Rock Star

Check out Aguanomics on Fox Business News talking about water pricing. The highlight is when the host asks Zetland, and I paraphrase, "why don't we make rain?"

Comments

[joshua corning]

Is it just me or does Zetland live in some sort of weird isolated world where residential consumption of water has risen rather then in our world where it has dropped like a stone? and in a world where government can manage resources better then markets and can pick prices out of the air rather then let markets determine the price and everything magically gets payed for?

Seriously who would not cut their water down to the "free" point after you triple the nonfree price and when that happens who the hell pays to keep the water pumps running?

[gormk]

Joshua -

The answer to your question is:

"Yes, It's just you".

You're a fool. Unfortunately, on your daily trip to various blog-sites (do you even have a job?), you are completely un-informed, in this case (as¨often is the case), about basic economics.

gormk

[Bob Murphy]

I think what Joshua Corning is trying to say--sans the anger--is something like this: What happens if they implement Zetland's recommendation, but people cut back so much that the amount they purchase above the "free" point, doesn't bring in enough revenues to cover total costs?

Basically, Zetland is proposing his own central plan instead of the one currently in use. It's cool that he is on TV and in print, explaining the cause of the shortage (i.e. too low prices), but without advocating true privatization, where the price is set in an open market, we have no reason to suppose that Zetland's recommended pricing structure will be correct.

[David Zetland]

@JC and BM: If you want to get picky, the line between free and expensive is endogenous. The marginal price is moves to the choke point, which is also endogenously determined by the weather, etc.

This "solution" is meant to be doable NOW, not when the "privitization fairy" comes for a visit.

@gormk -- miss your coffee this morning? You're right, of course -- about the basic economics... :)

[joshua corning]

@gormk -- miss your coffee this morning? You're right, of course -- about the basic economics... :)

I guess being informed about economics is to be completely ignorant as to the cost of hooking up water to house.

[joshua corning]

@JC and BM: If you want to get picky, the line between free and expensive is endogenous. The marginal price is moves to the choke point, which is also endogenously determined by the weather, etc.

A government entity funded and controlled by politicians will determine prices endogenously?

I don't think it is me who has a problem with believing in fairies.