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I don't understand why we are equating emergency situations to normal every day life.
Venezuela is no valid comparison to a disaster ravaged community in the US. come on people. you cannot let a "free market" "work" during a period where there are non-natural forces in play. A hurricane while nature is not 'natural' in terms of economic force.
you suspend regular order during an emergency. You insure the victims aren't further victimized and you insure the victims don't do further harm in desperation.
You put valid price controls AND limit the amounts that can be purchased to insure inventory. period.
Until those supplies arrive, prices MUST be increased to prevent some selfish SOB from buying all the water for himself. At $10/bottle you will only buy what you need.
Another ad hominem, and not even a true one. How does my knowledge of the laws of economics translate to either voting for or supporting President Trump?
I only vote for true libertarians. Donald Trump is so far from a true libertarian, you'd have to use units of measure reserved for astronomy and cosmology to describe the distance.
I hit the wrong one. I meant to vote Yes. There should be some sort of controls put in place. If a company as big as Anheuser Busch can forfeit some profit and can water instead of beer, the local Piggly Wiggly can afford to sell gas at the same price it does normally.
Until those supplies arrive, prices MUST be increased to prevent some selfish SOB from buying all the water for himself. At $10/bottle you will only buy what you need.
That isn't how it works. You don't increase the cost to control demand. You control supply. Putting limits and rations on the available supplies ensures that those who need them can get to them and afford them. It doesn't matter how selfish you are... if you don't have a hoard of cash laying around that $10 bottle of water may be out of reach for even the most selfish.
No... The issue here is that demand is temporarily and artificially inflated during a vulnerable time where people's decision making abilities are influenced heavily by a natural disaster. These crisis basically create a localized monopoly in the area where good and fair market competition cannot be realized and is unethical.
A person dying of an acute disease is by definition in an emergency and vulnerable, no? I assume that by that you believe that all critical medications should be price capped at low levels too
Price gouging is illegal in 34 states. Price gouging is determined based upon 3 criteria below:
1. Period of emergency: The majority of laws apply only to price shifts during a time of disaster.
2. Necessary items: Most laws apply exclusively to items which are essential to survival.
3. Price ceilings: Law limits the maximum price that can be charged for given goods.
Price gougers are taking advantage of a buyer's vulnerability. When a consumer no longer has the option to buy from another store at market price and is forced to buy a necessary item at an inflated rate to survive, that is price gouging.
While stores will definitely be boycotted in the future, it does little to preserve their means to survive in the immediate future.
The free market has nothing to do with a disaster area. Once that area is basically sealed off from the remainder of the market, it is now a closed market and stores hold a temporary monopoly. So your argument as to how the free market should work isn't valid in the instance of a natural disaster. It is no longer a free and competitive market.
Say what - the free market has nothing to do with a disaster area? Of course it does, the higher the market prices the more goods will flood in from outside areas. Price gougers are meeting market demand at market prices. Without it you are at high risk of SHORTAGES and nobody wins.
If you don't like it, fine, but you have no right to dictate to any business or person how much they can charge for THEIR inventory. Businesses do not operate charities, they are not there to ease anything they are there to run a viable business. In most cases that means pricing fairly for long term viability but if they choose to double prices and bear the risk of heavy blowback that is their right as an American business in a free society
A person dying of an acute disease is by definition in an emergency and vulnerable, no? I assume that by that you believe that all critical medications should be price capped at low levels too
The Fed Gov already scrutinizes the pharmaceutical industry heavily. Have you not watched some of the pharmaceutical companies being interrogated by Congress for the price spikes of epi-pens, etc? But to answer your question, YES. In an instance where the goods being sold are crucial to the continued life of a human being, there should be safeguards in place so that people are not exploited.
Quote:
Originally Posted by BlakeJones
Say what - the free market has nothing to do with a disaster area? Of course it does, the higher the market prices the more goods will flood in from outside areas. Price gougers are meeting market demand at market prices. Without it you are at high risk of SHORTAGES and nobody wins.
If you don't like it, fine, but you have no right to dictate to any business or person how much they can charge for THEIR inventory. Businesses do not operate charities, they are not there to ease anything they are there to run a viable business. In most cases that means pricing fairly for long term viability but if they choose to double prices and bear the risk of heavy blowback that is their right as an American business in a free society
No, it does not. In situations such as Houston, it is very difficult to get goods in from other areas quickly. Therefore the ability to source supplies on the free market has been limited. As such, the only available supplies are what can be reached locally until transportation is restored. Shortages are controlled by limiting supply, not increasing the cost of the supply.
Look at it like this. Company A bought 200 cases of water at $2 per case. Their typical sale price on a case of water is $4. A disaster hits. The company has already paid for the water they have on hand. Their cost of those supplies has not increased, and neither has the market outside of the disaster area. If not for the disaster, the water would sell for $4 per case. Since the disaster, the company has decided to go after windfall profit and sell each case for $20 by exploiting vulnerable consumers. Why do you think the government has made it illegal in 34 states?
Those who have most of their money in a bank cannot access it due to no electricity and flooded buildings. Their only means of purchasing supplies is through use of any available cash that they may have on hand. So not only are supplies limited, their ability to purchase supplies is also limited. Therefore exploiting these goods can cause people to lose their lives.
A free market only works when consumers have the choice to buy their goods in multiple areas where open and fair competition is allowed. THAT makes a free market. At such time where your options to buy goods are limited to one specific area, that area now has a monopoly where they can exploit others. There is a reason that the free market doesn't allow monopolies. It exploits consumers. The rare instance where it will quickly peek its head is during a disaster.
I don't understand how you cannot comprehend the difference.
As often happens in disaster areas, the government in Texas has made it illegal to raise prices above a reasonable amount (such as $50 for water or $5000 for a generator), citing that this is victimizing already battered residents.
The problem with price controls (just like in Venezuela) is everyone hoards and cleans out the shelves even if they don't need the supplies. When you let the market work, people will pay the actual value of goods and there will be enough supply and incentive for outsiders to get down there and bring in more materials.
discuss...
Quick repsonse and I'm going to read more -- it's illegal in Georgia -- I thought it would be illegal everywhere. And in fact when Atlanta had their floods businesses were aggressively charged for gouging.
As often happens in disaster areas, the government in Texas has made it illegal to raise prices above a reasonable amount (such as $50 for water or $5000 for a generator), citing that this is victimizing already battered residents.
The problem with price controls (just like in Venezuela) is everyone hoards and cleans out the shelves even if they don't need the supplies. When you let the market work, people will pay the actual value of goods and there will be enough supply and incentive for outsiders to get down there and bring in more materials.
discuss...
They are selling water in Houston for $99.00 per case, so there are people who are forced to drink flood water instead. In other places price gouging has prevented people from evacuating, or sleeping under a roof in a motel. Thankfully there are laws in Florida against price gouging when there is a natural disaster.
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