There are times when I forget that I hate George W. Bush. I am a disillusioned former government major. I didn’t even vote for John Kerry. I dated a Republican. Yes, there are times, when I forget that George W. Bush is a complete fucking moron.

CliffNotes version of the scenario: Hurricane hits. Oil distribution is severely effected. Prices rise rapidly, and are predicted to rise further. Bush comes out and speaks against “price-grouging at the gasoline pump,”

Now, Bush’s overall economic policy has proven to me that he knows nothing about Basic Economics, but this is really ridiculous. It’s such simple supply-and-demand economics, and the fact that he would attribute the price rise to greedy individuals trying to take advantage of the victims of the Hurricane reeks of Anti-Dog-Eat-Dog mentality.

Oil distribution and production were disrupted. When the supply of a product is drastically reduced, it makes sense that the price would rise, as the demand, in real terms, remains the same. The price rise is what causes the demand to fall, simply; people will be less inclined to be frivolous with the product because it isn’t worth the price. This is what allows the market to eventually stabilize (I have the utmost respect for The Invisible Hand theory.) The problem is, that in the short term, the supply crush causes big price increases and that when combined with the fear mongering media, causes a spectacle, which causes the Federal Government to get even more paternalistic.

Hawaii has gone so far as to institute “price controls” in which they use legal measures to keep the prices below the level needed to effectively reduce demand, and compound the problem. I wouldn’t be surprised if other states – or hell, the federal-fucking-government – follows suite. This time of intervention is extremely dangerous when dealing with a limited resource such as fuel, because it causes the consumers to demand, at the government fixed price, more then the supplies can provide, which leads to shortages. I cite Soviet Russia as the prime example. “Oh, that’s an extreme case, you can’t compare the two.”; How do you think it began? Russia wasn’t collectivized in a day you know.
It starts with media frenzy and government paternalism and then the whole thing just breaks down in a rather inefficient mess.