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Message
re: "Price Gouging" during a disaster: Good or Bad
Posted on 9/2/17 at 8:31 am to TigerstuckinMS
Posted on 9/2/17 at 8:31 am to TigerstuckinMS
Ther is no reason for price gouging, or shortages. Hurricanes do not pop up and hit land within a day.(normally)
When you know a storm has a good chance of coming your way, buy some supplies a week to ten days out. If the storm does not hit you, you will have some extra peanut butter, tuna, bottled water, gas, etc. on hand. They don't go bad.
If this stuff is bought in advance the stores will have a better chance to get more stock in for those that didn't prepare in advance. This way, everybody can have supplies.
When you know a storm has a good chance of coming your way, buy some supplies a week to ten days out. If the storm does not hit you, you will have some extra peanut butter, tuna, bottled water, gas, etc. on hand. They don't go bad.
If this stuff is bought in advance the stores will have a better chance to get more stock in for those that didn't prepare in advance. This way, everybody can have supplies.
1
Posted on 9/2/17 at 8:42 am to Hangit
What if all the stores buy extra but then all the stores but 3 are impacted by flooding or storm surge. What if one of the 3 has employees who can't make it to the store and so they don't have the manpower or labor force to immediately reopen?
What if one of the remaining two has no power and their inventory management or POS Software won't allow them to reopen because they can't accept payments properly?
Whether there's one store open or all three somehow can, if there were a dozen stores before and only 3 now, even ordering more by all 3 will still create critical shortages that cannot simply be dealt with by price gouging or spiking it or whatever.
The delay between the immediate aftermath of the disaster, the reopening of retail outlets (no guarantee as they are dependent on labor that may be impacted and infrastructure like water, electricity and public services like law enforcement), the price spike and then the movement of additional goods in to take advantage, and subsequent price adjustments back down to affordable levels...that delay no one is acknowledging...this is where life and death situations are happening.
This is where your kids need water. This is where the elderly must have food. This is where social order and society's behavioral norms can break down...and with government and law enforcement's diminished ability to project influence and calming social order, it's where human suffering occurs.
You cannot wait for the market to stabilize and correct itself. People die and people suffer and ordinary people resort to desperate acts.
People saying that this is "logical," are idiots who aren't thinking past the paper their theories they've read and agree with are printed on. You try that shite in the real world and people will die and human suffering will occur and laws will be broken.
Temporary, short term market interventions create calming effects and stabilize society and they are a necessity for any civilized society.
What if one of the remaining two has no power and their inventory management or POS Software won't allow them to reopen because they can't accept payments properly?
Whether there's one store open or all three somehow can, if there were a dozen stores before and only 3 now, even ordering more by all 3 will still create critical shortages that cannot simply be dealt with by price gouging or spiking it or whatever.
The delay between the immediate aftermath of the disaster, the reopening of retail outlets (no guarantee as they are dependent on labor that may be impacted and infrastructure like water, electricity and public services like law enforcement), the price spike and then the movement of additional goods in to take advantage, and subsequent price adjustments back down to affordable levels...that delay no one is acknowledging...this is where life and death situations are happening.
This is where your kids need water. This is where the elderly must have food. This is where social order and society's behavioral norms can break down...and with government and law enforcement's diminished ability to project influence and calming social order, it's where human suffering occurs.
You cannot wait for the market to stabilize and correct itself. People die and people suffer and ordinary people resort to desperate acts.
People saying that this is "logical," are idiots who aren't thinking past the paper their theories they've read and agree with are printed on. You try that shite in the real world and people will die and human suffering will occur and laws will be broken.
Temporary, short term market interventions create calming effects and stabilize society and they are a necessity for any civilized society.
Posted on 9/2/17 at 8:46 am to slackster
A pure free market would be terrible. The free market idiots on here need to pick up some books.
Not sure how anyone can use economics to support price gouging during a disaster.
Not sure how anyone can use economics to support price gouging during a disaster.
Posted on 9/2/17 at 9:11 am to GFunk
quote:
What if all the stores buy extra but then all the stores but 3 are impacted by flooding or storm surge.
