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The big taboo, rationing ..why not?

Discussions about the economic and financial ramifications of PEAK OIL

fuel/carbon rationing?

Poll ended at Mon 14 May 2007, 12:29:54

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Total votes : 44

The big taboo, rationing ..why not?

Postby mididoctors » Mon 30 Apr 2007, 12:29:54

Ok why would rationing of some sort not work? all economic solutions presented be it invisible hand to taxes all must reduce per capita consumption averages to be deemed successful..

ie in the end they ALL mimic the effects of rationing

Lets get some thoughts on this "unmentionable" topic

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Re: The big taboo, rationing ..why not?

Postby NEOPO » Mon 30 Apr 2007, 13:24:06

Its not taboo really.

Jevon's Paradox and the lack of political will to institute rationing prior to any major shortage is what they/we/peakers see usually and doesnt that seem logical considering our collective history?

The reality is that rationing is like taking a pill for a headache but not trying to find the reason for the headache and then doing what must be done to prevent future headaches.

I believe it would "help" yet without direction I am not sure what it will help or whom.
We must seek a permanent remedy or "cure". Do not get excited Jack because what you are probably thinking is not what I am referring to :)
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Re: The big taboo, rationing ..why not?

Postby auscanman » Mon 30 Apr 2007, 14:11:21

I'd fully support a carbon and fuel quota per individual, but I would want the quota to be tradeable. I'll be living close to where I work, sharing an apartment with several others, and will be using virtually no fuel and have a CO2 output far below the average, so I'll have plenty of credits to auction off.

It would bring me great satisfaction to see fat-assed suburbanites amassed before me, desperately bidding one another up to try to secure my spare quota in their attempt to continue their profligate lifestyle. :razz:

I could pour all that money into my preparations for PO.
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Re: The big taboo, rationing ..why not?

Postby auscanman » Mon 30 Apr 2007, 14:39:36

I will be auctioning off 20 liters of gasoline quota! Lets get the bidding started.......

me: 30 minutes later: Do I hear $205?

300lb man in front row raises hand.

me: ok $210? No? Going once, going twice, SOLD! (to the tub of lard in the front row who drives a Hummer, commutes 40 miles each way, has 4 kids and lives in a mcmansion)
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Re: The big taboo, rationing ..why not?

Postby Jack » Mon 30 Apr 2007, 14:49:47

Rationing creates the incentive for a massive black market. If, for example, the consumer can auction 20 liters for $205 dollars, someone upstream of the consumer can get$200 for that same 20 liters. It's an opportunity for those who care to seize it.

So if you want more organized crime and corruption, support rationing. Lord knows I do. 8)
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Re: The big taboo, rationing ..why not?

Postby mididoctors » Mon 30 Apr 2007, 15:45:51

$this->bbcode_second_pass_quote('Jack', 'R')ationing creates the incentive for a massive black market. If, for example, the consumer can auction 20 liters for $205 dollars, someone upstream of the consumer can get$200 for that same 20 liters. It's an opportunity for those who care to seize it.

So if you want more organized crime and corruption, support rationing. Lord knows I do. 8)


what happens if the allowance is tradable but this does not include the actual gas... you still need to buy it

the price of the gas is separate

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Re: The big taboo, rationing ..why not?

Postby vision-master » Mon 30 Apr 2007, 15:53:04

I can't see it happening. I picture the US to keep raising the prices until the poorer folk are squeezed out of the market. Simple economics.
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Re: The big taboo, rationing ..why not?

Postby Tyler_JC » Mon 30 Apr 2007, 15:59:53

$this->bbcode_second_pass_quote('mididoctors', '')$this->bbcode_second_pass_quote('Jack', 'R')ationing creates the incentive for a massive black market. If, for example, the consumer can auction 20 liters for $205 dollars, someone upstream of the consumer can get$200 for that same 20 liters. It's an opportunity for those who care to seize it.

