Our beloved Governor of Georgia has decided that companies cannot charge a price that exceeds his estimate of what fuel should cost. That is all well and good, except for one little problem, it creates other problems.

You see, once the ban is in place; it prevents fuel prices from rising to the level of reducing the purchases of that fuel. Along with other factors, the price of fuel has risen in light of the recent storm that hit Texas and Louisiana. During that storm, the power and pumps were shut down to prevent the storm from causing even more damage with electrical fires and broken pipelines. The fuel supply has effectively been shut down and the supply of that fuel has become limited.

Even with good intentions, the ban has caused an extra problem that should have been foreseen. The people of Georgia are aware that gas prices are going up and they rushed to the pumps in an effort to get the gas they needed for the week before the price went up even higher. By preventing price gouging, the price at the pump stayed at an affordable rate. With this in mind, the gas stations were inundated with people trying to get the fuel they needed and even the fuel that they did not need in an effort to ensure they did not run out before the prices went down.

The eventual result was that the gas stations ran out of their supply of gas. The distribution hub in Macon most likely distributed as much as they could before they had to stop so they could keep a reserve for emergency use i.e. ambulances, fire trucks and the military if they needed it. So the gas stations have out of gas signs at ever pump and we have a gas shortage now.

To sum it all up, the anti-gauging law has effectively created a gas shortage. Not only do we have higher than normal fuel prices, we have gas stations that are totally without any gas. This is the result of the government interfering in the free market system.

If the free market system had been able to maintain itself without government interference, the gas prices would have driven many away from buying fuel until they actually needed it. However, because the fuel was still affordable, the panic drove the people to absorb any reserve the service stations had.

This is much like the Wall Street problems, Fannie Mae and Freddie Mac. When the government involves itself in the free market, it becomes no longer free to maintain itself.

The government interference artificially maintains these businesses and keeps them in the system until their legs literally fall out from under them. Much like a basket that catches eggs that fall from the shelf, instead of these eggs breaking, they are caught and until the basket is full, they stay in business. Nevertheless, the basket cannot hold them all and the basket will break itself one day. That is when they all fall at once and cause even more problems.

If these businesses had been allowed to fail one at a time, the markets would not have reacted as they did today. However, because they all fell at once, it hit hard on the economy. Government interference in the market artificially sustain businesses that otherwise would and should fail. The free market is a self-regulating entity that kills the ones that make poor decisions and rewards those who make the proper ones.

When a business fails, it creates room for others to enter and while no one likes to see businesses fail, they must to keep a healthy economy. Just like nature, only the strong survive. When one business fails due to improper decisions, it makes room for new entrepreneur to begin a new business in that market. When the government does not allow companies to fail, it saturates the market making it almost impossible for new business minded Americans to enter; effectively holding down the American Dream.

 

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