Once he is elected, will they reduce prices? (After their taxes are cut). No. Corporations never lower prices.

Corporations have paid 20-30% tax in recent times. It is apparently worth the trouble to buy as many senators and presidents as you can for even 5%. And then also have someone like Trump who defund the IRS so they can't collect tax.
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Conspiracy theories thataway. The whole infaltion is a conspriacy to elect Trump is pure COnspriacy theory.
I am not convinced the Corporation are that thrilled with Trump, frankly. They sure as hell are not giving him money like thy have other GOP dcndidatres.
But you and I will never agree. You think corporations are evil, and although I have no great love for many of them, and thinn they need to be watche to see the don't abuse thi power, I don'y.
ANd concentrations camps for millions in just silly. Even if we do have some kind of authroatiran state, it is going tbe a lot more subtle then that.
 
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ahhell said:
The thing is prices are information. They combine two bits of information, the costs of production and the extent of demand. Artificially fix that and that information is lost.
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That only works in transparent market with sufficient competition - and only for products with elastic demand.
Fuel demand is elastic only for a very short time while you still have some in the tank.
 
dudalb said:
Irony is a great deal of how the economy performs is really beyond the power of the POTUS to control.
As a result, the POTUS gets the blame for things they could not have fixed.
But also they get credit for things they had little do wo with in the economy.
But that is fact of life: If you are POTUS you get both blame and credit when you really don't deserve it. I don't see that changing.
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I agree.

And I would argue that most policies take years to have an effect. I'd say, the economic conditions the first two to three years in any administration has far more to do with the previous administration than it does with the one in office. The Federal Government Fiscal Year doesn't start until October. So what impact did Biden's infrastructure bill have when they really didn't start spending it until year three of his administration?
 
dudalb said:
Conspiracy theories thataway. The whole infaltion is a conspriacy to elect Trump is pure COnspriacy theory.
I am not convinced the Corporation are that thrilled with Trump, frankly. They sure as hell are not giving him money like thy have other GOP dcndidatres.
But you and I will never agree. You think corporations are evil, and although I have no great love for many of them, and thinn they need to be watche to see the don't abuse thi power, I don'y.
ANd concentrations camps for millions in just silly. Even if we do have some kind of authroatiran state, it is going tbe a lot more subtle then that.
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It is not possible that companies raise prices and increase profits in a Free Market - this combination can only occur if there is a monopoly or cartel at work.
 
I think it is tellilng that the inflation did not get really out of hand until after the Ukriane war started.
Ukraine is one of the world's biggest grain exporters, and the war caused the price of grain from Uraine to skyrocket, and when the price of food goes up prece of evernything goes up.
 
dudalb said:
I think it is tellilng that the inflation did not get really out of hand until after the Ukriane war started.
Ukraine is one of the world's biggest grain exporters, and the war caused the price of grain from Uraine to skyrocket, and when the price of food goes up prece of evernything goes up.
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Probably a much bigger impact was the effect the war had on the energy market. Russia was the first or second largest energy exporter. It's impact was much larger in Europe than the US. But even so, the world market has an effect.
 
Brainster said:
Well, since were talking Economics, I will tell you my own experience with the outcome of anti-price gouging. About 20 years ago, Phoenix experienced a gas shortage due to a problem with a refinery in Tucson. As it happened, my car was low on gas. And for two weeks I could not get my tank filled because everytime a gas station opened up, there was a quarter-mile long line to get to the pumps. Most didn't exactly need gas desperately; people were just topping up their 1/2 to 3/4 tank. And why were they willing to do that? Because our idiot Attorney General, Terry Goddard threatened to prosecute any dealers who were guilty of price-gouging. If the stations had been allowed to (say) increase their prices by $1-2 a gallon, those people would have waited a bit and I would have been able to gas up.

This is the problem with price gouging laws in general; they prevent the market from sending the signal to consumers that availability of a good is limited. You mentioned the toilet paper shortage during Covid. Once again, our price-controlling commissars decreed no increases, and once again the response of the public was to hoard and buy beyond any current need. Let the price rise a bit and those who don't need it will say that's too much and those who do will be thrilled to find it on the shelf even at a dear price.
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Okay, now what if you're living paycheck to paycheck and need to drive to and from work?
 
acbytesla said:
They wouldn't have been artificially low. And you don't get it. Each station was limited in distribution. They were likely to get exactly what they got. Rising prices simply because they could is hardly justified.
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It is totally justified because it signals what the gas is actually worth and encourages more supply. You clearly haven't taken basic economics or forgot the most basic part of economics that almost every economist agrees on. Supply demand curves. In a shortage, the stations aren't anymore limited in distribution than they were before, they are limited in supply. High prices encourage more supply.

The Great Zaganza said:
That only works in transparent market with sufficient competition - and only for products with elastic demand.
Fuel demand is elastic only for a very short time while you still have some in the tank.
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Doesn't need to be transparent and even elasticity is fungible, but you are correct there needs to be a functional market.

Sticking with gas prices, price goes up. People still need to get from one place to another so you'd think that's inelastic, it is in some places but in others bikes and public transit exist. Even in a place where folks don't have that option the high price is an important signal and incentive. If it isn't allowed to go up there will be no conservation, if it does there will be. If it doesn't go up there is no incentive to increase supply or supply from otherwise unprofitable sources. If prices go up, there is. Honestly, ask almost anyone, would you rather pay a confiscatory price for gas or not have the option to buy gas? Economics and reality are about trade offs, you can't have all good things, you can have some but not others.
 
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3point14 said:
Okay, now what if you're living paycheck to paycheck and need to drive to and from work?
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It sucks but which do you prefer, driving to and from work while paying a lot or not being able to drive at all?
 
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