7 ms·

Price controls are almost always a terrible idea. Economists agree on this as much as dentists agree that sugared gum is bad for your teeth. If the price of a g

by ggreer 5y ago

Price controls are almost always a terrible idea. Economists agree on this as much as dentists agree that sugared gum is bad for your teeth. If the price of a good increases, several things happen: - People reduce their consumption of that good. - People find substitutes. - People with stockpiles of the good sell it. If price controls were in effect, they would hoard it instead. - On a longer time scale, people start producing more of the good. They pay workers overtime to work more shifts, buy/build more equipment, and so on. Economist Michael Munger wrote an article titled They Clapped: Can Price-Gouging Laws Prohibit Scarcity? which explains the problems with price controls, even in times of disaster.[1] 1. https://www.econlib.org/library/Columns/y2007/Mungergouging.html https://www.econlib.org/library/Columns/y2007/Mungergouging....

forty 5y ago
For energy, it's hard for people to either hoard it, find substitute, or producing more of the good. Reducing consumption is possible only to a limit (when you start freezing and getting sick).
- davidw 5y ago
  Short term, it's a problem in the US, but long term, we have a lot of ways to trim some fat. Like those gigantic, deadly trucks that get used to ferry a kid to school or a dad to the office. Or re-legalize things like corner stores so people can walk or bike to do some of what they need on a day to day basis.
  - forty 5y ago
    True :) that said upgrading to cleanest cars requires to build new car, which apparently requires some metals Russia has too... What a mess. Are corner stores really illegal in the US? I could not find anything on the topic from a quick search
    - mcbits 5y ago
      It's not as if corner stores are banned, but zoning restrictions have that effect in many places.
    - chii 5y ago
      > requires some metals Russia has too it's not like those metals are _only_ found in Russia. The upfront capital expense of opening new mines somewhere else is high, so doesn't make economic sense when Russia has already made this investment in the USSR era, and can pump it out cheap(er) now. But if the need arises, other sources of such metals can be acquired in the medium to long term. Same can be said for the rare earths from China.
    - shagie 5y ago
      Much of the new developments for residential are single family residential. A house, a garage, and a yard - on a street where you need to then go and drive to get {stuff}. Whatever you need, you need to drive there. The older style with business on ground level and residential above that isn't as profitable for developers and so isn't made as much. Cities, in bowing to demands of developers likewise zone for single family residential and it is thus illegal to build a commercial spot (other than the strip mall along one of the busier roads - that you need to drive to).
    - erosenbe0 5y ago
      Mostly yes -- American residential developments built after 1960 or 1970 have typically forbidden any commerce. There are often no sidewalks either.
    - evandijk70 5y ago
      Can't you just recycle the metals from the old cars? I imagine the metal from a truck is enough to make two small cars.
      - yunohn 5y ago
        > Can't you just Usually such conclusions are a good time to Google and better educate yourself on the problem domain and solution space.
deleted 5y ago
[deleted]
gowld 5y ago
Tariffs are not price controls. They are taxes on implicit behaviors (like "price controls" (wage suppression) in other countries).
dillondoyle 5y ago
Though with carbon fuels there's an extra layer of trying to avert global catastrophe where some of those affects are good. I would love if we could use this crisis to get investment in renewables and EVs/batteries. I could see Congress passing an emergency subsidy before the election if gas stays above $4 especially if it rises above $5. I would hope we can spend an equal amount or more for longer term 'green' investment, regardless of what happens. IMHO we do need those high prices to discourage driving. It is after all probably closer to the true cost with externalities of global warming. Could spur more investment in renewables too if done right. BUT would need to help lower earners during transition or will just get pummeled in the election and Republicans will do the opposite of what's needed on climate. I personally think most equitable solution would probably be raise corporate rate back up a bit + on very high earners/get rid of some wealthy deductions. Then do something akin to the child tax credit mailed out each month for maybe <50k households. An energy credit. Scale up slightly if have a bunch of kids.
- evandijk70 5y ago
  Are you taking $5/gallon? That is still way lower than the prices in Europe have been for years. Society still functions here and has not transitioned to green alternatives. Anything below $10/gallon is not an 'emergency' and insufficiently high to force a transition if people do not want it.
  - berdario 5y ago
    Prices in Italy are currently at the equivalent of 8.3$/gallon, so I think that even your 10$/gallon threshold is too optimistic (keep also in mind that if the prices of everything rise together, and so does labor compensation, it might be hidden away in the inflation). Maybe 20$/gallon would be what it takes for a quick transition?
    - londons_explore 5y ago
      The transition point in the USA is probably lower because we drive more miles and have an existing fleet of less efficient, older, larger cars.
edgyquant 5y ago
