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Gas shortages in wake of Sandy prompt price gouging debate
November 4, 2012 3:03 PM   Subscribe

A massive shortage of gas all over New York and New Jersey is fueling hours-long lines stretching blocks or even miles. A big part of the problem has been power shortages to gas stations and refineries. Nevertheless, some argue that laws preventing gas prices from spiking in response to the disaster ("price gouging") are making things much worse, discouraging businesses from staying open in tough conditions and preventing entrepreneurs from profiting from any clever ways of increasing supply. Others admit gouging has some advantages, but still consider it ethically dubious. Gouging seems to be happening informally regardless.
posted by shivohum (494 comments total) 18 users marked this as a favorite

 
What's the libertarian take on price gouging?

Oh, it's detailed in the Forbes article. Carry on.
posted by ymgve at 3:06 PM on November 4, 2012 [2 favorites]


Not sure I want my neighborhood crowded with guys in pickup trucks hauling a hundreds of gallons of gas in barrels.
posted by ryanrs at 3:13 PM on November 4, 2012 [1 favorite]


Sandy is a lesson in capitalism. Deprive merchants the ability to charge what things are worth (which is a factor of supply and demand) and everyone suffers (the time value of standing in line, the taxpayer overtime for cops monitoring each and every one of the lines).

Try to book a hotel on a search engine for tomorrow checking out Saturday (not an abstract problem for me with my power still out). Zero hotels in the suburbs, which aren't allowed to raise their rates to reflect the new demand. Hundreds (thousands?) of rooms in Manhattan, who have high rates to begin with and thus aren't liable of being accused of gouging.

Here's another fun example. In my town, there are still tons of trees down in the roads and powerlines not yet fixed, because the people doing that work aren't allowed to charge a premium. But the vast majority of yards have already had their leaves and downed branches cleared, and downed trees are on their way to being cleared, because the private gardening services are able to do whatever deals they want.
posted by MattD at 3:14 PM on November 4, 2012 [7 favorites]


I don't see how price gouging would make gas any more accessible to the population of NY and NJ. Wouldn't it just restrict gas to the wealthy?
posted by ef99 at 3:14 PM on November 4, 2012 [36 favorites]


This episode of EconTalk is a long story about gouging on the price of ice after a hurricane. It changed my mind about certain features of price gouging. (Yes, Russ Roberts and Michael Munger are hardened libertarians, but this is still an episode worth listening to.)
posted by painquale at 3:15 PM on November 4, 2012 [3 favorites]


this is so fucking dumb it makes me scream. This isn't a demand shock, its a supply shock. This is like Micro 101. That's why its gouging. Higher prices won't cause participants to offer gas to the market.
posted by JPD at 3:16 PM on November 4, 2012 [112 favorites]


Ugh. By this logic, we should have the "simple logic of supply and demand" rule disaster relief, also. Those who pay more, get better disaster relief. The current shortage of disaster relief funds can be thus solved by increasing the cost of disaster relief, right? Eventually we'll get at a point where disaster relief is expensive enough that the 'supply' of relief meets its demand. Problem solved!
posted by suedehead at 3:17 PM on November 4, 2012 [31 favorites]


So high prices would mean there was more gas for the rich, instead of no gas left for anybody and an equal number of people, rich and poor, who don't have gas.

And we're supposed to see this as a bad thing?

(on preview, what suedehead is saying).
posted by Potomac Avenue at 3:19 PM on November 4, 2012 [2 favorites]


The issue isn't pricing with regards to gas, it's that there is literally not enough...if it were more expensive demand would eventually go down to the point where everyone who could afford it would get it. That would also cause significant suffering to people running heat and rescue/relief efforts off of generators and it would keep volunteers from running supplies down to where they're needed.

No more lines, but lots of suffering. Can't really call that a win.

If the argument is that gas stations are closed because prices aren't high enough...well, I haven't seen evidence of that in the three gas stations in my neighborhood that are open and happily selling gas to an unending supply of customers (and selling snacks, water, and everything else to people while they wait).
posted by the young rope-rider at 3:20 PM on November 4, 2012 [8 favorites]


There's also this CBC Radio Podcast, from the show "The Invisible Hand", which covers anti-gouging laws.

Overall, the choice is between almost no gas (or hotel rooms, or generators, or whatever) for anybody, or stuff for the wealthy... AND those who truly need it and are able to pay (think hospitals, as a good example). Overall it seems better to me to have some people get what they need rather than no people.
posted by felixc at 3:20 PM on November 4, 2012 [2 favorites]


In my town, there are still tons of trees down in the roads and powerlines not yet fixed, because the people doing that work aren't allowed to charge a premium.

Anecdotally there is plenty of gouging going on for tree removal right now on Long Island. It just isn't a very transparent market. I only happen to know because of my family business I have some insight into prices both in normal times, what subs are charging us now for clients (2x normal) and what relatives of my wife in Garden City were charged to have a tree removed by someone they did not have an existing relationship with (4x).

I'd guess from afar that the inability to use private crews has a lot more to do with the insane work rules most of the towns and villages in the area have for outsourcing work to private suppliers.
posted by JPD at 3:21 PM on November 4, 2012 [1 favorite]


MattD: "Here's another fun example. In my town, there are still tons of trees down in the roads and powerlines not yet fixed, because the people doing that work aren't allowed to charge a premium. But the vast majority of yards have already had their leaves and downed branches cleared, and downed trees are on their way to being cleared, because the private gardening services are able to do whatever deals they want."
There is an upper limit to the number of trees you can clear and powerlines you can fix. If we assume that the "people doing that work" are working at full capacity, allowing them to charge wouldn't get more trees cleared or more powerlines fixed, it would just rearrange the order in which it gets done (i.e. you effectively bribe them to clear away your tree first).

I also don't see what problem would be solved by letting your suburban hotels charge more. The owners would make more money, sure, but that doesn't fix anything.
posted by brokkr at 3:21 PM on November 4, 2012 [16 favorites]


I mean, at this point if gas were more expensive I think that poor and otherwise vulnerable people would end up injured, ill, or potentially even dead as a result. That sounds like capitalism "working", but that doesn't make it right.
posted by the young rope-rider at 3:21 PM on November 4, 2012 [20 favorites]


It's interesting how often 'the problem' is that those who have are not being given enough leeway to take from those who don't.
posted by Mooski at 3:22 PM on November 4, 2012 [57 favorites]


Oh my god, that Forbes article. Just for the lulz I read some other stuff that guy has written, which was a terrible decision because now I want to institute a government program to harvest the viable organs of all libertarians and donate them to the poor.
posted by elizardbits at 3:23 PM on November 4, 2012 [61 favorites]


Higher prices won't cause participants to offer gas to the market.

Really? So there wouldn't be more effort put into making sure the gas pumps had electric power and a higher premium paid to independent fuel delivery truckers?

Tell ya what - can you prove your claim?

You might be too young to remember Sept 11th 2001. Yet one local gas station was charging $8 a gallon at one point and had lines of cars to "overpay" for gasoline.

When I walked pass I thought about how I might drain the gas from all the various sources to sell as if that was a valid price my best bet of getting out of town was going to be via bicycle anyway.
posted by rough ashlar at 3:24 PM on November 4, 2012 [4 favorites]


Anti-price-gouging laws are a rare concession on the part of our elites that the market is not good at rational, socially useful distribution of necessary goods under scarcity. The solution should be more planning, not less; let's actually determine what our priorities are and distribute things accordingly, not leave it up to the market (price gouging) or to random chance (anti-gouging).
posted by gerryblog at 3:28 PM on November 4, 2012 [6 favorites]


The hurdle is that utility itself has a different dollar price to different market participants. Poorer folk have less money to fulfil great needs than wealthier folk have to fulfil small needs. Letting price gouging might outcome in worse allocation.
posted by Jehan at 3:28 PM on November 4, 2012 [8 favorites]


Overall it seems better to me to have some people get what they need rather than no people.

Well, sure. The question is whether this should be decided on the basis of societal need or who has the most cash. The Market is rarely the friend of Society.
posted by GenjiandProust at 3:28 PM on November 4, 2012 [11 favorites]


So you propose that PSE&G are looking for a palm to get greased? LIPA looking for a 20 tucked in a hand? no they aren't. You know why? Because the regulator can already fine them for not putting all their efforts into restoring power to key facilities. You think Cuomo, and Christie, and Schumer aren't screaming at the top of their lungs already?

This is not a market failure, there is no market.
posted by JPD at 3:29 PM on November 4, 2012 [14 favorites]


Yeah, this is a bullshit argument. A bunch of economists are taking it apart in the comments section at Marginal Revolution. From what I understand, the Econ argument breaks down when you realize it equates "willingness to pay" with "level of need".
posted by subdee at 3:30 PM on November 4, 2012 [8 favorites]


There is an upper limit to the number of trees you can clear and powerlines you can fix.

Not necessarily, this isn't a factory with robots already at 100% efficiency. You're leaving out the fact that people would be more motivated to work 90 hours a week if they were paid double or more for their work, or the increase of the labor pool if the price goes up. I wouldn't clear trees for $15/hr, but I would at $100/hr.

Edit: Also, I would guess that raising the price of gas would simply price a large segment of the population out, not necessarily increase supply. You might actually have the scenario where it is more profitable to keep gas at a highly inflated price and not sell it at a lower price, simply to make it available to those who are willing to pay the enormous premium.
posted by geoff. at 3:30 PM on November 4, 2012 [1 favorite]


I remember waiting in line for gas during the oil embargo. That's all I got. Just wanted to talk about stuff I remember.
posted by Ad hominem at 3:30 PM on November 4, 2012 [9 favorites]


The issue isn't pricing with regards to gas, it's that there is literally not enough

If gas prices went way up, maybe people from other states without shortages would load up their cars and drive it in?
posted by shivohum at 3:31 PM on November 4, 2012


Also do the math on the viability of shipping in fuel on 18 wheelers owned by independent haulers. Capacity isn't there in the time needed.
posted by JPD at 3:31 PM on November 4, 2012


There is an upper limit to the number of trees you can clear and powerlines you can fix. If we assume that the "people doing that work" are working at full capacity, allowing them to charge wouldn't get more trees cleared or more powerlines fixed, it would just rearrange the order in which it gets done (i.e. you effectively bribe them to clear away your tree first).

I don't think it's true that there is an upper limit... or at least, that we are anywhere close to an upper limit. If the pay made it worthwhile for them to do so, tree removal services would drive in from other states.
posted by painquale at 3:32 PM on November 4, 2012


Those who pay more, get better disaster relief.

Do you have any proof that this is not already the case?

I'd go look up the name of the dude who was jogging and lacked ID/proof of insurance and when he had a personal disaster of a heart attack got a lack of service from the hospital as they didn't "know" if they were going to get paid. Same for studies I remember about Katrina survival VS wealth I remember reading.

But again, if you are claiming Those who pay more, get better disaster relief is not true, can you prove it?
posted by rough ashlar at 3:32 PM on November 4, 2012 [4 favorites]


Here's another fun example. In my town, there are still tons of trees down in the roads and powerlines not yet fixed, because the people doing that work aren't allowed to charge a premium. But the vast majority of yards have already had their leaves and downed branches cleared, and downed trees are on their way to being cleared, because the private gardening services are able to do whatever deals they want.

Matt that makes no sense at all, unless there is a legion of idle tree-loppers sitting around. Assuming all tree loppers are relatively busy most of the time (say 80% capacity), then the extra 20% they would have incentive to fill up by charging more would in no way meeting a 200% - or 2000% - increase in demand.

Charging what they want will not help when there is a finite supply, and it won't make them work twice as fast, either.

That argument only holds if you include that other libertarian wet dream - de-regulation, where anyone could become a tree-lopper if they have the equipment and the will. But of course - like so much de-regulation - that would create more problems than solutions, as tree-loppers become arm-loppers, trees land on houses, no insurance etc etc.

Needless to say, this is exactly true for petrol. They could charge $1000 a litre or whatever you have over there; all it would do is reduce demand, increase suffering, and ensure that rich people have the right to whatever they want will everyone else can screw off.
posted by smoke at 3:32 PM on November 4, 2012 [16 favorites]


I wouldn't clear trees for $15/hr, but I would at $100/hr.

With your own bare hands?
posted by ymgve at 3:32 PM on November 4, 2012 [3 favorites]


So there wouldn't be more effort put into making sure the gas pumps had electric power and a higher premium paid to independent fuel delivery truckers?

how much does it cost to have a generator on hand? a few hundred bucks?

and the effort would be repaid by being able to pump gas when there was no electricity

i would think some gas station owners would be smart enough to think of that
posted by pyramid termite at 3:33 PM on November 4, 2012


It's not the wealth who need gas -- they commute to Manhattan on the train or bus, and can telecommute if need be -- but the middle class who work in exurban office parks and don't have the luxury to telecommute, or people with delivery businesses. Buy 6 gallons of gas for $60 in ten minutes, or $6 gallons for $27 with a three hour wait in the cold, inching your car forward every five minutes? That's a no brainer for that guy.
posted by MattD at 3:33 PM on November 4, 2012 [1 favorite]


With your own bare hands?

I was using this as an exaggerated example of what happens when you increase the hourly rate of the market place, suddenly more participants are willing to do the work. This is econ 101...
posted by geoff. at 3:33 PM on November 4, 2012


A bunch of folks who have never climbed a tree with a chainsaw offering their labor for $100/hour will certainly have some positive impact on local emergency room admits.
posted by JPD at 3:34 PM on November 4, 2012 [43 favorites]


What this argument boils down to is this: Rich fucks in Long Island are flabbergasted that the power isn't back on in their specific neighborhood. I actually saw an "outraged" dude on local news last night going "HOW IS IT POSSIBLE THAT IN AN AREA WITH SIGNIFICANT WEALTH AND RESOURCES WITHIN IT THAT SERVICES AREN'T AVAILABLE TO US YET?" As in, "Why doesn't my town get power back first, we have more money than those poor ones, let us go first!"

Sigh.
posted by Potomac Avenue at 3:34 PM on November 4, 2012 [40 favorites]


My fiancee spent 5 hours in a gas line in Brooklyn this morning so that she could drive to her school which is being run as a shelter. They doubled the number of people taken in over the last 2 days and she has seen former students as well as the mentally ill there. All that, and she is expected to open for school on Thursday while housing the shelter for two more weeks.

All of this "lesson in capitalism" or "experiment in price gouging" stuff is bullshit. People standing in line to fill a jerrycan of gas or looking for donated clothing while sleeping in a school gym are suffering and indicative of a crisis. I mean, what the fuck kind of luxury is it that we can have this conversation.
posted by cgk at 3:36 PM on November 4, 2012 [14 favorites]


JPD, as someone who once considered doing that for a living, they won't even make it to the ER.
posted by bzbb at 3:36 PM on November 4, 2012 [2 favorites]


So at least I'm pretty sure nearly everyone inside and outside of economics considers "econ 101" material to bear almost no relation whatsoever to actual economic behavior at any scale, sort of like how teaching introductory chemistry or physics or whatever entails telling people a lot of things that are technically not true but stand as pedagogically useful.

So I don't know how to react to "this is econ 101.." as a statement.
posted by You Can't Tip a Buick at 3:37 PM on November 4, 2012 [15 favorites]


I was using this as an exaggerated example of what happens when you increase the hourly rate of the market place, suddenly more participants are willing to do the work. This is econ 101...

My point was more that it's not the manpower that's limited, but the amount of equipment available. Besides, any company would rather hire more short-term workers than giving a raise.
posted by ymgve at 3:37 PM on November 4, 2012


AND those who truly need it and are able to pay (think hospitals, as a good example)

Rationing is usually a bad idea, tovarich, but keeping hospital generators running in a crisis is one of the few really good justifications for it.

In general, price gouging makes little sense for any business that depends on repeat customers. People remember which businesses bled them dry in their hour of greatest need and which didn't.
posted by justsomebodythatyouusedtoknow at 3:37 PM on November 4, 2012 [5 favorites]


Try to book a hotel on a search engine for tomorrow checking out Saturday (not an abstract problem for me with my power still out). Zero hotels in the suburbs, which aren't allowed to raise their rates to reflect the new demand.

And if only they were allowed to raise their rates, think of the hotel capacity that people would add to the market in response to these price signals! Everybody would have a place to stay!
posted by weston at 3:38 PM on November 4, 2012 [28 favorites]


The coordination of effort during an emergency like this sucks. I live in Michigan, for the past three days we had two crews with two trucks with cherry pickers, working on repairing the power to ONE house down the street (I have no clue what took so long), but the point being is that those crews and trucks could have been on the east coast in a day, where there was a true need.

There's something wrong with our "United" States that we can't manage these events better.
posted by HuronBob at 3:39 PM on November 4, 2012


What this argument boils down to is this: Rich fucks in Long Island are flabbergasted that the power isn't back on in their specific neighborhood.

Whenever there is enough snow to require plowing, it's always fascinating to look at the plowing progress map Spokane provides. Major thoroughfares are of course the first to be cleared, but after that it's the rich neighborhoods which get the next top priority, and the poorest neighborhoods which end up being done last.

In a major event, this can require several days for the poorest neighborhoods to have their streets clear.
posted by hippybear at 3:40 PM on November 4, 2012 [6 favorites]


I remember waiting in line for gas during the oil embargo.

Alas, I remember reading about 'em and being told by my old man to hold unto his newspaper collection of Nixon impeachment because they'd be worth something one day.

While gasoline goes bad over time, Ethyl Alcohol is a poison and will be a usable fuel at 190 proof today, tomorrow and 100 years from now, so long as the container is "good".

If you are worried about a lack of sugar - as long as Americans are "sick", you'll have 190 booze.
posted by rough ashlar at 3:40 PM on November 4, 2012


I don't think it's true that there is an upper limit... or at least, that we are anywhere close to an upper limit. If the pay made it worthwhile for them to do so, tree removal services would drive in from other states.

Yeah but this falls for another libertarian fallacy: That people will do anything for money, but this is like totally not true at all and we see it everyday.

a) Assume the loppers have healthy businesses in their states with good income stream. Going to NY - with no petrol, some roads out, uncertain insurance coverage etc - would be a massive pain in the arse.

b) Assume many loppers have family and other committments that would make such travel extremely difficult.

c) Assume that storm ravaged areas represent an uknown, but greater level of risk to loppers.

d) Assume the interstate loppers are unaware if state laws/requirements/regulations are different, and don't want to risk being sued.

I find it so weird how people conceive these ideas of markets with no limiting factors beyond the transactional, when those are often just a small part in our actual buying/selling mindset in real life. I mean, I bet every person commenting in this thread has ways they could make more money if they wanted to right now. But they're not, cause other things are more important.
posted by smoke at 3:40 PM on November 4, 2012 [17 favorites]


Referencing Econ 101 when talking about real economic situations is like trying to plan a space program using only Euclidean geometry: your model is going to get people killed.
posted by Potomac Avenue at 3:40 PM on November 4, 2012 [35 favorites]


Try to book a hotel on a search engine for tomorrow checking out Saturday (not an abstract problem for me with my power still out). Zero hotels in the suburbs, which aren't allowed to raise their rates to reflect the new demand. Hundreds (thousands?) of rooms in Manhattan, who have high rates to begin with and thus aren't liable of being accused of gouging.

I'm not sure what you're saying here. So rather than those suburban hotels being filled first come, first-served, they'd be filled with those who can afford the high prices and that would be a better thing? Even though apparently people are unwilling to pay the higher prices of the open Manhattan hotel rooms? Or do you think people would start opening their homes to meet the increased demand? Hotel room supply is kind of fixed; no one is building new hotels in the next few days.

The arguments against anti-gouging are just bizarre to me. It seems much better to keep prices down and give everyone at least a chance than let only the rich get everything and everyone else rot. Willingness and ability to pay has no correlation with need. Perhaps some wealthy family could pay $100/hour to clear the trees off of their lawn because they don't like looking at them, but I'd rather the family whose street is blocked and need to get to work get priority.
posted by Sangermaine at 3:40 PM on November 4, 2012 [4 favorites]


As in, "Why doesn't my town get power back first, we have more money than those poor ones, let us go first!"

Oh yeah, I fully admit that I was super fucking irritated that the ridiculously expensive to live in West Village was one of the last neighborhoods in Manhattan to have its power restored, but at least I'm aware that this makes me an entitled jackass.



i don't feel bad about it because i don't have feelings, emotions are for the proles.
posted by elizardbits at 3:41 PM on November 4, 2012 [3 favorites]


I never even lost power obvy because I get the bends whenever I venture below 66th Street.
posted by Potomac Avenue at 3:45 PM on November 4, 2012 [2 favorites]


Referencing Econ 101 when talking about real economic situations is like trying to plan a space program using only Euclidean geometry: your model is going to get people killed.

That's ridiculous. My perfectly spherical frictionless ship has safely made it into orbit in 95% of the simulations.
posted by Sangermaine at 3:45 PM on November 4, 2012 [23 favorites]


I think tree-loppers may not be able to afford the gas to get to the trees that need lopping if sellers were allowed to sell at whatever price they wanted.

If I were rich, I would simply hire people to go wait in line for me. Problem solved.
posted by Ad hominem at 3:45 PM on November 4, 2012 [3 favorites]


If the rich want power so badly they should airlift in generators from out-of state where there's some available and bring some gas with them while they're there. It's not like they can't afford it.
posted by ymgve at 3:47 PM on November 4, 2012 [2 favorites]


If I were rich, I would simply hire people to go wait in line for me. Problem solved.

This is already happening, the line of cabs and limos stretched from the gas station on 49th street nearly all the way to Greenwich Village last night on 10th Street at 3am.
posted by Potomac Avenue at 3:47 PM on November 4, 2012 [2 favorites]


If gas prices went way up, maybe people from other states without shortages would load up their cars and drive it in?

Considering the traffic and safety issues involved in that it seems like it would be a clusterfuck. What happens when someone decides to rob those people? What happens when they get mobbed for gas? What happens when they store it incorrectly and their car explodes? It's a horrible idea to have random small-timers trying to make a buck with something people desperately need. There are cops at gas stations right now for a reason. Keeping that discord and disorder relatively contained to set locations is a huge benefit in terms of resource allocation for first responders.
posted by the young rope-rider at 3:49 PM on November 4, 2012 [10 favorites]


A gas shortage is so much better for working people on a tight budget than price gouging... at least when there's a shortage, employers can recognize that and make allowances for those who can't come to work. If gas was technically available, but much more expensive, working class folk might be expected to crawl in whether they could afford to or not.
posted by subdee at 3:49 PM on November 4, 2012 [12 favorites]


The thing is, if you were really wealthy, wouldn't you have already flown to your house in Tuscany to bide until everything is fixed?
posted by Jehan at 3:49 PM on November 4, 2012 [5 favorites]


it is just my bad luck that the storm hit at the exact same time that i gave all my litter-bearers the week off.
posted by elizardbits at 3:50 PM on November 4, 2012 [5 favorites]


This is already happening

Sure, there is always a way to pay extra for convenience. People with extra money already get gas first.
posted by Ad hominem at 3:51 PM on November 4, 2012


Buy 6 gallons of gas for $60 in ten minutes, or $6 gallons for $27 with a three hour wait in the cold, inching your car forward every five minutes? That's a no brainer for that guy.

Your framing is wrong.

Lets say 3,500 lbs is the average car curb weight.

A "fit amateur" can move stuff at 200-250 watts.

Once you know the rolling resistance of the tires on "your" car, you can figure out how much "effort" you need to excerpt personally to get your car to move...then to move at 65 MPH.

The "money shot" here is inching your car forward every five minutes - pick a flat spot then move your car via your own power.

Now imagine moving "your" car 300 miles at 55 MPH. how much would ya pay?
posted by rough ashlar at 3:52 PM on November 4, 2012


$20 per gallon for premium on Craigslist.
posted by MattD at 3:52 PM on November 4, 2012 [2 favorites]


working class folk might be expected to crawl in whether they could afford to or not.

Going by the mefite stories in the hurricane thread, plenty of middle class people were expected to make it to work this past week despite almost no viable transportation options.
posted by elizardbits at 3:53 PM on November 4, 2012 [6 favorites]


Yeah but this falls for another libertarian fallacy: That people will do anything for money, but this is like totally not true at all and we see it everyday.

I don't think anyone's making that exaggerated a claim. Let's not hyperbolize. I find it pretty reasonable to think that if out-of-state tree removal services could make five grand (or whatever) more than they normally make by coming to New York or New Jersey, some of them would. Is that really that contestable?
posted by painquale at 3:53 PM on November 4, 2012 [1 favorite]


Luckily, my car is a libertarian hybrid thats powered by gasoline and personal responsibility.
posted by dr_dank at 3:54 PM on November 4, 2012 [16 favorites]


Don't forget the bootstraps.
posted by elizardbits at 3:55 PM on November 4, 2012 [10 favorites]


I find it pretty reasonable to think that if out-of-state tree removal services could make five grand (or whatever) more than they normally make by coming to New York or New Jersey, some of them would.

Depends on the radius of damaged trees which this storm produced. It's entirely likely that tree removal businesses which are close enough to make financial sense importing their services into NY or NJ are plenty busy with downed trees in their own areas. At some point, the returns are diminished because you're having to travel so far and endure so many storm-related travel hardships to get to the places where you might make enough that it's simply not worth the effort.
posted by hippybear at 3:56 PM on November 4, 2012 [2 favorites]


Lets say 3,500 lbs is the average car curb weight.

A "fit amateur" can move stuff at 200-250 watts.

Once you know the rolling resistance of the tires on "your" car, you can figure out how much "effort" you need to excerpt personally to get your car to move...then to move at 65 MPH.

The "money shot" here is inching your car forward every five minutes - pick a flat spot then move your car via your own power.

Now imagine moving "your" car 300 miles at 55 MPH. how much would ya pay?


Is this some kind of Chewbacca argument?
posted by ymgve at 3:57 PM on November 4, 2012 [9 favorites]


Price is how the difference between supply and demand is met. If you have less supply, or more demand (and we have both in this case), then prices go up. This drives some people out of the market, typically uses that aren't actually that important. Eventually, the price stabilizes at the level where the increased price reduces demand to the amount of supply.

Saying that this doesn't happen, that this isn't true, is like arguing that gravity doesn't exist.

If gas were $12/gallon in NY right now, you could probably walk up to any gas station and get all you wanted. But you wouldn't want very much. You'd buy as little as possible, knowing that prices would come down later.

By holding it at $4/gallon or whatever it is, everyone is stocking up bigtime as soon as they fight their way through the lines, so that supplies stay tight, lines stay long, and people who desperately need it, can't get it.

If you want real disaster relief, let gas stations charge what they want. People will bitch, but they will be able to get gas. And prices will normalize within a week or so.

Pricing is incredibly important. It is the signal that economies use to communicate relative surpluses and shortages of things. Screwing with pricing is the surest path to tragedy -- possibly literally, in this case.
posted by Malor at 3:58 PM on November 4, 2012 [6 favorites]


I find it pretty reasonable to think that if out-of-state tree removal services could make five grand (or whatever) more than they normally make by coming to New York or New Jersey, some of them would.

I think it certainly is contestable, given the regulatory framework. Are they even licensed to work interstate? Will insurance cover them in a different state? Those are not even personal considerations.

But let's assume that can all be dealt with. No doubt some of them would, as you say. But how many? Enough to make up for a gigantic spike in demand? When likely there is enough comfortable, safe, known work at home? When there is likely nowhere to stay (hotels booked out), nowhere to buy gas (stations filled up) etc etc?

I think it's extremely ambitious to argue that the small increase of loppers and arborists willing to risk all that would do anything to slake demand.
posted by smoke at 4:00 PM on November 4, 2012 [2 favorites]


typically uses that aren't actually that important.

Yeah I know that poor people having heat, food, and a connection to the outside world isn't actually that important. It is basically fun times in the Rockaways right now and the gas is only being used to make giant recreational bonfires. Economics 101 FTW
posted by the young rope-rider at 4:01 PM on November 4, 2012 [20 favorites]


If gas were $12/gallon in NY right now, you could probably walk up to any gas station and get all you wanted.

Actually, I think it would be just as bad, because the only people on line would be cab/livery drivers, who would in turn pass on the costs to their passengers.

Prices will normalize within a week or so because supply will increase no matter what gas stations are charging.
posted by elizardbits at 4:02 PM on November 4, 2012 [11 favorites]


Also ConEd workers are working 24 hours shifts playing pinocle in the break room instead of fixing wires cuz govermint.
posted by Potomac Avenue at 4:02 PM on November 4, 2012 [8 favorites]


By holding it at $4/gallon or whatever it is, everyone is stocking up bigtime as soon as they fight their way through the lines, so that supplies stay tight, lines stay long, and people who desperately need it, can't get it.

If you want real disaster relief, let gas stations charge what they want. People will bitch, but they will be able to get gas.


The problem with this is, as other have noted, reality: no they won't.

The fallacy is that people don't want gas at $12. The reality is that they desperately need it no matter what but can't afford much of it. So they're fucked. The only people not fucked are those that can afford it, but gas is (unfortunately) something many, many people need to do basic things like go to work or get food. People don't just magically stop needing it at high prices.

The result would be people who are unable to afford it getting nothing.

At $4, at least everyone has a shot. I'd vastly prefer lines and possible hoarding where at least most people have a shot at getting what they need versus the poor and desperate just priced out and left to rot. At least hoarding can be fought by imposing caps (10 gallons per person or whatever).

Greater ability to pay does not equal greater need. I can't believe how anyone can believe this. Is there any situation in which libertarians just aren't awful people?
posted by Sangermaine at 4:03 PM on November 4, 2012 [32 favorites]


Malor that is all predicated on the idea that both supply and demand are able to react to price signals. In this case supply cannot, so price signals don't do what they should do, which is stimulate more demand so long as prices are above short term marginal cost. The net effect isn't to stimulate supply additions but rather allow rents to accrue to people lucky enough to have inventory
posted by JPD at 4:03 PM on November 4, 2012 [16 favorites]


Are there real-world examples of situations like this where price gouging has improved the distribution of a resource so that those who have a greater need get greater access? (As opposed to resulting in a situation where, say, guys in Lexuses have gas while people who are tasked with driving around to check on sick people don't have gas)
posted by rmd1023 at 4:03 PM on November 4, 2012 [3 favorites]


If gas were $12/gallon in NY right now, you could probably walk up to any gas station and get all you wanted. But you wouldn't want very much. You'd buy as little as possible, knowing that prices would come down later.

But someone who is incredibly rich could buy it all up, because the marginal utility of a dollar to them is much less than the marginal utility of a dollar to me. If everyone started with the same amount of money, then prices would perfectly reflect demand. But because the marginal utility of a dollar is different for the poor and the rich, prices given in dollars are imperfect measures of demand.

I agree that prices are the best signals of need that we have, and almost everything else is worse. But the bigger the gap between the rich and the poor, the worse off a free market pricing system is.
posted by painquale at 4:04 PM on November 4, 2012 [11 favorites]


Can someone give an example of price gouging working out well for the whole society affected at some point in the near past?
posted by Potomac Avenue at 4:04 PM on November 4, 2012 [4 favorites]


Aren't national emergencies what our petroleum reserves are for — what our government is for? Why isn't the military directed to commandeer NY and NJ refineries and the distribution infrastructure, until the state of emergency is lifted? Is this really the appropriate time to use the government to preserve historically high profit margins for private energy industries, at the expense of the public?
posted by Blazecock Pileon at 4:04 PM on November 4, 2012


Malor that is all predicated on the idea that both supply and demand are able to react to price signals. In this case supply cannot, so price signals don't do what they should do, which is stimulate more demand so long as prices are above short term marginal cost.