My point exactly. If most people buy things in advance, the three stores left are able to handle the small demand.
I am speaking of pre-disaster preparation. You are discussing post. Buying a week to ten days out allows the stores to better know what to have on hand, each day, leading up to the day of turmoil.
Most of us here have lived through multiple hurricanes and know the value of having hurricane preps done early.
Posted on 9/2/17 at 9:24 am to slackster
quote:
Then they're short sighted. It is a hardline, black and white stance that doesn't take into account the actual business strategy involved.
Not to mention that it's not a true shortage. It's a temporary interruption in supply during a unique event. Walmart is out of bottle water in Houston for the moment. But three days from now, Walmart will have 60 truckloads of it. plus it's a disaster and people are going to pay whatever to get what they need. So all you're doing is causing people already strapped for cash to pay more money and make more money for the retailers, because Walmart's supplier ain't raising the price of a case of water.
Posted on 9/2/17 at 9:53 am to elprez00
One thing nobody is taking into account is that you can survive 3 days without water and 3 weeks without food. It sucks but the vast majority of people 'rescued' truly weren't in a life and death situations and were merely uncomfortable.
Posted on 9/2/17 at 10:05 am to Hangit
quote:
Hangit
quote:
My point exactly. If most people buy things in advance, the three stores left are able to handle the small demand.
If your community did not order an evacuation (Houston for example did not) and you were serviced adequately by a dozen grocery stores, and 75% aren't open immediately after the storm, then even those with additional supply aren't going to adequately service an entire population that are in a stressed environment who may or may not have adequately prepared because their community lulled them to sleep by not issuing an evacuation warning.
The point of this is price gouging and my point is that it's bad and it's as much of a market aberration during a time of disaster as any market intervention preventing the gouging itself.
The difference is the aberration that allows gouging INCREASES HUMAN SUFFERING, can lead to societal breakdown, lawlessness and potential life and death situations. The temporary market intervention prevents this.
The risk to the market by criminalizing gouging is minor. The risk to human life, families and the community at large by allowing it is major.
Posted on 9/2/17 at 10:08 am to MikeD
quote:
One thing nobody is taking into account is that you can survive 3 days without water and 3 weeks without food.
Someone has been watching Naked and Afraid.
Posted on 9/2/17 at 10:18 am to GFunk
Once again. With very few exceptions, the only people benefiting from price gouging are retailers. Unless there is a legitimate shortage up the chain in the supply chain, there is no benefit to raising prices as they will have little affect on actual demand in a crisis. What they will do is make the end retailers an assload of money. First they'll experience increased profits from increase sales. Then they'll factor in a higher margin as well. You're talking about places meeting what they normally sell in a month in a week.
Posted on 9/2/17 at 10:21 am to TH03
A hypothetical question that won't take ethics into account, doesn't consider actual business repercussions and dismisses rationing as an option. Pointless to even answer.
Posted on 9/3/17 at 4:45 pm to 50_Tiger
quote:
DO you know most poor people who can afford 100 dollar water?
Keeping the price down does not mean the stuff will be available at any price - it just flies off the shelves faster.
Poor people can't buy water that isn't there. Jacking up the price to $100 ensures some of it will still be around.
This post was edited on 9/3/17 at 4:46 pm
Posted on 9/3/17 at 5:09 pm to foshizzle
Paper theory vs real world theory. I'd love to see you go to a coastal community and install these policies and watch the Lord of the Flies shite you'd see as people went all Denzel Washington as John Q on people doing this shite.
The staggering amount of disconnect between you free market theorists versus folks who exist in the real world is mind boggling. I'd love to see you run a business in a war zone like Beaumont for 24-36 after reopening and adjusting your prices.
It's lunacy to think this wouldn't increase looting and violence.
But hey at least you're making money and YAY FREE MARKET!!!!
The staggering amount of disconnect between you free market theorists versus folks who exist in the real world is mind boggling. I'd love to see you run a business in a war zone like Beaumont for 24-36 after reopening and adjusting your prices.
