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re: Price gouging laws predictably lead to shortages
Posted on 8/31/17 at 9:10 am to TBoy
Posted on 8/31/17 at 9:10 am to TBoy
quote:
This makes no sense whatsoever. Price gouging interrupts the market distribution of goods. Having water sitting on the shelf, priced higher than liquid gold, prevents distribution. Price gouging destroys the natural market.
Goddamn, this is stupid. Let me guess, liberal arts major and law school?
0
Posted on 8/31/17 at 9:13 am to weagle99
Posted on 8/31/17 at 9:15 am to cwill
quote:
Charging $20/gal of gas is not a market reaction, it's a gouge.
Such a scenario would not be possible if there was not a looking shortage in that situation.
Posted on 8/31/17 at 9:26 am to weagle99
All artificial, extra-market controls on prices will cause predictable shortages at times of need.
Why? If I cannot make a profit, then I won't engage in commercial activity. If I can't make a profit, I can't be charitable in time of need, either.
But, folks in favor of this nonsense just keep thinking that the world runs on unicorn milk and fairy dust.
Why? If I cannot make a profit, then I won't engage in commercial activity. If I can't make a profit, I can't be charitable in time of need, either.
But, folks in favor of this nonsense just keep thinking that the world runs on unicorn milk and fairy dust.
Posted on 8/31/17 at 9:28 am to tigerpawl
quote:
. Even squirrels anticipate shortages and act accordingly.
This is a terrible analogy. The squirrels are the citizens of Houston in this scenario, not merchants.
If the "squirrels" were actually prepared as you suggest, there would be no profit in price gouging.
Posted on 8/31/17 at 9:30 am to weagle99
quote:you understand that has nothing to do with gouging laws right?
Gas
Posted on 8/31/17 at 9:32 am to weagle99
quote:
If water is scarce and the government says it must sell for $1 a bottle then I have no incentive to truck water in and the supply remains limited at the disaster site.
But the government has NOT said you have to sell water for $1 a bottle. ALL they have said is if the price was fifty cents a bottle on Friday , hurricane hits and suddenly you're charging $5 a bottle on Monday, we have a problem.
And only a complete idiot wouldn't understand that very simple concept. If you are charging 50 cents the day before a hurricane and go to $2 the day after a hurricane nothing will be said. You have not violated the law.
Posted on 8/31/17 at 9:41 am to weagle99
I would say that in addition to the price gouging laws there should be a reasonable quantity limit on what people can buy. If we are going to keep prices from being raised then we should also stop the guy from going to the gas station and buying 250 gallons of fuel at one time, or the guy going into a store and buying 60 cases of water.
Posted on 8/31/17 at 9:48 am to Willie Stroker
quote:
During times of disaster, human nature expects compassion, not a harsh reality of supply and demand.
Why is one exclusive of another??
IF they are running short of $0.99 water in Houston, what is wrong with someone in Dallas buying up a lot of that water and driving to Houston and selling it for $2.00 a bottle?
And what is right about someone being first in line and buying up all the $0.99 water to hoard in his garage??
Now if someone is really selling water at $20 a bottle, then that should be a signal that the demand is such that someone will be motivated to rush down there and sell for $10 a bottle, and then someone will think of rushing down there to sell at $5 a bottle, and then we are back to the $2 a bottle scenario - then everyone is better off than when the shelves are emptied out of $0.99 water in the first day, with nobody motivated to bring more in to sell at $0.99.
If you make a huge deal out of arresting and prosecuting that first $20 a bottle guy, and announce that "no price gouging will be tolerated" you are stuck with the empty shelves
Posted on 8/31/17 at 9:57 am to ChineseBandit58
quote:So the guy that spent 1000s of dollars advertising and competing to sell as much 1.00 water as possible, is suddenly just going to stop selling water. The distributor is not going to ship it at the agreed upon contracted terms, the manufacturer of the water that is in demand and once again already contracted to sell it at a set price...is going to decide to not produce bottles of water.
If you make a huge deal out of arresting and prosecuting that first $20 a bottle guy, and announce that "no price gouging will be tolerated" you are stuck with the empty shelves
It seems every one has a scenario that is a little short sighted as to how this works.
quote:What motivates the water company, distributor and retailer to sell it at a buck every other day for years upon years? Compassion?
with nobody motivated to bring more in to sell at $0.99.
Posted on 8/31/17 at 10:00 am to HeyHeyHogsAllTheWay
quote:
And only a complete idiot wouldn't understand that very simple concept. If you are charging 50 cents the day before a hurricane and go to $2 the day after a hurricane nothing will be said. You have not violated the law.
That is a 4x increase in price. An earlier poster said anything over 2x is gouging. He would label you super gouger and have you fined.
Welcome to the arbitrary world of government run markets.
As I have said before, 3-4 day stabilizing period is cool with me. After that, trying to control the market is foolishness, even if done for the "right" reasons.
Posted on 8/31/17 at 10:02 am to weagle99
1 to a customer addresses your postulated scenarios.
Posted on 8/31/17 at 10:03 am to Ebbandflow
quote:True. But the assumption is that you're only free to raise the price. Is it not also true you're free to hold the line on pricing?
believe the free market is the most ethical system devised for society.
Posted on 8/31/17 at 10:06 am to weagle99
Correct. Price gouging laws are as silly as raising the min wage to 15 bucks
Posted on 8/31/17 at 10:08 am to DeafJam73
quote:
Those who don't need it, won't pay for it.
What about those who need it but just cant afford the new, unreasonably high price?
Posted on 8/31/17 at 10:10 am to DeafJam73
quote:
Actually, it makes a lot of sense. If there is a finite amount of resources, those who need it most will pay the price to get it. Those who don't need it, won't pay for it.
Including being robbed because someone with little money on them couldn't afford a 42 dollar case. Possibly robbed at gun point...in which case you're right, you got to keep your life for a simple case of water. In either case I really have no problem. When people need something really badly who feel like they lost everything already, they get desperate...
Posted on 8/31/17 at 10:12 am to tigerfoot
quote:
What motivates the water company, distributor and retailer to sell it at a buck every other day for years upon years?
The market. If they charge more, customers are free to go elsewhere.
Price controls force merchants to ignore market forces to the merchants' own disadvantage.
I would just set all my prices at 4x or 10x and then always have a 75% off or 90% off sale. And I would suspend the frick out of that sale in a crisis.
Posted on 8/31/17 at 10:13 am to CelticDog
quote:
1 to a customer addresses your postulated scenarios.
I hope you don't mean a government enforced rule? Because that would be fixing a problem created by government interference with more government interference.
Posted on 8/31/17 at 10:16 am to Ace Midnight
quote:what about markets where the customers aren't free to go elsewhere?
The market. If they charge more, customers are free to go elsewhere.
Posted on 8/31/17 at 10:21 am to tigerfoot
quote:
what about markets where the customers aren't free to go elsewhere?
I mean you have to make a choice - do you want a situation where the products are available for sale at a (potentially) "gouging" price or not at all?
It's impossible to legislate both.
This post was edited on 8/31/17 at 10:22 am
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