Malor's argument works just fine even if supply is fixed.
posted by painquale at 4:05 PM on November 4, 2012


And for anyone who thinks increased price won't bring in more supply: if they could charge $20/gallon, you'd have have huge tanker trucks driving into NY and selling the stuff draft.
posted by Malor at 4:06 PM on November 4, 2012


the problem isn't about a lack of gas - there are millions of gallons sitting in barges in the harbor - the problem is a lack of electricity to power the distribution network.
posted by JPD at 4:06 PM on November 4, 2012 [17 favorites]


you'd have have huge tanker trucks driving into NY and selling the stuff draft.

This is neither safe nor legal. There is a reason you can't drive around selling gas out of the back of your car.
posted by Sangermaine at 4:08 PM on November 4, 2012 [4 favorites]


Then that's not supply. A tanker truck on the street would be supply, and if they could charge $20/gallon, you'd have all the gas in the Northeast lined up on your boulevards.
posted by Malor at 4:08 PM on November 4, 2012


the problem isn't about a lack of gas - there are millions of gallons sitting in barges in the harbor - the problem is a lack of electricity to power the distribution network.

Why would you bring logic and reason to an argument like this, dude? Bad form.
posted by elizardbits at 4:09 PM on November 4, 2012 [13 favorites]


This is neither safe nor legal.

The government is doing it, giving away gas from tankers they're running.
posted by Malor at 4:09 PM on November 4, 2012


Are there real-world examples of situations like this where price gouging has improved the distribution of a resource so that those who have a greater need get greater access? (As opposed to resulting in a situation where, say, guys in Lexuses have gas while people who are tasked with driving around to check on sick people don't have gas)
posted by Potomac Avenue at 4:10 PM on November 4, 2012 [1 favorite]


And for anyone who thinks increased price won't bring in more supply: if they could charge $20/gallon, you'd have have huge tanker trucks driving into NY and selling the stuff draft.

No you can't. There aren't enough tanker trucks that can get here before the distribution network is back up and running. There's a reason why it comes in via barge and pipeline.

Malor's argument works just fine even if supply is fixed.
Yes, if supply was permanently fixed. And yes if gas were permanently in short supply in NYC he's absolutely right, you should let prices float to force people to adapt to the new reality. But all that letting the price float right now would do is let a few people make out like literal bandits for a few days until the system was working again.
posted by JPD at 4:11 PM on November 4, 2012 [6 favorites]


The National Petroleum reserve is stored as crude oil, not refined fuel. It would still need to be piped to a refinery, refined, then distributed. All possible, but that needs power and a distribution network. Supply isn't the problem, it's refining and distribution.

Further, refining can't be compensated for by other refineries elsewhere working overtime. There is only two to five percent spare capacity in all of the US (I forget the current figure).
posted by bonehead at 4:11 PM on November 4, 2012 [4 favorites]


The free market could have stopped this hurricane altogether if it weren't for big government red tape. You'd have had anti-hurricane machines set up in the harbor deflecting the hurricane on a rational price basis. This is Econ 101.
posted by gerryblog at 4:11 PM on November 4, 2012 [42 favorites]


if they could charge $20/gallon, you'd have have huge tanker trucks driving into NY and selling the stuff draft.

If there are lines stretching for miles and people waiting for days to get gasoline, why wouldn't people do this for $4/gallon? It's not like the price to the person who filled up the giant tanker truck has changed, so they're going to make their profit and they won't have to establish a permanent location with all the stuff involved in this.

The REAL reason why people aren't driving trucks into town and selling gasoline draft is because gasoline is a heavily regulated and taxed substance which requires a lot of levels of permitting and tax documentation to sell, along with having weights & measures approved distributing equipment for accurate sales. You can't just drive a tanker in and start selling gas out of the nozzle because it's not allowed. Gasoline isn't like volunteer-made baked goods -- you can't just set up a temporary corner stand and start exchanging for money.
posted by hippybear at 4:11 PM on November 4, 2012 [12 favorites]


I can't believe that nobody in a position of power has considered your thoughtful, carefully argued propositions, Malor. The solution is so simple! It's so weird, how politicians hate to see big businesses make obscene profits.
posted by clockzero at 4:12 PM on November 4, 2012 [6 favorites]


The government is doing it, giving away gas from tankers they're running.

No they aren't. Those are special Department of Defense mobile-fueling stations, not regular 18 wheelers wandering around:

Mobile Stations

Cuomo sent 5,000-gallon U.S. Department of Defense fuel trucks to five locations today in New York City and Long Island. Those mobile-fueling stations are currently closed to the public so that emergency personnel and first responder vehicles can use them, said Eric Durr, a spokesman for the state Division of Military and Naval Affairs.

posted by Sangermaine at 4:12 PM on November 4, 2012 [14 favorites]


hippybear stop ruining everyone's dreams of freedom in a libertarian paradise.
posted by elizardbits at 4:13 PM on November 4, 2012 [9 favorites]


Blazecock Pileon: “Aren't national emergencies what our petroleum reserves are for — what our government is for? Why isn't the military directed to commandeer NY and NJ refineries and the distribution infrastructure, until the state of emergency is lifted?”

I totally agree that this is what our petroleum reserves are for. However, as to the specific possibility of directing the military to commandeer factories or refineries during states of emergency in order to ensure that production of essential commodities is maintained, historically that has been found to be pretty solidly unconstitutional.
posted by koeselitz at 4:16 PM on November 4, 2012 [1 favorite]


(That's something I agree with, too, by the way. Oil is important. It's not quite important enough for the President to be authorized to send the military into refineries to force people out and occupy them for some unspecified duration. That would be a bad power to grant to the executive, I think.)
posted by koeselitz at 4:18 PM on November 4, 2012 [1 favorite]


Can someone give an example of price gouging working out well for the whole society affected at some point in the near past?

I believe so, yes, depending on how you define "gouging" of course. During Sandy itself, car service Uber instituted surge pricing (which is not a new policy) of 100%. I was highly amused at one point to read consecutive tweets:
@Uber - such an amazing company. Saved the hassle of waiting for a cab in the aftermath of hurricane sandy#lifesaver

@Uber_NYC @Uber @sarakata Amazing service in this gridlock. Told my whole office to use. :D

.@uber do you really need to do surge pricing at 2x in nyc now?
I get the sense that their service levels generally remained relatively high compared to less price-flexible options.

I also don't quite get why people believe that hotel room supply wouldn't increase at all if prices floated. Surely there is some price where, for example, a family of 5 would choose to consolidate into a single room vs. getting their usual two? Likewise, if I were stranded from business travel, ordinarily companies I have worked for paid for a room for each person, but might try to persuade us to double up if the price suddenly jumped a couple hundred percent. Maybe those are things that you'd hope people would do anyway, but it's not per se crazy to believe they'd happen more often with increased prices.
posted by dsfan at 4:20 PM on November 4, 2012 [2 favorites]


Are there really people who believe that the refineries and distribution infrastructure isn't working as best it can even without military commandeering? It's not like there are evil bosses sitting in a star chamber someplace saying "oh good! people are waiting days for our product and this is somehow good for us. let's make sure it continues."

It's more likely the case that refineries and distribution are working at maximum capacity within the limitations outlined by the destruction of the storm, and that restoration of full service will happen as quickly as possible under the circumstances.
posted by hippybear at 4:20 PM on November 4, 2012 [6 favorites]


Livery cab companies are price gouging right now. I am about to have a fun negotation session in an hour or two about getting what is usually a $12-15 cab under $25.
posted by griphus at 4:21 PM on November 4, 2012 [1 favorite]


the problem isn't about a lack of gas - the problem is a lack of electricity to power the distribution network.

And yet - one can use gasoline in an ICE (internal combustion engine - AKA your car or lawnmower-style engine) to provide enough electrical power to run the gasoline pumps.

The "distribution network" is 18 wheelers placing galoline in big underground tanks AFAIK. But hey - produce proof that I am wrong.
posted by rough ashlar at 4:21 PM on November 4, 2012


Or what dsfan said.
posted by griphus at 4:22 PM on November 4, 2012


The REAL reason why people aren't driving trucks into town and selling gasoline draft is because gasoline is a heavily regulated and taxed substance which requires a lot of levels of permitting and tax documentation to sell, along with having weights & measures approved distributing equipment for accurate sales.

If prices rose to $20/gallon, why wouldn't the oil companies or wholesalers themselves heavily prioritize sending full tankers to gas stations in NY/NJ, maybe tankers that would otherwise be going to other cities, or spare tankers, etc.?
posted by shivohum at 4:22 PM on November 4, 2012


ef99: "I don't see how price gouging would make gas any more accessible to the population of NY and NJ. Wouldn't it just restrict gas to the wealthy?"

Yes, rationing based on money is just as much rationing as any other form. More socially acceptable most of the time, but still rationing. Our reflexive disgust at the word is bizarre, like so many other things these days.

Others have already covered the idiocy involved in believing that more supply could materialize out of nowhere if only the price being charged were higher in the middle of a natural disaster.

rough ashlar, those tanker trucks have to fill up somewhere. They do so at fuel terminals that usually have some storage tanks and are connected to one or more refined products pipelines. They require electricity to operate. Without it, there's no fuel in the truck to deliver.
posted by wierdo at 4:23 PM on November 4, 2012 [3 favorites]


But all that letting the price float right now would do is let a few people make out like literal bandits for a few days until the system was working again.

Total bullshit. What the fuck does that even mean? They're not making a profit. You're just bitching because some people are willing to pay more for gas than you are? It's "making out like a bandit" when someone is stupid enough to pay $12 or $20/gallon?

Be angry about unfairness if you like, but reality is not fair. You can sit there, all smug and certain that this is the 'fair solution' -- for hours and hours and hours in gas lines, wasting gas and time and money. Or, you could just accept reality for what it is, let prices float, and let people get on with their lives.

It's OKAY if gas station owners make a big profit out of this. All you're doing with the ridiculous insistence on 'fairness' is making sure all the money in idling cars and waiting in line is outright wasted. And if you would rather see wealth wasted than given to someone who can use it, well, I dunno what to tell you. That's profoundly stupid behavior; you're compounding your problems, not fixing them.

You can get all red-faced and ragey about inequity, but all that means is that the guy who's supposed to be out there saving lives in sitting in a gas line. Everyone is. They could all be fixing stuff instead.
posted by Malor at 4:24 PM on November 4, 2012 [3 favorites]


The "distribution network" is 18 wheelers placing galoline in big underground tanks AFAIK. But hey - produce proof that I am wrong.

If you can't fill the trucks, they can't do their jobs.
posted by gjc at 4:24 PM on November 4, 2012


If prices rose to $20/gallon, why wouldn't the oil companies or wholesalers themselves heavily prioritize sending full tankers to gas stations in NY/NJ, maybe tankers that would otherwise be going to other cities, or spare tankers, etc.?

Because individual gas stations partaking in price gouging aren't turning that profit over to the CEO of fucking BP. This is just as ridiculous as Mitt Romney claiming that if elected, he will have the power to set the price at the pumps.
posted by elizardbits at 4:25 PM on November 4, 2012 [1 favorite]


Yes, if supply was permanently fixed. And yes if gas were permanently in short supply in NYC he's absolutely right, you should let prices float to force people to adapt to the new reality. But all that letting the price float right now would do is let a few people make out like literal bandits for a few days until the system was working again.

I don't understand what you mean. Can you elaborate?
posted by painquale at 4:26 PM on November 4, 2012


Malor: I don't understand what you mean here:

> making sure all the money in idling cars and waiting in line is outright wasted

Also, what on earth is this: "the guy who's supposed to be out there saving lives in sitting in a gas line"?

I quote, from the article explaining the actual facts of the situation with the government-operated tanker vehicles:

Cuomo sent 5,000-gallon U.S. Department of Defense fuel trucks to five locations today in New York City and Long Island. Those mobile-fueling stations are currently closed to the public so that emergency personnel and first responder vehicles can use them, said Eric Durr, a spokesman for the state Division of Military and Naval Affairs.
posted by hoople at 4:26 PM on November 4, 2012


shivohum: "If prices rose to $20/gallon, why wouldn't the oil companies or wholesalers themselves heavily prioritize sending full tankers to gas stations in NY/NJ, maybe tankers that would otherwise be going to other cities, or spare tankers, etc.?"

There already are tankers. What is so difficult to understand about this situation? Everything possible is being done to rectify the supply issue, but it takes time to do things. Charging more for the product will not reduce the amount of time needed. Everyone in the supply chain has a large incentive to get everything back to normal even at current prices. It's called staying in business, which is much harder when you have no product to sell.
posted by wierdo at 4:26 PM on November 4, 2012 [5 favorites]


oh my god metafilter is turning me from a totalitarian fascist into an angry communist

the fucking blue menace
posted by elizardbits at 4:27 PM on November 4, 2012 [21 favorites]


Actually, gasoline distribution is handled through a series of pipelines to distribution centers where it is loaded into trucks and taken to gas stations. This was well illustrated about a decade ago when a pipeline which fed Phoenix broke and led to metroplex-wide gas shortages that lasted for days.

It's most likely that the sort of stations which feed the pipelines which feed the NYC area have the electricity they need to keep the gas flowing to that point. But since this problem is largely caused by gas stations themselves not having the power to run their pumps, that isn't really an important point in this whole equation.
posted by hippybear at 4:28 PM on November 4, 2012 [3 favorites]


JOIN ME COMRADES FOR WE HAVE NOTHING TO LOSE BUT OUR MINDS
posted by elizardbits at 4:28 PM on November 4, 2012 [11 favorites]


reality is not fair.

Agreed. But anti-price-gouging laws keep things as fair as possible during crises. And I'm glad that they do, because I want laws to help level the playing field between classes as much as possible (which, uncoincidentally, benefits society's economic well-being as a whole).
posted by Potomac Avenue at 4:28 PM on November 4, 2012 [2 favorites]


oh my god metafilter is turning me from a totalitarian fascist into an angry communist

the fucking blue menace


Hang out in the grey for a while. You'll become a nihilist.
posted by painquale at 4:29 PM on November 4, 2012 [2 favorites]


Well fuck me, at least there is no tinfoil shortage.
posted by iamabot at 4:29 PM on November 4, 2012 [1 favorite]


Can someone give an example of price gouging working out well, for the whole society affected, at some point in the near past?
posted by Potomac Avenue at 4:29 PM on November 4, 2012 [12 favorites]


It's OKAY if gas station owners make a big profit out of this
That's the entire difference between you and I. I don't think that's ok. Its fine that you do, your choice.

The point is that the libertarian argument that not allowing price to rise is preventing supply from arriving to serve demand is just not correct. If it were the case I'd be in your camp that not allowing price increases is a mistake.
posted by JPD at 4:31 PM on November 4, 2012 [4 favorites]


Malor: I don't understand what you mean here:

> making sure all the money in idling cars and waiting in line is outright wasted


What he is saying is that gasoline is too valuable in the current supply crisis to be wasted waiting for more of it. Price it higher and the waiting goes down. People will conserve their gasoline instead of using it to wait for more gas.
posted by gjc at 4:31 PM on November 4, 2012


gjc: perhaps, but that's gasoline, and he said money, and I want to be exactly sure I understand what he meant, precisely.
posted by hoople at 4:32 PM on November 4, 2012


Exploiting a crisis is as American as apple pie and war based on dubious premises. I say let 'em do it
posted by Renoroc at 4:33 PM on November 4, 2012 [1 favorite]


> making sure all the money in idling cars and waiting in line is outright wasted

Because the money and time spent idling cars in line is wasted. It just goes into the air. And the time spent sitting in a line is wasted. That's time that could be fixing something, or helping someone. Or, hell, just sitting on your ass detoxing in front of the TV so you can go to work tomorrow.

All the price controls are doing is wasting a huge amount of energy and labor to make sure that the people with gas stations don't make a profit. It is profoundly stupid.

The government should probably offer a mix of gas trucks, as a supplement; some that are free, and some that charge the regular NY pricing. That would give folks a choice... the lines will be longest at the free trucks, very long at the $4/trucks, and nonexistent at the $20/pumps. People who have lots of time and not much money can go for 'free', people in between can pay $4, and those with more money than time can pay $20. Problem solved. And the money generated at the $4 trucks could just go back into the relief effort.
posted by Malor at 4:33 PM on November 4, 2012


Because individual gas stations partaking in price gouging aren't turning that profit over to the CEO of fucking BP. This is just as ridiculous as Mitt Romney claiming that if elected, he will have the power to set the price at the pumps.

It's called the supply chain. If gas stations can charge more, the oil companies that sell them gas can charge the gas stations more, and perhaps that will incentivize them to divert gas from other areas of the country to NYC.
--
But since this problem is largely caused by gas stations themselves not having the power to run their pumps, that isn't really an important point in this whole equation.

Is that still the case? Power has been restored to most of the metropolitan areas of NY and NJ.
posted by shivohum at 4:33 PM on November 4, 2012


Malor: how're you spending money *in* an idling car?
posted by hoople at 4:34 PM on November 4, 2012


malor, I'm also not sure why you're arguing that time sitting in line is a cost but also arguing that there is no disincentive for people to use the gas on unimportant things. Either time spent in line is a cost (and therefore a disincentive) or it's not a cost. Pick one.
posted by the young rope-rider at 4:34 PM on November 4, 2012 [3 favorites]


It's most likely that the sort of stations which feed the pipelines which feed the NYC area have the electricity they need to keep the gas flowing to that point.

As of yesterday this was not the case. But I think they thought they were close. At least that's what Cuomo said. I've not watched today's briefings.
posted by JPD at 4:34 PM on November 4, 2012


Malor: “If gas were $12/gallon in NY right now, you could probably walk up to any gas station and get all you wanted. But you wouldn't want very much. You'd buy as little as possible, knowing that prices would come down later... If you want real disaster relief, let gas stations charge what they want. People will bitch, but they will be able to get gas. And prices will normalize within a week or so.”

I haven't really made up my mind on this yet, and I want to consider all possibilities. However: when you say that if gas was $12/gallon people wouldn't buy much but at least they'd have gas – doesn't that pretty much assume that people could afford to buy the small amount of gas they need at $12/gallon, and simply would rather not?

I guess the response would be – if people really can't afford gasoline at $12/gallon, then the people will adjust their prices accordingly and work to sell their product for the highest price people can afford. But it seems like the whole point of the argument in favor of anti-gouging laws is that times of emergency are times when the dynamic of pricing doesn't really work; in normal times, within a few days prices would average out, but right now people need gas immediately and can't really wait for the price to come down.

“It's ‘making out like a bandit’ when someone is stupid enough to pay $12 or $20/gallon?”

I don't know how much this has to do with your other points, but one of the worst things about capitalism is the fact that fiscal responsibility and savviness tends to be seen as a moral imperative. But it isn't a sin to be a panicked person ravaged by a natural disaster who spends $50 on gasoline that it turns out later they ought to have spent on food instead; and people don't deserve to see their life go even further down the drain just because they made a bad financial decision.

More to the point – in financial transactions, we have responsibilities beyond simply making a profit. We have certain duties to other human beings. One of those duties is making sure we don't prey on their weakness or foolishness. Price-gouging is immoral and unjust because it represents a disdain for this duty – because it marks a fundamental disregard for our fellow humans and their frailties.

Whether or not price-gouging should be legal is kind of a separate matter – there are plenty of immoral things that are legal for various reasons – but I think it should be understood that price-gouging is, in fact, immoral.
posted by koeselitz at 4:34 PM on November 4, 2012 [21 favorites]


In the USSR, there was an everything shortage, and bribing/overpaying and price gouging was rampant.

Free market capitalist paradise, it was.
posted by griphus at 4:34 PM on November 4, 2012 [19 favorites]


Letting prices rise to correct for temporary mismatched demand is not price gouging. Price gouging is taking advantage of a mismatch of economic power. Raising prices to correct for a temporary shortage tells people not to buy the product unless it is absolutely necessary.

There are people who are buying gas and using it like normal, because it doesn't cost them any more money. This is not a good solution for a supply problem.
posted by gjc at 4:34 PM on November 4, 2012 [2 favorites]


You're burning gas, hoople. And you're wasting your labor.
posted by Malor at 4:34 PM on November 4, 2012


The cars are usually not idling. From what I've seen they're parked and off for most of the time they're in line. That might not be true at all gas stations.

Also, again, I'm not sure why you think "wasting your labor" isn't a disincentive that should also drive down demand using your logic.
posted by the young rope-rider at 4:36 PM on November 4, 2012 [5 favorites]


"logic"
posted by elizardbits at 4:37 PM on November 4, 2012 [2 favorites]


(My point being that allowing gouging encourages black and gray markets, not some sort of entrepenurial renaissance.)
posted by griphus at 4:37 PM on November 4, 2012 [1 favorite]


The government should probably offer a mix of gas trucks, as a supplement; some that are free, and some that charge the regular NY pricing. That would give folks a choice... the lines will be longest at the free trucks, very long at the $4/trucks, and nonexistent at the $20/pumps. People who have lots of time and not much money can go for 'free', people in between can pay $4, and those with more money than time can pay $20. Problem solved.

But isn't the problem here a lack of sufficient supply due to infrastructural limitations and lack of electricity to deliver gas at the vending points? How does price manipulation have anything to do with those problems?
posted by clockzero at 4:37 PM on November 4, 2012 [1 favorite]


Stupid Hurricane ‘Victims,’ Let Fox News’ John Stossel Explain Why It Is Awesome To Price Gouge You
posted by homunculus at 4:38 PM on November 4, 2012 [2 favorites]


I'd totally give New York and New Jersey gas if it were not for the laws against price gouging. That is really all that is holding me back from being a fuel company. That and my boots not having any straps.
posted by srboisvert at 4:38 PM on November 4, 2012 [8 favorites]


Apparently the problem is that rich people might have to wait in line, because that's the only problem that an inefficient differential price system would seem to solve.
posted by the young rope-rider at 4:38 PM on November 4, 2012 [9 favorites]


Trump at the Pump: The Full Story of his Post-Sandy Gas Guzzling and an Angry “Apprentice” Employee Responds
posted by homunculus at 4:39 PM on November 4, 2012 [3 favorites]


Apparently the problem is that rich people might have to wait in line

This is legitimately worse than genocide though.
posted by elizardbits at 4:40 PM on November 4, 2012 [12 favorites]


The purpose of our existence on this planet, if there is one at all, is not "optimise the transfer of capital".
posted by seanmpuckett at 4:40 PM on November 4, 2012 [16 favorites]


However: when you say that if gas was $12/gallon people wouldn't buy much but at least they'd have gas – doesn't that pretty much assume that people could afford to buy the small amount of gas they need at $12/gallon, and simply would rather not?

People will take the $60 they were going to spend on gas and buy 5 gallons instead of 15. And then use it more judiciously. No unnecessary trips, walking when they would normally drive, cancelling the drive to grandma's house for Sunday dinner. They will carpool. Etc.

Nobody but the strawmen are arguing that letting the price go up is awesome. But it is a fast solution to a temporary problem.
posted by gjc at 4:40 PM on November 4, 2012 [1 favorite]


The point is that the libertarian argument that not allowing price to rise is preventing supply from arriving to serve demand is just not correct.

(I wish people would stop saying that this is a libertarian argument. I mean, libertarians would stand by it, but you don't need to be a libertarian to stand by it. It's like calling any left-leaning argument a socialist argument.)

I think the real reason to oppose anti-gouging laws is not that getting rid of them would make supply increase. I think supply probably would increase, but whatever. The more important argument is that allowing sellers to set whatever price they want does a better job of distributing goods where they are most needed. Hospitals will pay more for gas than the guy who wants to visit grandma in Vermont, because their need is more crucial. Yes, the system is hardly perfect, because money means less to the rich than to the poor. Rich people will abuse the system. They will get gas to go on jaunts with and the poor won't, and that sucks. But if you can get past this disparity, you also get gas going to hospitals, which is nice. It's the best of a bunch of terrible distribution systems.
posted by painquale at 4:41 PM on November 4, 2012 [1 favorite]


What problem would be solved by allowing gouging that would not also be solved by rationing?
posted by rmd1023 at 4:41 PM on November 4, 2012 [15 favorites]


Yes, if supply was permanently fixed. And yes if gas were permanently in short supply in NYC he's absolutely right, you should let prices float to force people to adapt to the new reality. But all that letting the price float right now would do is let a few people make out like literal bandits for a few days until the system was working again.

I don't understand what you mean. Can you elaborate?


My attempt:
Under a normal economy, if gasoline prices went to $20 because there a huge demand but there wasn't enough pumps to sell it, refineries to refine it and so on, people would start building more gas stations, refineries, etc. and generally expand the distribution channel to sell more gasoline, which would eventually reduce the price. That's the Econ 101 situation, and what the libertarian segment is arguing.

If gasoline prices went to $20 because that's just how expensive it was to get out of the ground and sell or whatever, then people would adapt to the new higher prices; people would take transit and ride bikes more; houses a long way from the grocery store would become much less valuable; businesses would prefer to pay higher rent to locate downtown rather than the cheaper rent of an exurban business park, because their work force would demand more money to go there because of the expensive commute, and so on. Still econ 101.

Neither of these are the case right now. What's happened is that the supply has been radically reduced by disruption of the infrastructure needed; ports, roads, electricity, etc. These are mostly going to be fixed in a few days/weeks by the various organizations responsible, who are already working as fast as they can, both for legal reasons and because they are out of business until they fix their system. This is not a normal economic system, and simple Econ 101 doesn't work here. Letting a dude running a filling station charge $20 a gallon isn't going to do anything to work out the problems in the system. It's not going to spur someone to build a new refinery in New Jersey this evening, because that is impossible.
posted by Homeboy Trouble at 4:43 PM on November 4, 2012 [16 favorites]


If we want to make sure gas goes to first responders, doctors, hospital workers, and emergency crews, rather than Lexuses, there are better ways to do it besides anti-price-gouging laws, which basically just ensure that the scarce goods are distributed at random instead. Even the libertarian gougers' paradise would probably do better than this, in the main. But you could also just ration, or even (if necessary) declare emergency rules that say that for the duration of the crisis the only people who are allowed to be buying gas are people with socially useful, socially necessary work to do ameliorating the crisis. The world will keep turning if stockbrokers have to take a mandatory vacation for a bit while everything gets fixed.

The market is a really bad proxy for rational planning under crisis conditions.

On preview: What problem would be solved by allowing gouging that would not also be solved by rationing?

Exactly.
posted by gerryblog at 4:43 PM on November 4, 2012 [3 favorites]


Hospitals will pay more for gas

You seem to be assuming that hospitals have enough money. And that they can do so without cutting back on other things that might be saving lives.
posted by rmd1023 at 4:43 PM on November 4, 2012 [8 favorites]


No unnecessary trips, walking when they would normally drive, cancelling the drive to grandma's house for Sunday dinner. They will carpool. Etc.

Do you seriously think people are waiting in line for hours in the cold to take leisurely Sunday drives or avoid walking a few blocks? Because that is not reality.
posted by the young rope-rider at 4:44 PM on November 4, 2012 [17 favorites]


The more important argument is that allowing sellers to set whatever price they want does a better job of distributing goods where they are most needed. Hospitals will pay more for gas than the guy who wants to visit grandma in Vermont, because their need is more crucial.

So many people are confusing willingness to pay (which is mostly ability to pay) with crucialness of need. An advertising agency can and will pay more for gas than a food bank, but that doesn't make them more crucial.
posted by Homeboy Trouble at 4:45 PM on November 4, 2012 [15 favorites]


If I had but one granted wish for all of humanity it would be that all libertarians be forced to live in the idealized libertarian paradises for which they long, while the rest of us watch from the real world.
posted by elizardbits at 4:45 PM on November 4, 2012 [37 favorites]


gjc: "People will take the $60 they were going to spend on gas and buy 5 gallons instead of 15. And then use it more judiciously. No unnecessary trips, walking when they would normally drive, cancelling the drive to grandma's house for Sunday dinner. They will carpool. Etc."

Why will long lines not encourage people to use fuel more efficiently whenever possible? You can't have it both ways.
posted by wierdo at 4:46 PM on November 4, 2012 [7 favorites]



Do you seriously think people are waiting in line for hours in the cold to take leisurely Sunday drives or avoid walking a few blocks? Because that is not reality.

Those are examples off the top of my head. The point is, there is a shortage and the waiting time has not been enough to curb demand.
posted by gjc at 4:49 PM on November 4, 2012


Aside from protecting access, the other social function of anti-price-gouging laws that has been underplayed in this thread is the removal of any temptation to slow-walk recovery or the resumption of normal pricing patterns. That's important in an emergency.
posted by gerryblog at 4:51 PM on November 4, 2012 [16 favorites]


The laws against looting also seriously distort the free market.
posted by thelonius at 4:51 PM on November 4, 2012 [11 favorites]


Mattd: $20 per gallon for premium on Craigslist.

If I were that person, I would be very, very worried that the next 'quick meet-up' would involve a lot of very angry people beating me with 2x4s for trying to gouge them in their time of need. And then they would take all my gasoline.
posted by dunkadunc at 4:52 PM on November 4, 2012 [2 favorites]


the waiting time has not been enough to curb demand.
But surely prices would?
posted by modernserf at 4:52 PM on November 4, 2012


gjc, perhaps the continued demand is not for want of conservation. Perhaps it is actually caused by inelastic demand like generators, emergency and utility vehicles, and people needing to get around to clean up.
posted by wierdo at 4:52 PM on November 4, 2012 [4 favorites]


The waiting time has not been enough to curb demand because demand is as curbed as it's going to get.
posted by lydhre at 4:57 PM on November 4, 2012 [7 favorites]


There is a lot of stuff going on at once that makes this a much more complicated situation.

Public transportation is broken, that has driven up demand. Emergency and city vehicles need to be out much more than usual, this has an effect.

I also believe that a sudden shock and "uncertainty" causes people to hoard. People will buy gas if they get a chance even if they don't need it. This is why we have anti price gouging laws. In a disaster people do not act rationally, they don't think "I'll just buy 2 gallons" they think "I will spend my life savings and keep it in my basement"

This is New York, in the aftermath of a hurricane, people already avoid driving. You can bet the people buying gas really fucking need to drive or are stocking up for whatever reason.
posted by Ad hominem at 4:57 PM on November 4, 2012 [3 favorites]


The more important argument is that allowing sellers to set whatever price they want does a better job of distributing goods where they are most needed.

This is really unsupported, and your own attempt to prove it admits that "Rich people will abuse the system", whilst assuming that hospitals have both the wherewithal to spend extra money on fuel and that doing so - and making someone else rich - is the best use of their funds.
posted by smoke at 4:59 PM on November 4, 2012 [3 favorites]


koeselitz: in normal times, within a few days prices would average out, but right now people need gas immediately and can't really wait for the price to come down.

Right, but they don't need 15 gallons in the tank, they actually NEED like five gallons to bridge themselves to lower pricing. So they buy the minimum they think they can get away with. With pricing artificially held at $4, they fill their tank, plus any other gas can they can lay their hands on, so they don't have to wait in line again.

The high prices, especially with the knowledge that lower prices are coming, act as a strong constraint on demand -- people try to buy only what they really need, instead of what they would like to have. And they do this because it makes sense for them, not out of some nebulous feeling of civic duty, which is a hard thing to depend on. It makes the gas shortage into a million local problems, with a million local unique solutions, instead of a single large problem with an imposed solution... Thou Shalt Wait In Line.

One of those duties is making sure we don't prey on their weakness or foolishness.

I agree with you strongly on that, but that's not what $20 gas is doing. The station owner just raises his prices until people stop coming, and then lowers them at a steady rate to keep him or herself busy. This has the effect of maximizing his local profit, but it also means that people don't buy it unless they really need it. There's no deception, the price is up front, and he/she is not in a true monopoly position of any kind, able to charge unfair prices over a long period of time. There are other gas stations, and new supplies will be made available.

By imposing the price control, it means that demand doesn't drop the way it should. The demand is normally increased during a disaster anyway, to run generators, but holding the price at normal level increases the demand even further. With such dreadful lines, people will fill every container they can lay their hands on.