While that’s true from a purely economic perspective, nations and their goals aren’t always geared towards that economic perspective. For instance the trade war is economically ignorant but geopolitically it makes sense. Another example is the US in the 1800s. They used a ton of tariffs to force American companies to build out infrastructure within the US instead of importing everything we needed. This worked to create the economic juggernaut we see from the Spanish-American war onward. This wouldn’t have made economic sense to an economist because the goals here weren’t entirely economic. Yet it built a giant economy.
stuu99 5y ago
- yunohn 5y ago
  > The reality is the average consumer is stupid as fuck This language seems unnecessary, given the rest of your comment is very unclear and unexplained.
  - stuu99 5y ago
    Two or more computers in a network become and behave as a single PC, so if you buy any client-server software you are literally stealing programs for yourself. Because all programs are the same to a PC. AKA all programs executables can be divided into two or more exe's and run over a network it's called the client-server or mainframe dumb client model of computing and you don't want that because that's the end of the personal computer you own and control. Client-server apps are the ultimate security risk because you can't audit the code. The last 23 years there's been a war to kill the general computer. https://www.theregister.com/2001/12/13/the_microsoft_secure_pc_ms/ https://www.theregister.com/2001/12/13/the_microsoft_secure_... >This language seems unnecessary, It's not, the average gamer and PC buyer has been stealing software from himself for the last 23+ years. Straight, steam/mmo's are just back ended c applications, there's no reason for any piece of software to require a "internet connection" (aka a second computer) half a world away. The 1990's were great because it was before the computer illiterate got internet. Everyone was expecting level editors and free maps, mods and skins Level editors https://icculus.org/gtkradiant/ https://icculus.org/gtkradiant/ Free maps mods and skins https://ws.q3df.org/models/ https://ws.q3df.org/models/ ... to continue in all the big budget games but that didn't happen because the computer illiterate masses gave up game ownership giving birth to all the evils of modern gaming (shut down games, mtx, always online drm, which is the same as mmo's, aka client-server back ended c apps). So we're losing game history down the shitter and games just disappear from history because stupid got internet. Pub g and Apex, are just back ended quake 3 and UT2004, minus game ownership. When the computer illiterate started buying MMO's (which were just rebranded rpg's with stolen networking code), the game industry started stealing PC games on a massive scale, notice how Transformers fall of cybertron a game from 2014, doesn't have basic features like dedicated servers and server lists like every fps from 1996-2004. (aka pre-steam, pre-mmo). Once game developers realized gamers were stupid in 1997, there was a war on on local applications. Don't think so? Don't think mmo's killed quake 1-3 and warcraft 1-3? See here the ultima dev's themselves: https://youtu.be/lnnsDi7Sxq0?t=1134 https://youtu.be/lnnsDi7Sxq0?t=1134 Ultima 9 was cancelled for the scam game ultima online, so there was no ultima 10, ultima 11, ultima 12, with dedicated servers and level editors. So we didn't get the awesome future of PC gaming, we got the computer illiterate dumbass future that undid the personal computer revolution taking us back to mainframe computing of the 60's and the average gamer is unaware of it. Everyone was expecting diablo 2+ to have server browsers and level editing and huge modding, that never happened because they started stealing RPG's and rebranding them mmo's and just started back ending the shit out of every PC game, once they realized the public was stupid as fuck at computers. Don't think so? We already had infinite multiplayer game sin the 90's with quake 2, until the shit for brains who bought UO and everquest fucked up the future of the personal computer and gaming more generally, taking us back to mainframe computing of the 60's. "No limit to the # of players - JC, quake 2 https://youtu.be/TfeSMaztDVc?t=95 https://youtu.be/TfeSMaztDVc?t=95 We could take quake 2 engine an clone all "MMO's and have those same games run locally with ability to host multiplayer from your machine with no logins, subscription fees. If you have to infinity multiplayer videogames, one allows you to own it and costs $60, and the other has an upfront costs + sub.... guess who got swindled?
StanislavPetrov 5y ago
>- People reduce their consumption of that good. >- People find substitutes. >- People with stockpiles of the good sell it. If price controls were in effect, they would hoard it instead. This is only true when reduced consumption is possible, when substitutes are available, and when sufficient stockpiles exist to be sold. If my only driving consists of the 20 miles I drive to work every day, I don't have the option to reduce my consumption if I want to pay my bills and keep from becoming homeless. If there is no mass transit and no opportunity to carpool, there is no substitute. Stockpiles of oil are generally insignificant when compared to overall consumption (which is why releasing oil from the strategic energy reserve is more of a pr move than something which has a substantive or lasting impact on prices). The fact is that most of the US has been designed for people with cars. Outside of a very few cities mass transit is extremely limited or non-existent. Dentists have an excellent track record when it comes to predicting tooth decay and treating decayed teeth. Economists have a terrible track record when it comes to predicting economic activity and prescribing sustainable solutions to economic problems that arise.

