After getting whacked by a hurricane, the poor citizens of New York and New Jersey have to suffer the added indignity of government price controls on gasoline. It is not the hurricane and associated supply disruption per se causing the terrible shortages and lines, but rather the government’s interference with the price allocation mechanism of the free market. This is exactly what happened in the 1970s, and it is disturbing that Governor Chris Christie—considered by many to be a strong conservative Republican candidate for 2016—is stooping to such blatant restrictions that defy basic economics.
Yet instead of allowing market prices to do their job, the authorities in the stricken regions warned gas station owners that they would be charged with “price gouging” if they actually had the gall to adjust their terms of business in light of the new reality. Because the actual retail price was not allowed to rise to the new market-clearing level, massive shortages developed. Far more people were trying to buy gasoline than could be satisfied with the available stockpile, and so the authorities had to institute other, non-financial means of rationing, such as the absurdity of needing a certain license plate in order to engage in a voluntary trade with a gas station owner.
Critics of course will complain that “only the rich” would be able to afford gasoline in such circumstances, but this is absurd: The vast majority of vehicles on the road aren’t limousines or Ferraris being driven by millionaire playboys. No, most of the people driving are working- or middle-class people running errands and going to work. And also note that if people really are concerned about poor motorists, they can send them money to help pay for the temporarily expensive gas: It’s a lot easier to wire money to a storm-ravaged region than to ship in gallons of gasoline.