More On Gas Shortages
Written by Brian Garst, Posted in Energy and the Environment, Free Markets
More on the government created gas shortages, from Robert Prechter:
Q: Doesn’t reduced supply — scarcity — create shortages?
A: No. In a free market, shortages are impossible; there is only a price. Rubies and Picassos are scarce, but there’s never a shortage of them. You can buy all you want any day of the week. Just pay the price.
Q: So how is the state causing a shortage?
A: The overriding cause of the shortage in the Southeast is state legislatures’ mandates that anyone selling gasoline at market prices will be labeled a “gouger” and fined $10,000 to $25,000.
Q: That’s it? That’s the reason?
A: That’s all there is to it. Only government can create shortages. If the price for gasoline had been allowed to fluctuate freely and rise to $5 a gallon locally, it would have provided plenty of incentive for truckers to siphon gas from other states and haul it to Georgia, Tennessee, North Carolina and Alabama. But as it stands, every one of these states has an “anti-gouging” law, and every one of their governors stood up to announce that he would vigorously enforce it. They may as well have said, “I demand a gas shortage.”
I serve as Vice President of the Center for Freedom and Prosperity, a non-profit think tank dedicated to preserving tax competition and free markets. This site features my personal views, which are not reflective of CF&P.