How Chris Christie’s License Plate Scheme Adds Insult to Injury
[UPDATE: Actually, I am not sure the below is relevant, after thinking it through some more. What I will defend is the statement that if we had a long period of price ceilings, with new gasoline supplies being brought into the region but where the demand consistently were higher than the available quantity supplied, and there were no restrictions and how much you could buy once you made your way to the front of the line…then in that scenario, introducing license plate schemes would only make things worse. However, if you had a situation of a fixed total supply, a relatively short period of a price ceiling, and quantity restrictions (so you could only buy X gallons at a time), then in that scenario I could see how license plate restrictions added on to of all of these things, could reduce lines.]
Following up on an observation made by Ken B., I wrote the following in the comments of my previous post:
Major_Freedom wrote:
[I thought the license plate rationing scheme wouldn’t exacerbate the lines, because] I was assuming a constant distribution of plates. I was assuming that in any given neighborhood, or city, or whatever, there would be a 50-50 split.
[Bob now responds to Major_Freedom:] OK assume that. Now imagine an extreme scenario where in your neighborhood, the people with even plates for some reason don’t need to drive on Monday or Tuesday. But the people with odd license plates need to drive on both Monday and Tuesday.
If we just have the price ceiling, but no other rationing, then in practice the lines from the odd-plates will be evenly spread out over Monday and Tuesday. On Monday they might all go to fill up, until the lines encompass half of them and (since we assume rational expectations) they know that the lines will be just as long tomorrow, that’s when people decide to wait a day. (Or, people who really are running low on gas go on Monday, leading to long lines that encourage the others who can wait a day, to go on Tuesday.)
But then Chris Christie says, “If you have an odd license plate, you can only buy gas on M-W-F.”
Now everybody has to pile in on Monday, who can’t wait until Wednesday. So the lines that these people have to wait in, are longer than they would be in the other equilibrium.
And with our extreme assumption, there are no lines at all on Tuesday.
Yes if you assume away enough stuff, “on average” the license plate thing might not matter, but *at best* it won’t matter. There are all sorts of real-world complications that could make it cause worse delays.
Another way of putting it: It can’t possibly *reduce* lines by introducing another constraint, since the market would have an in-built mechanism to spread the lines out over time and minimize them. Thus, introducing a new constraint can at best do nothing, and in practice will lead to longer lines on average.
Econ 101 Works! Price Controls Cause Gas Lines
I can’t believe I had to write this up, but there were a surprising number of people who thought it was a right-wing myth to claim that it was the price controls causing gas lines, rather than the hurricane. An excerpt, and note that I make a point about stockpiling beforehand that I haven’t seen anybody talking about:
When a disaster strikes, causing supplies to drop and a panic demand for purposes of hoarding, we want market prices to skyrocket in order to provide the right incentives for everyone. Higher prices encourage conservation on the part of consumers: Rather than filling up the minivan, the soccer mom—seeing a posted price of $7/gallon, perhaps—may think, “Well, let me just buy eight gallons right now to get us through the rest of the week, and we’ll see if the price comes back down as things return to normal. I can carpool with the other moms in the neighborhood to take the kids to school; we don’t all need to be driving this week.”
At the same time, the high price would give incentives for people outside the region to ship in more gasoline. There are all sorts of individuals doing this in the “black market” via ads on Craig’s List and other sites; this news story talks of the police arresting a New York man who drove to a Home Depot 80 miles from his house, where he loaded up 150 gallons of gas in (allegedly unsafe) containers to bring back to his neighbors. If the retail market price were allowed to rise, then professional companies would have a much larger incentive to do the same thing, but on a larger scale and more safely.
Pre-Storm Stockpiling Would Have Been Higher, Too
Some critics have objected to the above type of analysis, claiming that in the immediate aftermath of the hurricane, the transportation infrastructure (such as bridges and ports) was so severely damaged that the local gasoline supplies were effectively fixed. Thus, these critics say, the price controls served a useful social purpose, in preventing a few gasoline retailers from getting rich at the expense of their unfortunate neighbors.
Yet this is a very shortsighted analysis, and fails to appreciate the versatility of a truly free market. Suppose for the sake of argument that Hurricane Sandy completely isolated New York City from the outside world for a few days. Even so, theexpectation of anti-gouging rules made the New York residents worse off.
