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Price Gouging
Townhall.com ^ | March 18, 2020 | John Stossel

Posted on 03/18/2020 4:20:23 AM PDT by Kaslin

"We don't have any...!" Fill in the blank.

People are stocking up on things, fearing that we will be stuck in our homes, under quarantine, without essential supplies.

Some hoard toilet paper. A popular internet video features someone driving up to what appears to be a drug dealer but is really someone selling toilet paper.

When it became hard to find hand sanitizer in New York, Governor Andrew Cuomo said the state would produce its own, made by prison labor.

Yet in-demand items like masks and hand sanitizer can still be found. It's just that we have to pay an inflated price.

People on social media are outraged by that. They post pictures showing stores charging high prices, like $19.99 for a can of Lysol spray and $22.99 for a 12 oz bottle of Purell.

We're encouraged to report such high prices to the government because "gouging" is illegal. New York has an online "price gouging complaint form" that people can fill out if they are charged "unconscionably high prices."

"On my watch, we will not tolerate schemes or frauds designed to turn large profits by exploiting people's health concerns," said New York's economically clueless Attorney General Letitia James. "Some people are looking to prey on others' anxiety and line their own pockets."

Well, yes.

People always look for ways to line their own pockets.

But what politicians call "gouging" is just supply and demand. Prices rise and fall all the time.

Most state's anti-gouging laws never even say exactly what is "unconscionably excessive." That invites abuse. Vague laws give politicians dangerous power. They can use anti-gouging law to punish any merchant who doesn't give them money or kiss their rings.

It seems cruel to charge customers more during a crisis, but when there are no laws against sharp price increases, people don't experience long lines and shortages.

Think about what happens when stores don't raise their prices: People rush to buy all they can get. The store sells out. Only the first customers get what they want.

But if the store charges more for items in extraordinary demand, people are less likely to hoard. Customers buy what we need and leave some for others.

Prices should rise during emergencies. That's because prices aren't just money; they are signals, information. They tell suppliers what their customers want most.

Entrepreneurs then make more of them and work hard to get them to the people who need them most. If "anti-gouging" laws don't crush these incentives, prices quickly fall to normal levels.

Stossel in the Classroom contest winners explained that in a video.

Last week, some people bought lots of hand sanitizers and masks and then sold them on the internet. One couple boasted that they made over $100,000 reselling Lysol wipes.

They're not bad people. Their actions allow people desperate for supplies to buy what they need, even if it's at a higher price.

We're supposed to stay indoors, so it's good that we can get these products online. Then we don't leave home and infect others.

Unfortunately, Amazon, eBay and Facebook, worried about accusations of "profiteering," cracked down on resellers. The companies removed listings for masks, hand sanitizers and disinfectants.

This will only cause more shortages. Bigger profit was what encouraged people to sell online. Now no one gets those products until the market returns to normal.

In China, there was a severe mask shortage. That raised the price of masks and kickstarted production of face masks all around the world. A factory in France hired more people and raised its production of face masks from 170 million a year to half a billion.

The French company didn't do it only because they want to help people in China. Extra profit motivated them.

Price "gouging" saves lives. In a crisis, we like to think that everyone will volunteer and be altruistic. But it's not realistic to believe that all will.

If we want more supplies, we ask sellers to risk their money, their safety and comfort. (Sellers often travel long distances to reach people most in need.) Most sellers won't do that unless they'll profit.

Government should dump its anti-price gouging laws and let the free market help those in need.



TOPICS: Culture/Society; Editorial; News/Current Events
KEYWORDS: coranovirus; disease; hysteria; shopping
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To: All

free market all the way...

if have a stock pile of ammos, i can choose to sell them at any price


21 posted on 03/18/2020 5:33:08 AM PDT by VAFreedom (maybe i should take a nap before work)
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To: Kaslin

I agree with Stossel on almost all products.

The one exception I have is jacking up gas prices as people are evacuating when a hurricane is approaching.


22 posted on 03/18/2020 5:33:51 AM PDT by hirn_man
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To: Alberta's Child

” I would have needed to charge $10 per bottle to make it worth my while.”

If that’s what you figured, then driving from 1200 miles away was too far for the amount that you could haul.


23 posted on 03/18/2020 5:37:04 AM PDT by nuconvert ( Warning: Accused of being a radical militarist. Approach with caution.)
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To: 11th_VA

I know, I’ve been prepped for years and mostly didn’t talk about it because people rolled their eyes. In January I visited my GD and seeing something like this coming, stocked her up and talked about it at work and people were asking why?

Last week they figured out why.


24 posted on 03/18/2020 5:37:20 AM PDT by tiki
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To: Kaslin

OTOH, as soon as the stores saw the hoarding, they could have put limits on what one person can buy.

That would keep the supply going without raising prices.


