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August 25, 2005
Hawiian Pols Do a Favor for Economics Professors
Don Boudreaux
The belief in magic never dies. Politicians in Hawaii apparently believe that ink on paper (backed up by policemen with guns) can keep the cost of gasoline lower than the price that would prevail on the market.
They're wrong. Shortages and queues will result from Hawaii's price controls on gasoline -- shortages and queues that will cause motorists to suffer higher costs than otherwise for each gallon of gasoline they manage to buy.
The silver lining around this politically induced foolishness is that it makes the teaching of economics easier.
I taught my first economics class in the Fall of 1982. All of my students then clearly remembered the gasoline shortage of the summer of 1979 -- the long lines, the five-gallon-maximum purchases, the anxiety of not knowing even if you could find a station selling gasoline, and the crazy rationing schemes (such as selling on some days of the week only to motorists whose license tags ended in even numbers, and on other days of the week only to motorists whose license tags ended in odd numbers).
Because my students in the early- and mid-1980s experienced first-hand and recollected all too well the palpable and highly unpleasant effects of oil-price controls, my job of teaching economics was then easier than it is today, when students have no experiences with, or memories of, any such absurd regulations.
So, while I pity poor Hawaiian motorists, I'll have lots of good, modern pictures of queues at gasoline stations to share with my students -- making my task of teaching the consequences of price controls easier than it would be otherwise.
(Thanks to Radley Balko for the pointer.)
Posted by Don Boudreaux in Prices | Permalink
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