Think of it this way: Meteorologists had given several days’ warning that the “Frankenstorm” was going to be a big one. Residents were stocking up on flashlights, batteries, bottled water, and so forth “just in case.” If we actually enjoyed economic liberty in this country, then the gasoline retailers in the area would have thought, “Hmm, if this storm is as bad as they’re saying, we might be cut off for a few days, and the subways might be flooded. The market in that scenario might bear a price of $7/gallon or even higher. So it makes sense for me to carry a much bigger inventory than I normally do. If the storm is a dud, then I’ll be out a bit of interest I could have earned on my capital, while it’s tied up in the massive inventory that I have to gradually unwind. But if the price does happen to skyrocket, I’ll make a killing.”
Thus, even the amount of gasoline on hand when Hurricane Sandy struck, was itself lower because people in the industry knew full well that the knee-jerk government response is to crack down on “gouging” in such situations. There was not as much incentive to build up large stockpiles in the week before the hurricane hit, as there would have been had retailers believed they actually owned their property and could charge their customers what they wanted for it.
My Views on Non-Voting
Here are some excerpts from an oldie but goodie I wrote for LewRockwell.com five years ago:
…However, the one thing that really bothered me about this guy’s talk was that he actually told them: “Now kids, the most important thing you can do to turn around this great nation of ours is to vote. Does anyone here know what percentage of the eligible voters participated in the last presidential election?”
Now this is a very typical view, especially coming on Memorial Day weekend. Yet I think it is just plain dumb. Bear with me as I try to explain my (literally!) politically incorrect views on voting.
The people who lament the state of our nation obviously don’t like the politicians we’ve been electing, right? So at first blush, shouldn’t they be blaming the people who voted for them? Let’s go back to the speaker at my brother-in-law’s graduation. He didn’t come right out and say it, but I’d be willing to bet my pocket Constitution that this guy was a strong supporter of George Bush over John Kerry and Al Gore. So what would have happened if more people had turned out to the polls? Either the same outcome would’ve occurred, or we’d have John Kerry leading us in the fight against Islamic terrorism. So why was this guy complaining?
Really folks, let’s think this through. The people who complain about the lack of voting seem to imply that if only people were more interested,then there would be great candidates from which to choose. No, actually the causality is the other way around. In our great system — at least for the last several decades — the voters have really been presented with only two possibilities. One candidate pledges to moderately invade economic liberties and strongly invade civil ones, while the other candidate pledges the reverse. The voters slowly come to see that there really isn’t a dime’s worth of difference between the parties. (Did you know that the “conservative” George W. Bush has increased federal spending at the highest rate since Lyndon Johnson, and that even if you exclude defense spending, he’s increased spending more than the “liberal” Clinton? What about the “right winger” Richard Nixon, who imposed wage and price controls and took the US off the gold standard? And how about those compassionate Democrats who care about children, like Janet Reno?)
Now in this environment, what the heck is the concerned citizen supposed to do? Keep mindlessly pulling the lever for the politician who will merely slow (not reverse) the erosion of the Constitution? No, I submit that, in his or her capacity as a voter in the general election, the best thing the voter can do (if the choices really are abysmal) is either vote for a third party candidate or abstain altogether. The worst thing in the world to do would be to cast a vote for an admittedly awful candidate and thus grant legitimacy to his rule.
Just to distinguish my cynical views on government in general, from my specific objections to the “You’re right to vote” crowd: It would have made sense if the commencement speaker had advised the kids to go into politics, or to become very active in the primaries of the party that best represented the particular student’s views. I personally would’ve disagreed with that advice, since I agree with H.L. Mencken that elections are just advance auctions on stolen goods. But at least that advice would’ve made sense.
In contrast, if you are as disgusted as most people are with the clowns running for office, then think before you repeat the mantra that it’s everyone’s duty to go vote. Maybe if the clowns starting getting only 10 or 15 percent turnout, more responsible people would go back into politics.
I Think Bryan Caplan Should Tweak His Quality Control Setting
Yesterday at EconLog Bryan Caplan had a post entitled “Optimal Open-Mindedness” in which he wrote:
Lately a few people have accused me of being “closed-minded.” As they’d predict, I reject the accusation. I say my degree of openness is close to optimal. Consistent with Bayesian reasoning, I am as reluctant to claim vindication by events as I am to admit refutation by events. (If you disagree, I am always willing to entertain a bet).
The root problem, as far as I can tell, is that most people underestimate the extent to which a wide variety of theories are consistent with a wide range of events. In this sense, they’re too closed-minded.
During the 2008 financial crisis, for example, most economists started proclaiming that events had overturned most of what economists thought. I, in contrast, (a) never ruled out events like those of 2008, and (b) didn’t see how heterodox views made the events of 2008 any more likely than more orthodox views.
