Monday/Tuesday Highlights

Good morning.

  1. Funky shapes in mind-space, but perhaps soon to air-space?
  2. High politics becoming similar to autocracies. Will we notice? Will it matter? What will the consequences be? And “shocked”? Seriously?
  3. Not thinking it through, specifically “another mystery” is not a mystery. He knew that it wasn’t secure. That’s gotta be a premise. Now follow that thought down the rabbit hole.
  4. And finally on that topic … a timeline.
  5. Emergency computing resources?
  6. Silliness of even/odd rationing.
  7. Mr West hasn’t realized that blogs are way cheaper than he thinks. “Serious discussions” don’t cost money and certainly not billions of dollars.
  8. Economic growth and its coming scarcity.
  9. Gouging.
  10. Hmm, liberte, egalite, and large overflowing buckets of blood from the French revolution becomes …. a new slogan? Probably not the allusion they were going for, eh?
  11. Cultural progressions.
  12. Some Latin palindromes.
  13. Wince.
  14. Baggage handlers and thieves.
  15. What my book “inbox” would look like too if I hadn’t gone mostly electronic.

 

I posted this early this morning … but then the hosting service lost the server (RAID fail). This reverted to draft. It is now up.

6 Responses to Monday/Tuesday Highlights

  1. Silliness of even/odd rationing.

    See this is the problem with outfits like Cafe Heyek, They are so committed to their model, they forget when reality doesn’t match your model you should seek to modify your model.

    The odd-even rationing worked. Yes this couldn’t have been due to demand reduction. It’s not really reducing demand so how can it have worked? I would say what it did was reduce the panic of a gas shortage thereby reducing the demand of the person who was waiting in line 4 hours a day every chance they got to fill up their car with ten gallons plus bring five containers with them as if it was the last chance to ever get gas.

  2. Boonton,
    You on the other hand keep limiting your imagination and thereby short circuiting your arguments. The other day, the options were drone strikes or invasion by ground troops. Your imagination failed to recall that the assassination of bin Laden did not require invasion nor drones. There are other options.

    Similarly, odd/even rationing will not solve shortages. At best it will reduce a 4 hour line to a 2 hour line. There are other options. If you allow prices to increase, two things will happen, demand may drop off and this will bring in incentives for the seller to go to more extra-ordinary means to increase inventory and this will provide incentives for consumers to go farther afield for product.

  3. Boonton,
    I’m not saying I don’t do this. It’s just that it seems like I’m pointing at you doing this over and over in our discussions.

  4. The other day, the options were drone strikes or invasion by ground troops. Your imagination failed to recall that the assassination of bin Laden did not require invasion nor drones. There are other options.

    Yes but as I pointed out you haven’t really made a case that there’s any difference between killing someone with a drone versus killing them with an air strike or killing with a team of special forces. If there’s no difference then it just becomes one of picking the best tactic in any given case.

    Similarly, odd/even rationing will not solve shortages. At best it will reduce a 4 hour line to a 2 hour line

    One would think, yet I can tell you it did more than that as I witnessed it. So the challenge is to figure out why? I think a big part of it was that when people saw a 4 hour ordeal to get gas may become a manageable 2 hour, they cut back on how much gas they were getting. In other words, they weren’t in a panic to fill up as if it was the end of the world and they were more willing to fill up what they actually needed for the next day or two until their day came up again.

    There are other options. If you allow prices to increase, two things will happen, demand may drop off and this will bring in incentives for the seller to go to more extra-ordinary means to increase inventory and this will provide incentives for consumers to go farther afield for product.

    This is the textbook answer but I think what it misses is the element of panic. I think it was about Wednesday after the storm when people started going to work ‘getting back to normal’ before they started to realize the gas problem was all over the place. I think at that point raising the price by a dollar or two a gallon would have just reinforced the ‘end of the world’ panic idea rather than tampering demand while providing an incentive boost to supply.

    This case should be analyzed as one where the extreme short term creates different dynamics than the more usual long term.

  5. Boonton,

    Yes but as I pointed out you haven’t really made a case that there’s any difference between killing someone with a drone versus killing them with an air strike or killing with a team of special forces.