There are times when price controls are warranted, typically in monopoly situations (like PG&E in California, a huge power company that serves most of the state). But in this case, the shortage is genuine, the demand needs to be limited to the amount of supply, and the way to limit demand is to raise the price.

but I think it should be understood that price-gouging is, in fact, immoral.

Well, as others have said, gouging is probably better defined as someone with long-term market control, using that market control to gouge rent out of the economy. (current examples being Apple abusing iOS to force people into the App Store, and now Microsoft doing the same with Windows and the Metro store.) That's immoral.

But what the gas stations would be doing here is just selling their limited goods to the highest bidders. People are mad that they could make a higher profit than usual, so instead they force everyone who wants gas to waste gas and labor time instead.

That's not, in my estimation, a good trade.
posted by Malor at 4:59 PM on November 4, 2012 [6 favorites]


the young rope-rider: that is indeed the gist of it, these laws shift ability to pay towards a currency everyone's doled out equally (except in that one movie recently that didn't do much box office to speak of).

gjc: *of course* demand has been curbed, it's just not curbed to the point that the gas-lines are as short as you'd prefer. Let's call a spade a spade here.

smoke: can't hospitals just start raising their rates to pay for the gas to run their generators? Let the market sort it out!

Malor: why change definitions? And why shift the topic to luxury goods for which we have established concepts like bundling and anti-trust / anti-competitive behavior, and so on?
posted by hoople at 5:00 PM on November 4, 2012 [2 favorites]


Malor, can I ask you a question?

Can you give a real world example of price gouging working out well for a real place in a real emergency situation? If you can't, and are just talking in hypotheticals, feel free to ignore this question.
posted by Potomac Avenue at 5:03 PM on November 4, 2012 [19 favorites]


This has the effect of maximizing his local profit, but it also means that people don't buy it unless they really need it.

IDK, I feel like within the first 24-36h of the emergency, this would have resulted in gas station owners getting shot in the face.
posted by elizardbits at 5:04 PM on November 4, 2012 [1 favorite]


Malor: "There are times when price controls are warranted, typically in monopoly situations (like PG&E in California, a huge power company that serves most of the state). But in this case, the shortage is genuine, the demand needs to be limited to the amount of supply, and the way to limit demand is to raise the price. "

That isn't "limiting" demand except in the sense of pricing some people out of the market who may or may not have a greater need for fuel than others. It's as artificial a limitation as rationing based on license plate number.

Generally speaking, when you think that economic rent is the solution to a problem you haven't thought about it enough yet.
posted by wierdo at 5:04 PM on November 4, 2012 [2 favorites]


I suppose it's a bit late to remind everyone that "econ 101" was a load of bullshit. The gentle, simple-minded supply-demand curves, the inelastic/elastic goods theories... entire textbooks of bullshit.
posted by odinsdream at 5:04 PM on November 4, 2012 [4 favorites]


Ok, let's compromise. Gas store owners can set the price to whatever the fuck they want, as long as the difference between the normal and the new prices goes directly to a non-profit hurricane aid relief organization.
posted by ymgve at 5:04 PM on November 4, 2012 [3 favorites]


With pricing artificially held at $4, they fill their tank, plus any other gas can they can lay their hands on, so they don't have to wait in line again.

Again, in my observation at local gas stations, the police are not allowing people to fill up dozens of containers at a time.
posted by the young rope-rider at 5:05 PM on November 4, 2012 [4 favorites]


But what the gas stations would be doing here is just selling their limited goods to the highest bidders

Who have a considerably smaller barrier to entry to purchase more gas, and more readily able to purchase and store surplus gas to resale. I can't see any problems with such a wholly unregulated second market.
posted by griphus at 5:05 PM on November 4, 2012


wierdo: Why will long lines not encourage people to use fuel more efficiently whenever possible? You can't have it both ways.

But the problem isn't really their gas consumption rate, because this is a temporary problem. The real problem is that they want gas NOW. And artificially holding prices low means that they'll buy at least as much as they normally would, and maybe a lot more, on the theory that they may not be able to get gas again for awhile.

What you want is for people to buy only what they need, not what they want. And if prices go up, that behavior magically comes into play.
posted by Malor at 5:06 PM on November 4, 2012 [1 favorite]


If I were that person, I would be very, very worried that the next 'quick meet-up' would involve a lot of very angry people beating me with 2x4s for trying to gouge them in their time of need. And then they would take all my gasoline.

What if the person had collected and driven the gasoline up from DC and was compensating for the time & effort that involved? And if gas stations were all charging $20/gallon, and if all the regulatory issues with selling gas were suspended for a few days, wouldn't lots of people be loading up their cars with 5-gallon containers and doing this - perhaps setting up a rapid informal network? Would that be so bad?
posted by shivohum at 5:06 PM on November 4, 2012


Can you give a real world example of price gouging working out well for a real place in a real emergency situation? If you can't, and are just talking in hypotheticals, feel free to ignore this question.

It's polite of you to say so, but gratuitous, since interlocutors such as the one you're addressing have no problem ignoring important questions which expose the weakness and irrelevance of their arguments and propositions.
posted by clockzero at 5:07 PM on November 4, 2012 [6 favorites]


I will buy you a gallon of $20 gasoline if you answer the valid and thoughtful question that Potomac Avenue has posed to you 4 times now, and which you have ignored every single time.
posted by elizardbits at 5:07 PM on November 4, 2012 [8 favorites]


Again, in my observation at local gas stations, the police are not allowing people to fill up dozens of containers at a time.

And that means they're having to pay the police to stand in goddamn gas stations.

That is insane behavior.
posted by Malor at 5:07 PM on November 4, 2012 [2 favorites]


Malor, that's not what's happening. Consumers are limited to 10 gallons of fuel at a whack, at least in NJ. And you still haven't explained why the increased time cost shouldn't be figured in just as much as the increased financial cost.
posted by wierdo at 5:07 PM on November 4, 2012


the waiting time has not been enough to curb demand.
But surely prices would?


It would do more than the lines are currently doing.


gjc: *of course* demand has been curbed, it's just not curbed to the point that the gas-lines are as short as you'd prefer. Let's call a spade a spade here.

What does my preference have to do with it? The lines mean that the people who drop out of the market place are going with nothing. And the lucky/stubborn people are rewarded with full tanks at normal prices. Letting the price rise is one of the ways to solve this problem, to force people to share a limited resource. Rationing would work too. But you can bribe your way out of rationing, and long lines, and you can't bribe your way out of high prices.
posted by gjc at 5:09 PM on November 4, 2012


Can you give a real world example of price gouging working out well for a real place in a real emergency situation? If you can't, and are just talking in hypotheticals, feel free to ignore this question.

Everywhere, all the time. Emergencies of various sorts happen all the time. I was in Athens (Georgia) a few years back when there was some really nasty weather, and the gas stations weren't able to get supply for quite awhile, so the prices went way up. People got mad, but they could get gas. There was talk of imposing price controls, but that would have resulted in immediate lines.

We didn't have lines, we had gas. Expensive gas, but we had it.
posted by Malor at 5:10 PM on November 4, 2012 [1 favorite]


wouldn't lots of people be loading up their cars with 5-gallon containers and doing this - perhaps setting up a rapid informal network? Would that be so bad?

Yes, a lot of people driving a bunch of random little bits of gasoline into an area with an already strained transportation, medical, policing, and housing infrastructure would probably be bad.
posted by the young rope-rider at 5:10 PM on November 4, 2012 [2 favorites]


Malor: how do you infer from what he said that they are paying police to stand in gas stations? Is that logically the only possible way in which such enforcement could occur?

More importantly: the young rope-rider: can you enlighten us with how specifically the police are enforcing this?
posted by hoople at 5:10 PM on November 4, 2012


The waiting time has not been enough to curb demand because demand is as curbed as it's going to get.

I think this a pretty interesting point. Short-run demand elasticity for gasoline is pretty low judging by historic data. It took literally years for people to react to the run-up in gas prices during the oughts to be reflected in miles driven and a shift towards more fuel efficient vehicles, and even then the reactions were pretty small.
posted by JPD at 5:11 PM on November 4, 2012 [5 favorites]


Expensive gas, but we had it.

It's good to be the "we."
posted by griphus at 5:12 PM on November 4, 2012 [36 favorites]


People are mad that they could make a higher profit than usual, so instead they force everyone who wants gas to waste gas and labor time instead.

I'm not mad about that, I don't care about that. Gas isn't iPhones though. I can't get knock-off gasoline. I can only get it in a very few places, and if I live in Staten Island or NJ, I need it. I don't want it, I need it.

America has a gasoline DEPENDENCY. We are literally addicted to a steady stream of gas going into our cars in order to live our lives. Treating it like some bullshit experiment in elastic valuation could result in the poorest people losing their jobs, not getting medical attention or food, and not being able to clean up their lives with the same ease as those with money. It will do those things in reality, not in a textbook. If you're OK with that inequality of access to a vital resource, fine. I'm not.
posted by Potomac Avenue at 5:13 PM on November 4, 2012 [13 favorites]


Nobody but the strawmen are arguing that letting the price go up is awesome. But it is a fast solution to a temporary problem.

If your only problem is rationing, it's one solution. Then again, rationing in the form of purchase size limits might as easily do the job, and without a wealth transfer.

If the problem is that you want to increase supply, then letting prices float *may* help. Not all the time, because as driving as market incentives can be, they're not magic. There has to be an actual way to make it happen (plenty incentive to develop a perpetual motion machine, but strangely, there isn't one that works). And there has to be a way that supply and demand can find an equilibrium. And *then* -- once that's all worked out -- you still have to consider the moral implications of a system that might find an equilibrium that prices essentials out of reach for some.

Gasoline might be OK to let float within a wider range than usual, but let it get out of hand and you've got a moral problem, and it's entirely possible that there is no more effective way to get supply back on hand than working to get the usual infrastructure back online.

Lodging, nobody's going to build out for this kind of shock no matter how much you let prices float, and shelter's essential, so it's better to find some other way to take care of this.

Debris clearing? Honestly, I think that one might work. Barriers to bringing extra supply online seem relatively low, it doesn't by and large represent an immediate and crucial need unless somebody's trapped underneath it, pricing could help people prioritize.
posted by weston at 5:14 PM on November 4, 2012


wouldn't lots of people be loading up their cars with 5-gallon containers and doing this - perhaps setting up a rapid informal network?

Coincidentally, I'm in South Jersey, and I spent three hours driving around to almost a dozen locations Friday trying to find somebody to sell me a five gallon gas can. Local hording and your theoretical opportunists have all of them already.
posted by Orb2069 at 5:14 PM on November 4, 2012 [1 favorite]


The more important argument is that allowing sellers to set whatever price they want does a better job of distributing goods where they are most needed.

No, it distributes goods to those with the highest willingness to pay, which includes ability to pay within it. This is not likely to be strongly related to any reasonable measure of need.

Hospitals will pay more for gas than the guy who wants to visit grandma in Vermont, because their need is more crucial.

This is a particularly bad example because the government has the capacity to ensure that critical generators receive fuel irrespective of the current sale price. The problem now is -- assuming competent governance -- not that hospitals are somehow standing in line for gasoline with the rest of the schmucks, any more than hospitals normally buy fuel by running down to the local gas station.
posted by ROU_Xenophobe at 5:15 PM on November 4, 2012 [7 favorites]


Malor is this what you were referring to?

Or this?
posted by JPD at 5:15 PM on November 4, 2012 [6 favorites]


Can someone give an example of price gouging working out well, for the whole society affected, at some point in the near past?

Listen to the EconTalk podcast I linked earlier in the thread. Things became worse when the police enacted the anti-gouging laws.
posted by painquale at 5:15 PM on November 4, 2012 [2 favorites]


I can't help think that in New York There is no upper limit to what people will pay. If it was expensive enough some people would buy it just to carry it around to show off. People would soon be using it as perfume. Gasoline would be the hottest new scent.
posted by Ad hominem at 5:16 PM on November 4, 2012 [6 favorites]


Oh, and a nice non-emergency example: when SSDs first came out, Intel had the best drives going. Everyone wanted them, and the retail price was, um, I think it was $400. Everywhere that sold at retail was out.

Newegg has a demand/supply price engine that seems to automatically reprice stuff based on stock levels and anticipated demand, and their price on the Intel SSD was much higher. I think it went over $700 at one point, definitely over $600. But they always had stock. You could always get an Intel SSD at Newegg, if you were willing to pay for it. Or, you could try to order one for $400 from a different retailer, but you'd be waiting probably for at least a month, if they even offered preorders.

It was one of the nicest examples of price constraining demand that I saw; as supplies caught up, Newegg's price steadily dropped until it was the same as everyone else. But it took like a year, because the demand was very, very high for the Intel drives. For that entire period of limited supply, you could pretty much always get one at Newegg.
posted by Malor at 5:17 PM on November 4, 2012


More importantly: the young rope-rider: can you enlighten us with how specifically the police are enforcing this?

They already have to be in gas stations to do crowd/traffic control. They tell people where the line begins so they can drive over to it, and they were allowing one person on foot in and then one car as they were in two separate lines for obvious reasons. I saw officers walk over to cars and tell them they'd gotten enough gas and they needed to move along. They were also not letting people with cars fill up cans or anything like that, it was tanks only. People on foot didn't have more than one or two small cans each. There might have been an official gallon limit, I wasn't able to hear the entire conversation, but I saw this same thing happen multiple times at multiple stations. (I was waiting for a bus today for a while in an area where there are multiple stations on the same corner, and I live across the street from another station.)
posted by the young rope-rider at 5:18 PM on November 4, 2012 [1 favorite]


weston: debris clearing seems better, but it starts running into capacity limits and safety issues in terms of where said debris *goes*, so even there it's tempting but not bulletproof.

gjc: you keep claiming demand hasn't been curbed *enough*, as if you have some a priori notion of the correct level of demand that's accurate enough to allow you to make such statements. If you don't see this as a preference I'm afraid we'll talk past each other.
posted by hoople at 5:18 PM on November 4, 2012


Generally speaking, when you think that economic rent is the solution to a problem you haven't thought about it enough yet.

That's not what economic rent is. Economic rent is charging MORE than the natural price (the supply-demand price point) for something because the supplier has some power that the buyer does not.

This is not the case here. Supply is limited because the docks were messed up by the storm and because there aren't enough gas stations with power.
posted by gjc at 5:20 PM on November 4, 2012


Malor: "There was talk of imposing price controls, but that would have resulted in immediate lines. "

As long as you realize that you're imposing a value judgement here where there is little rational basis for it. In the longer term, letting supply and demand allocate resources is the best method we've found yet of making sure that our resources are directed effectively. In a situation such as this or your Athens gas shortage, all allowing prices to float does is allow certain people to collect rent. It does not improve the allocation of resources one iota because the time frame is too short.
posted by wierdo at 5:20 PM on November 4, 2012 [9 favorites]


This is a particularly bad example because the government has the capacity to ensure that critical generators receive fuel irrespective of the current sale price. The problem now is -- assuming competent governance -- not that hospitals are somehow standing in line for gasoline with the rest of the schmucks, any more than hospitals normally buy fuel by running down to the local gas station.

That's good; I didn't know that. I was just using hospitals synecdochically to represent people with legitimate need, though.
posted by painquale at 5:20 PM on November 4, 2012


I was in Athens (Georgia) a few years back when there was some really nasty weather, and the gas stations weren't able to get supply for quite awhile, so the prices went way up. People got mad, but they could get gas. There was talk of imposing price controls, but that would have resulted in immediate lines.

Can't find any information on this via google, can you say what the bad weather was and how much the prices went up and what year it was? Was it one of the incidents JPD linked to?
posted by Potomac Avenue at 5:21 PM on November 4, 2012


Oh and no more non-emergency examples please, those are the opposite of helpful.
posted by Potomac Avenue at 5:22 PM on November 4, 2012 [5 favorites]


We didn't have lines, we had gas. Expensive gas, but we had it.

I truly don't understand why this state of affairs is better than having to queue up for a few hours, and why it's not acknowledged that expensive gas is not accessible to everyone, regardless of need.
posted by smoke at 5:22 PM on November 4, 2012 [2 favorites]


Yes, a lot of people driving a bunch of random little bits of gasoline into an area with an already strained transportation, medical, policing, and housing infrastructure would probably be bad.

You can fit 41 such 5-gallon containers in a 2-door hatchback with the rear seat removed. That's 200 gallons/car. Far more in a full-size car, even more in an SUV or truck. A few thousand such cars a day making such a commute sound terribly helpful. I'm not sure how these extra cars, a drop in the bucket to NY or NJ's overall traffic, would strain any of the infrastructure you mention above.
posted by shivohum at 5:22 PM on November 4, 2012


Malor, do you have any proof that Newegg actually sold a significant number of drives at those price points?

Also, good job comparing luxury items like SSDs where you have a wide choice of web stores to purchase from, with a vital resource like gasoline that you have to get from somewhere nearby where you are.
posted by ymgve at 5:22 PM on November 4, 2012 [2 favorites]


It's good to be the "we."

Yep. And it's especially good that I bought less gas during that huge disruption than I normally would have; I constrained my driving, and didn't fill my tank all the way. I didn't run out and fill every container I had. So there was more gas available for other people, and they bought only what they absolutely needed, leaving yet more for others.

Some people, I'm sure, were hurting from the high prices, but at least they could get gas. If we'd had price controls, maybe they wouldn't have been one of the lucky ones, or maybe they'd have just had to do without sleep for a week or two in order to get gas and keep both their jobs.
posted by Malor at 5:24 PM on November 4, 2012


That's good; I didn't know that. I was just using hospitals synecdochically to represent people with legitimate need, though.

People with less money have MORE legitimate need right now than people with lots of money. I'm not sure why that is so impossible to understand.

Oh, right, because the idea of people exchanging labor (time spent in line) directly for a necessity instead of being forced to first have their labor exploited in order to make a profit for someone else is THE WORST THING and OBVIOUSLY UNFAIR
posted by the young rope-rider at 5:24 PM on November 4, 2012 [12 favorites]


A few thousand such cars a day making such a commute sound terribly helpful

And how many of those cars, do you think, carrying an extra 1000 pounds of gasoline, will be involved in accidents (on account of the vehicle being overloaded, if nothing else)? Spilling hundreds of gallons of highly flammable liquid?
posted by junco at 5:25 PM on November 4, 2012 [4 favorites]


A few thousand such cars a day making such a commute sound terribly helpful.

Who, exactly, would organize this large-scale smuggling effort?
posted by griphus at 5:25 PM on November 4, 2012 [2 favorites]


A few thousand such cars a day making such a commute sound terribly helpful. I'm not sure how these extra cars, a drop in the bucket to NY or NJ's overall traffic, would strain any of the infrastructure you mention above.

Because those cars would not be allowed in the tunnels.
posted by elizardbits at 5:25 PM on November 4, 2012 [8 favorites]


me: “... in normal times, within a few days prices would average out, but right now people need gas immediately and can't really wait for the price to come down.”

Malor: “Right, but they don't need 15 gallons in the tank, they actually NEED like five gallons to bridge themselves to lower pricing. So they buy the minimum they think they can get away with. With pricing artificially held at $4, they fill their tank, plus any other gas can they can lay their hands on, so they don't have to wait in line again. The high prices, especially with the knowledge that lower prices are coming, act as a strong constraint on demand -- people try to buy only what they really need, instead of what they would like to have.”

Hm. It seems like the problem with letting high prices act as a constraint on demand is that it's a vastly disproportionate constraint – the rich can get a lot of gasoline, and the poor (especially those who need it most) often can't get any.

It seems like there's a pretty simple solution here that offers the best of both worlds. If you want to make sure that gasoline is equally available to all who can pay for it, and yet make sure that hoarding doesn't happen to make the situation more difficult, you institute rationing; say, for example, that no private citizen can buy more than five gallons of gas per day.

Do you have any arguments against that way of dealing with it? It seems like a better one all around.
posted by koeselitz at 5:25 PM on November 4, 2012 [2 favorites]


Can someone give an example of price gouging working out well, for the whole society affected, at some point in the near past?

I did, car services. Note that griphus said "I am about to have a fun negotation session in an hour or two about getting what is usually a $12-15 cab under $25." and not "I am about to wait in line for a couple of hours hoping I can find a taxi."

There's also a real open question about what you mean by "work out well." A massive natural disaster happened, there isn't a perfect solution. A person can very easily point to the massive waste spent queuing and say the current system sucks.

What problem would be solved by allowing gouging that would not also be solved by rationing?

Speed. Prices can be changed essentially instantaneously. A well-functioning rationing system might very well ensure that people had access to some gas, but think about how to set something like that up--in wars you have stamps, for example. Limiting people to a certain amount of fuel per stop encourages people to stop different places, increasing wasted time in line. I know at least one person has proposed debit cards that only get activated in emergencies, but he worried that they would essentially be sold for cash on the black market anyway (before an emergency hit), rendering the system ineffective.

The strongest argument for allowing "gouging" in gas isn't increased supply (I'm pretty skeptical this would happen very quickly for the reasons set out in this thread), or even decreasing demand for marginal trips (though surely some of these exist--people who would telecommute if they have power restored), it's to convince people that gas will be there when they really need it, so don't race to the station now. Eric Crampton has a post about this that's interesting. You really don't want people to hoard, but what's the first thing you do when you see a line--race to get your own supply before it runs out. If people believe that price increases will reduce demand, then they don't need to race to get their own gas, for the same reason that bank runs generally don't happen if people believe the banking insurance system is credible.

I have to say, this thread is a little disappointing. Allowing even sharp price increases in emergencies is not some far-out right-wing position among economists, who kinda know how markets behave. Here is a representative sampling about one such "gouging" bill, note that opponents of banning "unconscionably excessive" span the ideological spectrum. It's not accurate at all to paint opposition to anti-gouging laws with "lol dum libertarians don't understand econ 101 doesn't always work."
posted by dsfan at 5:26 PM on November 4, 2012 [7 favorites]


To prepare for Sandy, I put my car in the garage and lubed my bike chain.

And I have to shake my head at the people who think it's worse to have to pay $20 a gallon for gas than it is not to find it for any price.
posted by ocschwar at 5:26 PM on November 4, 2012 [2 favorites]


ocschwar: “And I have to shake my head at the people who think it's worse to have to pay $20 a gallon for gas than it is not to find it for any price.”

If I were going to make a habit of shaking my head at mythical creatures that don't exist, I imagine I would choose something more interesting, like a centaur or maybe a unicorn.
posted by koeselitz at 5:28 PM on November 4, 2012 [13 favorites]


Yep. And it's especially good that I bought less gas during that huge disruption than I normally would have; I constrained my driving, and didn't fill my tank all the way. I didn't run out and fill every container I had. So there was more gas available for other people, and they bought only what they absolutely needed, leaving yet more for others.

I experienced the 2008 southeast phantom gas shortage described in the articles JPD linked to, in a place without price controls, and people that could afford it still panic-bought all the supples up anyway out of fear prices would go even higher.
posted by junco at 5:28 PM on November 4, 2012 [13 favorites]


I did, car services. Note that griphus said "I am about to have a fun negotation session in an hour or two about getting what is usually a $12-15 cab under $25." and not "I am about to wait in line for a couple of hours hoping I can find a taxi."

No, it is definitely both.
posted by griphus at 5:29 PM on November 4, 2012 [10 favorites]


boy howdy that's just what we've been missing! let's see how many emergency supplies can be delivered by bicycle, i am sure it will be tons and tons of food and blankets and fresh water.
posted by elizardbits at 5:30 PM on November 4, 2012 [4 favorites]


The first accident involving one of those jerry-rigged jerry-can vans sure would be fun to have to deal with, but I guess it might do something to alleviate the boredom from queueing for petrol, eh?

Also: thanks for the on-the-ground info, rope-rider. Do you know if that's like every station or just certain high-volume stations?
posted by hoople at 5:30 PM on November 4, 2012


No, it is definitely both.

Yeah, OK fair enough. But they only increased their prices 100%!
posted by dsfan at 5:30 PM on November 4, 2012


from JPD's link - "In Charlotte, price ranged from $3.84 to a high of $4.31 a gallon for regular gasoline."

come on, now, we've all seen prices that high in the last few years

it doesn't qualify as an answer to potomac avenue's question

however, i can answer the question, "was there ever a time where price controls and rationing helped in a national emergency?"

the answer - ww2
posted by pyramid termite at 5:30 PM on November 4, 2012 [7 favorites]


(Although less "waiting in line" and more "calling through busy signals.)
posted by griphus at 5:31 PM on November 4, 2012


gjc: you keep claiming demand hasn't been curbed *enough*, as if you have some a priori notion of the correct level of demand that's accurate enough to allow you to make such statements. If you don't see this as a preference I'm afraid we'll talk past each other.

I have no such thing. Lines = excess demand, by definition. It doesn't matter what the cause is. The supply cannot be corrected until the infrastructure is fixed, so you either get the unfairness of long lines, or high prices, or rationing. The argument is that high prices are the fastest, easiest way of reducing demand.

I don't think anyone is saying it won't hurt. I think we are saying that it could hurt less than the current situation.
posted by gjc at 5:31 PM on November 4, 2012 [1 favorite]


A massive natural disaster happened, there isn't a perfect solution. A person can very easily point to the massive waste spent queuing and say the current system sucks.

Every problem doesn't have an instant solution. Some problems in the real world just need everyone to do their jobs as well as they can to rebuild the economy and their lives. Meanwhile, the government has a choice to make: who gets the important natural resources that people use in their everyday lives? In making that decision, a small amount of charity towards the poorest people in the affected area is necessary, in my opinion. Imperfectly, that may result in some folks not getting those resources. But if the choice is between having the resources distributed by luck or by wealth, I prefer luck.
posted by Potomac Avenue at 5:32 PM on November 4, 2012 [4 favorites]


Also: thanks for the on-the-ground info, rope-rider. Do you know if that's like every station or just certain high-volume stations?

Good question! Not sure, but I can tell you that one of them usually has a few pumps open at any given time, pre-hurricane I wouldn't have called it super busy.
posted by the young rope-rider at 5:32 PM on November 4, 2012


So I'm starting to have really good feelings about the death penalty thread, I think it will be uplifting and pleasant.
posted by elizardbits at 5:32 PM on November 4, 2012 [1 favorite]


from JPD's link - "In Charlotte, price ranged from $3.84 to a high of $4.31 a gallon for regular gasoline."

come on, now, we've all seen prices that high in the last few years


In 2008, that was about double the normal price.
posted by gjc at 5:33 PM on November 4, 2012


"
If I were going to make a habit of shaking my head at mythical creatures that don't exist, I imagine I would choose something more interesting, like a centaur or maybe a unicorn."

Tell that to the people in NJ and Long Island who have been running into gas lines for the last several days.

If there isn't enough to go around, someone is going to have to go without. It will either be the guy who got to the gas station 2nd, or the guy who didn't bid a high enough price. Either way, somebody is going without.

As I said for my part, I made damn sure I would not need my car. But if something came up where I did need it badly enough, like say to drive to the one pharmacy with my daughter's hypothetical prescription medicine, then I would be fine paying $20 a gallon.
posted by ocschwar at 5:33 PM on November 4, 2012 [3 favorites]


Malor, do you have any proof that Newegg actually sold a significant number of drives at those price points?

Newegg is probably the biggest retailer of computer goods online. If they've got it, they sell it, and if it's hyper-popular like the Intel SSDs were, they were moving a lot of them.

Remember, their engine seems to change price on a daily basis. I've been a customer of theirs for a long time, and their pricing is highly elastic. (well, it was before they went public anyway; I haven't been using them much for several years now.) And they seem to move pricing around to keep their stock at a desired level, when they're dealing with goods in shortage.

The fact that their prices were high meant that they were absolutely selling drives at those prices. If they weren't, their prices would have dropped, possibly even under retail.

Also, good job comparing luxury items like SSDs where you have a wide choice of web stores to purchase from, with a vital resource like gasoline that you have to get from somewhere nearby where you are.

Well, remember that I was talking about gasoline, too. This was just such a perfect example that it seemed worth mentioning. It's an example of price constraining demand, and how limiting selling price results in shortages. There weren't enough Intel drives to go around; companies that stuck with retail pricing instantly sold out every time they got any. Newegg moved its pricing around, and always had stock.

Another example there is when the XBox 360 first shipped -- anywhere that had them for retail sold out immediately. The real market price was about $700, IIRC, for a $400 console. If you wanted to pay retail, you had to wait for months. If you were willing to pay the real market price, you could have one immediately.

That's what price controls do; they cause (or exacerbate) shortages.
posted by Malor at 5:34 PM on November 4, 2012 [1 favorite]


But if something came up where I did need it badly enough, like say to drive to the one pharmacy with my daughter's hypothetical prescription medicine, then I would be fine paying $20 a gallon.

Do you realize that not everyone has $20 a gallon, but that those people still love their children very much and would like for their children to not suffer?

Do the poor love their children any less than the rich?
posted by the young rope-rider at 5:35 PM on November 4, 2012 [19 favorites]


In 2008, that was about double the normal price.

no, it went up and down quite a lot
posted by pyramid termite at 5:36 PM on November 4, 2012 [1 favorite]


This was just such a perfect example that it seemed worth mentioning.

If the car that took you to work ran on SSDs and XBoxes, maybe.
posted by griphus at 5:37 PM on November 4, 2012 [7 favorites]


I think we are saying that it could hurt less than the current situation.

And I'm saying it will hurt the poorest people rather than a random selection of people, therefore it is inequitable.
posted by Potomac Avenue at 5:37 PM on November 4, 2012 [4 favorites]


junco: I experienced the 2008 southeast phantom gas shortage described in the articles JPD linked to, in a place without price controls, and people that could afford it still panic-bought all the supples up anyway out of fear prices would go even higher.

Is that people you actually know directly, or fictitious people, like the proverbial friend-of-a-friend?
posted by Malor at 5:38 PM on November 4, 2012


Do the poor love their children any less than the rich?

Well I mean yes obviously look at how much more the rich are willing to spend on their children, clearly they value them more highly.
posted by Potomac Avenue at 5:39 PM on November 4, 2012 [10 favorites]


Do the poor love their children any less than the rich?
Of course. They didn't make themselves rich enough to protect them.
I mean this sarcastically - But I've heard it straight from my coworkers. Does that count?
posted by Orb2069 at 5:39 PM on November 4, 2012 [2 favorites]


Is that people you actually know directly, or fictitious people, like the proverbial friend-of-a-friend?

Sorry, how is that somehow magically less valid than your own story? Please show all work.
posted by elizardbits at 5:40 PM on November 4, 2012 [1 favorite]


As I said for my part, I made damn sure I would not need my car. But if something came up where I did need it badly enough, like say to drive to the one pharmacy with my daughter's hypothetical prescription medicine, then I would be fine paying $20 a gallon.

And this is a perfect example of how large swaths of Metafilter just don't get being poor. You're assuming you've got 20 bucks left to spend in the first place.

And can we put Xbox/SSD comparisons aside? You are not going to lose your job, freeze, or go hungry because you don't have a fucking Intel SSD. Not having gas for your car is very different.
posted by dunkadunc at 5:40 PM on November 4, 2012 [5 favorites]


"Do you realize that not everyone has $20 a gallon, but that those people still love their children very much and would like for their children to not suffer? "

Everyone who has $20 will pay it to help their child.

Not everyone who has $20 will pay it to fuel their commute.
Every car trip is not equal.

And your deflection is duly noted:

you seem to prefer to find yourself unable to get gas at any price, than to see the price hit $20.