25 posted on 03/18/2020 5:49:26 AM PDT by metmom (...fixing our eyes on Jesus, the Author and Perfecter of our faith...)
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To: nuconvert

Concur.


26 posted on 03/18/2020 5:49:47 AM PDT by metmom (...fixing our eyes on Jesus, the Author and Perfecter of our faith...)
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To: nuconvert
I wasn’t looking to make a fortune but I needed to cover the cost of the trip and the time.

Let’s look at this using round numbers:

2400 miles x $0.60 per mile (a bit higher than the IRS rate) is $1,440. Let’s call it $1,500 in operating expenses for the vehicle.

I figured I could do the trip each way in a day and a half. Add a whole day at the disaster scene and that’s four days. Let’s make it five days for the sake of the discussion. At $200/day in personal expenses (this is very high; I wouldn’t have spent more than one night in a hotel) that’s another $1,000.

If I sold the water for $10 per bottle that would have been $10,000 in revenue. A net of $7,500 isn’t a bad return for a week of disruption, is it?

27 posted on 03/18/2020 5:49:59 AM PDT by Alberta's Child ("Oh, but it's hard to live by the rules; I never could and still never do.")
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To: tiki

Exactly. It’s good citizenship to be prepared. We’re not the ones out there snapping up scarce supplies.


28 posted on 03/18/2020 5:52:41 AM PDT by Ken H (Best SOTU ever!)
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To: metmom

That would have saved a lot of trouble.


29 posted on 03/18/2020 5:53:31 AM PDT by Ken H (Best SOTU ever!)
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To: metmom

It looks like it is calming down?
The supply chain is what matters and it is A Ok.


30 posted on 03/18/2020 5:54:05 AM PDT by Leep (Everyday is Trump Day!)
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To: 11th_VA

LOVE it.


31 posted on 03/18/2020 5:54:43 AM PDT by metmom (...fixing our eyes on Jesus, the Author and Perfecter of our faith...)
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To: suthener
Thanks for the link
You are correct, Mr. Williams is a lot smarter than most of us.
32 posted on 03/18/2020 5:55:27 AM PDT by Karma_Sherab
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To: Kaslin

Some price gouging ends up making more of a scarce commodity available in a time of need.

Some people only oppose price gouging when the price goes above what they can afford for something they want.


33 posted on 03/18/2020 5:55:33 AM PDT by 9YearLurker
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To: nuconvert

Worse people are those who take advantage of anti gouging laws and buy more than they need with no intention of either using nor selling. Working as a group they deny goods to those who really need them and are willing to pay a high price.

Remember, the “gouger” has incentive to sell at a price someone is willing to pay, making it available.


34 posted on 03/18/2020 6:15:14 AM PDT by ctdonath2 (* - Interesting how those so interested in workERS are so disinterested in workING.)
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To: Kaslin

Most everybody seems to be addressing “price gouging” in regard to goods. What about services?

For instance, is it ok or not ok for medical services, doctors, nurses, hospitals, etc. to raise prices to whatever the market will bear and let those who can’t pay the price suffer or die?


35 posted on 03/18/2020 6:15:57 AM PDT by KrisKrinkle (Blessed be those who know the depth and breadth of ignorance. Cursed be those who don't.)
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To: VeniVidiVici

If you’re paying for “what the market will bear” but working for the same old pre-crisis wages, then this doesn’t help much. Your boss may profit, but you don’t.


36 posted on 03/18/2020 6:32:52 AM PDT by oldtech
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To: Kaslin

If I own something, then I and I alone should be the one to set the value that I hold on it and would sell it for.

If I set that value right, then I make a tidy profit. If I set it too low I lose money. If I set it too high I get stuck with 8000 rolls of TP that no one will ever buy.

Anti-gouging is a direct violation of my property rights. If something is mine (and if I bought it or made it, then it is mine) then whose business is it how much I sell it for?


37 posted on 03/18/2020 6:38:57 AM PDT by John O (God Save America (Please))
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To: Kaslin

A natural by-product of price gouging is looting and stealing.

If you are in favor of price gouging in times of panic or emergency - then you are OK with looting and stealing during these times also.


38 posted on 03/18/2020 6:59:28 AM PDT by Responsibility2nd (Click my screen name for an analysis on how HIllary wins next November.)
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To: period end of story

Many people don’t think of them but it’s the elderly on small fixed incomes who are hurt the most simply because they don’t have enough money.......In my opinion, gouging in order to profit from a natural disaster is not only unethical but immoral.


39 posted on 03/18/2020 7:00:38 AM PDT by Hot Tabasco (It's the China Flu and if you think you have it, take Zicam......)
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To: John O

Nothing wrong with wanting to make a reasonable profit. One guy has been stopped by Amazon and is stuck now and can’t rid of the stuff, which serves him right


40 posted on 03/18/2020 7:04:41 AM PDT by Kaslin
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