Odd-Even Gas Rationing Hits NYC; Only 25% of Stations Operational, Full Production Weeks Away; Why Rationing Won't Work; Insanity Over Price Gouging

Crain's New York Business reports Mayor calls for gas rationing in NYC

Mayor Michael Bloomberg on Thursday called for gas rationing in New York City to begin Friday, saying only 25% of stations in the city were operational and that full production would not be restored for several more weeks.

Vehicles with license plates ending in an even number or zero can purchase gas on even-numbered days. Vehicles ending with odd-numbered plates can buy gas on odd-numbered days. Vehicles with licenses plates ending in a letter or other character can make purchases on odd-numbered days.

Commercial, emergency and paratransit vehicles, medical doctor plates and vehicles licensed by the Taxi and Limousine Commission are exempt.

Rationing Won't Work

Precisely what good is rationing supposed to do? Whatever the theory is, it cannot possibly work.

Overall demand for gas will not drop a bit. Instead of random queuing, we will see odd-even queuing.

Insanity Over Price Gouging

In even more inane action, NY AG Subpoenas Craigslist for Sellers Price-Gouging in Wake of Hurricane Sandy.

The New York attorney general’s office hit popular web site Craigslist.org with a subpoena for the names and identifying information of sellers who are purposefully jacking up prices on essential goods like gas and generators, in the wake of Hurricane Sandy, according to the New York Post.

The subpoena is part of a larger investigation by AG Eric Schneiderman into post-storm price gouging by unscrupulous grocery stores, hardware stores, hotels and others.

The AG’s office is looking into more than 100 of the worst Craigslist sellers in New York, according to an official, like a brazen poster who was selling a five gallon empty gas container for $500. Others were selling the containers – which retail for under $20 – for between $40 and $100 on the site.

Free Market Solution

People should be able to sell whatever they want, for whatever price they can get. The same holds true for gasoline.

We see the same idiocy after every major hurricane.

Everyone tries to get out of the hurricane zone, they all need gas, then those who stay behind to sell gas to those fleeing, perhaps even risking their lives to do so, get accused of gouging.

Want to end the long lines?

Let stations charge whatever they want. The lines will clear out in no time, and everyone else can decide how much they really want to drive. I bet we would see a lot of ad-hoc carpooling in a hurry.

Free market forces will fix the problem easily and efficiently (as best as it can be fixed). Rationing will not do a damn thing except create odd-even queues.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com