That is so many levels of irrational and self defeating.
posted by ocschwar at 5:40 PM on November 4, 2012 [2 favorites]


If the car that took you to work ran on SSDs and XBoxes, maybe

Look. There's not enough gas. Not enough! Not enough not enough. And so you have to constrain demand. You can spend an immense amount of money imposing rationing and lines and having to fucking park police in every gas station in NY, or you can just let the price float.
posted by Malor at 5:40 PM on November 4, 2012


...And, of course, the police would be unnecessary if the price were allowed to float - Nobody will be desperate enough to just stick a gun in the attendant's face.
posted by Orb2069 at 5:43 PM on November 4, 2012 [7 favorites]


I'd rather take the lottery of the lines we have now which will fuck over a lot of people at random, than one where the prices go to $20 which will fuck over only poor people (which are the ones that need the gas for their commute the most since they often don't have understandable bosses or the ability to telecommute)
posted by ymgve at 5:44 PM on November 4, 2012 [17 favorites]


"...And, of course, the police would be unnecessary if the price were allowed to float - Nobody will be desperate enough to just stick a gun in the attendant's face."

If you see the last gallon of gas being pumped, because the price was not allowed to float, you're a lot more likely to do exactly that.
posted by ocschwar at 5:44 PM on November 4, 2012


ocschwar: “And I have to shake my head at the people who think it's worse to have to pay $20 a gallon for gas than it is not to find it for any price.”

me: “If I were going to make a habit of shaking my head at mythical creatures that don't exist, I imagine I would choose something more interesting, like a centaur or maybe a unicorn.”

ocschwar: “Tell that to the people in NJ and Long Island who have been running into gas lines for the last several days. If there isn't enough to go around, someone is going to have to go without. It will either be the guy who got to the gas station 2nd, or the guy who didn't bid a high enough price. Either way, somebody is going without. As I said for my part, I made damn sure I would not need my car. But if something came up where I did need it badly enough, like say to drive to the one pharmacy with my daughter's hypothetical prescription medicine, then I would be fine paying $20 a gallon.”

I was being snarky because it seemed like you were misrepresenting the arguments here; I don't think anyone here is actually arguing (or actually believes) that no one should have gasoline in order to make sure gougers don't gouge.

I agree that it is hard to make sure there's enough gas to go around. I argued above that I don't think letting the market take care of this makes sense. If we do, the rich will just end up hoarding anyway – and there are certainly enough people with money in New York to completely destroy the market for everybody else (see the Trump story above for an already-current example).

It really does start to seem as though rationing is the solution. It would mean less lines, too, since people wouldn't be spending the same amount of time actually at the pump, and since they wouldn't be able to go from station to station grabbing as much as they can.
posted by koeselitz at 5:44 PM on November 4, 2012


you seem to prefer to find yourself unable to get gas at any price, than to see the price hit $20.

Yes, I agree with this. I would rather not be able to get gas, even if I needed it badly, than think that specifically the underclass of my neighbors would be unable to afford gas and I would. Being poor, a small difference like using gas for one day, can mean the difference between being homeless next month or not. If I can't get gas, even in a dire situation, that's unlucky! If their lives are ruined, and they might be by a huge gas price increase more than by any other type of price, that's an inequality I can't live with.
posted by Potomac Avenue at 5:44 PM on November 4, 2012 [13 favorites]


You can spend an immense amount of money imposing rationing and lines

price gouging laws do not take an immense amount of money to enforce
posted by pyramid termite at 5:45 PM on November 4, 2012 [4 favorites]


"
I'd rather take the lottery of the lines we have now which will fuck over a lot of people at random, than one where the prices go to $20 which will fuck over only poor people (which are the ones that need the gas for their commute the most since they often don't have understandable bosses or the ability to telecommute)
"

In case you haven't noticed, if the price goes that high, the people who still get gas have to PART WITH THAT MONEY.

It's not like anyone's getting a good deal.
posted by ocschwar at 5:46 PM on November 4, 2012


I can't really argue with the jawdropping naivete required to assume that letting only the wealthy have access to a universally-necessary good will inspire civil peace.
posted by griphus at 5:46 PM on November 4, 2012 [30 favorites]


$20, for an already impoverished family dealing with the aftereffects of a natural disaster, could be the difference between children eating and not eating. $20 is a lot of money.

Some families don't have $20.
posted by Potomac Avenue at 5:48 PM on November 4, 2012 [9 favorites]


If you see the last gallon of gas being pumped, because the price was not allowed to float, you're a lot more likely to do exactly that.

...As opposed to knowing you can't afford it, but there's plenty there, and will be plenty there when you come back after getting a gun and setting up a getaway. Equally likely, I assume?
posted by Orb2069 at 5:48 PM on November 4, 2012 [3 favorites]


It's not like anyone's getting a good deal.

Everyone's getting a pretty bad deal right now. Letting the prices rise without control gives the rich a better deal and the poor a very bad deal. No thanks.
posted by Potomac Avenue at 5:49 PM on November 4, 2012 [7 favorites]


"
I was being snarky because it seemed like you were misrepresenting the arguments here; I don't think anyone here is actually arguing (or actually believes) that no one should have gasoline in order to make sure gougers don't gouge.
"

If you don't allow the price to go up, you are guaranteed that stations will run dry, and that will leave people unable to get gas at any price. They might be rich, they might be poor, but they will be screwed because they didn't get to the gas station in time.

That's what happens during a spot shortage. Always. It's what's happening right now.
posted by ocschwar at 5:49 PM on November 4, 2012


jawdropping naivete

You appear to have misspelled entitled douchebaggery.
posted by elizardbits at 5:49 PM on November 4, 2012 [15 favorites]


$20, for an already impoverished family dealing with the aftereffects of a natural disaster, could be the difference between children eating and not eating. $20 is a lot of money.

Some families don't have $20.


Surely they'll find a way to get the money they need. It's the rational thing to do, after all!
posted by clockzero at 5:50 PM on November 4, 2012 [1 favorite]


Can I just point out that the articles weren't arguing amount demand reactions - basically the "Lines and rationing vs higher prices" line of discussion, but rather arguing that higher prices would solve the supply shortage more quickly because the market would react.
posted by JPD at 5:50 PM on November 4, 2012 [1 favorite]


I would rather not be able to get gas, even if I needed it badly, than think that specifically the underclass of my neighbors would be unable to afford gas and I would


And it's so much better to be unable to get gas because some jerk pushed ahead of you in line?

You're talking nonsense about hoarding gasoline, by the way. In case you didn't notice, gasoline is a fire hazard. You can only hoard what's in your tank.
posted by ocschwar at 5:52 PM on November 4, 2012


I can't really argue with the jawdropping naivete required to assume that letting only the wealthy have access to a universally-necessary good will inspire civil peace.

Exactly. Waiting 3 hours for gas sucks, no question, but you know everyone else is waiting 3 hours also.

If people know that only the wealthy are getting a basic necessity then all hell is going to break loose. If people aren't getting what they need, then they have nothing to lose by trying to take it.
posted by Brandon Blatcher at 5:53 PM on November 4, 2012 [4 favorites]


I think Metafilter needs a moratorium on articles from Forbes Entitled Douchebag Magazine.
posted by dunkadunc at 5:54 PM on November 4, 2012 [3 favorites]


If you don't allow the price to go up, you are guaranteed that stations will run dry, and that will leave people unable to get gas at any price. They might be rich, they might be poor, but they will be screwed because they didn't get to the gas station in time.

That's what happens during a spot shortage. Always. It's what's happening right now.


That's fine with me if the other option is taking the entire population of working poor's ability to get gasoline while the rich get better access to it.

And it's so much better to be unable to get gas because some jerk pushed ahead of you in line?


Yes. That's better than me getting gas because I am richer than someone. Because I can see beyond my own immediate self-interest.
posted by Potomac Avenue at 5:54 PM on November 4, 2012 [8 favorites]


So, for those who are too obtuse to understand this, I'll spell it out.

If the price goes to $20, the people who get gas will be the rich people who can think nothing of it, and the people for whom their next car trip is that important.

If it's not allowed to rise to $20, the people who get gas will be the people who got to the station first.

Which makes the latter scenario a far worse distribution of gasoline.
posted by ocschwar at 5:54 PM on November 4, 2012 [3 favorites]


If people know that only the wealthy are getting a basic necessity then all hell is going to break loose.

If people know that only the wealthy are getting a basic necessity, maybe the wealthy will finally get what's coming to them.
posted by dunkadunc at 5:55 PM on November 4, 2012 [4 favorites]


The free market could have stopped this hurricane altogether if it weren't for big government red tape. You'd have had anti-hurricane machines set up in the harbor deflecting the hurricane on a rational price basis. This is Econ 101.

No, you've got it wrong -- it was Socialist President Al Gore (2001-2009) who developed the anti-hurricane machines. That's why we have the lock-box.
posted by dhartung at 5:56 PM on November 4, 2012 [1 favorite]


ocschwar, you forgot the ...and can afford $20 gas part.
posted by ymgve at 5:56 PM on November 4, 2012 [2 favorites]


Yes. That's better than me getting gas because I am richer than someone. Because I can see beyond my own immediate self-interest.


You're insane.

You are stark raving bonkers.

Thank you. I needed a reminder that the right wing has not monopolized insanity.
posted by ocschwar at 5:57 PM on November 4, 2012 [1 favorite]


Spilling hundreds of gallons of highly flammable liquid?

True, this is a risk. Still, it seems like you might drive a lot more carefully if you're packing so much gasoline, and statistically, a few thousand cars over a couple of days doesn't seem likely to have a major accident. Meanwhile, the costs of people going without gasoline seem quite certain.
--
Because those cars would not be allowed in the tunnels.

Maybe they should be. Traffic is way down in the tunnels anyway.
--
Who, exactly, would organize this large-scale smuggling effort?

If it were reasonably well-publicized and stated to be legal, how many entrepreneurs do you think would fill up their cars and drive to NY or NJ to make (200 gallons * ($20 price - $4 cost)) = $3200 for a day's work? Or even half that, or a quarter? Because if enough people were doing this, prices would quickly not be $20/gallon.
posted by shivohum at 5:57 PM on November 4, 2012


If the price goes to $20, the people who get gas will be the rich people who can think nothing of it, and the people for whom their next car trip is that important.

Half of this is accurate, half of this is ignorant classism.
posted by griphus at 5:58 PM on November 4, 2012 [6 favorites]


That's me CRAZY FOR CHARITY WHO KNOWS WHO I MIGHT TRY TO HELP NEXT
posted by Potomac Avenue at 5:58 PM on November 4, 2012 [17 favorites]


Unfortunately the upper limit is not $20. We have a huge disparity in NYC. What is the true upper limit? More than most people can afford. This is how people are driven to desperation and end up stealing gas from parked cars and robbing gas stations like during the embargo.
posted by Ad hominem at 5:59 PM on November 4, 2012 [5 favorites]


If it were reasonably well-publicized and stated to be legal...

What government would legalize this with zero regulation? This is not how commerce works.
posted by griphus at 5:59 PM on November 4, 2012


Clearly, gas is worth around $3.50 a gallon, which is the amount it costs to produce and the price it has stayed at for many years. That's the moral price, the right price. Anyone charging any more than that is price gouging.
posted by miyabo at 6:00 PM on November 4, 2012


JPD: who ever reads the articles here? Why care for facts when you can apply first principles to your own preconceptions and just run with it?

In the interim presumably oschwar (In case you didn't notice, gasoline is a fire hazard. You can only hoard what's in your tank.) and shivohum (You can fit 41 such 5-gallon containers in a 2-door hatchback with the rear seat removed. That's 200 gallons/car) will address their differences.
posted by hoople at 6:00 PM on November 4, 2012 [1 favorite]



If the price goes to $20, the people who get gas will be the rich people who can think nothing of it, and the people for whom their next car trip is that important.

Half of this is accurate, half of this is ignorant classism.


Oh, BULLSHIT.

There are plenty of situations where for the vast majority of US citizens, some trips will be worth $20 a gallon and some will not.

If you don't have $20 to your name, gas lines are the last of your problems.
posted by ocschwar at 6:00 PM on November 4, 2012


The main point to take away from all this: That one episode of Always Sunny is now plausible.
posted by RobotVoodooPower at 6:01 PM on November 4, 2012 [6 favorites]


What government would legalize this with zero regulation? This is not how commerce works.

As a very temporary (3-5 day) emergency measure it makes a lot of sense. They're already relaxing normal port restrictions on foreign vessels, etc. etc. They changed how taxis worked in NYC, allowing them to pick up multiple passengers. They changed how car service cars worked, and allowed them to be hailed from the street. This is just one more thing. But for it to work prices would have to rise.
posted by shivohum at 6:02 PM on November 4, 2012


One thing that always has me wondering: How come libertarians always have endless time to comment (often 15, 20 or more times apiece) in threads like these, and then often at length? I would have thought Randian-striving would take more time. Maybe that's the superman part.
posted by maxwelton at 6:02 PM on November 4, 2012 [4 favorites]


As a very temporary (3-5 day) emergency measure it makes a lot of sense

On hazmat transport in a disaster zone?
posted by griphus at 6:05 PM on November 4, 2012 [3 favorites]


One thing that always has me wondering: How come libertarians always have endless time to comment (often 15, 20 or more times apiece) in threads like these, and then often at length? I would have thought Randian-striving would take more time. Maybe that's the superman part.

They're just relaxing a bit after the skyscraper they architected before lunch, trying to unwind before the new alloy they're going to create around dinnertime.
posted by ymgve at 6:05 PM on November 4, 2012 [5 favorites]


If people know that only the wealthy are getting a basic necessity, maybe the wealthy will finally get what's coming to them.

Mob justice is bad enough at the best of times. In the midst of a disaster, it would be hell.

There's nothing intrinsically wrong with being wealthy and lumping a class of people into one group does no one any good. I'd hate to think want would happen to wealthy females facing a mob determined to give the rich "what was coming to them". I'd hate to see what would happen to people who worked for the wealthy or friends.
posted by Brandon Blatcher at 6:06 PM on November 4, 2012 [4 favorites]


So who goes to a gas station and buys ONE gallon of gas? If you have a car with great mileage, that single gallon may get you 30-40 miles of use, although I wonder if a single gallon of gas in a big tank is hard to completely use. If you get lousy mileage, that gallon gets you 15-25 miles.

What is the minimum amount any sane person uses for an emergency fill-up? (I'm not a driver: this is a sincere question.) Five gallons? I just don't think we're talking about a poor person pulling together the $20 to get a single gallon of gas: what if it's $60? $100? $200?

If gas stays at $4 a gallon, the poor person with twenty bucks scraped together has a chance at five gallons in exchange for a long wait.
posted by maudlin at 6:06 PM on November 4, 2012 [6 favorites]



One thing that always has me wondering: How come libertarians always have endless time to comment (often 15, 20 or more times apiece) in threads like these, and then often at length? I would have thought Randian-striving would take more time. Maybe that's the superman part.


How many libertarians do you think even have MetaFilter accounts?

This isn't a libertarian versus progressive flamewar.

This is a flamewar between leftists with common sense and leftists who are completely bonkers.
posted by ocschwar at 6:07 PM on November 4, 2012 [2 favorites]


Anyway, to reiterate.

Of the two solutions, it seems like allowing price gouging would be fundamentally unfair to the poorest and most desperate.

In addition, is there any real world proof that higher prices in a emergency actually do reduce shortages? It seems just as likely that the lines would remain long as people who aren't getting gas now because they don't really need it, would find the lines more manageable and grab some in fear that the price would continue to rise?

Meanwhile this argument continues to ignore the fact that unlike other goods, gas is a necessary item in many people's lives, and the gas at a station moreso for a poor person. The rich who don't get gas are free to call Uber.
posted by Potomac Avenue at 6:10 PM on November 4, 2012 [1 favorite]


Can someone give an example of price gouging working out well, for the whole society affected, at some point in the near past?

The decline of the USSR as a military superpower?
posted by zippy at 6:10 PM on November 4, 2012 [4 favorites]


200 Gallons * (7.1 lbs/gal) * (1 ton/2000lb) = .71 tons: A little more than most cars can carry...

But if I buy 5 gallon cans and fill them with four gallons of water, some soap and a gallon of gasoline each, I could probably make enough profit to rent a truck. I mean, without regulations or violence, who's to stop me?
posted by Orb2069 at 6:11 PM on November 4, 2012 [5 favorites]



So who goes to a gas station and buys ONE gallon of gas? If you have a car with great mileage, that single gallon may get you 30-40 miles of use, although I wonder if a single gallon of gas in a big tank is hard to completely use. If you get lousy mileage, that gallon gets you 15-25 miles.


Who goes to get one gallon? Someone who just saw the price rise high and realized that he needs to ration his use for the duration.

I'm going to go a step futher here:

If you participate in a gas line, you are going to deprive someone behind you in line of gasoline that he might need more than you. You are being selfish. Selfish enough that I can't work up much syympathy about beign gouged.
posted by ocschwar at 6:11 PM on November 4, 2012


This is a flamewar between leftists with common sense and leftists who are completely bonkers.

Maybe calling people mentally ill for knowing the difference between "willing to pay $20 a gallon" and "able to pay $20 a gallon" isn't the best strategy.
posted by Marisa Stole the Precious Thing at 6:12 PM on November 4, 2012 [32 favorites]


I might even agree that $20 a gallon might be ok. Poor people are not even likely to have a car here. The problem is that people already spend thousands of dollars a gallon gassing jets and helicopters, it would be a minor inconvenience to spend $1000 a gallon gassing a car in the short term.

In short, I don't know where this $20 a gallon number came from.
posted by Ad hominem at 6:13 PM on November 4, 2012


[Folks, everyone needs to take a step back and consider that maybe assuming your opponents are idiots or evil isn't going to lead to a productive discussion. Thanks.]
posted by restless_nomad at 6:14 PM on November 4, 2012 [3 favorites]


maxwelton: presumably they're all waiting for gas and just killing time until the line starts moving?

To be as fair as I can bring myself, the anti-anti-gougers see there being NO GAS, ANYWHERE, AT ANY PRICE! as the worst possible situation imaginable, and in that outlook flighting prices are a feature, because (in their opinion) if that's permitted then the last gallon will never actually sell out, because the price will climb astronomically high. Thus at any point in time you know you can go guy yourself some gas, at some price or other, and it'll be up to you to decide how much gas is worth to you and act accordingly.

The other side is more concerned with, approximately, "what % of people will get what % of their gas requirements (and is the distribution 'fair')"? It's a different question. It'd be about the same question if willingness-to-pay tracked need-to-have better than it does, but it's not hard to believe that they tend not to.

ocschwar: indeed it is.
posted by hoople at 6:14 PM on November 4, 2012 [2 favorites]


Maybe calling people mentally ill for knowing the difference between "willing to pay $20 a gallon" and "able to pay $20 a gallon" isn't the best strategy.


Maybe calling people randians isn't that far away from calling people completely bonkers.

And maybe you haven't noticed, but the vast majority of American car owners can damn well afford a $20 gallon of gas if they need it.
posted by ocschwar at 6:15 PM on November 4, 2012


What if Chobits DVDs were completely free for anyone to order? People who don’t even like Chobits would order them because there would be no incentive to not order them. I would order them and chuck the discs at cars because my need to chuck shit at cars is virtually unlimited.

Price acts like a barrier to participation. Chobits’ $26.99 price tag keeps people who don’t like anime from taking up scarce Chobits resources, and allows those who really want them to purchase them. Because I don’t know what Chobits is I have an incentive to not give Amazon.com $26.99 for a copy. The incentive is that I get to keep my money.

The Chobits market is just one of many efficient and neatly organized market systems that illustrate the principle of scarcity.


Economics.
posted by Jeff Mangum's Penny-farthing at 6:15 PM on November 4, 2012 [2 favorites]


On behalf of the mentally ill everywhere: it's not the same thing as being ignorant, entitled, rude, stupid, or Randian.
posted by gingerest at 6:17 PM on November 4, 2012 [16 favorites]



I might even agree that $20 a gallon might be ok. Poor people are not even likely to have a car here. The problem is that people already spend thousands of dollars a gallon gassing jets and helicopters, it would be a minor inconvenience to spend $1000 a gallon gassing a car in the short term.


Those people also have servants who can stand in the gas lien for them.

They're a senseless distraction because they're less than 1% of the population.
They are not the reason there is not enough gas to go around.
posted by ocschwar at 6:17 PM on November 4, 2012


Neither are the remaining 99%. The reason is Sandy.
posted by ymgve at 6:19 PM on November 4, 2012 [2 favorites]


Maybe calling people randians isn't that far away from calling people completely bonkers.

This is my now second comment in this thread. I haven't called anyone a Randian, but there are clear parallels when "let the market decide, fuck the poor" is in play.

And maybe you haven't noticed, but the vast majority of American car owners can damn well afford a $20 gallon of gas if they need it.

Yeah? Is there a cite for this? And how about how the price of fuel affects what people have to pay for cabs or mass transit?

If you participate in a gas line, you are going to deprive someone behind you in line of gasoline that he might need more than you. You are being selfish.

OK, this I don't get at all. You're being selfish for being in line to get a resource sooner? How is that more selfish than "make what is essentially a vital resource to millions of Americans less affordable"?
posted by Marisa Stole the Precious Thing at 6:20 PM on November 4, 2012 [6 favorites]



To be as fair as I can bring myself, the anti-anti-gougers see there being NO GAS, ANYWHERE, AT ANY PRICE! as the worst possible situation imaginable,


Because it is.

99% of American car owners are perfectly able to spring for a $20 gallon if they need the next trip that badly, or say "fuck this, I'm walking/biking/staying home" if they don't.

99% of us can distinguish between a car trip that justifies this price and one that does not.
posted by ocschwar at 6:21 PM on November 4, 2012


They're a senseless distraction because they're less than 1% of the population.
They are not the reason there is not enough gas to go around.


If you don't have $1000 for gas you have much bigger problems!

All I am saying is $20 a gallon is a made up number. Many people can, and will spend much much more, and the number of people who can spend $1000 a gallon on gas is higher in New York than just about anywhere in America.
posted by Ad hominem at 6:23 PM on November 4, 2012 [6 favorites]


99% of American car owners are perfectly able to spring for a $20 gallon if they need the next trip that badly, or say "fuck this, I'm walking/biking/staying home" if they don't.

I don't know what situation you are in, but a lot of people - poor people, even, need to drive two trips per day. To get to work.

If they can't afford gas, they will be fired.
posted by ymgve at 6:23 PM on November 4, 2012 [15 favorites]


OK, this I don't get at all. You're being selfish for being in line to get a resource sooner? How is that more selfish than "make what is essentially a vital resource to millions of Americans less affordable"?


YES. You are being selfish. Did you care to ask the people behind you in line why they needed the gasoline? How do you know the gas you're using wasn't needed more desperately by someone who is doing without?

When a situation like this rolls around, it's your duty to keep your use of a scarce resource like gasoline to a minimum. If you don't, you're being selfish.

DUH.
posted by ocschwar at 6:24 PM on November 4, 2012 [1 favorite]


Allowing price gouging won't stop hoarding; people are fucking stupid. The day after 9/11, lines for gas went crazy in my neck of the woods. There was no supply discontinuity; as I don't recall the twin towers housing any refineries. And yet that didn't stop people from mobbing the gas stations to where the price hit 8, 9 dollars a gallon and then running the station out.

That's what really mystifies me about this "everyone just has to wait longer" theory being proposed as an alternative to price spikes. Do east coast gas stations really stock up on multiple day's demand? That is what's really the raw fucking deal for people. You get in line, wait, and when it's your turn, there's no fucking gas left. Thats what a shortage looks like. I'd like someone to clarify how that's different than fucking the poor, because they look functionally identical.
posted by pwnguin at 6:24 PM on November 4, 2012 [3 favorites]


99% of us can make up unconvincing economic statistics on the spot.
posted by griphus at 6:25 PM on November 4, 2012 [7 favorites]


Just delurking here, against my better judgment, to protest that one does not need to be a libertarian to see that, in this situation, rationing on price is obviously -- obviously -- a better utilitarian solution than rationing on who can get there first and who can wait the longest.

Yes, there will be some set of people who just flatly can't afford it no matter their need. That is always going to be true. The number of people for whom that is true will rise temporarily. It sucks. It's still a better solution than lines and shortages. Sorry.
posted by eugenen at 6:26 PM on November 4, 2012 [3 favorites]


Everyone's getting a pretty bad deal right now. Letting the prices rise without control gives the rich a better deal and the poor a very bad deal. No thanks.

You're saying letting the price fluctuate is unfair because it gives the rich a better deal.

You're also saying that having people spend 3 hours in line is fair. Even though one could easily pay someone else $100/hour to be in line for them. Which means the current situation also gives the rich a better deal.

Let me offer you an anecdote. I spent my weekend shuttling volunteers and goods from all over the city to the Rockaways. Today at 1PM I had to stop because I was about to run out of gas. I would have EASILY paid $200 out of my pocket to fill my tank so I could do three or four more trips. But I couldn't so I went home.
posted by gertzedek at 6:27 PM on November 4, 2012 [1 favorite]


YES. You are being selfish. Did you care to ask the people behind you in line why they needed the gasoline? How do you know the gas you're using wasn't needed more desperately by someone who is doing without?

Whereas allowing price gouging will SURELY get the gas to the people who need it most. And again, please back up this "99% of car owners can totally afford $20 a gallon".

DUH.

I predict a meaningful and informed discussion awaits.
posted by Marisa Stole the Precious Thing at 6:27 PM on November 4, 2012 [2 favorites]


If you participate in a gas line, you are going to deprive someone behind you in line of gasoline that he might need more than you. You are being selfish. Selfish enough that I can't work up much syympathy about beign gouged.

It's correct to say that fixed pricing favors those who arrive first, and to say that floating pricing favors those who have more money.

There's a number of other conclusions you seem to have arrived at without showing your work, though, and it looks a lot to me like you're high-centered on a false dichotomy assuming these are the only two options.

I'm sure it's because I'm a stupid leftist, though, and if you just keep at it, you'll get through to us rather than eating away at your own credibility.
posted by weston at 6:29 PM on November 4, 2012 [6 favorites]



Whereas allowing price gouging will SURELY get the gas to the people who need it most.


At least it will punish their selfishness by making them part with their money.
posted by ocschwar at 6:31 PM on November 4, 2012


On hazmat transport in a disaster zone?

They're talking about letting trucks fuel up right off tankers "if that's safe." So yeah. They're already planning on taking some risks with hazmat in a disaster zone.
--
200 Gallons * (7.1 lbs/gal) * (1 ton/2000lb) = .71 tons: A little more than most cars can carry...

Even quartering the amount, it still makes sense. Heck, even quartering the amount AND quartering the profit/gallon it makes sense. Even assuming a profit of only $4/gallon * 50 gallons it would still be worth it for a lot of people to make the trip.

I mean, without regulations or violence, who's to stop me?

It would still be fraud, and that's illegal. Doesn't seem to stop transactions on eBay or in flea markets. Though if you're really worried about this, require people to associate themselves with a particular gas station or some established sue-able entity.
posted by shivohum at 6:32 PM on November 4, 2012


At the moment, the price of gas in NJ is $4/gallon plus around three hours of time, right? Suppose you value your time at $10 per hour. In that case the real price of 5 gallons is $50 ($20 of gas plus $30 of time), making a real price per gallon of $10.
If you value your time at $20 then the real price per gallon is $16.
If you value your time at $50 then the real price per gallon is $34.

But suppose you're buying 10 gallons. In that case the real price per gallon falls to $7, $10, $19.
If you buy 15 gallons then it falls to $6, $8, $14.

Wage rate | $10/h | $20/h | $50/h
=================================
5 gallons | $10/g | $16/g | $34/g
10 gallons| $ 7/g | $10/g | $19/g
20 gallons| $ 6/g | $ 8/g | $14/g
30 gallons| $ 5/g | $ 6/g | $ 9/g


The queueing system gives a huge incentive for people to buy as much gas as possible. It gives this incentive to rich people especially, because the real cost of gas to them is mostly waiting in line. Once they've bought it they will only economise if they think the crisis won't be over before they need to refill their tanks. So, perversely, the system which is being advanced as being economically fair in a crisis is one that encourages people to buy as much gas as possible, and especially encourages rich people to buy as much gas as possible to amortise their cost of labor more widely.
posted by Joe in Australia at 6:32 PM on November 4, 2012 [14 favorites]


If they can't afford gas, they will be fired.

OK...and if the gas has run out they won't be? It seems like saying there are people who really, really need gas is an argument against the randomness of the queue.

I mean, I (and I suspect ocschwar) understand that there are poor people who sometimes have more need for gas than richer people. We totally get it, really. But need isn't a binary off/on switch. Maybe my middle-class family of 6 could all fit in the sedan that gets 30 mpg, but it would be a lot better evacuating in the old minivan that gets 18. We've been stuck in the house for a few days and could really use something other than canned food, but do we really need it? And so on. What becomes a "need" at $4/gal isn't the same as $6/gal, or $8/gal, for different people.
posted by dsfan at 6:33 PM on November 4, 2012


Marisa Stole the Precious Thing: "And again, please back up this "99% of car owners can totally afford $20 a gallon"."

Pretty sure most cars on the highway are carrying at least 1 or two empty seats. We have whole lanes dedicated to carpooling, and it's still not enough. Maybe 20 gallon gas would do the trick.
posted by pwnguin at 6:34 PM on November 4, 2012 [1 favorite]


But where first come first serve rewards the first with all they want, it also denies the latecomers anything. There is nothing fair about that, and it encourages hoardy behavior. "I waited in this line, and there might not be any next time, and I won't want to wait, and I have already waited in line, so I'm buying all I can."

Whereas price rationing encourages people to think "fuck that's expensive, I will buy as little as I need."
posted by gjc at 6:35 PM on November 4, 2012


Again RTFA - the argument (mostly) being made isn't rationing vs floating prices, its that allowing prices to rise will help solve the supply constraint.

Neither will help solve the supply issues in this particular instance.
posted by JPD at 6:36 PM on November 4, 2012 [1 favorite]


So, perversely, the system which is being advanced as being economically fair in a crisis is one that encourages people to buy as much gas as possible, and especially encourages rich people to buy as much gas as possible to amortise their cost of labor more widely.

I think it's already been mentioned way upthread that people are being specifically prohibited from hoarding.

Pretty sure most cars on the highway are carrying at least 1 or two empty seats. We have whole lanes dedicated to carpooling, and it's still not enough. Maybe 20 gallon gas would do the trick.

I have no idea how this proves 99% of car owners can drop $20 a gallon, but I do support car pooling and mass transit.
posted by Marisa Stole the Precious Thing at 6:36 PM on November 4, 2012 [1 favorite]


reality is not fair.

Then we shouldn't have any laws at all.
posted by dirigibleman at 6:37 PM on November 4, 2012 [8 favorites]


Marisa Stole the Precious Thing: "I have no idea how this proves 99% of car owners can drop $20 a gallon, but I do support car pooling and mass transit."

If you drive your 4 seat car to work at 5ish dollars a gallon normally with no passengers, a full carpool makes the math work out.
posted by pwnguin at 6:39 PM on November 4, 2012


I support $10 gas, but not if it was $4 a week ago.
posted by seanmpuckett at 6:39 PM on November 4, 2012 [1 favorite]


"And again, please back up this "99% of car owners can totally afford $20 a gallon"

They can't afford to use it at the same rate they were using it. They will have to use less. But they will get *some*, which they may not if the station runs out. It sucks, nobody is denying it. It sucks less than losing a job because you were late getting in line because you are working 14 hours a day.
posted by gjc at 6:40 PM on November 4, 2012



Again RTFA - the argument (mostly) being made isn't rationing vs floating prices, its that allowing prices to rise will help solve the supply constraint.

Neither will help solve the supply issues in this particular instance.


Sure it does. The supply is what's in the gas station and available for sale. The ideal is to make sure the station does not run out until just before the next tanker truck arrives. You let the price rise to make people ration their use, the depletion of gas from the station slows down, and so there's gas available at all times.

