Gouge? Or Supply?

Florida officials, sticking to a tried-and-true template of distracting citizens from the aftermath of a disaster while feeding the illusion of your own efficacy, declared an intention to root out price gougers even before the debris had come to rest. I've always thought anti-gouging laws should be called pro-shortage laws, but that's just me.

Anyway, the first gougers to be reported are motel operators who charged more than advertised rates for rooms. From that definition, I'm pretty sure I've been gouged repeated over the years under skies fair and foul. Bastards.

Comments

[matt]

Joe, correct me if I'm wrong here, but you want to force business owners at the point of a gun to charge the price you deem to be compassionate, right?

Essentially what you're saying is that buyers should be able to dictate the price of a product that is currently not their property, but that they wish to purchase. Correct?

[fyodor]

"And to those ready to shed tears because motel operators having the most profitable month of their lives might have the state checking their books, and end up having a slightly less profitable month - boo fuckity hoo."

Since no one here complained that "motel operators having the most profitable month of their lives might have the state checking their books, and end up having a slightly less profitable month," and because you introduced the obviously hostile (do you deny it?) sarcasm of "boo fuckity hoo," it was only reasonable to assume you were expressing hostility towards their level of profit. If you say not, okay, whatever, I take it back.

Your second paragraph makes vague generalizations but doesn't address any of the specifics of what I said.

Not sure what you're saying in your third paragraph, but of course libertarians care about humans every bit as much as Statist liberals. We just disagree that the solutions offered up by those who make mindless appeals to emotion are the best solutions for human beings. Heh, I guess I could have just said that your implication that I didn't understand that human beings are involved was "telling" blah blah blah...

[Mr. Nice Guy]

Chuck in Florida:

I certainly don't think all people living in Florida are morons.. just the ones who ignore the high probability that a hurricane will one day make life very difficult for them.

You're correct.. every region has some calamity waiting to happen. I come from a family line rooted in a flood valley in Pennsylvania. I love them, but jeez, after one or two floods it's time to ditch that shitberg and move up the fucking mountain.

BTW - I'm tired of reading about these assholes going to a FEMA recovery center and whining about how long it takes and how impersonal it is. Okay, so I'm getting a decent-sized check of free government money, and I'm going to bitch that I have to talk on a phone?! Get a fucking clue.

[thoreau]

Fyodor-

I think social disapproval ("soft coercion", I guess) is great for correcting behavior that the consumers might not be fully aware of yet. For instance, if you think that a company's hiring policies are repugnant, I see nothing futile in bringing it to the attention of consumers. Now, consumers may or may not value certain hiring practices to the extent that they'll let it influence their buying decisions. But bringing that information to consumers is fully compatible with the basic functioning of the market. If consumers react to that information, well, then the market is working better now because consumers have received information that they value, as evidenced by the fact that they're acting on it. If consumers don't react, well, no real harm done.

But price "gouging" seems pretty pointless to rail against. We all know exactly what's happening here. There's a shitload of people who want to buy something, so suppliers are charging more. It might not be ethical or moral or whatever term one prefers, but it's pretty obvious what's happening. Complaining about it will not do anything to affect consumer behavior here.

joe-

As fyodor said, I was reacting to a comment on social pressure, not regulation. As to the subject of regulation, I might contemplate laws against price "gouging" if I could be persuaded that such laws would be administered in a sensible manner. But I see all sorts of problems with such laws. Yes, I know, some posters will say that such laws are unethical and that's the end of the story. But I see practical problems even if we don't assume a strict laissez-faire position.

[Mark]

Make that, "Since I am calling for a communitarian anarchy *no more* than I am calling for government regulation."

[Russ D]

joe,

Try saying "boo fuckity hoo" to the police and fire departments and highway workers and school custodians who are damn well going to demand the double-time overtime pay and comp time to clean up the messes and help people. Cops and Firefighters are nice people, but they ain't exactly Red Cross volunteers.

[fyodor]

"I was one a Randian, too. Don't worry, it wears off."

Sigh, first of all, I ain't no Randian. Since I advocated praising charity while Rand was foursquare against charity, I would think that should be clear.

My important point is that charging below market prices is in fact charity.

But this brings us to a big disagreement we have. You seem to think that if someone charges more during the aftermath of a disaster, that constitutes "over the top pricing." No, it constitutes market pricing, the market simply changed during the disaster aftermath period.

"I called only for fair pricing-never for below market pricing."

