Supply and Demand - Not Just a Good Idea, It's the Law

Every time something like a hurricane comes up, we hear a word that we hear at no other time -- Profiteering. Today Hurricane Ike is coming ashore in Houston. The offshore Drilling platforms have been shut down. The petroleum refineries have been shut down and secured. The pipeline pumps have been turned down and ultimately shut off. There is no more coming for a few days or even weeks.

The price of gasoline shot up. One station in my immediate area, which is normally known as a cheap station in an especially cheap area for gasoline, had unleaded for a while at $5.25 a gallon. The television is stridently complaining of price gouging. The Governor (a Republican) has declared a state of emergency which punishes profiteering.

What was lost in that Paragraph? Capitalism. Supply and demand. Private Property. Note first that it is his gasoline. Mr. Patel bought that 5000 gallons of that gasoline yesterday at the risen price. It is his not the Governor's gasoline, nor yours, nor mine. When the price goes back down next week because the supply has been restored, he will not get a refund to the then price. His base price will be yesterday's spot price. He does not have to sell it at all, which may well be his decision. But he will have gasoline to sell you when the others have all sold out; and what will it be worth to you then?

Government controlled rationing will always cause shortages -- not worth it to buy to sell, hoarding, diversion to politically expedient markets.

Price rationing, voting with your feet (wheels?), creates not just a more even flow; but it causes conservation as it makes us, the end user, decide how much a particular trip is worth to us. But raising the price has another effect -- it makes it attractive for someone to step up and take the risk to fill the void.

We have seen this in other things, too -- plywood, ice and even water. Several years ago there was a man here in Atlanta who bought a truck load of plywood at Home Depot and drove it to South Florida to sell after he heard on the television that the stores down there ran out. He was arrested for profiteering and his plywood taken away from him. The same thing has been done over bottled water and I have even heard of it happening over generators. What do you bet that those people have learned their lesson? This time that plywood is still sitting on the shelf at Home Depot here in Atlanta.

To each according to need, from each according to ability, it's the Democrat way.

p.s. Just wait till the government rations healthcare.

Hello Dolly

Every year on TV we are shown pictures of people nailing plywood over their windows in preparation for a coming hurricane. Tonight is no exception. It immediately is followed by someone bemoaning how high the price of plywood has become in the buildup in preparation for the arrival of the storm by those exploitive profiteers at Home Depot.

It is their plywood after all, Lady, not yours. Why didn't you buy your plywood earlier? Better yet, What did you do with last year's plywood? Or, how about shutters -- the real ones, not the decorative ones that you already have on your house.

I grew up in a two-hundred-year-old house in Pennsylvania. Rarely, a hurricane would live out its final days running up the Delaware valley. But the houses in my neighborhood were prepared -- with real working shutters that could be closed over the windows with minimal effort. Not so in hurricane alley. There the working plan is to nail up plywood again and bitch because the mean old lumber yards expect to sell it to the highest bidder.