Well, here’s what Bryan wrote before the crisis struck:
Two weeks ago, I relayed [my challenge to Jeff Hummel]: “Agree or disagree: In developed countries during the last 10-15 years, central banks have become (close to) the most efficient state enterprise.”
Now you can hear Jeff’s response (as well as the full lecture): Although he favors the abolition of central banking, his answer to my question is basically Yes. And I agree on both counts. Another rough patch may be coming, but it would be hard to improve over the 2-3% inflation combined with stable output and employment that central banks delivered in the 90s and 00s.
But why have central banks…out-performed other state-owned enterprises? My best guesses [he goes on to list his explanations for the relative success of central banking–RPM]…
I think it’s significant that Bryan wrote the above in August 2008. I’m wondering just what the heck would have had to happen, for Bryan to change his priors. Note that my critique applies whether you are a Rothbardian or Scott Sumner. If your worldview is so closed-minded that you can reconcile your opinion that “central banks do a great job” with the events of 2008, then I’m thinking it is too closed-minded.
Ricky Gervais’ Non Sequitur
On Facebook someone posted this:
In a quip that surely was only funny in my own head, I commented, “Fortunately for atheist libertarians, there has only been one group in human history who think they have a blueprint for a just society. Otherwise this witty barb could be turned against them.”
This is yet another example of an anti-religious argument that would be patently absurd if we switched to something in which the chuckling atheist did believe. For example: Throughout human history there have been 3000 different conceptions of property rights. When I hear someone say he believes in property, I say, “Which kind?” He’s almost as big a believer in Proudhon as I am; he disbelieves in 2999 types of property, I disbelieve in 3000.
This should go without saying, but I’ll say it anyway: If the atheist reading this wants to answer by saying, “No but Bob, I can give you good reasons for why I hold all of my particular beliefs on slavery, the laws of nature, just forms of government, the proper treatment of women, etc. etc. even though there have been all sorts of people thinking differently throughout history…whereas you can’t give me a good argument for believing in your God,” then you’ve missed the point here. Ricky Gervais’ argument is adding absolutely nothing to your position. The reason you think I shouldn’t believe in God, is that you think there is no good evidence for it. Fine.
But the fact that other people throughout history have believed in a supernatural being, is not a good argument against the existence of such a being. In fact, it’s prima facie evidence for it. It’s really astounding that atheists think the universal (at a cultural level, not individual) belief in a higher power, is somehow supposed to be a trump card showing that there must not be a higher power. That would be akin to someone claiming that there must not really be anything wrong with murder, because every society has had different definitions of and punishments for it.
Bill Hicks on Newly Elected Presidents
There is some naughty language in this, so be careful kids. I’m not saying it’s literally like this, but I think this is a heck of a lot closer to reality than the views of the people arguing with me in the comments of my earlier post.
The System Is Rigged: The Futility of Politics
[Such is the title of my article in the October issue of the Lara-Murphy Report (sample issues and subscription info here). This month we interview Dr. Murray Sabrin, who–among other things–is Professor of Finance at Ramapo College of New Jersey, is producing a documentary on the 100th anniversary of the Fed, ran for governor of NJ, and is co-founder of Conger LH, the world’s first lubrihibitor.]
The System Is Rigged:
The Futility of Politics
Robert P. Murphy
As this October issue will be published just before the presidential election, and especially because our interview this month with Murray Sabrin touches on the subject, I thought it appropriate to share my general thoughts on the so-called “political process.” To cut to the chase: I think it can be entertaining, but that people who revere liberty should focus their energies elsewhere.
What About Ron Paul?
The first thing that many self-described Austrians and libertarians will say in response to my claim is, “What about Ron Paul? Are you saying we just wasted our time and money spreading his message of Constitutional government, which necessarily includes his stress on genuine national defense and sound money?”
No, I’m not saying that the “Ron Paul Revolution” was a waste. But the purpose of the Ron Paul movement wasn’t to put him in the White House.
For one thing, that objective was impossible in the present climate. Look, if Ron Paul is right in his diagnosis of what ails the Republic, then the Federal Reserve and what Eisenhower famously called the “military-industrial complex” literally makes hundreds of billions of dollars annually by keeping the American public in a constant state of fear: Fear about collapsing banks, fear about terrorist attackers, fear about “paranoid” militia groups, fear about superflu viruses, you name it. Many of Ron Paul’s most ardent supporters—and I’ve talked with literally thousands of them over the years—think it’s clear as day that a small ruling clique manufactured bogus “evidence” to justify the invasion of Iraq. Yet if the Ron Paul supporters thought these shadowy figures are capable of starting wars to keep the money flowing, did they really think these nefarious characters were going to let somebody waltz in and end the gravy train?
