Posted on 08/30/2017 8:28:35 PM PDT by Arthur McGowan
I've often said that being an economist must be one of the most frustrating professions. You spend your life fighting against economic fallacies, and as you're lying in the hospital about to expire, the reporter on TV talks about all the jobs some natural disaster is going to create.
These days, the most dangerous economic error is the condemnation of "price gouging."
Even in my own Facebook feed I found people up in arms about high prices in the wake of an emergency.
Evidently many hundreds of complaints about the practice have been filed with the Houston authorities, with more coming in on a regular basis.
Those high prices, though, are the very thing that will restore needed supplies to the level people would prefer.
Without them, much more suffering ensues.
(Excerpt) Read more at mailchi.mp ...
Price gouging may be a supply and demand in action but the annoying part is all the finger pointing by businesses and corporate shills ducking the truth.
See Walt Williams and “gouging”. If you want more discussion.
“Gouging” - I always suspected this is a commie whine.
Meanwhile, why are more people enraged by “taking advantage” to get higher income (so-called) than by the low-life scum clearly taking advantage to TAKE free stuff!?
“more coming in on a regular basis.”
Followed very soon by complaints and whines that so-so virtually wiped-out business did not have this, that and the other when THEY went.
I can’t remember who said it (a freeper) the other day but here it is. You either have a free market or you don’t.
Someone the other day said, “I believe in the free market, but...”
Which means, “I don’t believe in the free market.”
Hourly I expect to hear about how Harvey is going to “create jobs” and boost the economy.
WWII ended the Depression, you know.
I'm in Texas and most of the time I agree with our AG but this stuff about going after price gougers is not only negligent ignorance but it's also dangerous.
Just days before the impact of the storm the news was showing totally empty shelves in grocery stores. Then after the storm hits one big box retailer had cases of bottled water for $42 and people were complaining of price gouging. Well that's only about $2 per bottle which is far less than you will pay at Six Flags any day of the week. The higher price ensures that people will naturally ration their purchases and most people will still be able to get water. If the retailer sold it at the same price as the grocery store then their shelves would be empty. The sellers that adjust their prices to match the increase in demand help to ensure needed commodities are rationed but remain available.
And that the seller will financially survive the disaster, and that he can afford to bring in more of the product.
What must attacked directly is the notion of a “fair” or “just” price—or wage.
>> Price gouging
Unlike Obamacare, the opportunism is short-term.
1. Would a person coping in the aftermath of a disaster rather buy 10 gallons of gasoline at a price of $10/gallon, or 0 gallons of gasoline at a price of $2.50/gallon?
2. Suppose a retail store has 500 bottles of water in its inventory and it isn't going to be resupplied for days. If the people showing up at his door would buy 5,000 bottles at the normal retail price, then what does the price have to do with the fact that there will be an unmet demand of 4,500 bottles of water?
3. Is it acceptable for a retail store owner who has fixed costs like rent and utilities that aren't going down just because the area has been decimated by a hurricane, wouldn't he have to raise prices substantially on his bottled water if it's the only thing anyone is buying for several days after the hurricane?
Just talked to my wife back home in. North Texas. She says that all our local gas stations are out of fuel. One station in Garland was selling what little they had left at $8.00 a gallon.
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