[Editor note: Tomorrow, economist Michael Giberson will critically assess government ‘price gouging’ laws.]
As an economist, whenever I hear the word “shortage” I wait for the other shoe to drop. That other shoe is usually “price control.”
– Thomas Sowell, “Electricity Shocks California,” January 11, 2001.
Like Bill Murray’s weatherman character in the movie Groundhog Day, the American public is obliged to relive certain bad ideas again and again (and again).
Like the movie the idea of price controls for energy keeps coming back, but will we, like Murray’s weatherman, reexamine what leads us to relive such unworkable concepts? The latest contestant in this march of folly was posted recently in the Atlantic Monthly’s business blog.
The idea–called a buffer fund–is to establish a target price for retail gasoline (diesel, too, though they seem to have forgotten that part of the fuel supply) and use taxes or subsidies to maintain the target price over time.…