Friday, April 04, 2008

Will I ever hear about this One!

I am truly feeling quirky Today, and this Post led me into speculative Thought, which I know that no one will appreciate. It takes me back to my first economic learning experience–study of the World Wars economies, something I dabbled in during my High School years. I turned my fond memories to the current economic mess We are in, and came up with the Proposition that what We need is the old Gas Rationing system; the good old Gas Ration books and Tickets, where you needed scraps of paper besides Money to fill the tank. Do I sound insane? Please allow me a miserly defense, before commitment to an insane asylum.

The sheer Production of the Gas Ration system is exactly the proscription for Our current economy: a two-tier Gas price system–Black Market and legitimate, Fuel Shortages in the legitimate market alongside with oversupply of the Black Market, expansion of Oil refining capacity coupled with published shortages, high Fines for Ration violations to ensure proper capitalization and efficiency in the Black Market, reduction of non-productive utilization of fuel–which either had to conform to Ration decrees and awards, or pay the extreme maxima of Black Market pricing. There would be an immense reduction in Soccer Mom usage, as violation of the Ration system became too expensive, whether due to Price or Ration ticket limitation. Car-pooling would be maximized, as Gas Tickets were saved for Household needs. Public Transportation would receive an immediate and immense Subsidy, funding by an impatient Consumption Public. The Black Market would supply any necessary Production needs, those needs defined by the profitability of the operation; which would possess the additional necessity of funding Black Market premium price. Vast advantages to economic activity and performance would soon appear.

The only Question remains if Gas Rationing would have better effect than either Carbon Taxation or Cap-n-Trade policies. Carbon Taxation, in my belief, will only diminish economic production with higher Retail prices for their existence. Cap-n-Trade policies will generate Windfall economic Profits for Trader and Producers, while producing even higher Retail prices for Consumers to fund the additional Profits. Gas Rationing will produce higher legitimate Prices, as Oil Producers and Refiners proclaim Production shortages, all in order to fuel the more profitable Black Market. The Black Market pricing will have limitation, as such Prices must still provide Profitability to the Consumers utilizing the Black Market. I believe that Gas Rationing will provide actual cheaper Product than even current free market operation, which wastes too much fuel on nonessential, nonproductive deployment of resources; where long-term fuel pricing will reflect the greater expense of Extraction and Refinement of fuel. I guess I am a free market Trader who believes in a good old-fashioned Black Market system. lgl

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