Does the higher price also get the tanker to come sooner? Probably not. But it still addresses supply.
posted by ocschwar at 6:40 PM on November 4, 2012


As a data point for you potential fuel smugglers here: the quanties of gasoline and diesel involved are mind-bogglingly huge. The eastern US (PADD 1) uses about 9 million barrels of gasoline per day. Diesel and heating oil is about half that. Even assuming that the area damaged by Sandy accounts for maybe 10% of that (probably low by a factor of 2), that's still fleets of cars, around 5,000 to 10,000 per day that would be needed. Imagine the chaos.

It's faster, and more importantly, a whole lot safer to just fix what's broken, as fast as possible.
posted by bonehead at 6:40 PM on November 4, 2012 [3 favorites]


I think it's already been mentioned way upthread that people are being specifically prohibited from hoarding.


Fuckload of good that's doing.
posted by ocschwar at 6:40 PM on November 4, 2012


It would still be fraud, and that's illegal. Doesn't seem to stop transactions on eBay or in flea markets

Both eBay and most regular flea markets have reputation systems (Formal or informal) specifically to stop this, a feature that does not exist on most powerless street corners in NYC.

Never mind the fun that ensues when you take a can of adulterated gasoline home and put it in your generator.

Seriously - Do you think that the whole bureau of weights and measures was created by busybody bureaucrats to annoy innocent shopkeepers and neuter otherwise savvy consumers?
posted by Orb2069 at 6:41 PM on November 4, 2012 [9 favorites]


The problem here is that the amount of gas available is too low for the demand. Period. Demand for gas in NYC is already lower than almost anywhere else in the country. Moreover, stations are already rationing. Out in Montauk, they were limiting to $20 of gas at a time. This was not done with any police or government interaction; the stations were just doing it (maybe to make the lines move faster).

I drove in from Montauk today. The trip, which is usually 3 hours, took 2, and I was driving slow to conserve gas. The roads leading into the city were completely empty. No traffic at all. So the idea that more expensive gas would decrease demand is simply not true.

There are three types of people buying gas now:

1. People who need it for generators, as they have no power
2. People who need it to get to work, so as to get paid
3. Emergency responders.

That's it. NYPD has its own fueling stations, and they are providing fuel to many other departments (sanitation, buildings, etc.), so #3 is not as high as you'd imagine.

I'm not anti-gouging, but in a situation where demand is essentially inelastic, and access to gas is literally a life or death issue (seriously -- there's a cold front on the way), the market literally has no effective way to respond. There is literally no price high enough that would both eliminate lines and not result in riots.
posted by snickerdoodle at 6:42 PM on November 4, 2012 [16 favorites]


Whereas price rationing encourages people to think "fuck that's expensive, I will buy as little as I need."

I am still not convinced. There are 720,000 millionaires in NYC. The price at which the richest people will balk is so high that a considerable amount of people will be priced out.

We have almost a million millionaires out of 9 million people.

I'm going to shut up because I am just saying the same thing over and over but the inequality is so great here that without controls in place the richest can just price everyone else out at a whim.
posted by Ad hominem at 6:42 PM on November 4, 2012 [5 favorites]


brokkr: "
MattD: "Here's another fun example. In my town, there are still tons of trees down in the roads and powerlines not yet fixed, because the people doing that work aren't allowed to charge a premium. But the vast majority of yards have already had their leaves and downed branches cleared, and downed trees are on their way to being cleared, because the private gardening services are able to do whatever deals they want."
There is an upper limit to the number of trees you can clear and powerlines you can fix. If we assume that the "people doing that work" are working at full capacity, allowing them to charge wouldn't get more trees cleared or more powerlines fixed, it would just rearrange the order in which it gets done (i.e. you effectively bribe them to clear away your tree first).

I also don't see what problem would be solved by letting your suburban hotels charge more. The owners would make more money, sure, but that doesn't fix anything
"

Part of the issue is that just because you can run a chainsaw and cut trees doesn't mean that you can do shit near powerlines. If you're not properly trained and certified to work around powerlines, you have no business getting near them. But you can still get trees off of houses or out of yards, even ones that may be very dangerous, if you're qualified to do that. Powerline fixing and tree hazard mitigation are different things.

As to price gouging: Expect that many companies that may be slow now where they live may come from a few hundred miles away to have an abundance of work. Some of them may be assholes and gouge; but even if they don't, they need to cover travel, lodging, overtime, per diem for employees away from home for however long it is and any other random expenses that would certainly come up— and their prices should rise commensurately, unless they're doing it for charity.
posted by Red Loop at 6:43 PM on November 4, 2012 [1 favorite]


ocschwar: “If you don't allow the price to go up, you are guaranteed that stations will run dry, and that will leave people unable to get gas at any price. They might be rich, they might be poor, but they will be screwed because they didn't get to the gas station in time.”

But that has nothing to do with rationing. I'm kind of confused; my comment, which you seem to be responding to, agreed with you that simply fixing prices the way they're doing now would not be helpful. I was arguing for rationing, but you seem to just be ignoring that.

Are you really against the idea of rationing, too? If so, why?
posted by koeselitz at 6:44 PM on November 4, 2012 [1 favorite]


gjc: “... price rationing...”

"Price rationing" isn't really "rationing" until gasoline is bought with some currency that's distributed to all according to need. Under "price rationing," the rich are still free to hoard all they want – and it seems realistic to believe that there are plenty of people in New York who will (again, see the Trump thing above.)

It's hard to see any way that "price rationing" is better than actual rationing.
posted by koeselitz at 6:49 PM on November 4, 2012 [3 favorites]


I remember gas rationing here in Australia, and what it did was get people to fill up their car every chance they got, just in case the rationing got worse. The system worked on number plates - an odd final digit meant you could buy $X of gas on odd days of the month, or something like that. So you had long queues at every gas station all the time, because people would go from station to station to station on days they could buy gas.

Unless you mean ration cards? Because a system like that takes a while to set up, and once again you see every person with a ration purchase their entire ration as soon as possible.
posted by Joe in Australia at 6:50 PM on November 4, 2012


Sure it does. The supply is what's in the gas station and available for sale. The ideal is to make sure the station does not run out until just before the next tanker truck arrives. You let the price rise to make people ration their use, the depletion of gas from the station slows down, and so there's gas available at all times.

Well no, that's destroying demand - which is probably not a terrible thing, but as you said it isn't making the trucks come faster - which is what the articles were arguing would happen.
posted by JPD at 6:50 PM on November 4, 2012 [2 favorites]


I'm not anti-gouging, but in a situation where demand is essentially inelastic, and access to gas is literally a life or death issue (seriously -- there's a cold front on the way), the market literally has no effective way to respond. There is literally no price high enough that would both eliminate lines and not result in riots.

I think this is an important point here. It's also why I agree with koeselitz when it comes to rationing by volume. Granted, not down to a single gallon per visit, but certainly enough to prevent the gas from running out at the station, while still having it available to people of all economic strata. Allowing for gouging assumes that desperate people won't take desperate measures, but will patiently sit and wait for the price of fuel to decrease.

And this isn't just about cars on the highway, either - there are cabs and mass transit to consider here, too. I think it's safe to say that allowing price gouging will be reflected in the fares charged the poor who take the bus to work.
posted by Marisa Stole the Precious Thing at 6:51 PM on November 4, 2012 [2 favorites]


If nothing else this thread has made me even more fucking terrified of what's going to happen when there's an actual systemic gas shortage, so, hooray for that I guess
posted by junco at 6:52 PM on November 4, 2012 [18 favorites]


Are you really against the idea of rationing, too? If so, why?


I favor rationing. I rationed my own use of gasoline to 0 gallons in response to Sandy.

I also ration my food shopping when blizzards are happening. Jerks in my city declare a French Toast Emergency and clog traffic rushing out to get milk, eggs and bread. Meanwhile, I remind myself of my store of dry nonperishables at home, and vow that in the worst case scenario, I will go without fresh food for a while.

And then I go home, in the traffic, and curse the jerks who make my bus trip quadruple in length because they MUST MUST MUST have milk.

But I also know that rationing per customer means customers will go station to station and be as selfish as ever. And I know that our government has never been able to print ration books and distribute them in response to things like a hurricane. So in a scenario like this, it's either ration by price or let gas lines form.
posted by ocschwar at 6:53 PM on November 4, 2012 [2 favorites]


I had this same problem to deal with at my apple stand, back when the big earthquake hit North Jersey back in August. You all remember the big August quake, right?

Well, there was a lot of trouble getting food in, and for more than a few days there my apple stand was just about the only game in town. I started out selling them for around what I'd always sold them for, but I was pretty worried that someone was going to want to hoard food and buy up all the apples, so I limited sales to one bag of apples to a customer.

Pretty soon, sure enough, long lines began to form, as everyone in town patiently waited to buy their bag of apples from me. And sure enough, at the end of the day, I'd usually run out, and there were always a few folks left who went hungry. They wouldn't get another chance until the next day when Sam brought over another load of apples across the river on his raft.

Well, that didn't seem right to me. It didn't seem fair that some folks were going hungry because someone was in line before them, or because they just didn't have the time to wait in line. I realized I had a civic duty to do something about this.

So I got rid of the one-bag-per-person limit, and instead raised my prices to $100 a bag.

It was selfless of me, really.

The lines went away almost immediately. As soon as I raised prices, the only people buying were the very wealthy, and those who weren't quite so well off, but just able to scrape together the money out of desperation. And I'm proud to say that from that point on, I never once ran out of apples!

Even with the very wealthy folks usually buying several bags at a time now, I always had some bags left at the end of the day. From that point on, not a single person went hungry just because someone else was ahead of them in line. There were always apples for anyone who came by. Well, came by with $100 in hand. Cash.

See, the way I figure it, by raising the price of my apples, I made sure that the only people who were buying them were the ones who really, really needed food. Or were rich, whatever. But anyway, I'd thinned out the line of people who were only waiting hours to buy food for frivolous reasons, because it was so cheap. To throw at woodchucks or something. Now the only people buying, other than the rich, were those who had thought really hard about whether they should buy food or, say, medicine for their sick kids. Folks who made the optimal, rational, choice about how much food they really needed. Or whether they needed it at all. Needed, could afford, same thing, right?

Anyway, just to show that sometimes good deeds really do get rewarded, for some reason, by complete coincidence, I made out like a bandit during the quake! Massive profits, just from charging as high a price as I thought I could get away with for a basic necessity during an emergency when people had no other choices. I think of it as "reward for doing good".

I'm sure that my efforts were appreciated. You know, I wouldn't be surprised if the town threw me a parade.

Look, here comes a big mob of folks right now!
posted by kyrademon at 6:58 PM on November 4, 2012 [66 favorites]


The ideal is to make sure the station does not run out until just before the next tanker truck arrives.

That is not the ideal! The ideal is to promote equitable distribution because we're in the midst of a crisis and many people have pronounced and immediate needs. That can be accomplished via rationing by volume or by gouging, among other options. It's hard to see how limiting access by cost is either practically superior (since it wouldn't promote equitable distribution) or morally preferable (since it would harm far more people).
posted by clockzero at 7:03 PM on November 4, 2012 [3 favorites]


It's amazing how much information you have about the purposes of other drivers.
posted by hoople at 7:03 PM on November 4, 2012 [2 favorites]


Joe in Australia: “I remember gas rationing here in Australia, and what it did was get people to fill up their car every chance they got, just in case the rationing got worse. The system worked on number plates - an odd final digit meant you could buy $X of gas on odd days of the month, or something like that. So you had long queues at every gas station all the time, because people would go from station to station to station on days they could buy gas. Unless you mean ration cards? Because a system like that takes a while to set up, and once again you see every person with a ration purchase their entire ration as soon as possible.”

ocschwar: “But I also know that rationing per customer means customers will go station to station and be as selfish as ever. And I know that our government has never been able to print ration books and distribute them in response to things like a hurricane. So in a scenario like this, it's either ration by price or let gas lines form.”

Well, maybe I'm being entirely too creative in thinking about it this way, but it seems like this is more a logistical problem than anything else, and I think we could solve it. In WW2, we printed up ration books; have we really not moved beyond that point? This could be done using license plate numbers; all you'd have to do is make sure people with a particular license plate don't get gasoline at multiple stations. I know people who could write a web site front end in an afternoon that would do this - enter a plate number, check it against a database, verify that it hasn't been used and add it to the database.
posted by koeselitz at 7:05 PM on November 4, 2012


Clearly not enough people have watched Mad Max - Beyond Thunderdome
posted by iamabot at 7:07 PM on November 4, 2012 [3 favorites]


But I also know that rationing per customer means customers will go station to station and be as selfish as ever. And I know that our government has never been able to print ration books and distribute them in response to things like a hurricane. So in a scenario like this, it's either ration by price or let gas lines form.

I don't know if you're in the NYC area right now, but this really isn't happening. People are not going from station to station. People are staying home, biking, or walking whenever possible. The number of bikes on the street has increased drastically, and the number of cars is way down. This will change tomorrow when more people have to go to work, but for the most part, New Yorkers are reacting in a far more rational and balanced fashion than you're giving them credit for.
posted by snickerdoodle at 7:07 PM on November 4, 2012 [9 favorites]


The Dickensian passion plays and libertarian mockery can't change that this really is how economics works.

This isn't about the gas station owners or the rich. This is about limiting consumption with the tools we have. Nobody is setting up a rationing system, except de facto ones at individual stations that reward the people with 3 hours to spend. If someone had set one up, we wouldn't be having this discussion. We'd be having the one where Donald Trump shows off all the ration coupons he bought off his minions.
posted by gjc at 7:09 PM on November 4, 2012 [4 favorites]


I don't know if you're in the NYC area right now, but this really isn't happening.

I'm in BOS, and right now I'm mostly ashamed that our Globe printed a columnist's whine about going 4 days without power, with no appreciation that the lineman who turned his lights on probably drove from Manitoba to do it. I will not buy any gas until the gas lines end, because we are in the same pipeline system as you guys. And yes, I know that most of NYC has risen to the challenge.

But there is the slight matter of New Jersey.
posted by ocschwar at 7:13 PM on November 4, 2012



Well, maybe I'm being entirely too creative in thinking about it this way, but it seems like this is more a logistical problem than anything else, and I think we could solve it. In WW2, we printed up ration books; have we really not moved beyond that point? This could be done using license plate numbers; all you'd have to do is make sure people with a particular license plate don't get gasoline at multiple stations. I know people who could write a web site front end in an afternoon that would do this - enter a plate number, check it against a database, verify that it hasn't been used and add it to the database.


So either we develop and test a foolproof rationing system well ahead of the next hurricane, or we go seat-of-our-pants and implement it right afterwords. The former: might work, but good luck getting it legislated. The latter: for fuck's sake just let the prices rise. It's only for a few days and it's better than gas lines.

World War II was for a multi-year crisis, not something like this. And we weren't really trying to ration gas (we were using gas as a proxy for rationing rubber.)
posted by ocschwar at 7:19 PM on November 4, 2012 [1 favorite]


I'm in Australia, so maybe I'm just not seeing the news, but last time I looked NJ had taken a huge hit from Sandy, and had more houses without power than New York. Is there something you're reading about the behavior of people in NJ, or are you just taking a cheap shot?
posted by gingerest at 7:20 PM on November 4, 2012


New Jersey is where the worst gas lines have been happening. It's because in most of NJ, it is difficult to live a normal life without a car.
posted by ocschwar at 7:26 PM on November 4, 2012 [1 favorite]


So either we develop and test a foolproof rationing system well ahead of the next hurricane, or we go seat-of-our-pants and implement it right afterwords. The former: might work, but good luck getting it legislated. The latter: for fuck's sake just let the prices rise. It's only for a few days and it's better than gas lines.

Well, except the former is kind of working (although not without complaint). I haven't heard any stories of people dying from lack of gas, which in the midst of a natural disaster, is what we're optimizing for. Not some theoretical economic ideal.

This isn't charging more money for shovels before a snowstorm. This is a situation where the supply-demand equilibrium has tons of negative externalities that a civilized society does not want to pay.
posted by snickerdoodle at 7:26 PM on November 4, 2012 [2 favorites]


People are staying home, biking, or walking whenever possible.

People in Brooklyn are hitchhiking to get into Manhattan, and it's working great. Spontaneous carpools are forming. It's funny seeing a guy in a business suit waving down a cab and having some random Volvo stop for him instead. My commuting friends have some pretty funny stories about the different sorts of people that pick them up. (Though, this happened because the subways were down, not because of a lack of gasoline.)
posted by painquale at 7:32 PM on November 4, 2012 [2 favorites]


This is a situation where the supply-demand equilibrium has tons of negative externalities that a civilized society does not want to pay.

You mean like mile long gas lines that reduce the number of lanes available on nearby roads? That externality has been happenign quite a lot in New Jersey. The only externality I see from $20 gas is that people don't like it.
posted by ocschwar at 7:32 PM on November 4, 2012


And can we put Xbox/SSD comparisons aside? You are not going to lose your job, freeze, or go hungry because you don't have a fucking Intel SSD. Not having gas for your car is very different.

Those are just examples of how price controls cause shortages and lines.

You guys have price controls. Therefore, you have shortages and lines. These problems would be greatly ameliorated, or even entirely absent, if the price was allowed to float.

This is like arguing against gravity. I'm saying, look, if you drop the ball, it will fall down. And about eighty five thousand of you seem to think that I'm a terrible human being for observing that balls fall down when you drop them, and you keep coming up with different ways to drop the ball, thinking that, somehow, you're magically going to get a different result.

It's not going to hang in space. Not everyone is going to get all the gas they want. All you're doing is forcing people to spend a ton of time waiting... all those hours that you're forcing on them is hours of labor you can't use to recover from your disaster.

Apparently, a lot of you think that's okay. It's fine with me, I'm not affected. If that's the path you want to take to allocate your scarce resources, fine, do that. I think it's very stupid, but it's your city, live how you want.

As long as you understand that the exceedingly long lines and shortages are greatly exacerbated by the price controls, then if you choose price controls anyway, so be it.
posted by Malor at 7:34 PM on November 4, 2012 [1 favorite]


If we do, the rich will just end up hoarding anyway – and there are certainly enough people with money in New York to completely destroy the market for everybody else (see the Trump story above for an already-current example).

I'm not convinced by this. The rich didn't get rich by throwing money away: they'll buy as much gas as they think they need to ride out the storm, and no more. Why would they hoard gasoline when it's at its most expensive? Prices are going to drop again at some point in the nearish future.
posted by painquale at 7:39 PM on November 4, 2012 [2 favorites]


The objection that "it takes a while to set up a rationing system" fails at the point when you remember that history didn't actually begin the moment Sandy made landfall. We've had decades and dozens of previous disaster case studies to come up with some solution better than "just jack up the prices until only the rich and the desperate are willing to pay."
posted by gerryblog at 7:42 PM on November 4, 2012 [1 favorite]



I mean, I (and I suspect ocschwar) understand that there are poor people who sometimes have more need for gas than richer people. We totally get it, really. But need isn't a binary off/on switch. Maybe my middle-class family of 6 could all fit in the sedan that gets 30 mpg, but it would be a lot better evacuating in the old minivan that gets 18. We've been stuck in the house for a few days and could really use something other than canned food, but do we really need it? And so on. What becomes a "need" at $4/gal isn't the same as $6/gal, or $8/gal, for different people.


THIS.

I need gas.
You really need gas.
He really really needs gas.

Is there some "really-o-meter" we can use to make objective comparisons? of course not. But we do agree that some people will need gas more than others.

Well, is a rationing by price going to ration the gas by who has the most reallies ? Not quite. But it will do a better job of this than rationing by who gets to the gas station first.


I'm not convinced by this. The rich didn't get rich by throwing money away: they'll buy as much gas as they think they need to ride out the storm, and no more. Why would they hoard gasoline when it's at its most expensive? Prices are going to drop again at some point in the nearish future.


And we're talking about NY, where the richest live in Manhattan and probably responded to Sandy by not using any gas (and still enjoying their usual sushi, et cetera, a short walk from home)
posted by ocschwar at 7:42 PM on November 4, 2012 [2 favorites]


The only externality I see from $20 gas is that people don't like it.

Really? You don't see people losing their jobs because they can't afford to go to work, or not being able to afford to help their neighbors or go to shelters if they need to, or robbing gas stations to fuel their generators so their kids don't freeze to death Wednesday night?

My husband's company is in northern NJ. He's been in contact with his employees who are doing the best they can to carpool and help each other out during this ordeal. He's keeping his office running on generators even though he can't do business (internet is down) so that 200 people have a place to go for heat, electricity, and running water. I don't know where you're getting your information from, but people are not out there driving and buying gas because it's fun.

Well, is a rationing by price going to ration the gas by who has the most reallies ? Not quite. But it will do a better job of this than rationing by who gets to the gas station first.

Why? I'm quite curious to see why you believe this. Time is a greater equalizer than money -- if you're desperate enough, you will get up earlier, stay later, etc. If you don't need it, you will just go home. But money -- at $20 a gallon, here is no way my doorman can compete with me, even though I have no real reason to drive and he needs to in order to get to work.
posted by snickerdoodle at 7:48 PM on November 4, 2012 [11 favorites]


New Jersey is where the worst gas lines have been happening. It's because in most of NJ, it is difficult to live a normal life without a car.

We had to roll down to S.I. for a family-thing Saturday, and stayed overnight over in Woodbridge. We had filled up before leaving Albany, so it wasn't an issue to roll down, visit, and roll back up to where there are no lines before needing to worry about it.

My mind exploded when we passed by the i-don't-know-if-they-were-a-mile-but-they-were-damned-long lines at the stations out IN FRONT OF THE LINDEN STORAGE TANKS on 1and9.
posted by mikelieman at 7:48 PM on November 4, 2012


He's keeping his office running on generators even though he can't do business (internet is down) so that 200 people have a place to go for heat, electricity, and running water. I don't know where you're getting your information from, but people are not out there driving and buying gas because it's fun.

And if gas was $20/gallon, he probably wouldn't do that, so there would be more gas available for everyone else. Him keeping his whole office lit and powered may not be that great an allocation of resources. It's nice, but nice is not the same thing as smart.
posted by Malor at 7:50 PM on November 4, 2012 [2 favorites]


You guys have price controls. Therefore, you have shortages and lines.

no, we have natural disasters - that's why we have shortages

All you're doing is forcing people to spend a ton of time waiting

waiting for the power to come back on, waiting for the insurance to settle, waiting for things to get back to normal ...

look, this situation was not caused by the government, it was caused by random atmospheric processes that don't give a damn about econ 101, price controls, or political philosophy

we are at the mercy of a universe that doesn't really give a shit about us - or funny little green pieces of paper and what we do with them

THAT'S the real world - everything you're discussing is a social construct that can easily be destroyed - or derailed - by the next random disaster

what's your response - "oh, the market will sort it all out" - or "hey, we need to sort it all out"?

on the one hand, ideological passivity and fatalism - on the other hand, a positive belief that one can DO something about the messes that happen - including working with one another instead of encouraging some to take ruthless advantage of vunerable others

honey badgers are as ruthless and as individualist as they come

you'll notice that they've yet to build any civilizations
posted by pyramid termite at 7:54 PM on November 4, 2012 [10 favorites]


His office runs on diesel, so he's not competing with people at in the gas lines. He's basically running a de facto shelter for his employees who are powerless (and yes, heat, lights, etc. are down to a bare minimum). It will be below freezing tomorrow night. He's not being nice, he's hoping that no one he knows and cares about freezes to death.

It seems like all the pro-price-gouging arguments for this particular instance rely on the idea that people in NY/NJ are stupid, selfish, naive and/or greedy. This is not the case.
posted by snickerdoodle at 7:56 PM on November 4, 2012 [6 favorites]


The strongest argument for allowing "gouging" in gas isn't increased supply (I'm pretty skeptical this would happen very quickly for the reasons set out in this thread), or even decreasing demand for marginal trips (though surely some of these exist--people who would telecommute if they have power restored), it's to convince people that gas will be there when they really need it, so don't race to the station now. Eric Crampton has a post about this that's interesting. You really don't want people to hoard, but what's the first thing you do when you see a line--race to get your own supply before it runs out. If people believe that price increases will reduce demand, then they don't need to race to get their own gas, for the same reason that bank runs generally don't happen if people believe the banking insurance system is credible.

Since when did price increases for inelastic demand reduce demand?

It's true that some people would just have to go without gasoline altogether, but talking about "people" is a moot point. It's important to remember that "people" and "death" and "suffering" can only have an associated monetary cost in libertarian fantasy land. Dead people are just unsold mulch or filler for discount hot dogs. So, what you must first do as a libertarian economist is eliminate the possibility of caring about people.

If you're comfortable with that, then we can move to the reality of what would happen if there were no protections against price gouging in place: the gas would still be sold out. Instead of being bought by random tri-staters, they would be hoarded by 1) people speculating on the rising price of gas and 2) wealthy people who can afford to hoard and 3) people freaking out because gas went from $5 per gallon to $20 per gallon and what the hell will it be tomorrow morning? Let's reiterate the fact that it would still be sold out because gasoline is one of the most inelastic products in human history. Without gas you can't go to work, and without work you can't provide for your family, so the gas will get bought one way or the other. And even if you're a libertarian economist and the word "family" is meaningless, you have to recognize that at some point the economic utility of gas sitting in massive tanks owned by speculators and the wealthy is far, far less than being in the possession of hundreds of working families. The cost to the economy for preventing price gouging is a hell of a lot less than lost employment, increased state spending on unemployment benefits, and all of the resulting economic consequences that follow.

I witnessed this first hand when the gas panic hit Atlanta. There wasn't actually a gas shortage, after the first day, but the rise in prices and the general panic caused everyone to overfill and top up when they didn't need to. As a result, the fragile petroleum distribution system that is in place all over the country buckled under local demand. A simple rationing system could have solved the problem in hours, but instead the wisdom of the market extended the bubble shortage to a week or so. And even though I had read about the bubble shortage, I still topped up because I didn't know how much longer everyone else was going to think there was a shortage, and I didn't want to run out of gas. (I'm sorry. I'm human.) Seeing gas go from $3 to $4 to $5 while the lines get longer and longer won't cause people to relax. Receiving a voucher from a government employee stating that you will get 4 gallons tomorrow if you show up for your appointment at 3pm does a much better job.

It's also important to point out that these shortages are not evidence of over-regulation. They are evidence of nearly zero regulation when it comes to our long term planning for transportation infrastructure. Fiscal fundamentalists have been pushing against raising the gas tax for decades, fighting investment in mass transit, and more recently screaming bloody murder at 90 billion for green investments while trillions are spent trying to secure Gulf oil resources. Going back to Atlanta, the poster child of depraved city planning:
The average Atlanta resident with a job drives 66 miles every day. In fact, people here drive so much that if you added up every commute and every trip to a store or soccer practice on just one day, you'd get a number that's larger than the distance between the Earth and the sun.
Now, how is that efficient? Of course, it isn't. Unregulated markets do not maximize efficiency. They maximize profits, which typically reduce efficiency, because inefficiency holds more profit potential for more companies doing more things inefficiently. That's why we have paper towels where we once had towels. Regular towels do a better job of cleaning up, use less water and other resources when you throw them in the wash, but are hated by paper towel manufacturers because proven, sustainable, and affordable competition are a direct threat to their existence.

Similarly, the US oil industry hates transportation efficiency, and the results are clear:
Of a potential 23 points, the U.S. scored only 5 in that category, which takes into account factors like public transit usage, fuel economy, and the miles traveled per capita. Americans travel the most vehicle miles per capita out of the 12 countries, and along with Canada, travel the least on public transit. Meanwhile, China, Germany, Italy, and the United Kingdom all led this category, each scoring 14 points.
That's what happens when you stop thinking about ways to solve problems and instead put your faith in the magic market which will solve everything for you! And make everyone rich! And provide justice because Free Market!

And that's the reason why libertarians shouldn't be allowed near anything important without an adult present.
posted by tripping daisy at 7:56 PM on November 4, 2012 [33 favorites]


I am not sure what it, if anything, contributes to this conversation, but gas can be rationed without use of coupons - I lived in Pennsylvania in 1979, when odd-even rationing was implemented to deal with the energy crisis. (Odd-even rationing: if your plate ends in an even number, you can only fill up on even days, etc.) I remember it annoyed my parents, and enraged my extremely conservative grandfather, and my mother and I had to spend the night once in Harrisburg because we got delayed by a blizzard leaving New York for Pittsburgh and ran out of gas on the wrong kind of day. But the lines at the stations were shorter, which was good during the winter, and there wasn't gouging.

also it figures that someone named termite would be all judgey about the heroically Randian honey badger's lack of 'civilization'
posted by gingerest at 7:59 PM on November 4, 2012


(That's something I agree with, too, by the way. Oil is important. It's not quite important enough for the President to be authorized to send the military into refineries to force people out and occupy them for some unspecified duration. That would be a bad power to grant to the executive, I think.)

You're kidding, right? American presidents have been militarizing oil supplies in the Middle East and Latin America for the last 100 years or so.
posted by Blazecock Pileon at 8:05 PM on November 4, 2012 [4 favorites]


Two of the links go to Matthew Yglesias' columns, but I think they left out the best one. I'm not sure I agree with it 100%, but it's much better than this whole "gouging is super!" vs. "gouging is horrible!" debate, actually explaining in which circumstances Yglesias thinks it might be useful, and when it should be prohibited:
In the case of the hurricane, the commodity where supply is inelastic is probably hotel rooms. They're not going to build any new hotels next week just because lots of people are trying to get out of the blacked out areas.

[snip]

Say you own a hardware store. How many flashlights should you keep on hand at the beginning of any given week? The correct answer to that question depends in part on what happens if there's a sudden surge in demand for flashlights.
posted by vasi at 8:09 PM on November 4, 2012 [1 favorite]


And if gas was $20/gallon, he probably wouldn't do that, so there would be more gas available for everyone else. Him keeping his whole office lit and powered may not be that great an allocation of resources. It's nice, but nice is not the same thing as smart.

The fact that you think that people willing to spend more on something need that thing more is hilarious considering reality.

According to this logic I need artisanal jam more than someone on WIC needs a jar of peanut butter for her kids. I mean, I'm willing to pay more for it, right? Even if I let it mold in my fridge because I always get takeout anyway, I needed it more than that peanut butter that was eaten in a week, and I know that because I paid more for it.

Just not at all relevant to reality. You can sit there and call it as obvious as gravity, but you're looking at a balloon without knowing if it's full of helium or rocks and telling us it's definitely going to sink. That's the level of nuance and understanding you're bringing to this particular situation with your broad and overly general theory about pricing and demand.
posted by the young rope-rider at 8:12 PM on November 4, 2012 [2 favorites]


You don't see people losing their jobs because they can't afford to go to work, or not being able to afford to help their neighbors or go to shelters if they need to, or robbing gas stations to fuel their generators so their kids don't freeze to death Wednesday night?

Just as a technical matter, losing your job because you can't afford transit is not an externality for you, because an externality is a cost or benefit incurred by someone who is not a buyer or seller. A line snaking back into traffic is an externality because it blocks traffic of people who aren't trying to buy or sell gas. Not to nitpick, just don't like confusion.

More importantly, though, I am very confused by the notion that if people lose their jobs because they can't afford gas, this is somehow a pro-gouging law trump card. This just is not persuasive to me, because this is a strong indication that you desperately want to conserve as much fuel as possible so that it's available for people who really need it. Now NO ONE is saying that need is perfectly correlated with ability to pay, surely not, but it's sure as hell better than random.

It's important to remember that "people" and "death" and "suffering" can only have an associated monetary cost in libertarian fantasy land. Dead people are just unsold mulch or filler for discount hot dogs. So, what you must first do as a libertarian economist is eliminate the possibility of caring about people.

