That seems to be a fair question to ask, as their latest piece on the economy contains this piece of great insight:
Gasoline prices-the national average is now $2.15, according to the Energy Information Administration- have fallen because higher prices tamped down demand and supplies in the Gulf Coast have been slowly restored.
Read that sentence again. Are you blinking in pure confusion? Me too. Think about this for a second: “higher prices tamped down demand and supplies in the Gulf Coast have been slowly restored“. How else are prices going to fall? Are the magic pricing fairies going to wave their sugar-sweet pixie sticks and mystically change the market-clearing price? Have you ever even taking an economics class, Vikas Bajaj?
The activity described is exactly how all markets, everywhere, work. Gee, a decrease in demand and an increase in supply lowered the price! Shocking! That’s exactly what anyone with even the smallest amount of knowledge about economics would expect. Because, you see, prices arise from the interaction of supply and demand…when either changes, so will prices.
The post-Katrina gas prices were the product of what’s called a shock to the market: a giant hurricane destroyed most of the refining on the Gulf coast where most domestic refining is done, so prices went up, now that those facilities are coming back, prices are going down, fairly obvious. Unless you’re a reporter for the New York Times.