You don't answer my question regarding how do you determine or define fairness, but I guess one can glean that for some reason you think that raising prices in the aftermath of a disaster is inherently unfair. But why? I can only guess that you fail to grasp the fact that once the disaster has hit, the market has changed! That's why the sellers charge more and the buyers agree to it! That's what we call the market, when sellers and buyers agree on a price! You must have some other definition...?

[The Lonewacko Blog]

"Even if there's a sudden spike in demand, they should honor their advertised prices"

What exactly is the advertised price for a motel room? If they've quoted a price, or put the price on the sign, that's one thing. However, if you look closely at the back of your motel room door, you'll see a "room rack rate" of $95, while you paid only $40 for the room. I suspect they charged the full rate and, as long as they didn't advertise a different rate *for that same day* somewhere else, I'd hope there wouldn't be a problem. Not that I'm that big a fan of hotel keepers; in fact, if you're ever in Lake Placid NY I'd suggest bringing a tent.

Br'er Drudge mentioned on Sunday's show that the toll booths were back in operation. That's pretty bad too.

[db]

Mr. Nice Guy---

You wouldn't happen to be from Johnstown, would you? That's why it's better to live in the East Hills or Westmont.

[Xrlq]

Gotta love that liberal mindset. On the one hand, human beings who run businesses as businesses rather than as charities are evil "motel operators" worthy only of scorn. On the other, morons who insist on building (and rebuilding, and re-re-re-building) cheap, flimsy houses in hurricane areas, partly at taxpayer expense, are "human beings whose homes have just been destroyed," presumably through no fault of their own.

It's too bad that both Kerry and Bush need the Florida vote to win. Somebody really needs to tell that state to get its own act together before hitting up the federal government for even more enabling ... um, I mean, assistance, but it probably won't be the President. Maybe President Bush in his second term, or maybe even President Kerry, if he doesn't want one.

[fyodor]

Mark,

Just re-read your latest post. What "name" did I call you??? The closest I can see to such was where I said your disparaging of honest entrepeneurs as "scum" was "nasty." Is that what you call "name-calling"? I sure wouldn't call it that.

[joesux]

What is "price gouging" in suffciently objective legal terms applicable to an entire community or society, in all situations? We know it when we see it, but could we ever definite it satisfactorily to avoid the abuses of administrative discretion?

I think the state gouges me on public services. And not simply by taxing me for stuff I never benefit from, but by the inefficiencies I suffer with every day. Can I get a little compassion? Or is it boo-fuckity-hoo to me?

If only a tree would fall on my house, then joe would see I am a human, too...

[Mr. Nice Guy]

db:

Wilkes-Barre. I have visited Johnstown, though, and was pretty impressed with it's museum dedicated to the Big Flood. The movie was creepy, with individual voices crying and yelling out from the hidden speakers in the theatre. It freaked me out!

More ranting: they raised the "death toll" to 20 because some 84-year old fell down in a hotel. Isn't this stretching things a bit? Why is the media so thirsty for a body count? I personally think each death should be canceled out by each conception due by boredom-fucking (hey, without TV, what else is there to do?)

[Isaac Bartram]

Xrlq

"Maybe President Bush in his second term, or maybe even President Kerry, if he doesn't want one."

Of course W wants a first term for his Republicon successor, so don't look for it to happen at all.

By way of other news from this front, power came on at my house (Seminole County) and my office (Winter Park) Monday around Noon. Plenty of homes from Volusia County south are still without. Compared to Southwest Fla we got off pretty lightly.

Mr. Nice Guy

I think the first "Hurricane Charlie fatalities" were in a car crash on the Bee Line Expwy in Orange County at about 4 PM; when Charlie was still offshore between Key West and Ft Myers.

[Isaac Bartram]

"...while Rand was foursquare against charity,..."

Actually, Rand was not "foursquare against charity", she "foursquare against" altruism. Charity and compassion need to have a rational basis.

I won't explain further lest anyone think I'm a Randroid.

[Isaac Bartram]

But fyodor, other than picking that nit, what you've said is spot on.

[Slippery Pete]

The argument that in a hurricane situation, the only two choices are price gouging or shortage, is completely bogus. This is a short-term market shock in which the available supply quantity is more or less fixed. In the few days following the hurricane, residents of Punta Gorda weren't getting any new ice shipped in.

Say there are 1000 bags of ice available, and normal market price is $2 a bag. Ice retailers would gross $2000 under normal circumstances.

