Economic Idiocy

Blather on:

"The actual government on the Canadian side needs to actually start regulating their toll rates because we have the highest toll rates in Ontario for a bridge that has the highest volumes," (Windsor West NDP MP Brian) Masse said. "I can't understand why we continue to allow that situation to exist when it's clear that volume should actually dictate price, and we should actually be reducing the rates."

Welcome to Economics 101.

Volume is a symptom of demand. Demand is driven by accessibility and prices. Prices are used by businesses to throttle demand and maximize their revenues -- that's why they call it "business", not "charity". So if you have a situation where more people want your service (ie use of a bridge to another country) than you can serve -- you raise prices, which reduces some people's willingness or ability to pay. So profits per transaction go up, and total volume goes down.

Now in the case of the Ambassador Bridge, there are no other bridges to compete with this one, so it enjoys a natural monopoly over international travel in this location. Building a second bridge will increase carrying capacity, and over time, the prices should come down.

Just making things cheaper will not, in the long run, help anybody.

The fact that people without an understanding of economics (or those who choose to pander to citizens without an understanding of economics) continue to get elected is a sad, sad commentary on the electorate today.