So if you want more organized crime and corruption, support rationing. Lord knows I do. 8)


what happens if the allowance is tradable but this does not include the actual gas... you still need to buy it

the price of the gas is separate

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I would sell my "allowance" for $10/gallon even if the actual price of gas was mandated to be $5/gallon.

Therefore, buying my gasoline allowance actually costs $15/gallon.

But even at $15/gallon I'd still have plenty of customers around here. People need to get to work...

The average person makes say, $20/hour. So if you live 20 miles from your job, your fuel cost is around 90 minutes of work per day.

That is a lot of money, but still highly doable for many people. And certainly doable if there is no alternative.
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Re: The big taboo, rationing ..why not?

Postby Jack » Mon 30 Apr 2007, 18:01:29

$this->bbcode_second_pass_quote('mididoctors', '
')
what happens if the allowance is tradable but this does not include the actual gas... you still need to buy it

the price of the gas is separate

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You simply create more opportunities.

The allowance coupons (or cards, electronic chits, whatever) can be forged (counterfeiting). The suppliers of such coupons (however defined) can be compromised. Those who account for or turn in the coupons can, likewise, be compromised.

Let's suppose that a tradable permit for 1 liter is worth 1 dollar in the secondary market. The virtuous bicycle rider and the frugal grandmother sell their 100 liter monthly allotments and get $100 each.

But the corrupt person who supplied counterfeits could now generate (print, enter on computer, make "unforgeable" cards, whatever) 4 million of the items, distribute them, and sell them to the public for 70 cents each. The creator of the fake coupons might garner a million dollars, the distributors would take their cut, and the final consumer could shave 30 cents off the price of a liter of gas.

At this point in the discussion, the game always devolves to some back-and-forth argument about how the coupons (permits, passports, RFID tags, whatever) will somehow be made utterly, absolutely counterfeit proof...or, some absolutely incorruptible central office will control it...or, penalties for using the counterfeits will be so draconian that no one will dare to commit the crime. Please, let's not bother with that.

Any rationing scheme will offer a chance for some to make big profits and others to cut their costs. It will happen. It cannot be stopped. If you doubt me, take a hard look at the war on drugs and tell me how successful that's been.
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Re: The big taboo, rationing ..why not?

Postby threadbear » Mon 30 Apr 2007, 18:28:48

$this->bbcode_second_pass_quote('vision-master', 'I') can't see it happening. I picture the US to keep raising the prices until the poorer folk are squeezed out of the market. Simple economics.


Won't happen. They'll ration. The poor, forced into domestic servitude in even larger numbers will need their cars to get to the man's house and help harvest the man's fields.
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Re: The big taboo, rationing ..why not?

Postby Twilight » Mon 30 Apr 2007, 18:36:38

These days, rationing is a sure way of losing control of a situation. However, that doesn't mean it won't be tried.

Rationing worked well in the UK during WW1 and WW2, but this was with a uniquely compliant population and a black market formed even so. Trying it today, when everyone has an entrepreneurial attitude to money-making (once exposed to eBay, never the same), you are going to have BIG problems.

In comparison, leaving market forces to price people out would result in a more orderly redistribution of consumption, with less economic distortion involving criminal enterprise.

But since governments miss the paradigm shift on just about every cultural change, they're going to try it.
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Re: The big taboo, rationing ..why not?

Postby IanC » Mon 30 Apr 2007, 19:10:04

Jack,

I take your point - there will be a lot of avenues for corruptions and counterfeiting. However, those avenues exist now for many items and, it seems, our current monetary system is already fairly corrupts and prone to manipulation (think insider trading, S&L crisis, Arms for Hostages, etc and on and on). Bad guys will always try to game whatever system is out there.

The benefits of rationing are many, too. If nothing else, it think it has the potential to force transportation and housing alternatives and more equitably distribute energy resources. It will be incumbent on government to provide these transportation and housing alternatives. Our current system can't last and a rationing regime would make that abundantly clear. True, many people would cough up the money to commute, but many more won't because they can't. Those folks will need more or less independant self-sufficient communities well connected to public transportation. The 'burbs will need to die.

