Hurricanes, Gasoline, and the dangers of internet rumors
Before I officially begin tonight's rant, I would like to extend sympathy and condolences to those who have been adversely affected by the Hurricane Katrina disaster.
Price inflation and panic are nothing new for disaster situations, but the case of gas prices in Georgia, and particularly the Atlanta metro area, is not merely a case of supply and demand rising by natural course although that may have been the initial idea. Reports from WSB radio in Atlanta unearthed a reason for the gas prices rising in some location to as high as 5 and even 6 dollars a gallon in some instances. It seems that internet rumors of Georgia running completely out of gasoline spawnned rampant paranoia and long lines at every gas stations. In some cases there were reports of violence. As the lines grew, the prices rose without bound. Many locations reaching price levels nearing $4 per gallon before the state government stepped in.
This story provides two areas for comment on my part. First in response to rumors and internet speculation, It's always necessary to verify sources before spreading the information. In cases such as this, the spreading of these rumors helped to prolong and exacerbate the situation. Though it most likely cannot happen, I almost wish that those who started the rumors could be punished in some regard but since proof of intent would be speculation and hearsay, it is merely wishful thinking.
Secondly, It is critical to note that the idea of price controls should only be used as temporary measures until the crisis situations are allowed to settle out. Applying these on a more widespread levels (to quell the rise in national gas prices) should be approached with caution. I could see applying these restrictions for a period of a couple of months; but the free market should eventually be allowed to regulate itself. Particularly for an international industries like oil and natural gas, imposing artificial retail price caps on a market where the raw material cost continues to escalate has potential to be devastating in a number of ways.
Thats just my opinion and I'm often wrong.
Song Lyric of the Day
"What sort of mess I mean
Self-destructive gasoline
The kind that strips you of your best"
-- Blue October
Price inflation and panic are nothing new for disaster situations, but the case of gas prices in Georgia, and particularly the Atlanta metro area, is not merely a case of supply and demand rising by natural course although that may have been the initial idea. Reports from WSB radio in Atlanta unearthed a reason for the gas prices rising in some location to as high as 5 and even 6 dollars a gallon in some instances. It seems that internet rumors of Georgia running completely out of gasoline spawnned rampant paranoia and long lines at every gas stations. In some cases there were reports of violence. As the lines grew, the prices rose without bound. Many locations reaching price levels nearing $4 per gallon before the state government stepped in.
This story provides two areas for comment on my part. First in response to rumors and internet speculation, It's always necessary to verify sources before spreading the information. In cases such as this, the spreading of these rumors helped to prolong and exacerbate the situation. Though it most likely cannot happen, I almost wish that those who started the rumors could be punished in some regard but since proof of intent would be speculation and hearsay, it is merely wishful thinking.
Secondly, It is critical to note that the idea of price controls should only be used as temporary measures until the crisis situations are allowed to settle out. Applying these on a more widespread levels (to quell the rise in national gas prices) should be approached with caution. I could see applying these restrictions for a period of a couple of months; but the free market should eventually be allowed to regulate itself. Particularly for an international industries like oil and natural gas, imposing artificial retail price caps on a market where the raw material cost continues to escalate has potential to be devastating in a number of ways.
Thats just my opinion and I'm often wrong.
Song Lyric of the Day
"What sort of mess I mean
Self-destructive gasoline
The kind that strips you of your best"
-- Blue October
posted by Aaron at 9:46 PM
1 Comments:
Here's a Chronicle editorial (doubtless also printed elsewhere) that might interest you with regards to price control.
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