For those who followed the Ron Paul campaign this last time, it was an amazing sight to behold. His insistence that, say, the Constitution said a formal declaration of war was necessary before U.S. forces occupied another country for a decade, was treated like the ravings of some lunatic. Yet when Newt Gingrich talked of building a moon colony by 2020, this was all taken in stride—at least among the Fox News crowd—as an interesting position from the “intellectual” in the pack.
It wasn’t just the media treatment, either. I talked with many people—and not just “angry guys in their 20s” but adults with careers—who had become Ron Paul delegates in their state’s primary or caucus process and told me astonishing stories of how their local GOP bosses either skewed things or outright violated the rules to try to minimize Paul’s impact. (For those who never heard of the story, go to YouTube and search for “Ben Swann Maine Ron Paul” and see how a local pastor explained that Ron Paul clearly had votes stolen in the Maine caucus.)
The purpose of the Ron Paul Movement was education. His campaigns for both 2008 and 2012 were exciting, wonderful vehicles for getting out his message of smaller government, individual responsibility, and honest (sound) money. But there was no way in the present environment—not until we reach the 10%—that he would be elected and could singlehandedly roll back this monstrous system.
No Genuine Conservatives in the Field, Either
I realize some LMR readers may not share my enthusiasm for Ron Paul’s foreign policy views. I understand that perspective; I used to be a military hawk myself. But our difference of opinion here isn’t central to my argument. It’s not just the libertarian Ron Paul who has been excluded: There are no genuine conservatives either.
Stop for a moment and think about this: Barack Obama was rated one of the most liberal members of the Senate, and yet he managed to get elected in 2008 when the very word “liberal” is supposed to be the kiss of death in recent American politics. Now, four years into it, Obama may very well be re-elected even though “on paper” with the economy this awful, he shouldn’t stand a chance. How is this possible?
The answer is that in both 2008 and 2012, the Republican nominee was just about the least conservative candidate imaginable. John McCain was famously a “cross the aisle” kind of Republican, who introduced signature bills on immigration, campaign finance reform, and cap-and-trade legislation to arrest global warming. Regardless of what one thinks of these moves, they were generally anathema to right-wing fans of, say, Rush Limbaugh. And this was the guy the Republican establishment put up against Obama in 2008.
In this cycle, there was actually a chance to roll back “ObamaCare.” A large segment of the American people were outraged by it; in addition to the bank bailouts it was one of the rallying cries of the new Tea Party movement. When I spoke at the Cincinnati Tea Party event at Fifth Third arena on April 15, 2010, I told them that if they managed to clean house (literally!) in November, and then those “conservative” freshmen Republicans didn’t actually do anything, that the Tea Party needed to drop those guys. Well, the Republicans did enjoy major gains in 2010. So if they could just get their guy in the White House in 2012, we might actually turn back the move toward medical socialism…
But nope, instead what happened is the nominee is the single least credible Republican politician on planet Earth to roll back ObamaCare. That is because Mitt Romney introduced his own version of the plan while governor of Massachusetts. When the issue came up during one of the debates against Obama, Romney made sure to clarify that he wasn’t opposed to government intervention in health insurance per se. No, he is just going to give us more cost-effective medical central planning (though he didn’t use that latter term, of course).
My point is, this essay isn’t mere griping over Ron Paul. Even if one doesn’t like his “isolationist” views, there are still plenty of law-and-order, tough-on-Iran, fire-breathing, eloquent, principled conservatives in the Republican Party. And yet, for some inexplicable reason, they never make their way to the final ticket. It’s not a matter of “focusing on winning rather than principle,” either: History shows that someone like Ronald Reagan would have crushed Obama in this election. But because Romney is such a flip-flopper and doesn’t actually believe in the free market, Obama may actually win despite his awful first term.
So how can we explain this? The Republican Party keeps putting up extremely weak candidates, which makes no sense in terms of ideology or even smart politics. And the last guy who won, George W. Bush, ran massive deficits, expanded federal drug prescription coverage, and literally nationalized major banks. What the heck is going on here?
The System Is Rigged
These strange outcomes aren’t a coincidence. The establishment leaders of the two major parties don’t want actual anti-Warfare State progressives going head-to-head in elections against actual anti-Welfare State conservatives. Most of our current readers probably come down more on the laissez-faire, “right wing” perspective. But they must realize that Barack Obama as president is not at all the “radical Marxist” depicted by Fox News. No, actual progressives who thought Obama would bring the troops home, repeal the Patriot Act, close Guantanamo Bay, and provide universal health care while sticking it to the pharmaceutical companies are just as disgusted with Obama, as fiscal conservatives were with George W. Bush.
