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I don't really know how to respond to your post. It's hard to tell if you don't understand the economics, or if you do understand it but for some reason reject it. It appears that you have never spent time in an actual hurricane zone in the wake of a hurricane, because what you describe isn't even remotely what actually happens. That you reject the idea of shortages, and also reject the idea of high prices assuring supply is just not reality, although it may represent your Utopia. You've seen reports of the shortages in the news. You've seen reports of entrepreneurial types who are stopped at the county line and not allowed to bring in necessary goods as a result of the misguided price gouging laws. Can you show one example of a desireable good that has a price ceiling associated with it that doesn't have a corresponding shortage? Good luck.
I don't think that you and I will ever come to an understanding on this.
To clarify things a bit. Yes, I've been in the aftermath of a hurricane, although not immediately after (Andrew.) What I did see was the Army assuming the role of providing shelter, food and water distribution, security, etc. Many folks that were hit hard by Andrew ended up getting free necessities from the government, which as it should be. The ice truck incident happened like the day after, and that problem was quickly put to bed once the military moved in, at which point there was very little "private enterprise" going on - just aid for the people that needed it the most.
As for my personal experience with the gas shortage here in Atlanta, that was caused by a hurricane that hit the western Gulf - we never even got a shower from that thing. What happened was that the flow of gasoline through the pipelines was shut down for a number of days, which rippled through the entire Southeast. Atlanta, being a high-demand area, sucked what little of the gas that was left nearly dry, causing the shortage. At this point, there was no physical way to get more gas to Atlanta until the flow of gas reached the Atlanta area. Once again - gas could been selling for $100 a gallon, I can assure you, there was no way to get additional supply. Yes, there were fistfights at gas stations, people were crying in front of news reporters as they didn't have enough gas to get to and from work - not the best of situations. But I think it was handled in the best possible, sensible and FAIR way, and although I'm not Republican, I was very pleased with how Sonny Perdue handled it. In times when Nature throws us a curve ball, that's when we NEED government to step in and play referee. Other times, when the market is able to function NORMALLY, I agree, the government should keep out of the way. I just fail to see what the big problem is.
And you're right, we'll never come to an agreement about this. In a democratic society, generally when 3 out of 4 people, or 9 out of 10 people think things should be done a certain way, then it'll probably be done that way. Like I said, the game was played, and "anti-gougers" won. End of discussion.
The unknowable wisdom of the perfectly efficient markets! There are no information asymmetries, no poor decisions. Firms have no market power. Again, I say to you, all praise the Invisible Hand. His is the wisdom, the power, and the glory. In his ghostly name we pray, A-men!
Dude the government can't even make money delivering the mail. Do you really expect these clowns in office to know how to effectively manage an economy. The state is not the path to prosperity.
Quote:
Originally Posted by lurtsman
The poll shows even the majority of people having studied economics admits that it exists. I'd bet there is a correlation with stating that it doesn't exist and not having a clue how to do it. I can assure you it exists. One form of price gouging is what is known as "economic rent".
I don't know about that, the average economist doesn't seem to have any common sense these days. I mean Paul Krugman won a Nobel Prize in Economics by telling people that printing money and raising tax rates to 91% would cause economic growth.
Dude the government can't even make money delivering the mail. Do you really expect these clowns in office to know how to effectively manage an economy. The state is not the path to prosperity.
The post office is the wrong example. The post office is a state-run not-for-profit.
Quote:
Originally Posted by TaxPhd
Of course it does. But that hardly answers the question.
What do you mean? One would say that a price gouging is a case of businesses being greedy. One would also say that price gouging is exploiting. I think with those two comments, it would be a potential answer.
Dude the government can't even make money delivering the mail. Do you really expect these clowns in office to know how to effectively manage an economy. The state is not the path to prosperity.
Dudette (I don't know your gender but I'm a woman, so I'm just making the random assumption here), the market can't even avoid massive bubbles and boom and bust cycles, do you really trust the Invisible Hand?
Not only that, but the USPS' business was largely from delivering mail... you know, that thing that is no longer relevant due to e-mail technology? Plus there is the fact that Congress has constrained the USPS in ways no private actor would be subject to, nor in ways that are meant to benefit the public, but instead ways that are based on regulatory capture. Some are reasonable, but many are not. How the Postal Service Is Being Gutted Even so, USPS is way cheaper and more efficient than the others, even adding in the cost of losses.
There's a reason FedEx spends more on lobbying (24th ranked) than their Fortune 500 rank (63rd) would predict: FedEx Corp: Summary | OpenSecrets.
What do you mean? One would say that a price gouging is a case of businesses being greedy. One would also say that price gouging is exploiting. I think with those two comments, it would be a potential answer.
If price gouging is a conscious act of greed and exploitation, tell me how much money I will make if today I attempt to "gouge" the customers at my Atlanta gas station by charging them $7/gallon for gas.
If price gouging is a conscious act of greed and exploitation, tell me how much money I will make if today I attempt to "gouge" the customers at my Atlanta gas station by charging them $7/gallon for gas.
I await your answer.
Depends on market rates. If the market is $3.60, you are charging around two-times the pricing. You likely wouldn't make money because there are likely competitors charging lower prices. If you are the only one in town, it will likely be relatively better as there are no substitutes. The substitutes causes lower prices because if one sells gas for $0.05 lower and you sell the same gasoline (so forget about Shell and Chevron who have cleaning gasoline), you will likely have lower profits until you lower.
Depends on market rates. If the market is $3.60, you are charging around two-times the pricing. You likely wouldn't make money because there are likely competitors charging lower prices. If you are the only one in town, it will likely be relatively better as there are no substitutes. The substitutes causes lower prices because if one sells gas for $0.05 lower and you sell the same gasoline (so forget about Shell and Chevron who have cleaning gasoline), you will likely have lower profits until you lower.
The part in the red is the answer, and the rest is just noise. Today, in Atlanta, I am not the only game in town.
What this means in the context of the price gouging question is that no matter how badly I would truly LOVE to be a price gouger (and earn excess returns), I cant. It is impossible for me to charge, and get, more than the market determined price for my goods.
Let's change the context to a hurricane zone, with no "anti price gouging" laws in place. In the wake of the hurricane, gas prices have risen, and stabilized around the $10/gallon mark. As a price gouger, I LOVE hurricanes, because this is where I can really exploit my customers, right? So, as a price gouger, I charge $20/gallon for my gas. How much gas am I going to sell? None! Even though there has been a horrible natural disaster, I am unable to charge, and get, more than the market determined price for my gas.
Price gouging doesn't exist. If it existed, I could do it. But it can't be done.
You may understand price gouging per se doesn't exist. When prices go up sharply due to an event, price is a means of rationing resources and assuring additional resources will pour in to an area with need. Unfortunately, people do not by and large understand that laws which limit so called price gouging, also limit access to relief after a major event.
Except that in the case of emergencies, plenty of supplies can and will be trucked in by volunteers and donors, and relief programs (the safety net, if you will, which too is a part of the equation.
In the time shortly after Katrina, yep, the gougers were out in full force and were stymied by volunteers delivering water. Fuel took a little longer.
Nope, there IS such a thing as gouging, which derives from the dark side of some people, who think that is all about money. Such folk have no moral center and might even be evil.
PS society and the social contract "should" outweigh the kind of free market which you are defending here, particularly in emergency situations.
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