Again, look at the list of economists I cited who disapprove of price-gouging laws. Barry Eichengreen is not a libertarian. Ray Fair is not a libertarian. Richard Thaler is not a libertarian. It seems to be popular here to assert that only people who's economics education stopped at econ 101, or hardcore libertarians, could possibly disagree with anti-gouging laws. It's completely contrary to reality.
posted by dsfan at 8:20 PM on November 4, 2012 [2 favorites]


It will be below freezing tomorrow night. He's not being nice, he's hoping that no one he knows and cares about freezes to death.

I just checked the weather, and it's saying 34F on Monday night. That's not going to kill anyone with a house and blankets. Providing a shelter is a nice human thing to do, but in those weather conditions, it's not about survival, it's about comfort; we're so sheltered in modern life that we confuse the two. What he's doing is fulfilling a want, not a need, and he might potentially be preventing someone else from fulfilling a genuine need by using up that diesel. (I have no idea what the diesel supply looks like, in-city.)

It seems like all the pro-price-gouging arguments for this particular instance rely on the idea that people in NY/NJ are stupid, selfish, naive and/or greedy. This is not the case.

All of us are stupid, selfish, naive, and greedy. All of us, every one, from President Obama right down to Ernie the Sanitation Technician. We're also smart, generous, wise, and self-sacrificing. Sometimes, at the same time. We contain multitudes.

What I'm trying to point out in this specific exchange is that your friend running his mini-shelter may not, from a systemic view, be even remotely efficient. It can be both kind, and stupid, simultaneously. I have no way to know what the actual tradeoffs are in this case, but no matter how much of a standup guy he may be (and he sounds like the kind of boss you really want, someone worth working for), looked at with more data, we might find that it would be far better for an actual shelter to have that diesel. Floating prices help to communicate relative scarcities and surpluses, and if diesel is actually in shortage, then him not running a marginal shelter due to pricing might well be a systemic win, even if his friends and employees had to pile extra blankets on the bed on Monday.
posted by Malor at 8:22 PM on November 4, 2012 [1 favorite]


Malor: " You can spend an immense amount of money imposing rationing and lines and having to fucking park police in every gas station in NY, or you can just let the price float."

Either way you're spending an immense amount of money. It doesn't matter to me which fucking pocket it comes out of.

ocschwar: "This is a flamewar between leftists with common sense and leftists who are completely bonkers."

Yes, it is indeed bonkers to think that gas should just be left hanging around in tanks at filling stations for your convenience.

If you favor one form of rationing over another, that's nothing more than an ideological difference. I am ideologically predisposed to favor rationing based on ability to pay for most goods most of the time. It leads to better resource allocation and in a functional market, minimizes economic rents.

What we have at hand is not a functional market, however. It is a "market" where certain people get to take unearned rents from other people's pocket for no particular reason. It will not lead to more efficient allocation of resources (it in fact encourages resources to go completely unused!), nor will it cause speedier restoration of a normally functioning market because immense pressure is already being exerted toward that end.

ocschwar: "How is losing your job because of $20 gas any different from losing your job because the gas station ran out before you got to the head of the line?"

In one scenario you have no chance at the gas. In the other you at least might get it. People tolerate that much better than being told to go fuck themselves because they don't have enough money.
posted by wierdo at 8:22 PM on November 4, 2012 [6 favorites]


Now NO ONE is saying that need is perfectly correlated with ability to pay, surely not, but it's sure as hell better than random.

People are pretty much saying that. Also, the distribution of gas is not random--I have no chance of getting gas because it is not being randomly allocated. For one, in order to get gas one has to be willing to stand in line, which people seem to forget in their rush to insist that willingness and ability to spend is the only true and reliable indicator of need.
posted by the young rope-rider at 8:23 PM on November 4, 2012 [4 favorites]


Since when did price increases for inelastic demand reduce demand?


Inelastic isn't a binary attribute. There's elastic. There's somewhat inelastic. There's very inelastic. There's no absolutely-inelastic.

The only good that doesn't have demand go down in response to price is designer goods, where it can go up in response.
posted by ocschwar at 8:24 PM on November 4, 2012


Two of the links go to Matthew Yglesias' columns, but I think they left out the best one. I'm not sure I agree with it 100%, but it's much better than this whole "gouging is super!" vs. "gouging is horrible!" debate

Interestingly, this seems like the exact opposite conclusion that JPD posted above - Yglesias favors rationing for permanent shortages and price floating for short-term emergencies. He also assumes that there are opportunities for increasing supply which are just inconvenient or costly, which others in the thread have argued against.
posted by en forme de poire at 8:26 PM on November 4, 2012


And we're talking about NY, where the richest live in Manhattan and probably responded to Sandy by not using any gas (and still enjoying their usual sushi, et cetera, a short walk from home)

The richest all left, they are at their ranches in Montana or whatever.

So you are left with middling rich the, 1-5m a year people, maybe they are not rich enough to just take off and still need to show up in offices in midtown to keep morale up and keep shit rolling. Maybe they are in Manhattan or maybe they come in from Connecticut, or Brooklyn Heights but they need their towncars. Under normal circumstances These towncars are waiting discreetly at all times. Also, sushi a short walk from home? I doubt it. I guess if you can't get to Masa or whatever cuz your towncar is out of commission you are looking at catering, you aren't going to get toro at the corner sushi place. Nobody is going out to dinner in UGGs and you aint walking that far in heels. There are tens of thousands of people like this.

The people eating sushi a short walk from home are the 100-250k people. They may live in Park Slope and are certainly trying to take cabs and car service they may own a car and need gas to try to drive to their weekend places just to get the fuck out. There has got to be over a million people like this.

Then of course you have the rest that live in New York that make nowhere near that. The people who still have to show up to clean the offices, make the sushi, drive the towncars, do nails, watch the kids. There are millions of them.
posted by Ad hominem at 8:28 PM on November 4, 2012 [3 favorites]


Either way you're spending an immense amount of money. It doesn't matter to me which fucking pocket it comes out of.

But if you spend wealth by waiting and idling, you're just wasting it. Putting money into the gas stations' collective pockets means that the rest of your economy can be that much more efficient.

If someone spends two hours sitting in a gas line, that's a quarter of a normal working day, up in smoke, plus all the gas to idle his or her car for the duration. Just burned up, gone.

That's cutting off one's nose to spite one's face.... you're so angry about the gas stations making some extra money that you'd rather burn it instead, just so they can't have it.
posted by Malor at 8:30 PM on November 4, 2012



In one scenario you have no chance at the gas. In the other you at least might get it. People tolerate that much better than being told to go fuck themselves because they don't have enough money.


Is that why gas lines are rife with fights? Because people tolerate them so much better? Is a lottery to keep your job really that much better than knowing ahead of time that you might be getting up at 4 am and walking to work for 2 hours because you can't afford to drive? I did that. I'd much rather know than go out every day and have to fight my way through a gas line to keep my job.
posted by ocschwar at 8:30 PM on November 4, 2012



That's cutting off one's nose to spite one's face.... you're so angry about the gas stations making some extra money that you'd rather burn it instead, just so they can't have it.


I wonder, if we passed a law that the price of gas can increase say, 50% overnight, but anything over that is taxed at 100%, would these people chill the fuck out?
posted by ocschwar at 8:32 PM on November 4, 2012


What about allowing the price to float, and then taxing the gas stations accordingly?
posted by parki at 8:36 PM on November 4, 2012 [1 favorite]


Now NO ONE is saying that need is perfectly correlated with ability to pay, surely not, but it's sure as hell better than random.

Crises are awesome times to be a rich speculator.
posted by bonehead at 8:39 PM on November 4, 2012 [1 favorite]



Now NO ONE is saying that need is perfectly correlated with ability to pay, surely not, but it's sure as hell better than random.

Crises are awesome times to be a rich speculator.


That is so inane. If you own a gas station, you are not a speculator. And speculating in physical gas delivery is a good way to win a Darwin Award.
posted by ocschwar at 8:43 PM on November 4, 2012


I have no way to know what the actual tradeoffs are in this case, but no matter how much of a standup guy he may be (and he sounds like the kind of boss you really want, someone worth working for), looked at with more data, we might find that it would be far better for an actual shelter to have that diesel.

If there were an actual shelter in his town, or if people in those shelters weren't worst off than his employees, he wouldn't feel the need to do this. And if there were a shortage of diesel, he'd reevaluate. But that is not the case, and you're assuming that my husband, who is on the ground and sees what's happening, is less equipped to make that decision than you are, with your "data." Because he's being stupid, greedy, and selfish right now. Which I honestly find kind of presumptuous.

There are many occasions where price gouging "works." However, what I'm seeing (and I've been from NYC to the tip of Long Island and in constant contact with folks in NJ and Westchester) is that this is not one of those scenarios. More people need gas than can have it. Stakes are high and you need to maintain an aura of fairness to keep heads cool and people cooperating. $20 gas will not accomplish that.

BTW, it'll be 28 degrees in Bergen county tomorrow night. You're probably right that no one will die, but fuck if I'll let anybody I know sit alone in the dark with no heat in this weather if I can help it.
posted by snickerdoodle at 8:47 PM on November 4, 2012 [13 favorites]


It seems to me that allowing prices to float and limiting the amount which can be purchased would prevent hoarding (Which seems to be happening now anyway), cut down on wait times (Which can also impact people's employment), and maximize the amount of fuel available to everyone (People could absolutely get desperate and angry at $20/gallon, but all it takes it one frustrated person for things to get ugly after Bill drives away with the station's dregs, leaving the rest of the queue with bupkiss).

Then again, I hate the rich and poor alike and walk to work, so, yeah.
posted by Alvy Ampersand at 8:54 PM on November 4, 2012


I just checked the weather, and it's saying 34F on Monday night. That's not going to kill anyone with a house and blankets. Providing a shelter is a nice human thing to do, but in those weather conditions, it's not about survival, it's about comfort; we're so sheltered in modern life that we confuse the two.

This is untrue, by the way, as hypothermia can set in in these temperatures. It doesn't need to be freezing outside to die from exposure, as I've seen here in Iceland every other year or so. But I don't think anyway that "would you die out there without it?" should be the criteria for providing shelter. I mean wow.
posted by Marisa Stole the Precious Thing at 8:57 PM on November 4, 2012 [16 favorites]


you're so angry about the gas stations making some extra money that you'd rather burn it instead, just so they can't have it.
posted by Malor at 11:30 PM on November 4 [+] [!]


Literally nobody in this thread has said this. The only thing angering me is how you keep bringing it up. Nobody cares about the gas stations making extra bucks. Good for them. It's the fact that it would have a dangerous effect on the poor people that need gas the most, and turn the situation from an unfair, shitty one, into one that was unfair and shitty only to the poorest.
posted by Potomac Avenue at 8:58 PM on November 4, 2012 [10 favorites]


If you own a gas station, you are not a speculator.

Was Enron speculating in California in the 1990s? You can do exactly the same thing with retail gasoline (and diesel) if you have enough money and own enough of a distribution network (you don't need to own the stations, just their wholesaler). These are several majors who are in a position to do exactly that.
posted by bonehead at 9:01 PM on November 4, 2012


you're so angry about the gas stations making some extra money that you'd rather burn it instead, just so they can't have it.

I think, though, that what many people in the thread are arguing against is distribution of gas that favors the rich over the poor, not whether or not the gas stations make more money per se. If gas stations were able to make lots of extra money without disproportionate consequences for people on the bottom rungs I would be all for it. On preview, wow I am slow.
posted by en forme de poire at 9:01 PM on November 4, 2012 [2 favorites]


I just checked the weather, and it's saying 34F on Monday night. That's not going to kill anyone with a house and blankets. Providing a shelter is a nice human thing to do, but in those weather conditions, it's not about survival, it's about comfort;

I would like to ask you and ocschwar a question:

Let's say for the sake of argument that one poor person will die because of the increase in prices: say an old lady whose deadbeat son can't afford to get gas once it's been raised and so doesn't fill up his generator all the way.

Is that death worth the benefits of short lines?
posted by Potomac Avenue at 9:01 PM on November 4, 2012 [1 favorite]


Literally nobody in this thread has said this. The only thing angering me is how you keep bringing it up.

Yeah I don't get that particular strawman at all. I'd add that the "look at how mad you are you have steam coming out your ears" thing is a pretty tired internet retort, too.
posted by Marisa Stole the Precious Thing at 9:03 PM on November 4, 2012


Or could Malor and ocschwar or someone that agrees with them just address the point I've made 100 times in this thread that raising prices would increase hardship for poor people specifically and that this is more unfair that the current shitty situation?

Please check one that you agree with:

1. That's not true, poor people wouldn't be negatively affected by floating prices, they'll find a way to get gas like everyone else.

2. Who cares? Poor people will feel the bite in some ways but in the end the whole society would benefit.

3. You're batshit crazy and your ovaries are infested with galls!
posted by Potomac Avenue at 9:06 PM on November 4, 2012 [3 favorites]


Malor: "But if you spend wealth by waiting and idling, you're just wasting it. Putting money into the gas stations' collective pockets means that the rest of your economy can be that much more efficient."

They're paying either way. One way they're paying excess rent, the other way they're paying for labor. Either way is economically inefficient. One because resources are being left unproductive and the other because other resources are being left unproductive. The way to solve this isn't with increased prices, but with virtual queues.

ocschwar: "Is a lottery to keep your job really that much better than knowing ahead of time that you might be getting up at 4 am and walking to work for 2 hours because you can't afford to drive? I did that. I'd much rather know than go out every day and have to fight my way through a gas line to keep my job."

Presumably there are others like you for whom the lottery is optional if they find the price of entry too high. It makes you mad because you have cash but not much time and you're used to getting your way because in normal times that's just how shit works in this country. You (and Malor) talk about rationing as if it's necessarily a bad way to deal with shortages and then propose a different sort of rationing.

Price-based market clearing works great when there are avenues to increase supply. That is not the case with the fuel supply in the northeast. There is no mass social benefit to letting gas lay fallow as you insist must happen at any cost.
posted by wierdo at 9:11 PM on November 4, 2012 [1 favorite]


Let's say for the sake of argument that one poor person will die because of the increase in prices: say an old lady whose deadbeat son can't afford to get gas once it's been raised and so doesn't fill up his generator all the way.

Is that death worth the benefits of short lines?


What if there wasn't anything left for the deadbeat son by the time he got to the head of the line because a bunch of people who didn't really need fuel thought it'd be best to top up since the price was fixed and it was better to have it and not need it? Not being fighty and not sure if that's a realistic counterpoint, just curious.
posted by Alvy Ampersand at 9:13 PM on November 4, 2012 [2 favorites]


Let's say for the sake of argument that one poor person will die because of the increase in prices: say an old lady whose deadbeat son can't afford to get gas once it's been raised and so doesn't fill up his generator all the way.

These emotional counterfactual arguments swing both ways. As it stands now, people who need gas can't get it and are resorting to siphoning. Let's say for the sake of argument, some deadbeat son is not willing to wait in a seven hour line, and as a result, his mother dies. Is that death worth maintaining a perceived sense of fairness?

FWIW, I'm ambivalent and undecided, but I think someone who goes in for floating prices would have to go with (1) on your checklist. I'm pretty unmoved by all these made-up stories about granny dying from an empty generator, and similar stories about how hard poor people would be hit by higher prices. Would that happen? I don't know, which is part of the reason that I'm ambivalent. But all these emotion-laden predictions about the terrible consequences of floating prices seem awfully cartoonish to me.
posted by painquale at 9:16 PM on November 4, 2012 [2 favorites]


Alvy: That's something that might happen now, sure, but my question was, for the sake of argument, if one more person dies from letting prices float, is that a situation they can live with?
posted by Potomac Avenue at 9:17 PM on November 4, 2012


I'm pretty unmoved by all these made-up stories about granny dying from an empty generator, and similar stories about how hard poor people would be hit by higher prices.

Do you not believe that the poor are hit harder by higher gas prices, or are just unmoved?
posted by Marisa Stole the Precious Thing at 9:18 PM on November 4, 2012 [4 favorites]



Or could Malor and ocschwar or someone that agrees with them just address the point I've made 100 times in this thread that raising prices would increase hardship for poor people specifically and that this is more unfair that the current shitty situation?


Could you get it through your thick skull that these poor people you're pointing to are just as hard hit by not having access to any gas?

Presumably there are others like you for whom the lottery is optional if they find the price of entry too high.

Maybe I'm too much of a bleeding heart liberal, but I don't think anything like this should be set by a lottery.


It makes you mad because you have cash but not much time and you're used to getting your way because in normal times that's just how shit works in this country.

No, I actually have been so poor that I would walk 2 hours to my job. And I find that a better scenario than going out wondering if bad luck at the gas line would get me fired. That's the most ridiculous thing about your example. Even if you're shit poor and absolutely must get to work because your boss sprang from the mind of Berthold Brecht, you're still better off with certainty than uncertainty.


You (and Malor) talk about rationing as if it's necessarily a bad way to deal with shortages and then propose a different sort of rationing.


It's all rationing. If there isn't enough gas to go around, it's going to get rationed.
posted by ocschwar at 9:18 PM on November 4, 2012



I'm pretty unmoved by all these made-up stories about granny dying from an empty generator, and similar stories about how hard poor people would be hit by higher prices.

Do you not believe that the poor are hit harder by higher gas prices, or are just unmoved?


Why should I be moved by examples like this put forward by someone unable to understand that no-gas-at-any-price is just as bad for the poor?
posted by ocschwar at 9:19 PM on November 4, 2012 [1 favorite]


painquale: They are a little cartoonish sure, but real shit like that is actually going down. Your arguments sound to me like you think solutions and problems happen in a vacuum, where human costs are just numbers.
posted by Potomac Avenue at 9:19 PM on November 4, 2012 [1 favorite]


ocschwar: I am able to understand that you have no idea what you are talking about and have offered not a shred of real evidence that anything you say would work the way you say it would. I am unable to understand why you can't talk to me since I am addressing you directly and asking you questions that you haven't answered. So those are two things that I both understand and do not understand.
posted by Potomac Avenue at 9:22 PM on November 4, 2012 [7 favorites]


Potomac Avenue-

A variant of 1. Let me do the economics thing and try to come up with the most stylized example I can think of. Imagine 3 people with the following characteristics:

Richy Rich: Can afford $500/day. Values gas right now at $5/day (yeah I'm making up a unit for simplicity but I think you'll catch my drift)--kinda sucks being stuck with non-perishable food, but has power and can telecommute for a couple of days.

Poorer Commuter: Can afford $20/day. Values gas right now at $20/day, since this the only way he can get to work

Poorer Non-Commuter: Can afford $20/day. Values gas right now at $5/day--basically the same situation as the rich guy, just without as much money

Now, let's say there's only enough gas for one person. Who gets it? Well, if people behave perfectly and nicely, the poor commuter does. And moral suasion is a good thing and we should encourage people to bike, not fill up SUVs, etc. And there are rationing schemes that might be good. But we haven't had the foresight to employ them, so that's not an option for us. If prices can move up to $10/day, we're good--the poorer commuter may not like it, but at least he can still get to work. If they're stuck at $4/day....well, he better hope he gets in line first. I view this as a worse outcome.

Where I, and I think others, disagree with you is that your implicit model of the world seems to be a segmentation into 'poor and rich' and 'need and not-need.' But the world is grayer than that.
posted by dsfan at 9:23 PM on November 4, 2012 [1 favorite]


Could you get it through your thick skull that these poor people you're pointing to are just as hard hit by not having access to any gas?

I think the point others are trying to make is

(1) Artificially low gas price:
Rich = might get screwed if they show up late
Poor = might get screwed if they show up late

(2) Increased gas price:
Rich = somewhat more screwed than before
Poor = a lot more screwed than before

And there are those of us here who actually prefer situation (1) over (2) - flaws and all! because we'd rather not divide ourselves up by class even worse than before
posted by The Biggest Dreamer at 9:24 PM on November 4, 2012 [6 favorites]


Again, raising prices in this situation means people must consider what value they place on the goods in question. I might be willing to pay $50/gallon so I can go pick up food for my family and repair materials for my house, but not to go visit some friends. If the only limiting factor is time to wait in line, you are effectively rewarding those with time to kill and punishing those without. Which makes me wonder if we won't start seeing people renting out their own time to sit in line, or selling their place in line.
posted by sophist at 9:24 PM on November 4, 2012 [1 favorite]


Alvy Ampersand: "What if there wasn't anything left for the deadbeat son by the time he got to the head of the line because a bunch of people who didn't really need fuel thought it'd be best to top up since the price was fixed and it was better to have it and not need it? "

What is the basis for your assertion that people will wait five hours to buy 10 gallons of gas they don't need but will not pay an extra $60-$160 for 10 gallons of gas they don't need?

ocschwar: "Could you get it through your thick skull that these poor people you're pointing to are just as hard hit by not having access to any gas? "

Why do you refuse to acknowledge that raising the price of gas doesn't magically make more gas appear when supply is constrained by infrastructure and not something like not enough trucks? Why is it better for nobody to get the gas remaining at the station? It's an ideological preference (and an actively harmful one in some ways).

By the way, if you have the option of not paying for $20 a gallon gas to get to work, you also have the option of not waiting in a gas line for work. In both scenarios you have the option of going to work without using any gas.
posted by wierdo at 9:24 PM on November 4, 2012 [1 favorite]


Could you get it through your thick skull that these poor people you're pointing to are just as hard hit by not having access to any gas?

I am having a hard time getting that through my think skull because it is wrong. Poor people on the whole would be harder hit in my estimation. They would still have to buy gas, because it is necessary, but they would be in financial hardship which would impact their lives heavily or they would not get the gas at all and be in trouble. That would make the disaster recovery a lot harder than long lines.
posted by Potomac Avenue at 9:27 PM on November 4, 2012


Out of all this discussion, the one thing that sticks in my mind is why the fuck is it okay to fire someone for being unable to get to work when there's a fuel shortage brought about by a natural disaster that's still being cleaned up? Fixed prices, floating prices, rationing - none of those solutions fix the messed up reality of a bunch of people barely making ends meet having to worry about having enough gas to go punch the clock in the middle of this kind of clusterfuck for fear of losing their jobs.
posted by jason_steakums at 9:28 PM on November 4, 2012 [15 favorites]


The following is not meant to endorse rationing nor floating pricing but merely an exploration of the technical problem of rationing. Also I realize that this wouldn't be a solution today but a new emergency is bound to happened sooner rather than later (after all the anti gouging legislation has been in effect in many jurisditions for a long time prior).

Rationing (actual rationing not the line shortening "rationing" now in place) in a short term emergency like this can be fairly straight forward:
  1. Require gas stations to have on hand election ink pens in the same way they are required to collect tax and have fire extinguishers on hand. Or stamps like nightclubs use; yay branding!
  2. Come up with a marking scheme. I suggest marking the pads of fingers from left to right(hands face down) IE:
    • On the first day of rationing mark the left pinky.
    • On the second day of rationing mark the left ring finger.
    • On the third day of rationing mark the left middle finger.
    • On the fourth day of rationing mark the left index finger.
    • On the fifth day of rationing mark the left thumb.
    • On the six day of rationing mark the right thumb.
    • On the seventh day of rationing mark the right index finger.
    • On the eighth day of rationing mark the right middle finger.
    • On the ninth day of rationing mark the right ring finger.
    • And then on the tenth day of rationing mark the right pinky.
    • People lacking fingers would have dates written on their hands/forearms. Double amputees get to make as many gas purchases as they want.
  3. When rationing is implemented first limit the volume any one person can buy.
  4. Then when a person comes up to a pump check the appropriate finger and let them buy gas up to the proscribed amount if their finger isn't marked and then mark the finger as part of the transaction.
Election ink wears off in a few days to a week so if the emergency lasts longer than 10 days you can start over again.

Cheap, easy, essentially indefeatable (even limits professional line waiters to a single transaction per day), well tested, and doesn't require logistical coordination like a ration book scheme would. Special dispensation could be extended to anyone driving say a registered taxi or emergency vehicle allowing them to fill up without being marked.

PS: War rationing as practiced in the states wasn't about conserving gas; it was about conserving a relatively long wearing consumable: tires. Natural rubber came solely from areas of the world under Japanese control and though artificial rubber had existed for years it wasn't price competitive with the natural product so production facilities didn't exist in large enough quantities to meet demand.
posted by Mitheral at 9:33 PM on November 4, 2012 [2 favorites]


[Folks, if you've gotten to the "eat shit and die" phase, it is time to take a walk/go to bed. ]
posted by restless_nomad at 9:33 PM on November 4, 2012 [1 favorite]


dsfan thanks for responding.

Where I, and I think others, disagree with you is that your implicit model of the world seems to be a segmentation into 'poor and rich' and 'need and not-need.' But the world is grayer than that.

I didn't create those divisions in this thread though.

If prices can move up to $10/day, we're good--the poorer commuter may not like it, but at least he can still get to work.

My contention is that:

A. Sometimes he wouldn't be able to afford it and wouldn't go to work. Tragic shit happens as a result.

B. In order to afford it, he has to take actions that have long term awful implications both for himself and the economy (he steals, he goes further into debt, his children skip meals).

Do you think either of those scenarios is more possible if price gouging is allowed?
posted by Potomac Avenue at 9:34 PM on November 4, 2012


Wierdo asked: What is the basis for your assertion that people will wait five hours to buy 10 gallons of gas they don't need but will not pay an extra $60-$160 for 10 gallons of gas they don't need?

Excellent question, although I didn't make the original statement. The answer is sunk costs. Once you have waited in line for five hours it's just as easy to buy ten or twenty gallons as it is to buy two or three. In fact overpurchasing is a rational thing to do - it makes it less likely you'll need to wait in line again. In contrast, if you raise the price of gas then overpurchasing is a foolish idea - you're committing money you could use on something else, and you'll probably be able to buy gas at a cheaper price next week.
posted by Joe in Australia at 9:36 PM on November 4, 2012 [4 favorites]


Then when a person comes up to a pump check the appropriate finger and let them buy gas up to the proscribed amount if their finger isn't marked and then mark the finger as part of the transaction.

At first, I read "mark the finger as part of the transaction" a much different way than you intended. As in: one gallon per knuckle, all gas station attendants now carry cigar cutters.
posted by jason_steakums at 9:37 PM on November 4, 2012


I guess there are two different arguments going on here:

1) Will letting prices float result in more efficient allocation of a scarce resource?

2) Will raising prices result in there being more gas to go around?

My answer to #1 is probably yes because people do have a lot of flexibility in how much gas they use. Most normal people do not need to run a generator in their home... but if they're off of work and gas is cheap, might as well do it. There are options for a couple million people to carpool or take the bus. Obviously some people really, really need gas, but they should be willing to pay for it. (The resource allocation argument would still work even if we taxed 100% of the gas station profits and redistributed them back to the people. No one has to profit at all.)

My answer to #2 is probably no. Clearly there's a huge amount of gas in the US that could easily be trucked in, but the big problem is that each state has very specific boutique gas requirements that limit what you can sell. Changing the regulations, or altering refineries in Texas to produce New York gas, would take a long time. I think the supply of New York gas probably really is fixed, at least on the short timeframe we're talking about.
posted by miyabo at 9:38 PM on November 4, 2012 [1 favorite]


Mitheral, India uses ink markings of fingers to determine if a voter has voted in some areas. Your idea would certainly work in the short term.
posted by bonehead at 9:41 PM on November 4, 2012


Why do you refuse to acknowledge that raising the price of gas doesn't magically make more gas appear when supply is constrained by infrastructure and not something like not enough trucks? Why is it better for nobody to get the gas remaining at the station?

The gas that "magically" appears is gas that would otherwise be hoarded in the tanks of people who don't really need that much gas.

And there's not going to be much gas sitting around at the station, too expensive for anyone to buy and use. Why would a gas station owner price gasoline so high that he's completely unable to sell it?

Do you not believe that the poor are hit harder by higher gas prices, or are just unmoved?

As others have said, it's better than getting no gas. Possibly it's better for the very poor than spending seven hours in line. I don't know. I'm unmoved because I haven't seen a convincing argument that the terrible situation for the poor will be made into a more terrible situation if prices went up.

I still don't really know how much people absolutely need gasoline and what the consequences of high gas prices will be. There seem to be a lot of predictions that seem totally off. People here have said that the rich will buy and hoard all the gas if prices rose, for instance, which I think is false.
posted by painquale at 9:41 PM on November 4, 2012 [1 favorite]


I didn't create those divisions in this thread though.

Sorry, didn't mean to imply that you said it, just that it seemed to me like the way you frame matters is built around it.

My contention is that:

A. Sometimes he wouldn't be able to afford it and wouldn't go to work. Tragic shit happens as a result.

B. In order to afford it, he has to take actions that have long term awful implications both for himself and the economy (he steals, he goes further into debt, his children skip meals).

Do you think either of those scenarios is more possible if price gouging is allowed?


Both A and B are possible (though B less so I think over the likely timespan we are talking about--days, maybe low weeks). Do they happen more with "gouging"...it's a tough empirical question. It's no less tragic if it's because he was too slow getting in line, though.
posted by dsfan at 9:44 PM on November 4, 2012


It's no less tragic if it's because he was too slow getting in line, though.

As to which is less or more tragic, a matter of opinion, unfortunately.
posted by The Biggest Dreamer at 9:47 PM on November 4, 2012


What is the basis for your assertion that people will wait five hours to buy 10 gallons of gas they don't need but will not pay an extra $60-$160 for 10 gallons of gas they don't need?

Joe in Australia's comments about a queue system being an incentive to buy as much as possible made sense to me (And reminded me of my sole contribution to an Economics discussion, with a situation that's possibly tangentially related). It also seems to me that most people don't value their time, or rather, assign a monetary value to their time. Whereas with money, the value is far less abstract, for obvious reasons.
posted by Alvy Ampersand at 9:49 PM on November 4, 2012


Well heck, I should have previewed.
posted by Alvy Ampersand at 9:51 PM on November 4, 2012


Joe in Australia: "Excellent question, although I didn't make the original statement. The answer is sunk costs. Once you have waited in line for five hours it's just as easy to buy ten or twenty gallons as it is to buy two or three."

There exists a 10 gallon limit. If you need gas, you're going to buy as much as you can either way. Either because you don't want to wait in line or you don't want to have to buy more when the price may be even higher. If you don't need gas, you're not going to wait in a long line or buy it for $20 a gallon.

In either scenario, people who need gas will go without. If you charge a price high enough to prevent stations from running out of stock, by definition more people will go without since the gas in the stations' tanks could be in cars and trucks and being used for useful things. The usual mechanism by which high prices increase supply doesn't work because of distribution issues, so the high prices end up serving no actual purpose other than satisfying some people's ideological desire to have rationing implemented in the way that comports best with their ideology and framing it as some sort of unquestionable economic good.
posted by wierdo at 9:51 PM on November 4, 2012 [3 favorites]


I'll answer my own question since I should go to bed and stop fighting with y'all.

If you don't think A and B are more likely during price gouging then I think you haven't thought beyond the tidiness of this talking point though. Or you don't realize how much people need gasoline. They need it to live. They can't take the bus. There is no bus. They have to drive. That's the situation they are in, right now.

And both of those (A and B) in aggregate, hurt not just individuals in a cartoony aww-grandma way but devastate the local economy en masse, turning a momentary disaster into a whole new mess of problems as a neighborhood burns through its savings and everyone moves back in with their mom and their teeth fall out.

I have yet to see any real actual evidence that price gouging would fix this situation or that it wouldn't cause real harm to poor people. I have seen plenty of evidence that this argument is based on a "selfish poor dumbasses" meme, the idea that consumers are idiots who line up uselessly for gas just 'cuz and hoard it and otherwise are stupid. I don't think that is the case, especially during a disaster when millions are without power and the majority of folks are doing their best to not make a bad situation worse.

