by Daniel Doom » Fri 29 Nov 2019, 12:08:21
[quote="sparky"].
" I do not think "well managed tightening" will happen anywhere."
Well managed tightening has happened many time , it's called rationing
Rationing is normally done to compensate for the effects of price controls, and rarely lasts for more than a few years. There are several problems with rationing, perhaps the worst being that it lacks flexibility, since different users have different needs, and even the same consumer may have different needs at different times. It also incurs enforcement costs (more government overhead at a time of collapsing government revenues since less energy means contracting economic output, ie, chronic recession). When coupled with price controls, it also dampens the price signals that incentivize people to conserve, produce, and switch to alternatives. Prolonged controls induce or, in this case, worsen shortages. In the seventies we tried gasoline price controls and a mild form of rationing and we got "gas lines," empty filling stations, and commuter frustration. I do acknowledge that the intuitive reaction of many people and politicians to a crisis is to assume that the best response is to centralize control of resources, thus reducing individual and local control and decision making. I am not convinced that this intuitive reaction is the optimum response to every crisis or most crises.
"You can ignore reality, but you cannot ignore the consequences of ignoring reality."--Ayn Rand