It's lunacy to think this wouldn't increase looting and violence.
But hey at least you're making money and YAY FREE MARKET!!!!
Posted on 9/3/17 at 5:12 pm to foshizzle
quote:
Keeping the price down does not mean the stuff will be available at any price - it just flies off the shelves faster.
Poor people can't buy water that isn't there. Jacking up the price to $100 ensures some of it will still be around.
You are wasting your time bringing knowledge and common sense here, making decisions based on what feels good is now the basis of crisis management.
Posted on 9/3/17 at 5:30 pm to EA6B
quote:
You are wasting your time bringing knowledge and common sense here, making decisions based on what feels good is now the basis of crisis management.
quote:
EA6B
The market cannot react quickly enough to prevent human suffering, loss of life and social and behavioral norms from breaking down in a post disaster situation. No matter how purely the supply and demand equation works to stabilize prices on goods, it takes TIME for that stabilization to occur.
In the specific situation of post disaster local markets, this TIME is where human suffering, potential loss of life, looting, civil unrest and civilized society decay. A displaced man with a young family may value that $7 bottle of water. He may make $500,000 a year in a management position in a plant in Port Arthur. But since he uses debit and credit cards, even if he values and has a willingness to pay the market's new, gouged price, he cannot access it due to issues the market has no ability to control or address (his lack of liquid cash/legal tender).
That young family must then go without vital necessities, and that man may be forced closer to making desperate decisions in the worsening, desperate situation.
Giving the market the TIME I am talking about is taking that TIME away from human beings impacted by the disaster. Temporary market interventions prevent these potential situations from occurring.
Why does the market receive the protection at the expense of human beings?
This post was edited on 9/3/17 at 5:31 pm
Posted on 9/3/17 at 5:31 pm to foshizzle
quote:
Poor people can't buy water that isn't there. Jacking up the price to $100 ensures some of it will still be around.
1)Are poor people expected to buy $100 water?
2)The odds of $100 sticking around arent high, but its not due to purchase, its because the store will most likely get looted.
Posted on 9/3/17 at 5:33 pm to GFunk
quote:
Paper theory vs real world theory. I'd love to see you go to a coastal community and install these policies and watch the Lord of the Flies shite you'd see as people went all Denzel Washington as John Q on people doing this shite.
The staggering amount of disconnect between you free market theorists versus folks who exist in the real world is mind boggling. I'd love to see you run a business in a war zone like Beaumont for 24-36 after reopening and adjusting your prices.
I worked to recover critical infrastructure in New Orleans after Katrina, I was on the ground as soon as the water went down, and worked there almost a year. The market was setting prices and if we needed a critical item in short supply whether water of a diesel generator we expected to pay a premium. Large corporations can engage in large scale charity and absorb the cost, many small business cannot and should not be expected to.
Posted on 9/3/17 at 5:39 pm to EA6B
(no message)
This post was edited on 9/3/17 at 5:46 pm
Posted on 9/3/17 at 5:40 pm to EA6B
quote:
many small business cannot and should not be expected to.
Business interruption insurance
Just a thought. That said, they should be free to not have it and suffer the consequences if they so choose.
Posted on 9/3/17 at 5:42 pm to TheArrogantCorndog
quote:
Or just set limits on amounts purchased so everybody can get something, instead of exploiting people when they are the most vulnerable
Then that destroys financial incentives for people outside of the disaster area to bring supplies in. If someone has a pallet of generators why would somone spend the time and effort getting them to a disaster zone if they can't sell them there for any more than they can here? then as soon as enough people do that, the supply increases and the price drops back down.
In economics, more often than not good intentions hurt people more than letting the market work does.
Posted on 9/3/17 at 5:48 pm to elprez00
quote:
nless there is a legitimate shortage up the chain in the supply chain, there is no benefit to raising prices
If there is no legitimate shortage, how could retailers jack up the price? No shortage in relation to demand means there are competitors, which means you can just go across the street and buy water at the other store.
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