Then a hurricane hits, and 19 people die. Thousands - like, ahem, my sister - are homeless and physically and mentally exhausted. The suffocating heat and humidity, combined with structural damage, result in hundreds of mosquito bites. There's no running water and no power, and all the hotels are booked up, and the roads are impassable, so people go days in sweltering heat, covered in bites, without a shower or access to antibiotics and antivirals.

In this case, all they want is a cup of fucking ice, and some scumbag says he's charging $20 a bag. First of all, he is the definition of human scum. But sticking to the economics, if the post-shock price of ice goes to $20 a bag, then ice retailers will gross $20,000 instead of $2,000, despite the fact that they're offering no additional services or incur marginal ice retailing costs that are any higher. Furthermore, 1000 bags of ice is 1000 bags of ice - the higher market price by definition can't serve to encourage greater ice production, new shipments of ice, etc., because the market shock is so short-term. They didn't plan for the disaster - they just got "lucky".

Sometimes companies that operate in war zones or disaster areas are unfairly accused of "profiteering", but in most cases they provide legitimate services that would not otherwise be offered, and they move into dangerous situations where a security premium is justifiable.

In this case, ice retailers (or hoteliers, or whatever) are not providing any additional resources or benefits, and their price increases serve no function other than to drain desperate, devastated people of more money. This is real profiteering, and it is really sick, and there's a reason most normal people hold profiteers in utter contempt. I don't know if it should be illegal, but it's always inevitable that it WILL be illegal because there is near universal consensus that in this case, the behavior is antisocial and beneath contempt.

[Chuck]

Xrlq--

FWIW, most of the residences that are now uninhabitable are *not* on the beach--they are mainly modular homes or trailers and are for the most part a few miles inland. You can see a lot of missing shingles on the beach houses but relatively few of them seem to have major damage (there're a lot of sunken boats though!). They just started letting residents of the barrier islands back on this morning, so I'm sure we'll hear more.

Lonewacko--

To my knowledge most of the toll roads down here are still not charging, although the Cape Coral bridges--which charge $1 toll--may be back to normal operation. I believe the Sanibel causeway still has tolls suspended, but they're only letting residents and business owners out there anyway.

Mr. Nice Guy--

I agree with you about the complaints about FEMA service. But I try to keep in mind that most of these people have been without air conditioning for nearly a week now, which would make ANYBODY grumpy. And I have to disagree with you about boredom-fucking: it's too hot without power. At least that's what my wife said when I suggested it :-(.

It's raining again.

[Mark]

Fyodor-in libertarian circles, saying that a person is a statist-soft or otherwise- is tantamount to name calling. This is especially true when the person being referred to has gone out of his way to not advocate government intervention.

You and I have either a fundemental disagreement or a semantic one; I'm not sure which. To me, something like a natural disaster creates a market distortion-a temporary fluctuation. This is a special circumstance.
It seems to me that your definition of what constitues market price would allow for price fixing-after all, if a group artifically inflates the price of a widget, then that is the market price.
My assertion is based on the idea that the market, while it is the most moral system, does not itself define morality. My objection to "gouging" is based on the idea that using people's misery as a way to demand more from them is not acceptable.
I also accept that the price for certain goods will increase because of supply contractions and logistical problems. However, when a company increases its per-unit profit of 20% to 300%(just pulling numbers out of the air to illustrate a point), something is wrong, the market notwithstanding.

[Mr. Nice Guy]

Chuck:

Keep cool and dry. I had a small taste when Hurricane Isabella hit Washington DC and I was out of power for a week. All my food spoiled, had no AC, and was bored shitless. It sucked ass.

[joesux]

You do remember people lived in Florida long before A/C was invented?

Slippery seems to forget that the market has changed, and the ice seller takes greater risk to maintain supply in a hurricane zone. Profiteering is what losers call successful speculation.

[thoreau]

Slippery Pete-

I understand your point about profiteering. But I wonder how many babies might be thrown out with the bathwater if it were made illegal.

Most storeowners and their employees have homes. Many of those homes might have suffered damage during the hurricane. Maybe not utter devastation, but still damage. They might have injured relatives. They might have any number of other concerns on their minds. On a normal day, their normal profit is enough to get them to show up at work. But during a disaster it might take a little more than normal profit to get them to show up and work, especially if there's a power outage and the cash registers are down. Doing all the book-keeping by hand will be tedious.