No, we must realize the sickening truth that the “great debate” in our major media outlets is a sham. Here Noam Chomsky’s famous observation is quite apropos: “The smart way to keep people passive and obedient is to strictly limit the spectrum of acceptable opinion, but allow very lively debate within that spectrum.”
This is why our “serious” candidates—not kooks like that wacky Ron Paul—debate things like, “Should we pull our troops out of Afghanistan at a definite date in 2014, or should we give no timetable whatsoever? Regarding Iran, should we say we will use conventional bombers and our flying killer robots only, or are nuclear weapons also on the table? Of course we are going to have the federal government telling insurance companies they must cover pre-existing medical conditions, but how exactly are we going to say it? Of course we are going to have a central bank monopolizing the money and controlling banking, but in what quarter should it begin raising interest rates?” And so on.
The same thing happens every election cycle. The conservative Republican outlets like Fox News, Rush Limbaugh, and the Wall Street Journal get their base fired up about what an awful Big Government Candidate the Democrat is. The liberal outlets like CNN and the New York Times (there’s no real analog on the left to Rush) get their base fired up over what a hypocritical deficit-spender and proponent of corporate welfare the Republican nominee is. And you know what? They’re both right!
When is this cycle ever going to end? How many Republicans thought, “It can’t possibly get worse than Bill Clinton,” and now think the same of Obama? If Romney wins, and continues the trend of the warfare state abroad with the police surveillance state at home, many Democrats who thought, “It can’t get worse than George W. Bush” will realize the shortsightedness of that judgment.
What Then Shall We Do?
Am I preaching a counsel of despair? No, I’m not. In his column last month (September 2012), Carlos summarized the viewpoint of Étienne De La Boetie, who pointed out that an oppressive State can only survive if the people support it. The ruling class is but a tiny fraction of the population. If the mass of public opinion withdrew its consent, the regime would collapse of its own weight. This is why totalitarian regimes devote so much effort to controlling schools and newspapers; they know that all of their prisons and firing squads are impotent against ideas.
This is why education is so important. We must teach our fellow Americans the true legacy of the Founding Fathers, and the ideals of liberty upon which this country was built. We need to stop accepting the major media figures who tell us what the relevant “issues” are in today’s campaigns. This is all a smokescreen, to keep the public from seeing how they are getting bilked of trillions of dollars.
Reform of “the system” will not occur by picking the right man (or woman) to ride into Washington and beat back the hordes. That’s like fighting drug addiction by locking up dealers. No, we won’t roll back the welfare state until the American people don’t want handouts from the government, and instead encourage their own family members and neighbors to find private solutions to the genuine problems that occur in life. If we could somehow get to that happy scenario, it wouldn’t matter what elected officials promised or didn’t promise.
This is why Carlos and I chose “Building the 10%” as the motto and mission of the Lara-Murphy Report. We want to play our small role in spreading the ideas of liberty to this generation and the next. We appreciate your support and your active role in spreading this message as well.
Krugman Explains That a Bogus Alien Invasion Would End Recession in 18 Months
Sometimes I wonder about the fate of the Austro-libertarian movement. In what I thought would be such a crystal clear post that even Matt Yglesias would personally call and apologize, I made the case that anyone who thought a bogus alien invasion would be better than the status quo, would also think a suitable hurricane (which didn’t hurt anyone bodily) would also be better than the status quo.
The pushback I got was amazing. Several people seemed to think I was endorsing such an alien invasion, and/or wondered why I thought the economy would stay at full employment after removal of the stimulus.
Then it occurred to me: Have you guys not seen the below video? I was just taking that context for granted.
So: If Krugman in my earlier post clearly thinks Scenario A is better than Scenario C, then how can Keynesians object when Austro-libertarians make posters on Facebook attributing fake quotes to Krugman about thinking Hurricane Sandy will at least help the economy? That is the same logic. To be clear, Krugman wasn’t “calling for” an alien invasion, just like he’s not pining for a hurricane. But he is clearly arguing in the above video that a bogus alien invasion that motivated our policymakers to give stimulus would be better than the status quo. So by the same logic, why shouldn’t he say, “Yes, you Republicans and tight-money worry warts are so so awful, that you’re leaving us in worse shape than what would happen–at least economically, disregarding personal tragedy–if we had a major natural disaster that forced people to massively increase their planned investments at current interest rates.”
Recent Comments