RE: Laying fault and the merit of price caps.
I live in California, and believe that our political leaders should just bite the bullet and accept the blame for this problem. Once that is done, they can then go about trying to help alleviate the problem. They could create a lot of goodwill by actively becoming part of the solution, even if they were also part of the problem.
In general, I believe that price caps are a bad thing, because as many have already said, they do nothing to alter the "demand" or "supply" of the product. They do, however, serve as a temporary control of opportunistic/predatory practices undertaken by unethical business people. Let me give an example.
Every year, Florida and other Southeast states know that hurricanes will batter their states. Some residents prepare in advance, buying batteries, bottled water, and plywood. Many don't however. And even so, when the "big one" hits, the price of plywood suddenly skyrockets. And just as predicatably, government officials (and YES, the fed gov too!) interceeds and says what a horrible thing it is that these cold-hearted hardware store owners are taking advantage of a disaster...and that the government will ferret out price-gougers and do something...perhaps by imposing price caps on key commodities. [My guess is that nothing really happens.] And politicans fall over each other trying to look sympathetic, helpful, etc.
At any rate, I believe that Americans have a long standing tradition of simultaneously helping each other out when in need while also taking advantage (i.e. price gouging) of each other when we can get away with it. Right now, us Californians are not getting much sympathy...but when this behaviour spreads to a few more states, I predict that the politicians will suddenly all be condemning it.
PS--For those of you outside of California...you don't think that the big-bad energy companies are looking for chinks in your state's "regulatory" environment??? They found the holes in California's system...I predict that they are actively looking in other states as well. They smell profits!!!
Regards,
Bill Shepherd |
