Almost but not quite

Via Tam I found this article talking about the boom/bust cycle for the oil producers in Pennsylvania:

Even after 150 years of this roller coaster, we’re still far from implementing a better system to price this essential commodity.

An easy answer, and one often brought up in casual conversation, is some type of price control. The government would say oil prices can’t go below $50 or above $100, or some such number. Oil companies would have a guaranteed minimum price, and consumers would have a guaranteed maximum price. Everyone wins.

Wow! Just wow! Not only has that sort of thinking been shown to be a disaster in numerous countries around the globe for hundreds of years but President Nixon even tried it here in 1971 and it was a huge failure. Just think for a few seconds will you? To let that sort of thinking actually get to the verbalization stage shows a profound ignorance of reality.

The article eventually is skeptical of the idea but then goes on to only slightly obfuscate the fundamental flaw in their thinking and arrive at a conclusion that is equally ignorant:

A better alternative, experts say, is to encourage long term, stable policies that focus on both increasing supply and shrinking demand.

On the supply side, encouraging greater access to resources and a stable tax policy that gives breaks for oil production is what the oil industry is looking for.

On the demand side, stricter fuel efficiency standards, better urban planning, alternative fuels and a big tax on gasoline would help cut use.

“We’ve never had a real, long-term strategy to address the energy problem,” said Bruce Vincent, vice chairman of the Independent Petroleum Association of American, an industry trade group. “We need to have a comprehensive strategy that works for America.”

More government intervention when you just got through coming to the realization that government price fixing probably wouldn’t work? They almost get it but not quite.

Now there is a government policy that would optimize supply and prices. And it would do that optimization in real time and completely without political favoritism. It’s a Free Market. But apparently they are too ignorant to have heard of it.


3 thoughts on “Almost but not quite

  1. It’s amazing to me how many people, even very educated people, don’t understand how the price system works.

  2. It’s also amazing how many people would do great damage based on a temporary condition. The slump in crude price will eventually be corrected, just like how it was corrected after Iraq and Iran stopped dumping on the market to fund their war.

  3. This fits in perfectly with the “FDR’s only mistake was that he didn’t do enough, fast enough” meme. If it fails, do it harder.

    Mere price controls? Naw– we want total control of supply, the very structure of cities, transportation, and all other aspects of demand.

    In discussing this sort of thing long-term with a lot of people, I have to conclude that stable prices, or stable supply, or whatever the stated goal may be, is not the goal at all. That sort of rot is just the rationalization. The goal is finding a permament place and permanemt justification for force as official policy (socialism/Fascism/totalitarianism).

    The goal isn’t a positive one, as in, “we want society to work smoothly, without risk or pain” or etc. The goal is a negative one. It’s anti capitalist. It’s anti-freedom, and in its ultimate form it’s anti-human.

    To argue with a leftist (over this or that method of making this or that work better for the people) is a distraction. The leftist looks out at society, sees people creating, building, living and doing and succeeding, without anyone paying any attention to them whatsoever, and it just pisses them off to a point of such extremity that it is hard to put to words. All the garbage about saving society is just a form of self-protection for someone who hates his own kind with a burning rage.

    If we say, “But don’t you see; capitalism has created the most vibrant and prosperous society in human history, with more opportunity than could ever have been dreamed by our grandparents…”

    Yes, and that’s the problem that needs to be “solved”.

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