ARNOLD KLING
August 14, 2011
The Top Political Contributors
August 11, 2011
Gender and the New Commanding Heights
August 11, 2011
Jamie Galbraith Makes an Assumption
August 11, 2011
Macroeconometrics: The Science of Hubris
August 10, 2011
Real and Nominal Bond Yields
BRYAN CAPLAN
August 14, 2011
The Effect of Thumb Sucking on Income
August 12, 2011
The Voice of Cold, Hard Truth to All Would-Be Educators
August 12, 2011
Ability, Morality, and Prosperity: A Paper and a Report
August 11, 2011
The Theory of Time and Frittering
August 10, 2011
Male Variance and the Remnants of the Gender Gap
DAVID HENDERSON
August 9, 2011
Hayek in "Unbroken", Part Two
August 8, 2011
Hayek in "Unbroken"
August 5, 2011
James Bovard on the Peace Corps
August 4, 2011
Summers Way Off on FDR and 1941
August 3, 2011
The "Amazon" Tax
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Well, the public isn't very well informed, it seems. But professionals don't seem to be either... Lots of truckers in Europe, mainly Spain and Great Britain, are on strike because of higher fuel prices and they want the governments to guarantee hauling rates. Farmers and fishermen are also complaining. I have a hard time understanding this. They should all be used to fluctuating prices on the goods they use in their businesses, and should see the obvious solution: increase their rates themselves!
I still think what is driving high gas prices (other than the weak dollar) is giffen behavior and people acting on bad information (misconceptions of what is efficient).
There were many good comments on recent posts by Tyler Cowen and at Freakonomics Blog. (here and here)
1. These poll results look to me like a perfect example of the Mueller Effect. Do you agree?
2. How quickly does the political system need to give the public what it wants ("good and hard" as Mencken put it) in order for us to believe that it works (at least in that sense)?
Or, if you prefer, how long a time-lag would it take before we can declare that the public is not getting what it wants?
My SWAG would be 1.5 election cycles -- IOW three years in the United States. So I'd like to know how long a majority of the public has favored price controls on gasoline.
3. Going back to the Mueller Effect, as far as I can see the only way to have price controls without rationing is if people support a rule of first possession -- i.e., people who are at the head of the line can have as much gas as they want.
Right of first possession just leads to accounting tricks... basically, your position in line becomes a tradable commodity (directly or indirectly)... *poof* you've just moved money from the hands of people who provide gasoline to the hands of people who spend time idling in line... how efficient...
You could stretch it like this with any policy. For example, maybe the public wouldn't want (enjoy?) the unintended consequences from having withdrawn from Iraq (which, as I pointed out 19 months ago, would have been done by now if politicians gave the public what they plainly want) -- but does that prepare us to claim that (A) the public doesn't really know the consequences of withdrawal, (B) the politicians do (when they didn't know the consequences of invasion?!), and that thus (C) the people are getting what they want even though the troops remain in Iraq? (If that's the case, couldn't we just skip the survey research from now on and just ask politicians what the people really want?)
Isn't the simple truth that a majority wants price controls, a majority doesn't want rationing, a majority wants out of Iraq, a majority wants to win in Iraq, and a majority wants free ice cream? The notion that the majority-favored positions are (or could be) consistent was debunked loooong ago. Let's not make Ken Arrow come back and prove his theorem again...
Perhaps they just don't mind queues?
Oil prices have been rising in euros as well. The primary driver for the rise in oil prices is rising demand in Asia, the dollar's fall is just an accelerator.