Jordy Blog

Utah to Monitor Gas Prices

The Deseret News is reporting that Governor Huntsman has ordered the Utah State Department of Commerce to monitor gas prices.

That’s just politics as usual, but I’m alarmed by how many people here in “conservative” Utah are commenting that they want the government to step in and “do something” rather than just “monitor”. It’s like we’re all living in some fantasy land where socialism works…

Attention people: price controls only ruin your quality of life. Prices that are artificially low cause shortages, and shortages mean hoarding, rationing, and long lines at the pump. Some days you just won’t get any. Do you seriously want that?

We should be thankful that the State is only “monitoring” for now. Ideally it wouldn’t be monitoring at all, because that’s a slippery slope –especially because political motives are involved. Plus, “monitoring” could be easily be done by an activist group or a not-for-profit –and they could do it without spending your tax money. That said, I will be interested to read the DoC report; I just wish it were generated by someone else and on someone else’s dime.

By the way, where were the government monitors a couple months ago when Utah enjoyed the lowest prices in the nation?

Prices fluctuate. If they’re unfair to either party, the market will insure that they become fair. That’s how free markets work. No intervention is necessary; in fact, intervention is almost always counterproductive.

Utah, the nation, and the world need a healthy dose of Econ 101. We shape our governments by our will, and if the voting public is ignorant of basic economics, our stupid will may well lead to our own demise.

I highly recommend Sowell’s Basic Economics: A Citizen’s Guide to the Economy to anyone who wants an excellent treatise on economics, especially as it pertains to government.

If you liked this post, you may want to subscribe to my RSS feed. Thanks for visiting!

Arson, Rent Control, and the Perverse Incentives of Socialism

Allan Young plugged my last post in a piece he wrote about the potential of arson as a scapegoat of housing-bubble hardships.

His post reminds me of a similar report of arson, this time related to government rent control.  In Thomas Sowell’s excellent book, Basic Economics – A Citizen’s Guide to the Economy, he explains that in places where the government puts price ceilings on rent to make housing more affordable, rental properties often suffer major losses, and many owners end up torching their own properties to avoid suffer ongoing losses.  This trend is well-documented, by the way.  Introduce rent control in a city, and you can bet the level of arson in that city will increase.

So a socialistic program intended to make housing more available will actually make it less available; and because artificially low rents ensure that existing housing is filled while reducing profit incentive to build more housing, renters who might have a place to live under a free market system are forced to flee to another city without rent control, or become homeless.

Yes, it’s just another example of the way the perverse incentives of socialism love to backfire.

Anyway, the arson connection is interesting.  The Government should look at the real-world incentives of policies it creates, which often trigger results exactly opposite of those it intends.  The incentives leading to crash of the housing market demonstrate the exact same principle, but I’ll cover that tomorrow.