Almost a week after Hurricane Sandy devastated New Jersey, many in the state are still living without electricity, while others have lost their homes and businesses. Yet Governor Christie has decided that now is the time to go back to the failed policies of the 1970s and inflict many in New Jersey with government-made gasoline shortages and long lines.
First, Christie has threatened to prosecute businesses that would raise gas prices in his state, under price-gouging laws. That applies to gas-station owners who would be tempted to increase the prices at the pump in response to the recent gasoline shortages. In that, he is not alone since New York governor Andrew Cuomo has done the same. Anti-price gouging policies are always popular with politicians of all stripes, but they have terrible consequences for consumers. As George Mason University’s Don Boudreaux explains:
Prices kept artificially low – prices forcibly prevented from reflecting the reality that gasoline and other staple goods are in unusually short supply – discourage the extra efforts required by suppliers in times of natural disasters to bring much-needed inventories to market. And in return for this dampening of efforts to increase supplies, New Jerseyians receive no off-setting benefits. Quite the contrary. At a time when being with family and neighbors is especially v ital, price controls cause desperate people instead to waste long hours waiting in lines at gasoline stations and other retail outlets.
Reporting from Brooklyn, N.Y., on Saturday, Reason TV’s editor Jim Epstein gave us a little taste of what the problem looks like on the ground.