by ggreer 5y ago

forty 5y ago

For energy, it's hard for people to either hoard it, find substitute, or producing more of the good. Reducing consumption is possible only to a limit (when you start freezing and getting sick).

davidw 5y ago
Short term, it's a problem in the US, but long term, we have a lot of ways to trim some fat. Like those gigantic, deadly trucks that get used to ferry a kid to school or a dad to the office. Or re-legalize things like corner stores so people can walk or bike to do some of what they need on a day to day basis.
- forty 5y ago
  True :) that said upgrading to cleanest cars requires to build new car, which apparently requires some metals Russia has too... What a mess. Are corner stores really illegal in the US? I could not find anything on the topic from a quick search
  - mcbits 5y ago
    It's not as if corner stores are banned, but zoning restrictions have that effect in many places.
  - chii 5y ago
    > requires some metals Russia has too it's not like those metals are _only_ found in Russia. The upfront capital expense of opening new mines somewhere else is high, so doesn't make economic sense when Russia has already made this investment in the USSR era, and can pump it out cheap(er) now. But if the need arises, other sources of such metals can be acquired in the medium to long term. Same can be said for the rare earths from China.
  - shagie 5y ago
    Much of the new developments for residential are single family residential. A house, a garage, and a yard - on a street where you need to then go and drive to get {stuff}. Whatever you need, you need to drive there. The older style with business on ground level and residential above that isn't as profitable for developers and so isn't made as much. Cities, in bowing to demands of developers likewise zone for single family residential and it is thus illegal to build a commercial spot (other than the strip mall along one of the busier roads - that you need to drive to).
  - erosenbe0 5y ago
    Mostly yes -- American residential developments built after 1960 or 1970 have typically forbidden any commerce. There are often no sidewalks either.
  - evandijk70 5y ago
    Can't you just recycle the metals from the old cars? I imagine the metal from a truck is enough to make two small cars.
    - yunohn 5y ago
      > Can't you just Usually such conclusions are a good time to Google and better educate yourself on the problem domain and solution space.

deleted 5y ago

[deleted]

gowld 5y ago

Tariffs are not price controls. They are taxes on implicit behaviors (like "price controls" (wage suppression) in other countries).

dillondoyle 5y ago

Though with carbon fuels there's an extra layer of trying to avert global catastrophe where some of those affects are good. I would love if we could use this crisis to get investment in renewables and EVs/batteries. I could see Congress passing an emergency subsidy before the election if gas stays above $4 especially if it rises above $5. I would hope we can spend an equal amount or more for longer term 'green' investment, regardless of what happens. IMHO we do need those high prices to discourage driving. It is after all probably closer to the true cost with externalities of global warming. Could spur more investment in renewables too if done right. BUT would need to help lower earners during transition or will just get pummeled in the election and Republicans will do the opposite of what's needed on climate. I personally think most equitable solution would probably be raise corporate rate back up a bit + on very high earners/get rid of some wealthy deductions. Then do something akin to the child tax credit mailed out each month for maybe <50k households. An energy credit. Scale up slightly if have a bunch of kids.

evandijk70 5y ago
Are you taking $5/gallon? That is still way lower than the prices in Europe have been for years. Society still functions here and has not transitioned to green alternatives. Anything below $10/gallon is not an 'emergency' and insufficiently high to force a transition if people do not want it.
- berdario 5y ago
  Prices in Italy are currently at the equivalent of 8.3$/gallon, so I think that even your 10$/gallon threshold is too optimistic (keep also in mind that if the prices of everything rise together, and so does labor compensation, it might be hidden away in the inflation). Maybe 20$/gallon would be what it takes for a quick transition?
  - londons_explore 5y ago
    The transition point in the USA is probably lower because we drive more miles and have an existing fleet of less efficient, older, larger cars.

edgyquant 5y ago

While that’s true from a purely economic perspective, nations and their goals aren’t always geared towards that economic perspective. For instance the trade war is economically ignorant but geopolitically it makes sense. Another example is the US in the 1800s. They used a ton of tariffs to force American companies to build out infrastructure within the US instead of importing everything we needed. This worked to create the economic juggernaut we see from the Spanish-American war onward. This wouldn’t have made economic sense to an economist because the goals here weren’t entirely economic. Yet it built a giant economy.