    You’ve contended that these aren’t acts of war. Invasion or a SEAL team strike are acts of war. So is a drone attack. So … we are at war with Yemen and Pakistan? When was that declared? Congress was notified? They are voting on this in 90 days after the attack (or whatever the required interval was … I don’t exactly recall the Constitutional requirement)?

    Regarding gas reactions … I thought your the rational fast-market reaction guy. Isn’t that the standard econ model? Yet here, an policy that rationally would do nothing is (you presume) effective because it is a response of any kind. However, that it works better, isn’t established. You didn’t do the experiment, i.e., have three crises run side by side … in one you legalize and encourage so-called gouging, in another you do nothing, in the third you enact a do-nothing-but-seem-to policy like odd/even.

    Raising the price of gas by 1-2 dollars not being effective just means it wasn’t enough. Raise it by 8-10. You won’t get panic’d people going to gas lines you’ll get entrepreneurs selling gas in cans for 2 dollars less. You’d have people deciding whether they need gas, or whether they might drive 30-45 minutes to an area with power to get their gas. Point is, the lines would vanish if you raised prices. If they don’t … you didn’t raise prices enough.

  6. You’ve contended that these aren’t acts of war. Invasion or a SEAL team strike are acts of war. So is a drone attack. So … we are at war with Yemen and Pakistan? When was that declared? Congress was notified? They are voting on this in 90 days after the attack (or whatever the required interval was … I don’t exactly recall the Constitutional requirement)?

    No constitutional requirement other than Congress must make an official declaration of war. You assume an act of war means you’re at war. Countries do acts of war quite often but do not actually consider themselves at war. For example, Syria has shot down a Turkish fighter jet over Turkey’s airspace and has even shelled some Turkish border towns. Those are acts of war but Turkey, while quite angry about it, does not consider itself at war. Likewise blockading a country is also considered an act of war but the US was not at war with Cuba or the USSR during the Cuban missile crises.

    However, that it works better, isn’t established. You didn’t do the experiment, i.e., have three crises run side by side … in one you legalize and encourage so-called gouging, in another you do nothing, in the third you enact a do-nothing-but-seem-to policy like odd/even.

    NYC waited a few days before doing the rationing themselves. The impression I have of NJ was a nearly overnight change. You went from having to wait hours to get gas to quite often being able to get gas with no wait (or gas with a modest wait). Considering that price gouging would have meant eliminating the wait but paying a much higher price, it would seem the rationing plan trumped both doing nothing and allowing gouging.

    Raising the price of gas by 1-2 dollars not being effective just means it wasn’t enough. Raise it by 8-10. You won’t get panic’d people going to gas lines you’ll get entrepreneurs selling gas in cans for 2 dollars less.

    Considering the current ‘normal’ price is about $3.60 why would entrepreneurs sell gas for $2 a gallon? Unless they were selling watered down gas. Some people were selling 5 gallon cans for $60 at the most dramatic time….but you got the can with it at a time when you couldn’t find a gas can at Autozone or Home Depot to save your life.

    I think the problem you’re having here is that the ‘rationing’ system was essentially harmless. There wasn’t a true ration in the sense that your purchases were limited in quantity. Let’s use a simple model

    1000 people get gas every two days. Without rationing you’d expect them to randomly pick days to get gas…so on average they’d divide 50-50 but some days you might get 75% versus 25% other days. In normal times there’s probably a line dynamic. Say one day 60% of people decide to get gas. On that day you’ll notice lines a bit longer than usual and opt to put getting gas off to tomorrow. So even if people are getting gas at random times, the dynamics of lines will push people towards alternating days. All the odd-even rationing does is formalize the process that is the natural state of affairs.

    What’s interesting is to consider life in ‘panic mode’. In normal mode, if 60% of people try to get gas on day 1, that will make lines which will discourage people from trying to get gas and push people to day 2 thereby making the equilibrium of people splitting gas purchases 50-50 each day. In panic mode, though, 60% getting gas on day 1 creates modest lines which *encourages* people to get in line because of the fear that gas will soon run out.

    The rationing system seems to address panic mode by forcing the 50-50 equilibrium which produces few if any lines. So why would you even want to test this against a price increase option?

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>