Stimulating oil demand with government subsidies..., page-8

The brain fart becomes reality:   




When a market behaves normally with the usual self-moderating mechanisms, demand destruction occurs when prices get too high.  

Instead, governments that legislated to shut down fossil fuel supply, are now also stimulating fossil fuel demand.

If someone asked you to design a plan that served to increase fuel prices, you couldn't come up with a better one than that, namely shift the:

1.   Supply curve to the Left
2.   Demand curve to the Right.


When you have this sort of neo-Marxist tinkering with the market mechanisms, you get the opposite of normal demand destruction... "demand construction", I guess might be an appropriate term.


Viewed another way, the government of California is using Californian taxpayer money to underwrite my investment in WPL.  

Nice people, the Californians.

I feel I should return the favour by using some of my Woodside dividends to take a holiday there.

.