My ulterior motive is that I live centrally in a city with great transportation and my family really does not NEED our one vehicle. I, too can't wait to put my fuel credits on Ebay and satisfy my greed for expensive, handmade musical instruments!!! The sad part is, if there is an economic need for rationing, I think the political pressure and frustration of the populace would boil over and I'll be hiding in my basement to practice!

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Re: The big taboo, rationing ..why not?

Postby MaterialExcess » Mon 30 Apr 2007, 21:19:03

I think some form of rationing is inevitable. You cannot just allow the free market to price people out. Some low wage earners still have important roles in the economy. What happens if the people who work in grocery stores cannot afford to drive to work?
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Re: The big taboo, rationing ..why not?

Postby Jack » Mon 30 Apr 2007, 21:19:09

$this->bbcode_second_pass_quote('IanC', 'T')he benefits of rationing are many, too. If nothing else, it think it has the potential to force transportation and housing alternatives and more equitably distribute energy resources.


The thrust of our age has been against any form of "equitable distribution". So the degree of change would be large; qualitatively, it would be wrenching.

$this->bbcode_second_pass_quote('IanC', '
')It will be incumbent on government to provide these transportation and housing alternatives.


Ah, but this is, again, a change of direction. And it will occur just as government resources (taxes) are down, and demand for government resources are up.

$this->bbcode_second_pass_quote('IanC', '
')Our current system can't last and a rationing regime would make that abundantly clear.


Indeed it would. Does any Western government dare do that? What sort of fallout occurs when the masses realize that "Our current system can't last"?

$this->bbcode_second_pass_quote('IanC', '
')True, many people would cough up the money to commute, but many more won't because they can't. Those folks will need more or less independent self-sufficient communities well connected to public transportation. The 'burbs will need to die.


Perhaps. That's lots of really ticked off voters. Of such malaise, armed revolutions are made. I'm quite serious.

$this->bbcode_second_pass_quote('IanC', '
')My ulterior motive is that I live centrally in a city with great transportation and my family really does not NEED our one vehicle. I, too can't wait to put my fuel credits on Ebay and satisfy my greed for expensive, handmade musical instruments!!! The sad part is, if there is an economic need for rationing, I think the political pressure and frustration of the populace would boil over and I'll be hiding in my basement to practice!

-IanC

Still sadder - the money you gain will probably be spent on covering increased expenses for food. Don't think you'll get to sell all of your allotment - delivery and repair services might well demand fuel coupon payments along with monetary payments.

You might wish to consider the potential for demagoguery. Let's see...

(Insert corpulent, red-faced politician here)

"Look! Look at all those rich people in their city mansions! They still have their houses, still live in luxury, while you and your children shiver on the streets!"

(Politician raises handful of papers above head)

"We have reports! These rich leeches are buying handcrafted musical instruments - luxuries! - when you can't even get to work! Can't even take your children to the doctor! While the stores can't even bring in a pitiful supply of milk for babies!"

(Politician slams papers down. Glares at crowd)

And they take the fuel - your fuel! - and they make us all beg like dogs for a liter of gas as they go down the street on their fancy bicycles. They don't care about you! They just want to take more of your money, even when you don't have any left.

{End scenario}

I probably don't do screaming politicians well. But keep in mind that at least some of the residents of inner city condos are well off, and the formerly middle class (the ones from the dying suburbs) will discover new reservoirs of hate.

Will rationing be tried? Probably so, at some point. I suspect it will take a bad situation and make it worse.

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Re: The big taboo, rationing ..why not?

Postby Jack » Mon 30 Apr 2007, 21:28:46

$this->bbcode_second_pass_quote('MaterialExcess', 'I') think some form of rationing is inevitable. You cannot just allow the free market to price people out. Some low wage earners still have important roles in the economy. What happens if the people who work in grocery stores cannot afford to drive to work?


Doctors need to get to work...should they pay extra to treat patients?

