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Nicole Gelinas
Gas-Guzzling Sandy « Back to Story

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When then Governor Brendan Byrne announced the impending imposition of odd/even gasoline purchase rules, my immediate reaction was "how absurd, the only way this will affect gas lines is if most of the people on the gas lines are crazy". The day the odd/even took effect, the gas lines disappeared.

When Governor Christie announced the impending imposition of odd/even gasoline purchase rules, my immediate reaction was "yup, that'll do it".

Nicole: if you let the government jack up the price of gasoline, or jack up the price of bridge and tunnel tolls, for any reason, you don't have to be psychic to foretell that they will be very reluctant to undo those changes. Odd/even was perfectly effective and didn't pander to government's insatiable appetite for our earned income. It was a better way.
Dear David,

Your chivalrous concern for internal consistency is appreciated, but the fact of the matter is that the market does not re-set instantaneously; it is not the equities market. The retail gasoline market re-sets itself only with new shipments of fuel.

In the short term, then, the only thing that was regulating the gasoline market after Storm Sandy into earlier this week was the long line of people, a situation that posed an unnecessary challenge to New York's ability to maintain law and order.

Thus, there was nothing wrong with the state using its police power, something that is well established, to use, in higher prices, a proxy for free markets -- not actual free markets -- to control the lines.

Life is imperfect; deal with it.
The problem wasn't a lack in the 70's either. It was a lack of gas at the price allowed. Price controls cause shortages.
Is it just me, or does there not exist some inherent contradiction in Ms. Gelinas's argument? The subtitle to this piece is "Why not use economics to help people get fuel?". Yet for all of her bluster about free markets, etc, etc, Ms. Gelinas's solution is, ultimately, to allow "New York and New Jersey officials [to] set the gas price at $5 a gallon—about 25 percent above today’s “market” price. If $5 doesn’t shorten lines, the government could raise the price to $7 or $10". So which is it? Does the market get to control the price of gasoline (as many commenters to this piece seem to think Ms. Gelinas is arguing)? Or, instead, do government officials set the price? This is probably one of the worst-written articles I have ever read in this publication. It lacks internal consistency, not to mention logic, and it offers no real feasible way for dealing with the situation discussed. I expect more from City Journal, but I suppose all of the hair pulling and teeth gnashing after the election are causing conservative writers (like Ms. Gelinas) to lose their sense of perspective. I'm not saying that Governor Christie's and Mayor Bloomberg's solutions are good ones. They're not. But if she's going to offer up some other way of coping with the problem, I think Ms. Gelinas should, at the very least, present a cogent argument supporting her position. She has completely failed to do so in this piece.
The problem with implementing something like the writer suggests is that it would be perceived as unfair, allowing only those who can afford the higher prices to buy gas. People wouldn't pass by a short $8.00 a gallon line and think, "Look, the market is working efficiently!" No, they would see the line and think "There he goes again, Bloomberg setting prices high so that only his cronies can afford it!"

The odd-even system at least looks fair: the $12,000-a-year handyman can be in the car ahead of the $2 million-a-year CEO.
This is what happen in an administered economy. THe main benefit of an administered economy is the need for a lot of administrators (public sector employees). The main drawback is that it is not efficient. USSR tried it for many decades. It is now NYS' turn.
A secondary market is one outside the government sanctioned and regulated market. I call it the Black Market, and you will go to jail for tax evasion if you are caught trading in a secondary market.

So yes, an unregulated market will occur naturally, but it will never be open. I define a Black Market as one person with something to sell, does not advertise that he has it, and hunts for one buyer who is also not publically advertising he wants it. It is a one-on-one exchange, usually with few or no people as wittness to the transaction. It happens all the time. All of us have done it at one time or another.

Concerning the lost girl in the city, does she have to go with the cabbir who wants sex? Definitely not, unless he grabs her and forces her to ride with him, but that's a crime, and I presume he is not a criminal. He has a right to ask for sex, and she has a right to deny it: No harm done to either.

A cabbie will come along who is respectful and business minded; she'll get where she intends to go. All's well in the free market.

By the way I hope you are not defining a good samaritan cab driver as a horny male looking for young females to exploit.
Gas vendors seek the best price for their gas, which means the highest difference between price and costs, called gross or net profit, they can find. Gas goes there first, then to lower priced areas. Simple supply and demand. Price allocates resources every minute of every day all over the world, even in China.

Winfall profits attract gas where demand is the highest. The economy is like an aution: Hign big wins. Windfall profits do not exist where there is no scarcity.

