23 Sep 2008

Politicians, Not Ike, Causing the Return of Gas Lines

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I explain in this IER piece. What tipped me over the edge on writing this up is that the absurdity struck us here in Nashville. It’s crazy; there are lines of 20 cars out into the street at busy parts of the day. The pastor at church even worked in gas shortage jokes into his sermon. An excerpt (from the article, not the sermon):

At artificially low prices, consumers want to buy more gallons of gasoline than producers want to sell. Specifically, what happened in this case is that wholesale prices spiked, eating away the profit margin of independent retailers. Because anti-price gouging laws forbade them from raising their own prices just as sharply, some retailers decided it was better to shut down, rather than lose money with every gallon they sell.

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