Teachers need to get to work...as do plumbers...police...lawyers...judges...sanitation workers...and so on and so forth. Everybody will have an ever-so-special need; and if they don't, they'll come up with something. Perhaps a disability? Or maybe they volunteer for the meals-on-wheels delivery program? Surely they deserve an extra portion?

And how much of a bureaucracy will we have to administer this? To hear the countless appeals? To prosecute the (many) violators?

How do we pay for it?

Do we dare create another great hulking bureaucracy at the same time the structure of our civilization creaks and groans under the weight of previous bureaucracies?

For a taste of how well it would work, look at what FEMA did during Katrina. Will the new rationing police do better? Why should we assume that?
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Re: The big taboo, rationing ..why not?

Postby Auntie_Cipation » Mon 30 Apr 2007, 21:45:26

$this->bbcode_second_pass_quote('MaterialExcess', 'I') think some form of rationing is inevitable. You cannot just allow the free market to price people out. Some low wage earners still have important roles in the economy. What happens if the people who work in grocery stores cannot afford to drive to work?


Wouldn't rationing then provide the pressure to raise wages enough that those people can afford to get to work? And at the same time, encourage people to shorten their commutes however possible?
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Re: The big taboo, rationing ..why not?

Postby NEOPO » Mon 30 Apr 2007, 21:47:01

After more thought on the matter, I agree with Jack on principle yet I wonder if I can get him to agree with me likewise.
The war on drugs, SSDD. TPTB have found a way to make it "pay" thus if there is rationing that will inevitably lead to a black market then there will inevitably be agents of the state in on the action just like they are with the present day drug trade.

Do you agree? Are you a L.E.A.P cop er not?!!? :)

Aren't we rationed anyways considering the inequality of wealth distribution?
Of course we are. Imagine how many hummers would be taking kids to soccer games if everyone could afford one.
Imagine how many 10,000 sf mansions would be built if everyone had a few million dollars.

The price is a way of rationing and yes the poor are going to get screwed first but in time so will 90%+ of the rest so Enjoy!
See! Rationing works!!! it all depends on how you look at it... :lol:
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Re: The big taboo, rationing ..why not?

Postby Jack » Mon 30 Apr 2007, 22:00:29

$this->bbcode_second_pass_quote('NEOPO', 'A')ren't we rationed anyways considering the inequality of wealth distribution?


A good point - but one that may be stronger than you suggest.

Physical reality dictates limits. In this case, those limits are resources. It isn't just inequality of wealth distribution - it is the limited availability of all things physical.

Even if we all had unlimited money, we could not have unlimited amounts of anything - McMansions, Hummers, or chocolate bars.

What you're saying, then, is that the market allocates resources efficiently. On that we agree.

I think others might argue that the market does not allocate resources humanely or compassionately. True. That's the nature of limits.

Can people intervene to take the sharp edges off market-based rationing? On that point, I suspect arguments will rage so long as mankind exists.
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Re: The big taboo, rationing ..why not?

Postby cube » Mon 30 Apr 2007, 22:22:06

$this->bbcode_second_pass_quote('NEOPO', '.')..
The reality is that rationing is like taking a pill for a headache but not trying to find the reason for the headache and then doing what must be done to prevent future headaches.
...
The solution to PO is simple ----> STOP using fossil fuels.

Unfortunately that means 5 billion people will need to die off. :-D

Actually it's not as bad as it seems. Much of this "die off" will come in the form of decreased fertility rates...especially in the 3rd world as staple foods like wheat, corn, rice skyrocket.
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Re: The big taboo, rationing ..why not?

Postby IanC » Mon 30 Apr 2007, 22:52:46

Unfortunately that means 5 billion people will need to die off. :-D

I think they are already starting to die off. The images of starving people in the 3rd World have been ubuquitous my whole life. I can't wait to see how massive depopulation through starvation and war is repackaged for our TV watching public. How will they make it palatable for us? Which Hollywood star will lead the Telethon to Save the Victims of the Post Peak Cataclysm?

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