So let's all STFU and start thinking of a different solution. We are smart, look at all these words we just wrote about something none of us have control over! Let's think of something cleverer than this! How about electric cars hahahhaa just kidding.
posted by Potomac Avenue at 9:53 PM on November 4, 2012 [2 favorites]


The point I should have made but didn't is that using price to ration requires rational actors to make the market function as optimally as possible given the very out of whack supply/demand situation. Limiting purchases to certain amounts and certain days accounts for the already demonstrated risk that people will not be rational actors in a crisis and, importantly to me, distributes all of the available fuel.

My solution is simple and I mentioned it above: virtual queuing. You "wait" in a nonexistent line, during which time you are free to do other things before heading to the station to buy as much or as little gas as you desire at the appointed time. It would require power, though.
posted by wierdo at 9:57 PM on November 4, 2012


I'm unmoved because I haven't seen a convincing argument that the terrible situation for the poor will be made into a more terrible situation if prices went up.

I am shocked by this. So if the examples mentioned upthread don't move you, what are you looking to hear ?? what evidence do you seek

People here have said that the rich will buy and hoard all the gas if prices rose, for instance, which I think is false.

Yeah it's silly to assume they'll be all hoard hoard hoard. However, I do think that they would be less inspired to lower their consumption, since they're not losing much more money... I'd guess that they'd just use as much as they always do, instead of trying to conserve so that more people could buy gas. But who knows.
posted by The Biggest Dreamer at 9:57 PM on November 4, 2012 [2 favorites]


Most normal people do not need to run a generator in their home...

This is true, and those people probably don't have generators. They're expensive and dangerous and the vast majority of people in this area don't have them. Hell, my building doesn't, and it's 18 floors.

I think the disconnect is that those in favor of price gouging are assuming that there is "false" demand from hoarding or wasting. If this were true, I wouldn't mind an increase in prices. However, that's not what I'm seeing, based on the number of cars on the road and behavior at the pumps. What I see is people stretched to the breaking point, and allowing price gouging could very well make them snap. Don't underestimate the human need for fairness.

People are waiting in line even when there isn't any gas. They are waiting even though they know that the gas, if it comes, will be rationed. I'm going to give them the benefit of the doubt and assume that they really, really need gas.
posted by snickerdoodle at 9:59 PM on November 4, 2012 [5 favorites]


>2) Will raising prices result in there being more gas to go around?


My answer to #2 is probably no.


My answer is probably yes. Damage causes a spike in demand, creating things like lines. But if the price is held artificially low, everyone is encouraged to hoard, precisely because the price is low. But this taxes supply even further. Additionally, the inability to hike prices creates no incentive for producers to get on the ball with supply. So what we have is increased demand, and relying on producers to ramp up supply out of the goodness of their hearts, if they have the capability at all. If they don't, due to storm damage, we have increased demand anyway
posted by 2N2222 at 10:20 PM on November 4, 2012


Clearly there's a huge amount of gas in the US that could easily be trucked in, but the big problem is that each state has very specific boutique gas requirements that limit what you can sell. Changing the regulations, or altering refineries in Texas to produce New York gas, would take a long time. I think the supply of New York gas probably really is fixed, at least on the short timeframe we're talking about.

I thought the boutique gas requirements exist because some states have their own clean fuel programs. Why wouldn't NY and NJ lift their blending requirements temporarily until the crisis is over to allow gas from other regions?

Most of what I've read scanning through the thread suggests that supply is inelastic due to power outages in the ports and other distribution systems. But, why can't more gas be trucked in from further away where there are no power issues?

It seems that Bloomberg and Cuomo first announced that the situation would going to get better soon, but it hasn't. This may have been a mistake, if it signaled to the market that it wasn't worth trucking gas from across the country if the problem was short lived.
posted by Golden Eternity at 10:34 PM on November 4, 2012


I am shocked by this. So if the examples mentioned upthread don't move you, what are you looking to hear ?? what evidence do you seek

I'd like evidence about the average socioeconomic status of people who are currently in lines to get gas and what they are doing with it, whether these people would not be in line if gas cost more, how much gasoline would cost if gouging were permitted, the number of poor people who are currently hurting extremely badly because of the long lines and the total lack of gasoline in certain areas, and how this compares to the number that would be hurting extremely badly if gasoline cost more. I could go on...

These are empirical questions that I have not seen answered, or are counterfactuals that are extremely difficult to assess. Here's the pro-gouging picture: each poor person who gets gas from waiting in line would pay more if gouging were permitted... but each poor person who is denied gas because of long lines would have the option of getting gas if gouging were permitted. Fewer poor people would be totally denied gas, although prices would be higher. Is this alternate picture accurate, and is it preferable? It all depends on whether the price increase would be too much for poor people, how many poor people there are, how many poor people are actually waiting in lines, etc. It depends on all sorts of facts that no one here has offered.
posted by painquale at 10:37 PM on November 4, 2012


2N2222: "Additionally, the inability to hike prices creates no incentive for producers to get on the ball with supply. So what we have is increased demand, and relying on producers to ramp up supply out of the goodness of their hearts, if they have the capability at all. "

Isn't the revenue foregone by not selling their product incentive enough? (Not that this situation has anything to do with production and everything to do with distribution)
posted by wierdo at 10:41 PM on November 4, 2012


Wierdo wrote: There exists a 10 gallon limit. If you need gas, you're going to buy as much as you can either way. Either because you don't want to wait in line or you don't want to have to buy more when the price may be even higher.

I certainly agree that most people queueing for gas will buy up to the 10-gallon limit, but if we allow price gouging there must come a point at which people decide to buy only what they actually need. I don't know where that point is - $10? $20? $200? but it must exist somewhere. People do not have infinite amounts of money.

I agree that people will buy more gas today if they think that the price will rise tomorrow, but surely everyone knows that the price of gas will fall to normal levels sooner or later. That's one thing that would constrain price-gouging and hoarding, by the way - a reliable prediction that normal gas supplies will resume on a particular date.

Painquale's questions are very good ones. Most of us (me especially, being in a different country and all) are just guessing. We're assuming that poor people are more time-rich than money-rich, but that's certainly not true of everyone: if you're working two shifts then you really don't have time to wait in queues; if the gas stations get deliveries when you're at work then you would probably prefer high prices to the knowledge that they'll be out of gas by the time you're going home. We have a real lack of data here, and it may be the case that every solution hurts a comparable number of people.
posted by Joe in Australia at 10:52 PM on November 4, 2012 [3 favorites]


I think the disconnect is that those in favor of price gouging are assuming that there is "false" demand from hoarding or wasting.

Not wasting, exactly, just usage that could be deferred, reduced, or entirely eliminated. There's always lots of that. Taking the smaller car, only running your local generator for one hour instead of two, and using a blanket instead of the generator to stay comfortable are all quick examples that come to mind. The problem isn't that people want to drive, it's that they want to drive now. It's not "false" demand, but a lot of it is demand that could be shifted to next week sometime.

We often confuse wants with needs; extreme gas prices would cause some major priority changes for many people, probably for the great majority, throwing the difference between the two into stark relief. When it cost you $100 to fill that five-gallon can of gas, you're going to be very careful with how you use it. And this is true, in my experience, even for people who are rich, because they hate getting gouged TOO, and don't want to 'get robbed' any more than the plebs or the proles. Obviously, it hurts them a lot less, but it still infuriates them.
posted by Malor at 11:00 PM on November 4, 2012 [1 favorite]


I'm kind of late to the conversation but I don't understand how the lines are getting so long when the problem is localized. I would have thought that the first time someone had to spend five hours waiting for gas, they would take that one tank full of gas they'd gotten and instead of waiting another five hours again for a second tank drive 2½ hours (or probably much less) outside the city, buy enough gas containers to pack every open space in your vehicle (maybe even temporarily remove seats to make more space), fill them up to the brim, drive back very carefully, and end up with several times as much gas for the same five-hour investment of time.

If you time it so that you leave around midnight you can get pretty far away from NYC in 2½ hours; in my experience traffic during the night there is nowhere near as bad as places like Los Angeles, though the roads are far from completely clear. You'd just pick a destination with a 24-hour Walmart to buy the containers at and a nearby 24-hour gas station, which are fairly common as they grow up symbiotically with the Walmarts.

As somebody said way up above an increased cost in time is just as valid as an increased cost in money, so in this situation it makes way more sense to me to let expenditure of time be the free variable in the system, in this case, rather than expenditure of money so that all of the gifts and help and disaster relief flowing into the city just goes into the pockets of the large gasoline vendors.

Any rich people who want to can pay some random poor person to drive their cars out a midnight to do the same thing. They like job creation, right? Well time to get job creatin'.

And if there's some reason why this sort of thing is not happening now we should figure out why not rather than just lifting all regulation on vendors and allowing them to price-gouge and assume that some sort of magic free-market pixie dust will solve a problem consumers are having trouble solving for themselves.
posted by XMLicious at 11:59 PM on November 4, 2012


It depends on all sorts of facts that no one here has offered.

There's the fact that the poor make less money than the middle class, that they therefore become less able to buy things as they get more expensive, and that poor people use fuel-based transportation. I'm not sure why this needs explaining, exactly, but it might explain why there's this confusion as to why price-gouging would hurt the poor more than having to wait in line for a limited quantity of gas would, and why there keeps being repeated this assertion that the poor would have "the option" of buying this more expensive gasoline if they chose to take it.
posted by Marisa Stole the Precious Thing at 12:16 AM on November 5, 2012 [2 favorites]


There's the fact that the poor make less money than the middle class, that they therefore become less able to buy things as they get more expensive, and that poor people use fuel-based transportation. I'm not sure why this needs explaining, exactly, but it might explain why there's this confusion as to why price-gouging would hurt the poor more than having to wait in line for a limited quantity of gas would, and why there keeps being repeated this assertion that the poor would have "the option" of buying this more expensive gasoline if they chose to take it.

No, I recognize those things, nothing there is at issue. I still think we do not have sufficient evidence to know whether price-gouging would hurt the poor more than the current situation. There are all sorts of reasons to think it might be better.

For instance, I liked Joe in Australia's point: We're assuming that poor people are more time-rich than money-rich, but that's certainly not true of everyone: if you're working two shifts then you really don't have time to wait in queues. Considerations like this are just being glossed over entirely.

I really do want to know who is waiting in these 7 hour lines. That information must be out there somewhere; I hope someone finds a link at some point. If everyone in the queues is middle class, the poor aren't getting any gas anyway, and all these arguments against price-gouging hurting the poor fall by the wayside.
posted by painquale at 1:03 AM on November 5, 2012 [1 favorite]


I'm shocked, shocked that Yglesias wound up on the glibertarian side of the debate.

He never misses an opportunity to advocate for policies that screw the poor. Unless he's already occupied advocating for policies that belittle teachers.
posted by professor plum with a rope at 1:46 AM on November 5, 2012 [2 favorites]


Guys, basic supply and demand is not libertarian.
posted by Malor at 2:13 AM on November 5, 2012


But this is anything but basic.
posted by ymgve at 2:36 AM on November 5, 2012 [2 favorites]


> "The only good that doesn't have demand go down in response to price is designer goods, where it can go up in response."

Wait, that's not true at all. I know that from having set prices myself. It's only true where the quality of a product in relation to other products is either completely known or irrelevant. Otherwise, if you set your price too low, people assume your product is lower quality and preferentially don't buy it.

One real-world scenario where this plays out is restaurants, which generally put the cheapest wine they buy at the mid-level price to sell, because more customers buy the mid-level wine than the lowest-priced wine, assuming that the lowest-priced wine is poorer quality. Mid-level pricing generates more sales in this circumstance. Demand is demonstrably highest for the middle priced product there, not the lowest priced product.

Now, this actually doesn't apply to gas, which in the U.S. is assumed to have a consistent quality across all markets, and to many products where quality is not a major factor, or where quality is considered to be a known quantity. But seeing this declared as an ineluctable law of nature except for "designer goods" is frankly bizarre.
posted by kyrademon at 3:01 AM on November 5, 2012 [1 favorite]


What's to stop a group of gasoline stations from colluding to raise prices together? They don't even need to get ALL the stations in the area to participate - The ones who aren't participating will be out of gas soon enough.
posted by Orb2069 at 3:46 AM on November 5, 2012


Entering this discussion late, but want to say that sentiments like these-

And then I go home, in the traffic, and curse the jerks who make my bus trip quadruple in length because they MUST MUST MUST have milk.

absolutely disqualify one from rational discussion. Kids, particularly, need milk, and lots of other kinds of people definitely need specific kinds of food. If you're flailing this badly trying to find people to blame, maybe it's time to take a step back.
posted by newdaddy at 3:49 AM on November 5, 2012 [8 favorites]


Guys, basic supply and demand is not libertarian.

Malor, I don't think many people are arguing with you that raising the price is going to constrict demand and shorten lines. People get the economics of it. Where your argument falls apart, I think, is how you make an assumption that rationalists will be those who change their behaviour (those who will choose to consume less gas as a result.)

In reality, it's people who cannot afford gasoline who will stop showing up at the pump. Do you think Jay-Z stops sending a driver to fill up his Navigator? I don't. He's not going to buy 5 gallons. The elasticity of individual demand is wholly dependent on one's purchasing power. Those who can buy gas will; those who cannot afford it will either not buy it or sacrifice other things to get it. Those living on the subsistance line will sacrifice other necessities to get it if it's that important. There are people who get by buying $5 of gas at a time already because they literally have no more money. If you take that away, they stop being able to go to their job, be productive, and earn money for themselves and their employer. Small business owners with delivery service get squeezed hard by this kind of thing too.

The reason in an emergency people think that rationing is a more effective strategy is that what people lose (productive time) is less valuable to the poor than it is to the rich. Letting everyone get 5 gallons at a time for a few days means nobody suffers too much, whereas your model allows a much smaller number of wealthy people to continue to live a largely unhindered life while others go without.

So no, I don't think it's that people think the economics make no sense or are particularly leaning, because in reality if you let prices spike in an emergency you will end up constricting demand. How okay you are with this effect in society occurring does, however, generally end up somewhere on the libertarian/socialist scale for most people.

I'll say this as an economist: you can't use economics to take a grey world and make it black and white. The simple and most efficient solutions are almost always the most harmful, particularly to vulnerable members of society. Finding a way to balance efficiency with humanity is, in my opinion, the mark of a truly great economist.
posted by Rodrigo Lamaitre at 3:59 AM on November 5, 2012 [19 favorites]


I find the outrage against gouging pretty reasonable, but I'm not completely confident in my response to this question: why not use rationing and price controls all the time? There are plenty of people who can't afford gas right now in places that haven't just faced a hurricane.

The best answer I can come up with is that shared pain is appropriate when nature is to blame. But nature is to blame for gas shortages in the first place. So: any thoughts?
posted by anotherpanacea at 4:26 AM on November 5, 2012


why not use rationing and price controls all the time?

Well, rationing is not really needed in normal circumstances, since the supply is elastic enough to meet any fluctuations in demand. When there's not a crisis, everyone that can afford gas is able to get as much as they want.

When it comes to price controls...well, that is pretty close to a thing some will call "socialism" or "communism". That's a debate for another time and another thread.
posted by ymgve at 4:32 AM on November 5, 2012 [1 favorite]


why not use rationing and price controls all the time? There are plenty of people who can't afford gas right now in places that haven't just faced a hurricane

If you hold prices low enough for long enough, the incentive to get oil out of the ground and refine it declines and some companies stop doing it (either voluntarily, or by going out of business.) Plus, with exploding demand in BRIC (Brazil, Russia, India and China) countries, you could simply lose your gas to other markets where the return is so much greater.

NYC for a few days is a lot different than the USA for the foreseeable future. The reality is that there is plenty of oil and gas around, there just isn't the capability to refine or distribute it. For temporary shortages in supply, installing price ceilings can help the most vulnerable in our society from getting squeezed. Over the long-term, you just stop creating an incentive to sell in your particular market, as there are more lucrative ones elsewhere.
posted by Rodrigo Lamaitre at 4:52 AM on November 5, 2012 [1 favorite]


I would have thought that the first time someone had to spend five hours waiting for gas, they would take that one tank full of gas they'd gotten and instead of waiting another five hours again for a second tank drive 2½ hours (or probably much less) outside the city, buy enough gas containers to pack every open space in your vehicle

It's probably worth pointing out that the lines have indeed had a knock-on effect on gas stations lines into southeastern Pennsylvania. In some cases, those stations provided handy help for New Jersey residents unused to "pumping gas." I believe some people in this thread are assuming more perfect knowledge on the part of the gas consumers. In reality, some areas of central New Jersey just got their power back last night, let alone the more hard-hit areas. Information on available gas facilities and times was, I hear, somewhat scattered and difficult to come by, especially as those who could leave did. Many people never even considered it as as an alternative, because people aren't perfect. Many roads were still closed or backed up, making this trip to suburban Philadelphia or southern New Jersey less easy or desirable last week than I think many here imagine. (Also, it's easier to wait in line with fumes in the tank.) It also has been presented as a short-term issue with a short-term solution I think to prevent the kind of crazy action like turning your personal vehicle into a flammable/volatile gas runner:

"Power losses at refineries and pipelines during and immediately after Sandy had made gasoline deliveries impossible. Power to those facilities has been restored and Christie said he expected more fuel to be available this week."

In other words, most people probably have to deal with this one or two times until their local stations are back under full power and supply, so they aren't in the mindset of needing to hoard fuel or store it in unsafe conditions. In the meantime, the roads are less clogged with lines, it's easier for road crews to get through, more people have been able to refuel, and there are fewer violent altercations at the pumps. The latter would undoubtedly not be true if gas went up to $20 a gallon. It appears New Jersey has decided that it is far preferable to use gas rationing instead of dealing with the emotional nightmare and bad PR of $20 gasoline...
posted by jetlagaddict at 4:54 AM on November 5, 2012


The best answer I can come up with is that shared pain is appropriate when nature is to blame. But nature is to blame for gas shortages in the first place. So: any thoughts?

Short term supply disruption vs long-term permanent changes in the cost of supply. In the latter case prices need to rise to incentivize changes to behavior. If you do not someone (the state usually) will be forced to bear the burden of insuring supply with some sort of subsidy/transfer or people will stop providing oil and shortages will get worse.

ETA: or what RL said.
posted by JPD at 4:55 AM on November 5, 2012


Does anyone here even know what the constraints are? What IS the problem with gas? Power to run the distribution pumps in the pipelines and port facilities? Supply in the right place? All of the above?
posted by sfts2 at 5:16 AM on November 5, 2012


Oooops read 3000 comments and missed the one two above.
posted by sfts2 at 5:16 AM on November 5, 2012


Does anyone here even know what the constraints are? What IS the problem with gas? Power to run the distribution pumps in the pipelines and port facilities? Supply in the right place? All of the above?

In Jersey, as I understand it, the major problem has just been electricity to the filling stations themselves. The gas stations there use electric pumps, so there's artificial scarcity being created just from having so many stations out of service.

You're not allowed to pump your own gas in Jersey, either, which hasn't been mentioned much in news coverage but can't be helping matters. I bet it more than doubles the length of the lines.
posted by gerryblog at 5:22 AM on November 5, 2012


Well, after all the back-and-forth of economic theory here, I have to say that the argument has left me umoved from my position that people who greatly jack up prices on necessities during short-term catastrophes are pretty much pond scum.
posted by kyrademon at 5:34 AM on November 5, 2012 [1 favorite]


Taking the smaller car, only running your local generator for one hour instead of two, and using a blanket instead of the generator to stay comfortable.

With all due respect, you are speculating wildly. Most people do not have a smaller car or local generator. Heat isn't just a matter of comfort to the young, old, and inform. When then mayor is telling people how to recognize the signs of hypothermia on tv, we are reaching crisis levels.

There are plenty of articles about the gas lines, and plenty of people here who can tell you why they need gas. It's work, generator, and relief efforts.

I hope that every business out there is preparing a business continuity plan that includes identifying who can and should work from home, and who can carpool in case of an emergency.
posted by snickerdoodle at 5:38 AM on November 5, 2012 [7 favorites]


Frankly, I'm buying up shovel futures if anyone wants in.
posted by Hello, I'm David McGahan at 5:49 AM on November 5, 2012 [1 favorite]


using a blanket instead of the generator to stay comfortable

Oh man, is it ever cold here, though. I don't have a generator, so I've been sleeping in my camping gear, under every blanket and comforter I have. I needed all of it to not actually be shivering. I am young and in good health and can deal with the conditions. Even so, without the camping gear I'd have had to find someplace else to live until power came back. And many people are less able to tolerate the cold.

I just got my power and heat back, so my camping adventure is over (and thank God for it - I am lucky, lucky, lucky). But a lot of people are still in the dark and the cold. LIPA says that most of Long Island should have power back by evening on the 7th (this Wednesday), but also that some towns should be prepared not to get power back for at least another week after that. That's not even including towns that experienced major flood damage. And it is getting colder. Under those conditions, I can't fault anybody for standing in gas lines to keep the generator running.
posted by pemberkins at 6:01 AM on November 5, 2012 [2 favorites]


500 power workers came up from Alabama to restore power to the Northeast.

Weren't spurned to do so by the free market, fyi.
posted by whimsicalnymph at 6:31 AM on November 5, 2012 [1 favorite]


Most of what I've read scanning through the thread suggests that supply is inelastic due to power outages in the ports and other distribution systems. But, why can't more gas be trucked in from further away where there are no power issues?

Great point. I can't find any definitive answers on why this is not happening. Would it be happening if prices were allowed to rise? Seems plausible.

Meanwhile, this article is very informative on all the pipelines, terminals, etc. that are broken in the system, and a rigid government regulation that caused a big problem:

The Jones Act, prohibits the transfer of goods between U.S. ports unless the ship moving the cargo was 1) made in the U.S., 2) registered in the U.S., and 3) staffed by an all American crew. The economics of shipping gasoline under those restrictions makes the trip very expensive -- double the price of a foreign sailing. In any case, even if the economics worked out, there are very few U.S.-made gasoline tankers, let alone U.S.-made tankers with all American crews onboard. So that means gasoline supplies backing up in Houston, due to the Colonial shutdown, is currently being loaded onto ships bound not for New York, where it is needed, but for South America and Europe. Governor Cuomo announced Friday morning that the Federal government had waived the Jones Act provision, allowing for the transfer of gasoline via any ship to New York. That was welcome news, but it shouldn't have taken a week for the government to get its act together.
posted by shivohum at 6:34 AM on November 5, 2012 [1 favorite]


And many people are less able to tolerate the cold.

They should move into their warm house. You know, their spare house that has more insulation and a heat-trapping design. They are only staying in their cold house because of cheap gas.

Or perhaps they should start wearing clothes.

Right now people are lounging around naked in their cold house while lighting cigars from their decorative gas-powered torches. Hence the gas shortage. DUH.

Not sure why this is so hard to understand.
posted by the young rope-rider at 6:43 AM on November 5, 2012 [9 favorites]


You're not allowed to pump your own gas in Jersey, either, which hasn't been mentioned much in news coverage but can't be helping matters. I bet it more than doubles the length of the lines.

Having driven the NJ Turnpike what feels like approximately a million times, with stations that back up on a normal weekend day, I disagree with this premise. It is very very rare that they attendant isn't at my car as I pull to a pump, and as the pump finishes. Some work quicker than others, sure, but double the length? Not a chance, in my opinion.
posted by inigo2 at 7:14 AM on November 5, 2012


I grew up in Jersey. Trust me, this varies.
posted by gerryblog at 7:16 AM on November 5, 2012


You're not allowed to pump your own gas in Jersey, either, which hasn't been mentioned much in news coverage but can't be helping matters.

Really? Wow, that hasn't been reported where I am. I like the idea of giving people more jobs at gas stations, and also see the advantages to the handicapped, or young parents with small kids, who won't have to get out of the car to pay at the pump, but what is the offocial reasoning behind that restriction in New Jersey?
posted by misha at 7:21 AM on November 5, 2012


They waived the Jones Act on Friday. Again - if the pipeline is full it doesn't matter where the Jones Act ships are going. It takes a few days for the barges to get up the East Coast from Houston. But again - its problematic off loading the barges right now. There is lots of fuel sitting in the harbor waiting to be unloaded

NY needs something like 4.5 millon gallons of gasoline a day, a tanker truck holds something like 9k gallons, it takes at least two days to get a tanker from Houston (where the excess gas is) to NYC. 4 days round trip So you need something like 2000+ gas tankers running full out to fulfill the needs. The total fleet in the US is something like 15000 tankers.

That 2000 number is probably low since people need to sleep.
posted by JPD at 7:27 AM on November 5, 2012 [3 favorites]


Also interesting to note how unconsolidated the tanker business is. Makes it harder to move big supply quickly and in a coordinated fashion

A recent American Petroleum Institute review found that its seven largest members have a combined fleet of just 1,040 tank trailers.
posted by JPD at 7:29 AM on November 5, 2012


I find the outrage against gouging pretty reasonable, but I'm not completely confident in my response to this question: why not use rationing and price controls all the time? There are plenty of people who can't afford gas right now in places that haven't just faced a hurricane

Well, how do you apportion out the rations and how do you set the prices? Do all drivers get an equal amount of gas? If so, why is there any reason to think that that would be a desirable use of resources? It encourages hoarding by those who don't need gas at the expense of those who we would rather see get more gas, like farmers or people who deliver medical supplies. Are medical workers and truckers and movers going to be allowed more gasoline than other people? If so, then suddenly you need a committee that can make these decisions, and it can be gamed.

The inefficiency and the inevitable corruption of this kind of centralized economy is one of the things that led to the Soviet Union being unable to feed its own people. Price controls, like rent control in NYC, are almost always a shambles and there are very few economists who support them, whether libertarian or not.
posted by painquale at 7:31 AM on November 5, 2012 [1 favorite]


Seems like a logical way to ration gas would be by something easily identifiable, rather than the finger-marking thing.

For instance, if your driver's license number ends in an odd digit, you can only buy gas on M, W, or F. If it ends in an even number, T, Thr or Sat. No gas on Sundays; that's when the generators get charged up, maybe.

Something like that is easier to implement in places like Jersey where someone else has to pump the gas, of course, but I think it could be programmed into the modern pumps that you swipe your credit card through, as well--many of them ask for a postal code when you use a credit card already, so inputting a driver's license number would not be out of the question, I'm pretty sure.
posted by misha at 7:33 AM on November 5, 2012


So gas, as it is now, can be purchased by people who have either time (to wait in lines) or money (to hire people to wait in lines). With increased prices, we'd have gas able to be purchased by people with money. Yes, they need to have the desire to pay that much for gas once the prices go up, but they still need to have the desire to pay that much in money/time even now. This is a short-term issue, not a long-term one, so the concerns that this will degenerate into Soviet-style corruption are overblown: no one is suggesting that all goods should be allocated by the government for all time.
posted by jeather at 7:34 AM on November 5, 2012


It is very very rare that they attendant isn't at my car as I pull to a pump, and as the pump finishes. Some work quicker than others, sure, but double the length? Not a chance, in my opinion.

Maybe not under normal circumstances, but it's also possible that some of the attendants were unable to get to work, right? Most people don't live within walking distance of their jobs in Jersey, I'd imagine.
posted by elizardbits at 8:02 AM on November 5, 2012


Simple question: how do we know that, if allowed to float, the gas price wouldn't top out at $1000, rather than $20?
posted by newdaddy at 8:09 AM on November 5, 2012 [1 favorite]


There's the fact that the poor make less money than the middle class, that they therefore become less able to buy things as they get more expensive, and that poor people use fuel-based transportation. I'm not sure why this needs explaining, exactly, but it might explain why there's this confusion as to why price-gouging would hurt the poor more than having to wait in line for a limited quantity of gas would, and why there keeps being repeated this assertion that the poor would have "the option" of buying this more expensive gasoline if they chose to take it.

Because the change happens at the margins, not at the edges. Of course there are people who will buy all the gas they want at almost any price. And of course there are people who cannot afford all the gas they need even at current prices.

What increased prices does is forces people in the middle to reevaluate their wants from their needs. It's not binary. An increased price isn't meant to force individuals out of the market in favor of people more willing to pay. It is meant to trim consumption all around. Everyone buys less, the result being that there is more to go around, there are shorter lines and prices stabilize. People buy a few gallons at a time instead of filling up. They decide to connect fewer things to their generator so it burns less fuel. They call their bosses and coworkers to arrange car shares and work hour changes. And so on and so on.

Another consideration is that now is probably too late to de-implement price controls. Lots of people have already "wasted" a lot of gas that they were able to get cheaply (both in time and dollars), not knowing that the gas crisis was going to last this long. If prices were to go up the instant the hurricane passed and the extent of the damage to the supply infrastructure was realized, people would have conserved their fuel budget better. Prices might have legitimately raised to $6 or $8 and settled. As opposed to the $20 that it probably would have to go to now.

Look at Wednesday, Thursday and Friday in Manhattan. Despite the gas shortage, tons of people piled into their cars and drove into Manhattan. So many that they had to impose HOV rules, and Manhattan was turned into gridlock. Lots of people using their cars that probably didn't HAVE to, and now they are sitting in gas lines. If gas was more expensive right away, people would have conserved their usage right away. They wouldn't have needed to impose the HOV rules because fewer people in their right minds would fire up the car and drive into Manhattan unless someone was sharing the cost with them. Incentives would have changed. Not all of them would be easy decisions to make, but there are always hard decisions to make in a disaster. The point is that high prices would send the signal that gas needs to be conserved more clearly to everyone. It wouldn't have been business as usual north of 23rd street.
posted by gjc at 8:18 AM on November 5, 2012 [1 favorite]


This entire thread could be a discussion of American health care.
posted by srboisvert at 8:18 AM on November 5, 2012 [12 favorites]


Most arguments against price-gouging claim that the poor will be shut out of access to gasoline. But if we can change the system to allow the rich to have as much gasoline as they can afford, there will then be a rise in charitable donations of gasoline to the poor. The rich will literally allow their gasoline to trickle down onto those who can't afford gasoline and society will be all the better for it.

C'mon guys, this is, like, Reaganomics 101.
posted by turaho at 8:19 AM on November 5, 2012 [10 favorites]


On New Jersey gas stations - there are still plenty of places without power, and with no prospect of getting power until the end of the week. Here is an article about the single gas station anywhere near my parents' house - no power, so they can't service cars, but they've brought in hand pumps meant for water from all over New Jersey. It sounds like those gas station employees are working damn hard (and I'm sure they are - I remember them being good guys), but yeah, the speed of the line is dependent on them working all day, in the cold, with equipment that most of them have just been trained on this week. And those are mostly guys who don't actually live in Rumson, is my guess, because it's a somewhat snooty little town and if you're a gas station attendant you probably can't afford to actually live there where you work, so they're driving through not-particularly safe nor clear-of-debris roads to get there. It's certainly a bottleneck.
posted by Stacey at 8:32 AM on November 5, 2012 [1 favorite]


NY needs something like 4.5 millon gallons of gasoline a day, a tanker truck holds something like 9k gallons, it takes at least two days to get a tanker from Houston (where the excess gas is) to NYC. 4 days round trip So you need something like 2000+ gas tankers running full out to fulfill the needs. The total fleet in the US is something like 15000 tankers.

I wonder if the 15k number includes all truck categories (this survey from 1979 mentions 26,5k trucks and 85k trailers). What about railroad tank cars? I wonder if there aren't vehicles used for transporting other liquids (LNG/ethanol) that could be quickly converted to carry gas. Maybe gas could even be transported in barrels if the price was high enough. If things like this could create an elastic supply, it would seem to make sense to let prices rise to some level.

I find the outrage against gouging pretty reasonable, but I'm not completely confident in my response to this question: why not use rationing and price controls all the time? There are plenty of people who can't afford gas right now in places that haven't just faced a hurricane.

