The conservative National Review Online writes this:
A defense of gas profiteering.
By Jerry Taylor
It all sounds reasonable from libertarian point of view. But what happened to the argument that gas prices are crucial to the economy? In particular, that they are vital for small businesses and consumers? This argument suddenly disappeared… May suddenly troubled businesses and consumers drop dead?
We may argue about blame proportions in the cited energy crises. For example, one may reasonably say that pure free market is not sufficiently good in anticipating or preparing for these crisises.
Once a crisis happens, we have a choice: do we try to control or influence the reigning chaos, or do we leave everything and everyone to fate’s mercy.
On the long term, it is best to let the free market determine prices, there is no doubt here. But under sudden emergency, is it the most crucial thing to defend opportunities of the few disproportionally lucky? What is wrong in giving numerous people and enterprises a better chance to survive and adopt to new circumstances? Would it be the end of the world if we would have long queues for a week? Is temporarily shortage more terrible than ruined “American dream” lives?
We may not control all intentions and economic eagerness at critical moments, but it certainly seems tolerable to make moral appeal for solidarity from all sides, the vital supply side included. That may save many better lives, and may keep the economy more stable.
The “price control” issue has also the other side of keeping prices above the “natural” level. Then we have precisely the same arguments (“People who value gasoline most are willing to pay higher prices than those who value it less. The former get the gasoline – the latter to some extent go without, etc“) that nothing is horribly wrong, even better, there are no terrible shocks. Or is the something horrible?
Of course, libertarians then probably get back to the “non-efficient economy” litany. But the efficiency has the price of short-sightness. It is even very ironic to require most efficient conduct and impulses from a “good” government when the same ideology says that no government can regulate economy efficiently. Perhaps we may agree that government should not worry about marginal efficiency. But government should have responsibility for anticipating, preparing and dealing with harsh crisises.
[Crossposted at European Tribune and dKos.]
As a result of the hurricane’s effects, gas prices in my city of Calgary, Alberta, Canada have risen from an average of 97 cents/litre yesterday to 1.14/litre overnight. And we live in oil country!
Canada is trying to help out: link
In Saskatchewan for that province’s centennial celebrations, Prime Minister Paul Martin says Canada will do its part to get more oil and gasoline to the energy strapped United States.
He says he has talked to producers and the provinces to find some additional resources.
“Our goal will be to help stablize the existing situation,” said Martin. “But not in a way that will impose any diminishment of supply for Canadians.”
But at least one Calgary energy analyst says there is very little Canada can do because almost all our exported oil goes to the U-S already.
Peter Linder of DeltaOne Capital says the extra oil pledged today won’t make an impact for weeks.
He says Canada is operating at capacity and any oil that does make it into the market will be delayed at the refinery.
At least eight refineries are off line in the Southern U-S because of the hurricane, straining other facilities to pick up the slack.
Linder says North American consumers need to recognize that higher energy prices are the new reality.
He is also warning about higher natural gas prices this winter.
Linder says they could nearly double to 15 dollars a gigajoule.
Late this evening, Alberta’s government announced that it will increase production, but this is not expected to have much of an impact overall. My government is also refusing to lower gas taxes even though it is projected that we will be swimming in money as a result in the price increase of a barrel of oil. I gave up my car last year and now share the “house car” with my roomies, but for poor people like me, these prices are so out of control that they will have dire consequences – everywhere.
I am not dependant on gas. I live in Japan, close to work, and do not own a car at all. But I try to imagine how my friends and many other people have to live now.
Here is some background in Japan.
Typical rich white guy, that Jerry Taylor:
People who value gasoline most are willing to pay higher prices than those who value it less.
What he’s missing — probably because he’s never felt actual want in his entire life — is that being willing to pay isn’t the issue; it’s whether people are able to pay. At a projected $4 or more per gallon, we are exceed the ability of many people to pay. If gasoline were a luxury, it wouldn’t be an issue, but in our society, where living without a car in most urban areas is well-nigh impossible, it’s a big problem.
When heating bills double or triple this winter in the northeast, will Mr. Taylor be asserting that those who freeze to death are simply unwilling to pay?
An efficient, self-correcting market is often touted as a virtuous thing. The problem with that theory is that the market can be perfectly efficient while people starve to death. It’s not only possible but usually the case that human suffering is more profitable than serving the common good. To rely on the market as the arbiter of offical policy is to to accept the perfectly avoidable suffering of millions as just part of the game.