19 July 2008

A market for some young entrepreneur

Basic economics.

Apparently, it isn't just some provincial premiers who need some help understanding the numbers.

There are plenty of others.

On the order of hundreds of thousands.

Stackleberg Follower should ditch the studies or set up a business on the side.

These would be the same people, of course, who pushed for gas price regulation in the idiotic belief it could or would do anything constructive in a market economy.

As many are now finding out, the scheme pushed by people - like the recently elected mayor of the Great City - doesn't work.

Here's the thing: there was never any reason to believe it would work.

That is, no reason for anyone with a grasp of basic economics.


Update: Crude oil prices started dropping before the public utilities board jacked up gasoline prices this week. That's just the way the bureaucratic system is set up.

Crude ended the week trading below US$129 a barrel.

So when will the petroleum pricing office lower retail gas prices in Newfoundland and Labrador consistent with the 13% decline in crude prices in the past few days?

Possibly never. Given the way the system is arranged, consumers in areas not covered by some sort of price "regulation" will see prices drop.

If the crude prices climb back up between now and the next time the public utilities board works its numbers, nothing will change.

It all goes back to a group of people who lobbied hard and at least one politician - this one with an economics degree - who backed them.