The Great Toilet Paper Shortage of 1973

I predict shortages ...

I remember the Great Toilet Paper Crisis of 1973. I did my normal shopping for the week and noticed that there was not a roll of toilet paper to be found. While the early 70's was a time of shortages, especially gasoline, this struck me as very odd. What I did not know is that the evening before, Johnny Carson on the Tonight Show in his monologue on December 19, 1973 had said this:

"You know what's disappearing from the supermarket shelves? Toilet paper. There's an acute shortage of toilet paper in the United States."

While there was in fact no shortage, panic buying started, and it took weeks to replenish the stock across the nation. We do not realize that we are relying on a supply chain with little depth.

But there was a more serious shortage of gas caused by government actions:

As oil supplies contracted because of the embargo, the United States held prices artificially low. Government officials, fearing a return of the previous year's frigid winter in the Northeast, then ordered refineries to produce an oversupply of heating oil instead of meeting the demand for gasoline.

If you cannot import oil and make a profit, guess what--you will not import oil.

While I do not expect an apocalyptic future like a disaster movie, as I mentioned in a previous blogpost, it just seems prudent to have a little bit of food stored back for emergencies. Just do not tell anyone you are doing it. 

If the dollar drops, and the government tries to help the poor by price controls, there will be shortages. This is already starting in the medical area as some doctors will not accept new Medicare patients. This means that those doctors that do accept Medicare will have longer waiting times to see the doctor. This can only get worse.

The best way to allocate scarce goods is to permit prices to rise.  If this is allowed to happen, then while there may be spot shortages, the market will take care of it.

Comments

[eric anderson]

I do remember during the days of price controls when I went to the grocery store and the freezers where they kept beef -- steaks, hamburger, etc., were empty. That was something I had never seen in my young life. Since then, it is oft-heard that "Nixon proved price controls don't work." However, the powers that be don't let the fact that something has never worked be an impediment to trying it again. "We'll tweak it. This time is different!"