George Will has more on economic ignorance:

The indignant student, who had first gone to Home Depot for a flashlight, says it “didn’t try to rip us off.” It was, however, out of flashlights. Ruth suggests that the reason Big Box had flashlights was that its prices were high. If prices were left at regular levels, the people who would have got the flashlights would have been those who got to the store first. With the higher prices, “someone who had candles at home decided to do without the flashlight and left it there for you on the shelf.” Neither Home Depot nor the student who was angry at Big Box had benefited from Home Depot’s price restraint.

Capitalism, Ruth reminds him, is a profit and loss system.Corfam–Du Pont’s fake leather that made awful shoes in the 1960s–and the Edsel quickly vanished. But, Ruth notes, “the post office and ethanol subsidies and agricultural price supports and mediocre public schools live forever.” They are insulated from market forces; they are created, in defiance of those forces, by government, which can disregard prices, which means disregarding the rational allocation of resources. To disrupt markets is to tamper with the unseen source of the harmony that is all around us.

The spontaneous emergence of social cooperation–the emergence of a system vastly more complex, responsive and efficient than any government could organize–is not universally acknowledged or appreciated. It discomforts a certain political sensibility, the one that exaggerates the importance of government and the competence of the political class.

Yes, an exaggeration that is reinforced by the propaganda inculcated into people by government schools.

George Bush’s announcement this morning that the administration was concerned about “gouging” reminded me of why I wish that we’d had better options in the last two elections (and still do). I expect that kind of nonsense from Democrats, but you’d think that someone who was supposedly a businessman would know better. Or perhaps he does, and is just pandering. I’m not sure which is worse.

Every time we have a natural disaster like this, this idiotic topic comes up, and we once again have to explain Econ 101 to the products of our public school system, probably in futility. This time, it’s Rich Hailey’s turn.

Here’s what I wrote about it a three years ago, in the wake of Katrina.

[Update late morning]

Jeez, I thought that David Asman was smarter than that. Now he’s telling Fox viewers to take pictures of stations with high gas prices so that they can be reported to authorities. It’s hard for me to believe that Neal Cavuto would do that.

[Another update a minute or so later]

You know, I think that this is an explanation for socialism and collectivism’s continuing grip on the public mind, despite its long history of unending failure. There’s just something in human psychology to which it naturally appeals, and rationality just can’t break through. It just “feels” unfair for prices to go up in an emergency, regardless of the demonstrably bad consequences of attempting to legislate them.

[Late afternoon update]

Shannon Love explains how the gas station business works:

I’ll say it one more time for those who can’t be bothered to actually ask someone who owns a gas station. Gas stations set prices for the gas they sell today based on the wholesale price of the gas they will have to buy to replace it. Get it? The price you pay for a gallon today is the cost of the gallon the station will have buy to replace the one you just bought.

Gas stations sell gas at or near cost, so if they did not use replacement pricing any sudden spike in gas prices would shut them down and you couldn’t get any gas. I simply do not know why our public and private talking heads cannot understand and communicate this simple fact.

Because either they don’t know it, or they think that people don’t want to hear it. They operate on razor-thin margins, and can’t afford to hand out subsidized gas as charity, even if that wouldn’t screw up the market. And note, for those who say it’s “big oil” that is “maximizing profits” in the face of a national emergency, even if that were true (it’s not) “big oil” isn’t threatened with jail for “gouging.” It’s the gas station owner, who has no control over his wholesale gas costs. So people who demand that we crack down on gougers are essentially demanding that the station operators either operate at a loss, or pay fines, or go to jail. I don’t know why anyone would want to be in that business in the face of so much public ignorance about it.

“Messrs. Obama and McCain both reveal a disturbing animus toward free markets and success.”

Indeed.