Politicians Reach A New Level Of Stupid

To paraphrase Mencken, no one ever went broke underestimating the intelligence of lawmakers:

Georgia Gov. Sonny Perdue late Wednesday enacted a state law that prevents retailers from selling gas at an unreasonable or egregious price.

The law does not prevent price increases that accurately reflect an increase in the cost of the goods or services to the retailer, an increase in the cost of transporting the goods or services into the area, or an increase due to the market forces of supply and demand.

Emphasis added. So, let me get this straight: no price gouging except when the increase is due to the market forces of supply and demand? Um, yeah.

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Jim: I think you're missing

Jim: I think you're missing the point (my apologies if I misunderstood you). "Gouging" is *good*. Letting prices rise even to astronomical levels when there is a shortage ensures that everyone will purchase as little as they can get away with, which means that there will be more for everyone instead of a lot for a few people and none for everyone else.

Yesterday in Atlanta rumors of a gas shortage caused a run on gas stations. Due to the run, some gas stations did in fact run out. Note: they ran out not because there was a shortage, but because people *feared* there would be a shortage and therefore tried to fill up as much as they could. They topped off their cars when the tanks were almost full already, they brought in all of their cars to top them off, and in some cases brought in 55-gallon drums and filled them up. This kind of excess filling would run the gas stations out of gas in any circumstances, hurricane or no.

Some gas stations raised their prices. Guess what: those that did still had gas when the panic subsided. If all gas stations had raised their prices when they saw the demand spike, then more people would have decided that maybe they only needed to fill up one car to make it through the weekend instead of paying through the nose just to have extra on hand "just in case". The run would have been less severe and shorter-lived.

"Gouging" is good.

Looks like Arizona is also

Looks like Arizona is also considering an anti-gouging law:
http://www.azcentral.com/specials/special44/articles/0819gas-gouge19.html

Note that this article contains a much better way to stop individual shops from gouging--bring in the news film crew. ("After the film crew showed up, employees lowered the price to $2.97 for regular and $3.97 for premium" from $4.27/$4.97)

Wouldn't this law have the

Wouldn't this law have the effect of preventing a single gas station (or small number of gas stations) from raising prices dramatically above the rest?

In Phoenix, a gas pipeline that supplied more than half of the city's supply of gasoline broke in 2003, which led to a run on gas. There was one station that raised its prices to over $4/gallon; none of the others did. If a law like this had been in effect, wouldn't it have applied to that one station (unless that station could point to particular circumstances that fell into one of the listed categories of exception)?

I'm not saying this law is a good idea--stopping that one station isn't going to make much difference to what happens--but I don't think that it's vacuous.

Yeah a case of a pol being

Yeah a case of a pol being seen to do something even if its idiotic and counterproductive.:furious:

What...you're contemplating

What...you're contemplating THERMONUCLEAR ANNHILATION?

(You really need an emoticon for that.)

And let’s not be

And let’s not be “utopians” here. I mean, people are going to demand that their political leaders act.

There are then, I submit, two treatments of the problem. Either go for the demand side or go for the supply side of the equation.

The law is only dangerous in

The law is only dangerous in the hands of judges who are not economically literate. Luckily for us all judges without exception are economically literate...

And let's not be "utopians"

And let's not be "utopians" here. I mean, people are going to demand that their political leaders act.

Are you sure he's not

Are you sure he's not actually a genius? This allows him to say "look, we've done something about it!" without actually bringing in real price caps.

I understand the case for

I understand the case for gouging, I was responding to what I took as an implicit criticism of the proposed law that it is vacuous when the exceptions are added in, which I don't think is the case. Perhaps that was my misinterpretation of the original post.

The same thing you describe in Atlanta occurred in Phoenix yesterday, as well, but the stations that ran out got resupplied overnight and have not raised their prices. Those that raised their prices did not run out, but since there really isn't a supply problem, the stations that didn't raise prices are doing a much higher volume of business than those that did.

"Gouging" is not necessarily good, but it results in its own reward or punishment.

Wouldn’t this law have the

Wouldn’t this law have the effect of preventing a single gas station (or small number of gas stations) from raising prices dramatically above the rest?

If read correctly, I don't see why it would prevent even that. What leads even a single gas station to raise its prices dramatically, if not the market forces of supply and demand?