NYC has scarcity big time.

Why prohibit gas from going where it is most needed or wanted by forcing the price to be the same as the price at the gas station closest to the refinery? What incentive has any company got to travel into NYC to sell gas, even in an emergency, if not higher prices?

Faith, Hope, and Charity don't pay costs, including employee wages and NYC taxes.

Reduce costs and sell it local, the heck with putting up with NYC traffic, attitudes, and thousands of regulations that increase costs and threaten companies with fines and possible jail time.

There's that old saying: if you won't pay, you don't get: unless you steal it.

Those people who do not want to pay are the people who will accept Charity: They are the people who Hope that someone sees them as a Charity case: and they have Faith that they will be picked for Charity.

I see more bloodsucking horrors in NYC from the lack of gas than I do from profiteering.
Surely, if people are rationed and by definition there is insufficient supply, if the answer were simply the free market, a secondary market would have occured naturally and unregulated.
Let that secondary market occur, encourage it if you like, but there is something distainful in charging more when people are at the low point.
It is a bit like the good samaritan cab driver that says to the girl lost down town, I'll rescue you from being gang r..d, but hey you have to sleep with me first or pay a couple of hundred times the normal cab fare, its a free market, but - right?
"...why don’t public officials allow price to weed out those who really need gas and those who don’t?"

Because we are a country that puts the values of Faith, Hope and Charity ahead of the bloodsucking horrors of sociopathic Randian malevolence.

Raising prices would provide windfall profits, which per se would be irrational as a matter of microeconomics. Hundreds of gas stations are out of service. No change to price-per-gallon at undamaged stations is going to significantly affect bringing damaged stations back into service. The damaged stations aren't going to get these windfall profits. If anything, price hikes would lessen the motive for making repairs.
Excellent piece. Naturally, these proposals are the solutions we need. But economically illiterate men such as Christie, Scheiderman, Cuomo and Bloomberg will likely never let this happen. Of course it doesn't help that most citizens share a similar antipathy for truly fair and economic solutions as proposed by Ms. Gelinas.
Good point. The additional cost could be levied as city tax and the
revenue used to provide badly needed help in other ways.
nothing can be done about refinery damage but tankers were in river very soon after storm. gov. should have bought and national guard utilized to distribute all over city at open and closed stations and other sites for free without question. the largest thing holding up recovery is lack of fuel to transport people around and power replacement devices until the utility companies can get going. speak to people in rockaways
Yes, whenever the government starts mucking around with the freedom to set prices, all kinds of problems and inefficiencies ensue. There are only a few of us willing to defend "price gouging" as a helpful thing.

My proposal....exempt individuals from price gouging and set up a few "individual free market zones" where people can sell 5 gallon cans of gas at whatever price people are willing to pay. If we did this thousands of underemployed people in the entire region would fill up their vans and pick up trucks with 5 gallon gas cans and bring gas into the area where the shortages are...bringing immediate relief.....and making a few bucks for their time and effort.
I'm trying to find a smidgen of sympathy for the poor East Coast dwellers who, after all, had plenty of warning about "Superstorm Sandy" and were still knocked on their rear. Welcome to your brave new world.
What's wrong with letting the free market determine gas prices?

Say the price per gallon went to $30, or whatever.

Many gas buyers would say, nope, I'm waiting for the price to drop, I don't need to go anywhere at that price. But cabbies and others who value their time and need to go somewhere would pay.

And they would probably pass the price onto those who need their services too.

People wanting to go to work would also buy if in their minds they decide they would be better off, make more money, get brownie points, etc. if they paid and worked their job.

And the producers?

If I was in the chain of gas supply, I'd love that price. I would drive a gas tanker truck from Philadelphia to NYC pronto to sell my gas. If I were a gas station without electricity, I'd buy or rent an electric generator so I could run my pumps and sell my gas. Or the truck driver could have one with him.

Getting the picture?

And as gas availablilty increased in NYC, prices would drop, and eventually become normal again.

And it just might not be weeks before the market stabilized either. It might be days.

Bloomberg and Christie and others only want power, they do not want a citizen to recover
quickly from a natural disaster.
Unfortunately, politicians are not required to pass even the most basic Econ 101 literacy test.

Either that, or they understand basic economic concepts such as market clearing pricing, but feel that they have no choice but to pander to their economically illiterate constituents.
Allowing prices to play a role in the allocation of anything that matters is unacceptable to liberals. Conservatives, in their estimation, have money, while they have power. So they speak power to money. It's that simple.