It would be hard to stop this from creating a black market and other forms of corruption, might be one reason; it may limit the market from working to increase supply and lower prices, another; it may discourage the market from finding other modes of transportation/energy. Maybe, instead, there could be something like food stamps that could be allocated to needy people to allow them to buy gas at the market price. The gas stamps could be funded by windfall taxes on the oil industry, or perhaps with a flat gas tax.
posted by Golden Eternity at 8:41 AM on November 5, 2012


Look at Wednesday, Thursday and Friday in Manhattan. Despite the gas shortage, tons of people piled into their cars and drove into Manhattan. So many that they had to impose HOV rules, and Manhattan was turned into gridlock.

Considering several of the river crossings were closed, most of the commuter trains were out or on limited schedules, and the subway was barely working, traffic was an absolute joke last week. Far far far below what I (and apparently the government) expected.

My SIL had to go to Manhattan from Queens to have Stitches removed on Wednesday and made it in to the city in not much more time than it would take her on a normal day.

I wonder if the 15k number includes all truck categories (this survey from 1979 mentions 26,5k trucks and 85k trailers). What about railroad tank cars? I wonder if there aren't vehicles used for transporting other liquids (LNG/ethanol) that could be quickly converted to carry gas. Maybe gas could even be transported in barrels if the price was high enough. If things like this could create an elastic supply, it would seem to make sense to let prices rise to some level.

1) If you read the article I posted the whole point of it was how surprised the truckers were at the small size of fleet given historical examples such as that study you posted
2) I'm sure there are some carriers that could be converted given time (though not LNG), but given gasoline is the most commonly used and transported fuel in the US it would seem like the available fleet of hazardous tanker trucks to be converted would be quite small. Plus you would need to believe that the fuel shortage was going to last long enough to pay for you to convert and reconvert your vehicle and that you would have the conversion done quickly enough to profit.

Also don't forget that 15k number includes diesel and biofuels carriers already.
posted by JPD at 8:47 AM on November 5, 2012 [1 favorite]


Simple question: how do we know that, if allowed to float, the gas price wouldn't top out at $1000, rather than $20?

This is not snark, but the answer is the supply demand curve. There is still enough gas to give to most of the people waiting in the lines. So the supply is not so low that the price would rise that much. A station owner would put up the price of $1000, and nobody, or nearly nobody, would buy it. But the station owner has bills to pay. He can't keep his lights on selling 4 gallons of $1000 a gallon fuel. The gas station owner is going to raise the price only to the point that it maximizes his revenue. If he has a line of cars waiting, those are sales he isn't capturing. There are people walking away when they see the line.

The station owner's revenue curve looks like sort of like a parabola. If his price goes beyond the market clearing price, his revenue goes down. His profit margin goes up, but his revenue goes down. If his price is too low, his revenue also goes down because he can't fulfill all the demand in the time period.

Further, the higher the price goes, the more it will give incentive to station owners with no power to figure out a way to get a generator. (Or like the above comment, figure out creative ways to pump the fuel.) At $4 a gallon, a station owner with no power cannot hire a generator because he would lose money. (Remembering that even at today's awful gas prices, gas stations only make a few cents profit on every gallon. They have no room in their budgets to pay extra for a generator.) At $4 a gallon, the station owner's only choice is to stay closed- paying the current market rate for a generator would mean that he loses even more money than he does just staying closed. At $6 or $8 maybe he could afford to open up.
posted by gjc at 8:49 AM on November 5, 2012 [1 favorite]


you don't know what the demand curve looks like. The evidence historically is that in the short term price elasticity is very low so the demand curve it is pretty flat. $1000 probably doesn't clear the market, but $100 might, $50 might?
posted by JPD at 8:54 AM on November 5, 2012 [2 favorites]


you don't know what the demand curve looks like. The evidence historically is that in the short term price elasticity is very low so the demand curve it is pretty flat. $1000 probably doesn't clear the market, but $100 might, $50 might?

Right. $1000 seems pretty high to me, sure, but $100/gallon seems like it might potentially be in the ballpark, especially if it takes a while to restore supply.
posted by gerryblog at 8:58 AM on November 5, 2012


That sounds improbably high to me. Who are these people willing to pay 100 dollars a gallon, and would they really buy enough gas to drain the city's resources? But I'm not sure what to offer as evidence for or against.
posted by painquale at 9:03 AM on November 5, 2012


Nobody knows what it looks like, because the only way to discover it is to let the price rise or fall.
posted by gjc at 9:05 AM on November 5, 2012


I wonder if there aren't vehicles used for transporting other liquids (LNG/ethanol) that could be quickly converted to carry gas. Maybe gas could even be transported in barrels if the price was high enough.

In the case of NJ, this could be a solution, I think? In the case of NYC, however, it is not, as there are Port Authority restrictions on what materials are allowed in the Hudson River tunnels (and IIRC on one of the levels of the GWB). This means that the primary viable shipping method of fuel products is via water.
posted by elizardbits at 9:06 AM on November 5, 2012


Nobody knows what it looks like, because the only way to discover it is to let the price rise or fall.

I agree, but I also didn't post a wikipedia link to Demand Curve as if it provided some answer in and of itself.

Saying prices increasing will bring supply on is an underpants gnome solution. You are snapping your fingers and saying "supply will arrive". The reality is that in the very short term supply is pretty well fixed as is demand.

If you thought this was more than a one week problem then you probably do want to let the market incentivize supply, but that does not seem to be the case here.
posted by JPD at 9:12 AM on November 5, 2012 [2 favorites]


1) If you read the article I posted the whole point of it was how surprised the truckers were at the small size of fleet given historical examples such as that study you posted

Yikes, I missed the link. Interesting that the article recommends reducing overcapacity in the chemical transportation fleet as well. I wonder if having such a small tanker fleet could be considered a national security risk, because of situations like this. Something for FEMA to look at, perhaps.
posted by Golden Eternity at 9:17 AM on November 5, 2012


Fuel Relief Fund is delivering tankers of gas.
posted by whimsicalnymph at 9:36 AM on November 5, 2012


What we really need to outlaw is building neighborhoods where you can't walk to the grocery store and a train station, and it's dangerous to ride a bike beyond your cul-de-sac. We used to build those because they worked alright before electricity and cars.
posted by akgerber at 9:53 AM on November 5, 2012 [8 favorites]


Well, I don't really see any of that as a compellingly rigorous answer to my question. How many millionaires are there in NYC, and neighboring areas? If at some point the very last gallon is sold, what is going to limit the price of that gallon and the few before it? What kind of damage does it do to the larger market, and to The Business Environment generally, to see a spike like that? And what happens to the community when suddenly a few members are holding the last units of a commodity that skyrockets in value, surrounded by desperate scarcity?

What guarantee do you have that the market itself wouldn't create a second 'Perfect Storm'? I'm reading a lot of faith in the wisdom of markets here, but no real analysis showing that an unfettered market couldn't also be vastly destructive in an unfortunate circumstance.
posted by newdaddy at 9:54 AM on November 5, 2012


ocschwar: " If you don't allow the price to go up, you are guaranteed that stations will run dry, and that will leave people unable to get gas at any price. They might be rich, they might be poor, but they will be screwed because they didn't get to the gas station in time. "

I live in Queens, NY. Gas stations in my area are limiting gas to 5 gallons per car by handing out containers to people and having them fill their tanks with them. The main pipeline into our area has been closed and there is a supply shortage. Lines have been incredibly, astonishingly long, and wrap around several blocks. Many many side streets in Queens are pretty tight to begin with and parked cars on either sidewalk and a line of cars on a block can totally block traffic. Especially since the felled trees on those side streets haven't all been cleared. Gas prices are averaging around $4.10 for regular, $4.35 or a little more for premium. Which is exactly what they were before the hurricane hit us.

There's a station near me that was charging $6 this morning. The lines were just as long there as anywhere else. And they ran out of gas anyway.

The lines are extremely long and the stations literally run dry with dozens of cars still waiting to buy gas. These aren't people who are filling their tanks for the hell of it. They're adding gas to their tanks in the hope that they might be able to get where they need to go.

Please note: The stations are running dry regardless of the price they are charging for gas. They could be charging $20 and people would still buy.

Public schools (and most private schools) are open today in NYC and on Long Island. Not all schools have had bus service restored. Most places of business are open as well. Bosses expect people to come to work. Mine did. It took me three hours to get in today. Parents are also expected to bring their kids to school. With bus service spotty and such long delays, many parents seem loathe to let their kids stand out in 40º for a couple of hours, waiting for a bus that may or may not show up.

Speaking of felled trees, according to our illustrious Mayor Bloomberg, of all the trees that were felled in NYC, approximately 75% of them came down in Queens. When they fell, they took out power lines, roads and landed on houses. This happened near my house.

A number of people in my area have had their homes destroyed or damaged. Some have no heat, hot water, gas and/or electricity. A number of friends are living with their friends or family, because their homes are not yet liveable.

ocschwar: "I favor rationing. I rationed my own use of gasoline to 0 gallons in response to Sandy.

I also ration my food shopping when blizzards are happening. Jerks in my city declare a French Toast Emergency and clog traffic rushing out to get milk, eggs and bread. Meanwhile, I remind myself of my store of dry nonperishables at home, and vow that in the worst case scenario, I will go without fresh food for a while.


How about fresh water? Homes here lost water, remember? Hey, can we buy water to live on or would that also make us jerks?

I have two small children. They spend 5 days a week in pre-K, and get three meals a day there. I don't keep my refrigerator stocked to the brim with milk, eggs and bread because they're not home to eat full meals more than a couple of days a week. So before the hurricane hit, I bought enough milk, veggies, fruit, water and bread for an extra couple of days. And then I ran out on Thursday. So I went for more. If keeping my kids in the basics makes me a jerk in your eyes, so be it.

Friends went without water for days and had to live on bottled. We gave them the bottles we had bought before the storm.

And then I go home, in the traffic, and curse the jerks who make my bus trip quadruple in length because they MUST MUST MUST have milk."

I don't think you have a very good grasp of what some of us are dealing with up here. Nor do I think accusing people who have been affected by what to all accounts is a hurricane that caused billions in property damage, (including hundreds of destroyed homes and cost dozens of lives) of entitlement is particularly helpful or kind.
posted by zarq at 10:33 AM on November 5, 2012 [25 favorites]


Zarq, thank you for saying what I have been struggling to convey. I have an MBA and a love of economics. I also have first-hand experience as a refugee. Economic theories are great and all, but these circumstances are unprecedented, and credence should be given to first hand accounts and the facts on the groud rather than what we wish to be true.

Bloomberg and Christie are as free market as you can get. If raising prices would fix things, don't you think they'd do it?
posted by snickerdoodle at 11:24 AM on November 5, 2012 [4 favorites]


I also ration my food shopping when blizzards are happening. Jerks in my city declare a French Toast Emergency and clog traffic rushing out to get milk, eggs and bread. Meanwhile, I remind myself of my store of dry nonperishables at home, and vow that in the worst case scenario, I will go without fresh food for a while.

How...virtuous...of you.

And then I go home, in the traffic, and curse the jerks who make my bus trip quadruple in length because they MUST MUST MUST have milk.

Why, how DARE they mildly inconvenience you while they ensure that their families are taken care of! The NERVE! Dude, seriously? Are you psychically attuned to everyone else, that you know that they didn't really need those things? Your complaining and lack of compassion is kind of gross.

I live in a blizzard prone area, and have all my life. If Blizzard Bill, the local weather guy, says we have a big one coming, it's a guarantee that there will be a run on the grocery store, largely by people with kids who need to make sure they're well stocked for however long they may be out of school. I live in a blue-collar town, where about 70% of students qualify for free or reduced price meals. That's food the 'rents don't have to keep in the house most of the time. A looming weather emergency changes that, and people need to get out when they can to prepare for a complete upset of their daily routine.

Not everyone is well-off enough to stuff the pantry with a month's worth of non-perishables, and you should probably consider that their need to ensure their families have food is more important than your desire to get home faster.
posted by MissySedai at 12:56 PM on November 5, 2012 [1 favorite]


It still seems remarkably charitable to assume that that is likely to be an accurate assessment of what people are, in fact, out doing. It seems extremely specific and there's been nothing to indicate access to such information adequate for making such an assessment.
posted by hoople at 1:02 PM on November 5, 2012


Speaking of felled trees, according to our illustrious Mayor Bloomberg, of all the trees that were felled in NYC, approximately 75% of them came down in Queens. When they fell, they took out power lines, roads and landed on houses. This happened near my house.

A few years back, an August tornado blew through Toledo and the surrounds, and wreaked similar havoc. We were out at the German-American Festival when the sky suddenly turned green, then black, then the wind kicked up almost exactly at that same time the sirens blew. Sheriff's deputies did a great job of overstuffing the few permanent buildings at the grove, and kept everyone calm when the lights went out and that freight train sound roared through.

My street was largely unscathed. The city had already removed out ash trees earlier that year due to ash borer infestation, so we had a few ornamental trees ripped up and blown about, but that was it. The rest of the neighborhood? Looked like your picture. My neighbor around the corner came up out of the basement to find that the old maple in her front yard sheared off her entire front porch, and just missed landing on her teeny little car by about a foot. The guy across the street from her? Had his maple in his living room.

Ma Nature is scary.
posted by MissySedai at 1:07 PM on November 5, 2012 [1 favorite]


This thread has given me some interesting thoughts to meditate on while I ride my bicycle to work.
posted by Joe Chip at 1:08 PM on November 5, 2012


snickerdoodle: "Zarq, thank you for saying what I have been struggling to convey."

You're very welcome. Honestly, I think you've done a fantastic job countering some of the assumptions made in this thread with clear, firsthand examples.

I was extremely lucky during this storm. During the last couple we lost power, phones and hot water for days. Less downtime was an improvement.

MissySedai: " My street was largely unscathed. The city had already removed out ash trees earlier that year due to ash borer infestation, so we had a few ornamental trees ripped up and blown about, but that was it. The rest of the neighborhood? Looked like your picture. My neighbor around the corner came up out of the basement to find that the old maple in her front yard sheared off her entire front porch, and just missed landing on her teeny little car by about a foot. The guy across the street from her? Had his maple in his living room."

Dear lord. She was very lucky. Was the guy across the street okay?

The house next to my mom had an old oak tree crash into it during this storm, taking out part of the top floor. The tree was actually in front of mom's house, not her neighbor's. It just happened to fall at an angle.

There are branches down on nearly every block here, and quite a few trees have toppled. The worst are the ones that have taken out cable and phone lines in the process. (and I assume some above-ground power lines? We do have a few -- there are a lot more in Staten Island.) But the department of sanitation is clearing the trees slowly with buzzsaws.
posted by zarq at 2:05 PM on November 5, 2012


Saying prices increasing will bring supply on is an underpants gnome solution. You are snapping your fingers and saying "supply will arrive". The reality is that in the very short term supply is pretty well fixed as is demand.

I'm not saying that. If supply could arrive, it would already be doing that. That's fucking obvious. What I and the others are saying is that when supply is limited, you must limit demand somehow.
posted by gjc at 2:33 PM on November 5, 2012


No, plenty of the folks in the "All price caps are bad no matter the circumstance" camp are saying that its preventing a supply response. Look at all of our armchair logistics experts who say "They'd load it up on tankers if you let them sell it for $20/gallon." You might not have said that (although you actually sort of did by implying it would incentivize gas stations to get generators) but plenty here have, and its the key point of most of the articles in the post itself.

I certainly don't think rationing by volume vs. price is a clear cut answer. Both have pluses and minuses. In what is supposed to be a short term crisis I'm not really sure it matters.

My problem with price rationing is that is allows a few gigantic winners.
posted by JPD at 2:43 PM on November 5, 2012 [1 favorite]


Zarq, thank you for saying what I have been struggling to convey. I have an MBA and a love of economics. I also have first-hand experience as a refugee. Economic theories are great and all, but these circumstances are unprecedented, and credence should be given to first hand accounts and the facts on the groud rather than what we wish to be true.

1- This type of circumstance is not unprecedented. It happens whenever there is a natural disaster.

2- People on the ground can't see the whole situation. I don't think anyone says their stories aren't true. They are simply anecdotal and not necessarily indicative of the overall picture. One of the points of economics is that individual actors can only see what they can see, and the fastest way to smooth things out is to let those individuals behave as rationally as they can. This means letting people set prices.

3- Further up the thread, there were stories from the ground in other circumstances where prices were allowed to go up, with better results. They weren't believed or were handwaved away. So it goes both ways.
posted by gjc at 2:44 PM on November 5, 2012 [1 favorite]


Further up the thread, there were stories from the ground in other circumstances where prices were allowed to go up, with better results. They weren't believed or were handwaved away. So it goes both ways.

One example of that, and a cursory search on CNN showed their description of the events to be very colored.
posted by JPD at 2:52 PM on November 5, 2012 [2 favorites]


Dear lord. She was very lucky. Was the guy across the street okay?

He was at work when the storm blew through, the only one home was the cat, thankfully. His insurer was Johnny-on-the-spot with getting him sorted out, so he was rebuilt in about a month. He gets pretty skittish during tornado season now, though. I fully expect him to move to somewhere less...ah, windy...when he retires in a couple years.

Many of my neighbors remember the Palm Sunday tornado of '65, which actually completely flattened the neighborhood we currently live in. They said the one that ate Shannon's porch and threw the tree into Dan's house was "a summer breeze" in comparison. Ouch.

The house next to my mom had an old oak tree crash into it during this storm, taking out part of the top floor. The tree was actually in front of mom's house, not her neighbor's. It just happened to fall at an angle.

Holy cats! So glad your Mom didn't find a tree in her house, but her poor neighbor!

There are branches down on nearly every block here, and quite a few trees have toppled. The worst are the ones that have taken out cable and phone lines in the process. (and I assume some above-ground power lines? We do have a few -- there are a lot more in Staten Island.) But the department of sanitation is clearing the trees slowly with buzzsaws.

I am relieved to see on the news over here that things are being cleaned up steadily. Some of my friends up your way are still without cable and phone, but have power again, others are still without power, but are otherwise well.

I am impressed as hell that the busses and subways are largely up and running already.
That's actually pretty badass, considering.
posted by MissySedai at 3:08 PM on November 5, 2012 [1 favorite]


My problem with price rationing is that is allows a few gigantic winners.

So in other words, exactly like I said upthread, just so that gas station owners can't have all that cash, you would rather burn the money. Absolutely literally, as people sit in lines for seven hours, idling their cars, to get gas. They're burning both time and petroleum, instead of just handing more money than normal to gas stations, and getting on with their lives.

I know you mean well. I know you want things to be fair. But fairness is costing you an unbelievable amount of labor, entire working days lost just to get a tank. You're also burning a lot of gas to idle all those cars, and the shortage of gas is the original problem. You're increasing the total systemic cost of the disaster a great deal, because a few people would dare, dare! to sell things at their true market value in a crisis.

If the price were floating, there still wouldn't be enough gas for what everyone wanted to do, but you'd be able to get it almost immediately. There would be more total gas available, because less gas would be wasted getting gas. And there would be a heck of a lot more labor free.
posted by Malor at 4:02 PM on November 5, 2012


1- This type of circumstance is not unprecedented. It happens whenever there is a natural disaster.

Please show me another record-breaking natural disaster in as dense a population area, as reliant on mass transit, and affecting as many people as this one. And then show me how they handled it better.

I've been through snowstorms, hurricanes, a typhoon, blackouts, tornadoes, and a couple horrific man-made disasters. They have no bearing on the situation in NY/NJ at all, other than bolstering my belief that when the situation is dire and people believe they are being treated fairly, they will do what's best or the common good. We may be selfish, but we also didn't get here without cooperation.
posted by snickerdoodle at 4:03 PM on November 5, 2012 [6 favorites]


People are generally not idling, malor, as I mentioned above.

But fairness is costing you an unbelievable amount of labor

For the vast majority of working people, MONEY REQUIRES LABOR. You have to work to get the money.

Labor isn't first being exploited in order to make a profit but instead is being exchanged directly for a need. That doesn't make that labor "wasted" any more than my labor is "wasted" when I change my child's diaper instead of paying someone to do it for me.
posted by the young rope-rider at 4:31 PM on November 5, 2012 [1 favorite]


Orb2069 writes "What's to stop a group of gasoline stations from colluding to raise prices together? They don't even need to get ALL the stations in the area to participate - The ones who aren't participating will be out of gas soon enough."

I can't speak to NYC/Jersey's anti gouging laws but generally such laws incorporate a maximum price that is set based on a maximum or average of the last few weeks or months. So sure they could all raise their prices to some maximum but that maximum is in line with what they would normally charge.

whimsicalnymph writes "
500 power workers came up from Alabama to restore power to the Northeast.
Weren't spurned to do so by the free market, fyi.
"

I'm not 100% positive but it's pretty unlikely those workers are volunteering to work without pay. The article says they volunteered to go but that just means they volunteered to work out of their service area not that they are forgoing pay. Around here we'd get time and a half and then double or triple time for our hours over 40 (and obviously there are lots of hours over the 40 available) and we'd get a living out allowance in addition to getting our expenses covered. This cost will of course be billed back to the appropriate authorities in NY and New Jersey.
posted by Mitheral at 4:51 PM on November 5, 2012


So in other words, exactly like I said upthread, just so that gas station owners can't have all that cash, you would rather burn the money. Absolutely literally, as people sit in lines for seven hours, idling their cars, to get gas.

Everybody has said, dozens of times already in this very thread, that if cars are stuck in line for hours, people are turning them off.

And we've tried to point out time and again, our objections have little to do with a few gas station owners making out like bandits. Just selecting and paraphrasing a few of the many arguments above;

Ability and willingness to pay are poor proxies for actual need.

People least able to pay exorbitant prices are likely to be the ones most vulnerable to real scarcity.

The short term supply really is rather inelastic. There are lots of barriers, both legal and logistical, to random people just driving into NYC and selling gas from the back of a truck.

Rich guys already do have a way to beat the system - they're just paying other people to sit in line for them.

Consumers are going to remember who gouges them in a moment of hardship - its counterproductive long-term to gouge people who might otherwise be repeat customers.

The last thing NYC needs is something that further accentuates class differences. If there's any kind of silver lining in a tragic event like this, it's that it brings about circumstances where people pitch in together. Outbidding your neighbors like some kind of Dickens villain such that they end up freezing to death kind of undermines that.

Finally, everyone making the argument for floating gas prices just naturally assumes they will be able to still afford what they need, but no one can make any rational argument regarding what the peak price might be. Would you still be a fan of this solution, honestly, if you thought you would be easily outbid?
posted by newdaddy at 5:46 PM on November 5, 2012 [3 favorites]


Well, some guys would like you to know that they think the price of 5 gallons of gas is a blowjob. Classy.
posted by dejah420 at 6:46 PM on November 5, 2012 [1 favorite]


gjc: "you must limit demand somehow."

Demand is being limited, just not in a way that satisfies your ideological preference. You prefer unmet demand to exist quietly out of sight rather than in the open where it can be seen. The need for fuel is not diminished by lack of funds.
posted by wierdo at 6:52 PM on November 5, 2012 [1 favorite]


wierdo, there is a difference between need and demand, and gjc recognizes that. gjc is proposing that we try to get rid of demand where there is no need.

Demand is being limited, just not in a way that satisfies your ideological preference.

Can we knock it off with this "ideological preference" stuff and all these references to libertarianism? There are zero libertarian arguments in this thread. Absolutely no one here has argued against gouging laws on the behalf of the supposed "rights" of the gas station owners. Not a one. That is the argument that would be animating libertarians.

It is possible to be against gouging laws without being libertarian. I'll bet most people against gouging laws are not libertarian. I am at least somewhat moved by the arguments against gouging laws, and I support the NYC soda ban; I'm pretty sure that automatically disqualifies me from libertarian circles. As I said upthread, I wish people would stop saying that this is a libertarian argument. I mean, libertarians would stand by it, but you don't need to be a libertarian to stand by it. It's like calling any left-leaning argument a socialist argument.

"Libertarian" is going to become the left-wing version of "socialist."
posted by painquale at 7:26 PM on November 5, 2012


I'm not 100% positive but it's pretty unlikely those workers are volunteering to work without pay. The article says they volunteered to go but that just means they volunteered to work out of their service area not that they are forgoing pay. Around here we'd get time and a half and then double or triple time for our hours over 40 (and obviously there are lots of hours over the 40 available) and we'd get a living out allowance in addition to getting our expenses covered. This cost will of course be billed back to the appropriate authorities in NY and New Jersey.

The article is vague on details but it alludes to agreements being in place to provide mutual coverage of their home areas during the provision of crisis support to the Sandy zone. I would suspect they probably also had agreements with similar companies within the Sandy zone for mutual support if either party had a crisis scenario.
posted by srboisvert at 8:02 PM on November 5, 2012 [1 favorite]


No, I won't knock it off, in the sense of repudiating it, because it's calling a spade a spade. You may note that I haven't specifically stated it's a libertarian ideology, because it isn't. Drop "ideological" if you like, but it is still only a preference.

Can you really argue with a straight face that purchase limits and long lines don't work to suppress "soft" demand? All allowing price gouging does, other than create the obvious windfall, is shift the cost of the shortage from time to money. Those with money can pay other people to stand in line now, so they're not really hurt relative to a situation where prices are higher. Those without the money to pay people to stand in line can stand in line themselves if they really need gas. Those who are completely without money are screwed either way, although they might be able to make a few bucks as a line stander if they have time. Neither scenario can be stated to be universally better.
posted by wierdo at 8:02 PM on November 5, 2012 [1 favorite]


Mithreal: I can't speak to NYC/Jersey's anti gouging laws but generally such laws incorporate a maximum price that is set based on a maximum or average of the last few weeks or months.

I thought the whole point of the article was to claim that government 'tampering' was actually breaking the free market system? Malor et al have been waving the $20/gal price point around - which would be a 5X overnight jump - but why should it stop there? Collusion and price fixing are as old as the hills - and in a restricted market like this, there isn't even much outside competition to counteract it.
posted by Orb2069 at 8:46 PM on November 5, 2012


You may note that I haven't specifically stated it's a libertarian ideology

You are right; sorry. I was unfairly lumping you in with other people using the word.

Can you really argue with a straight face that purchase limits and long lines don't work to suppress "soft" demand?

They do. I'm not sure anyone was claiming otherwise. But allowing price gouging does not simply shift the cost from time to money; there are other effects. For instance, the current system invites hoarding. Everyone who gets to the front of the line is going to fill their tank to the top: they are not going to fill up only halfway for the benefit of other people who need the other half tank of gas more. They've already paid by waiting in line. A system that allows gouging allows for a more fine-grained transactions to take place, so it is less likely that people will purchase gas they don't really need. This is the main reason to support gouging, I think. Arguments for gouging are at their strongest when they claim that more people will get gas, although everyone who gets gas will probably get less gas.

Also, the fungibility of money is another relevant difference. I know it has been contentious here to say that gouging will increase supply, but it's at least possible in principle that people from out-of-state could bring gasoline in for money. Whether they do or not depends on factors like whether the roads are clear, whether its legal, etc. On the other hand, we know right off the bat that no one is going to bring in gasoline from out of state to be paid in other peoples' time.

Neither scenario can be stated to be universally better.

I think one probably is better; it's just really hard to know which one. Which is why it's worth debating it out.
posted by painquale at 8:57 PM on November 5, 2012


NY needs something like 4.5 millon gallons of gasoline a day, a tanker truck holds something like 9k gallons, it takes at least two days to get a tanker from Houston (where the excess gas is) to NYC. 4 days round trip So you need something like 2000+ gas tankers running full out to fulfill the needs. The total fleet in the US is something like 15000 tankers.

Why is Houston the only place with excess gas? Is there no gas that could be siphoned off between Houston and NY? And even if Houston WAS the closest place, it should have easily arrived by now. Why hasn't it? Why would we think that has nothing to do with price? Why would 1000-2000 tankers be diverted from their normal routes and go to special efforts to grab fuel from nonstandard places if there's going to be no compensation for the trouble, time, money, and effort that would cost?
posted by shivohum at 9:34 PM on November 5, 2012


For instance, the current system invites hoarding. Everyone who gets to the front of the line is going to fill their tank to the top: they are not going to fill up only halfway for the benefit of other people who need the other half tank of gas more. They've already paid by waiting in line.

I live in Queens, NY. Gas stations in my area are limiting gas to 5 gallons per car by handing out containers to people and having them fill their tanks with them.

I would think some sort of limit would be in place throughout NY/NJ, no?

Maybe they could charge $5 for the first 5 gallons, $50 for a second 5 gallons, and $200 for the third and last 5 gallons, or something, if they want to try an elastic price. I guess this only makes sense if it would help pay to bring in gas via more expensive distribution methods. If those methods (trucking or rail or whatever) are insignificant, then I think people here have made a good argument that rationing is the best way.
posted by Golden Eternity at 9:39 PM on November 5, 2012


If at this point, those arguing in favor of price-gouging are still talking about cars idling in line and people filling their tanks to the brim, I have to believe that they're simply not really reading the comments arguing against their position on this thread.
posted by kyrademon at 12:43 AM on November 6, 2012 [2 favorites]


NYC Man Arrested in Alleged Gas Hoarding in Conn.
Police arrested two men Sunday for their involvement in alleged gas "hoarding" in Connecticut.

If you read the link they were actually arrested for an inspired attempt to win a Darwin Award by driving around with a truck full of gasoline in 5-gallon plastic jugs, but I like the original headline so I kept it.

See? Hoarders! Rationing! Obama!
posted by Joe in Australia at 12:43 AM on November 6, 2012 [1 favorite]


There are zero libertarian arguments in this thread. Absolutely no one here has argued against gouging laws on the behalf of the supposed "rights" of the gas station owners. Not a one. That is the argument that would be animating libertarians.

I think that the idea, or at least attitude, involved in this discussion that is most stereotypically libertarian is that free markets are a sort of magical pixie dust which solves every problem in the very best and most optimal way. Often arrived at with some circular logic that declares however free markets solve a problem as the best way it could be solved and firmly blames any apparent problems on there being some not-laissez-faire-enough practice somewhere.

There are other arguments being made of course but I think this is the aspect of the issue which is reminding people of libertarians.

If you read the link they were actually arrested for an inspired attempt to win a Darwin Award by driving around with a truck full of gasoline in 5-gallon plastic jugs

"plastic tubs" according to the link, even.
posted by XMLicious at 1:03 AM on November 6, 2012 [1 favorite]


Update from the NYTimes.

So, rationing has pretty much been a good thing towards reducing lines, even if people are hoarding gas and exacerbating the issue, or doing idiotic things like buying "gas" on Craigslist. Many gas stations north of Trenton are still off-line because they don't have power and/or gas. The power issue continues to be a problem both at the micro level (individual stations-- pumps, credit card machines, etc.) and the broader infrastructure level, even though more gas is coming in.
posted by jetlagaddict at 4:35 AM on November 6, 2012


If at this point, those arguing in favor of price-gouging are still talking about [...] people filling their tanks to the brim, I have to believe that they're simply not really reading the comments arguing against their position on this thread.

Why? I've been reading them and I don't know what comments you mean. Is it because of the comment that said that some gas stations in Queens are handing out five gallon jugs? That is far from universal.
posted by painquale at 8:01 AM on November 6, 2012


painquale, rationing in New Jersey has been noted as well (e.g., "Consumers are limited to 10 gallons of fuel at a whack, at least in NJ.") While it may not be universal, it does seem to be a reasonably widespread policy.
posted by kyrademon at 4:52 AM on November 7, 2012


...and a form of rationing has been noted (by me) at multiple stations in Brooklyn.
posted by the young rope-rider at 6:56 AM on November 7, 2012


Long Island is imposing odd/even gas rationing starting Friday.
posted by desjardins at 1:26 PM on November 8, 2012


Report from Long Island: As of yesterday, there are gas stations with gas and with no line.
posted by Andrhia at 9:28 AM on November 11, 2012 [1 favorite]


Just to pour some gasoline on the fire, today's EconTalk examines John Locke's moral philosophy of trade, commerce and prices.
posted by pwnguin at 9:37 PM on November 12, 2012


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