The good news is that economics gives us some tried and true ways of making consumers better off. They mainly have to do with allowing competition and allowing increased supplies. Trump did some of that while president. Harris as vice president showed no signs of moves in that direction. Yet many of the policies that both propose would do the opposite.
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One method that appears to drive down consumer costs but actually raises them is price controls. When the government keeps the price below what the free market price would be, it creates a shortage. That causes people to waste valuable time in line trying to get the goods that are in short supply. When the price controls on oil and gasoline in 1979 kept the price of gasoline at 80 cents a gallon, energy economists at the newly created Department of Energy estimated that ending the controls would cause the price to be about $1.00 per gallon. At the time, I estimated, using the average worker’s wage and the average time spent in line, that the time cost of getting gasoline was about 40 cents a gallon. The real cost to consumers, therefore, was about $1.20 per gallon, which was 20 cents above the free market price.
The quotes above are from David R. Henderson, “How to Lower Costs for Consumers,” Defining Ideas, October 4, 2024.
Read the whole thing.
READER COMMENTS
Craig
Oct 5 2024 at 8:42am
“At the time, I estimated, using the average worker’s wage and the average time spent in line, that the time cost of getting gasoline was about 40 cents a gallon. The real cost to consumers, therefore, was about $1.20 per gallon”
Indeed, I remember sitting in those lines. Anecdotally my dad bought a siphon from Sears so that he could take gas from one car and put it in the other. He taught me how to do it and he’d use it to put gas in lawnmower. Snowblower was some mix with gas and…..diesel (I forget), but it wssn’t straight gas.
Thomas L Hutcheson
Oct 8 2024 at 10:52am
“Some of this?”
Trump’s two huge anti-growth policies were and are tax cuts to increase deficits and restricting immigration. And he did nothing to tax the CO2 emissions externality.
There is plenty to criticize about Harris but on the big issues she closer to correct than the ex-President.
Craig
Oct 8 2024 at 8:35pm
“tax cuts to increase deficits”
I disagree, tax cuts were enacted, federal revenue did increase, but, spending exploded higher and thus the deficit got larger.
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