stuu99 5y ago

yunohn 5y ago
> The reality is the average consumer is stupid as fuck This language seems unnecessary, given the rest of your comment is very unclear and unexplained.
- stuu99 5y ago
  Two or more computers in a network become and behave as a single PC, so if you buy any client-server software you are literally stealing programs for yourself. Because all programs are the same to a PC. AKA all programs executables can be divided into two or more exe's and run over a network it's called the client-server or mainframe dumb client model of computing and you don't want that because that's the end of the personal computer you own and control. Client-server apps are the ultimate security risk because you can't audit the code. The last 23 years there's been a war to kill the general computer. https://www.theregister.com/2001/12/13/the_microsoft_secure_pc_ms/ https://www.theregister.com/2001/12/13/the_microsoft_secure_... >This language seems unnecessary, It's not, the average gamer and PC buyer has been stealing software from himself for the last 23+ years. Straight, steam/mmo's are just back ended c applications, there's no reason for any piece of software to require a "internet connection" (aka a second computer) half a world away. The 1990's were great because it was before the computer illiterate got internet. Everyone was expecting level editors and free maps, mods and skins Level editors https://icculus.org/gtkradiant/ https://icculus.org/gtkradiant/ Free maps mods and skins https://ws.q3df.org/models/ https://ws.q3df.org/models/ ... to continue in all the big budget games but that didn't happen because the computer illiterate masses gave up game ownership giving birth to all the evils of modern gaming (shut down games, mtx, always online drm, which is the same as mmo's, aka client-server back ended c apps). So we're losing game history down the shitter and games just disappear from history because stupid got internet. Pub g and Apex, are just back ended quake 3 and UT2004, minus game ownership. When the computer illiterate started buying MMO's (which were just rebranded rpg's with stolen networking code), the game industry started stealing PC games on a massive scale, notice how Transformers fall of cybertron a game from 2014, doesn't have basic features like dedicated servers and server lists like every fps from 1996-2004. (aka pre-steam, pre-mmo). Once game developers realized gamers were stupid in 1997, there was a war on on local applications. Don't think so? Don't think mmo's killed quake 1-3 and warcraft 1-3? See here the ultima dev's themselves: https://youtu.be/lnnsDi7Sxq0?t=1134 https://youtu.be/lnnsDi7Sxq0?t=1134 Ultima 9 was cancelled for the scam game ultima online, so there was no ultima 10, ultima 11, ultima 12, with dedicated servers and level editors. So we didn't get the awesome future of PC gaming, we got the computer illiterate dumbass future that undid the personal computer revolution taking us back to mainframe computing of the 60's and the average gamer is unaware of it. Everyone was expecting diablo 2+ to have server browsers and level editing and huge modding, that never happened because they started stealing RPG's and rebranding them mmo's and just started back ending the shit out of every PC game, once they realized the public was stupid as fuck at computers. Don't think so? We already had infinite multiplayer game sin the 90's with quake 2, until the shit for brains who bought UO and everquest fucked up the future of the personal computer and gaming more generally, taking us back to mainframe computing of the 60's. "No limit to the # of players - JC, quake 2 https://youtu.be/TfeSMaztDVc?t=95 https://youtu.be/TfeSMaztDVc?t=95 We could take quake 2 engine an clone all "MMO's and have those same games run locally with ability to host multiplayer from your machine with no logins, subscription fees. If you have to infinity multiplayer videogames, one allows you to own it and costs $60, and the other has an upfront costs + sub.... guess who got swindled?

StanislavPetrov 5y ago

>- People reduce their consumption of that good. >- People find substitutes. >- People with stockpiles of the good sell it. If price controls were in effect, they would hoard it instead. This is only true when reduced consumption is possible, when substitutes are available, and when sufficient stockpiles exist to be sold. If my only driving consists of the 20 miles I drive to work every day, I don't have the option to reduce my consumption if I want to pay my bills and keep from becoming homeless. If there is no mass transit and no opportunity to carpool, there is no substitute. Stockpiles of oil are generally insignificant when compared to overall consumption (which is why releasing oil from the strategic energy reserve is more of a pr move than something which has a substantive or lasting impact on prices). The fact is that most of the US has been designed for people with cars. Outside of a very few cities mass transit is extremely limited or non-existent. Dentists have an excellent track record when it comes to predicting tooth decay and treating decayed teeth. Economists have a terrible track record when it comes to predicting economic activity and prescribing sustainable solutions to economic problems that arise.