Price gouging, and other socialist myths

One of the clearest signs of how far gone the modern left has gotten is the swiftness with which they have concluded that the high gas prices of late are the result of corporate greed.

It's funny (not funny ha ha, but funny as in distressingly pathetic).

I've heard their arguments:

The most common argument goes something like this: this is a national emergency and energy companies shouldn't raise prices on the oil they refined a few weeks ago because of a little thing like a shortage.

Right.

At the head of each energy company is an evil Mr. Burns, and he jacks up prices at the first opportunity, just because he can.

And his competitors do exactly the same thing, even though they know the best way to make profits is to offer the cheapest price to maximize customers.

Lost in such muddied thinking is the problem of supply. The prices don't go up because of Mr. Burns and his greed. They go up because a significant amount of gasoline won't be there - not just now,but in the next few weeks.

The price expresses the fact that buyers throughout the South are desperate for gas now. Stations there will gladly pay $5 a gallon, because their suppliers are offline. If they don't, their pumps will be dry.

So if Mr. Burns were a "good" man, he might sell his gas at $2.50 a gallon in Michigan. But that just opens up a nice opportunity for his middleman, the man who transports his gas. Let's see, I truck this gas on my normal route and I collect $1,000,000; or I go out my way down South to help those folks out and make $2,500,000, more than covering my extra transportation costs.

I would love to do business with the people who argue that sellers should always use yesterday's prices. I'd love to buy their houses, cherrypick their stocks.

I'd make a fortune pocketing their profits for them.

I know almost nothing about economics, but the little bit I do know has served me well.

It makes sense with a little thought.

Some on the left would rather spare themselves even that minimal effort, and just attribute rising prices to the evil machinations of "the man."

This is how liberals becomes socialists.

And it is how intellectuals become morons.
- posted by total @ 9/20/2005 06:36:00 AM .