And although they'll be guaranteed to sell every bag of ice, whereas normally they might only sell a handful of bags of ice, consumers' priorities will be different that day, so a lot of other items WON'T be selling. Foods that require heating won't be selling, for instance. Gifts won't be selling. It's not at all clear to me whether the store will make more money than usual if they sell at regular prices. The answer is probably out there, but I don't know that politicians and bureaucrats make good business analysts, so I don't know that they should be trusted with this determination.

So what's to stop a retailer from closing shop during an emergency if he can't raise prices? Also, if a few local retailers close shop and thereby drive down supply, is it still price gouging if the remaining retailers raise prices?

Another issue: Suppliers from outside the hurricane area will undoubtedly be rushing to get supplies in, since they know that certain supplies are guaranteed to sell in greater quantities than usual after a hurricane. But might they not rush even faster if they can benefit from the double whammy of greater volume and greater price? If they can get higher prices they're more likely to pay overtime and call Manpower for temps. They're more likely to rent whatever extra equipment they need to move merchandise faster if they can command a higher price.

Now, admittedly, not all of the price increase is going to compensate store owners working under adverse conditions and suppliers hiring extra help to get supplies to the hurricane area. The problem is that I don't see an easy way to separate "gouging" (extra money earned without doing any extra work) from a reward for doing extra work. I can recognize the difference when I see it, but I don't know of any way to write it into law effectively.

And so we're left with the lesson that my economics professors constantly beat into my head: The market often sucks, but all of the alternatives suck even worse most of the time.

[Slippery Pete]

Joesux, your extremely simpleminded formulation is lacking a little bit. The ice retailer already factors in his risk premium under his normal market price. Your point really just bolsters the point I already made: If he's been charging a risk premium all along, then there's no justification for piling on when a hurricane hits. After all, he lives in a hurricane zone, right? He should hardly be surprised at the hurricanes. 😉

[Mr. Bumble]

"Florida's price gouging statute requires that the cost of necessities like food and water must remain at the price that was average during the 30 days immediately preceding a major storm like Hurricane Charley."

If the law supposes that, the law is an ass...

[Slippery Pete]

Thoreau -

I'm not sure making gouging illegal is a great idea, either. Personally, I think public shame and humiliation would probably do a better job. I'm sure the local papers are going to be running stories on the dirtbags who attempted to truly profiteer, and they will suffer, rightfully. These laws, probably, are more cosmetic - a way for politicians to prove they're "doing something".

Immediately after the 9/11 attacks, a gas station in my area raised their gas prices to about $4.50 a gallon. And I live in Ohio. I still remember that, and I haven't gone there for gas since. I believe they were prosecuted under an "unconscienable acts" law.

We'd all do well to keep in mind the difference between what should be legal, and what is merely immoral. True price gouging is, in my opinion, deeply immoral. Risk premiums are not. In your example, I guess I might see a theoretical case that some premium is legitimate, but I still think in most cases retailers will either show up for work or not, regardless of whether they can screw hurricane victims for a few extra dollars.

Whoever argued that ice gougers are just successful "speculators" - that's the silliest thing I've heard all day.

[jc]

This whole "ice" analogy sure leaves out a lot of facts such as:

- the ice retailers are also without electricity unless they have generators, something they planned ahead for apparently

- the ice manufacturers are also without electricity unless they have generators, something they planned ahead for apparently

- someone who just bought a bag of ice for $20 could also give someone a cup of fucking ice, but they're hoarding it for themselves apprently. Sounds like a phony drawing of the line between merchants and everyone else (I seem to recall the Nazis doing the same thing back in the day)

- what did the residents of Florida do before air conditioning and ice machines? Oh yeah, people were smart enough not to live there then

- your failure to plan doesn't turn into my obligation

- locals hate those motels for the "shady" element they seemed to attract, lots of ED going on to redevelop the property, now that they are a temporary necessity for the locals there's a new found love to go along with a new found hate for them even though the locals contributed to the shortage of rooms

- people who are supposedly in need sure spend an inordinate amount of time complaining instead of working. I'm sure you could help your homeless neighbor remove a tree and he'd help you with yours, avoiding the $11,000 cost altogether. Which is what most people are doing unless the local bureaucrats are spending their time cracking down on unlicensed tree cutters.

- sounds like I oughta get in the Florida ice business

[Slippery Pete]

jc -

What obligation? I never said any ice should be given away for free.

Your comment about "failure to plan" is too stupid for words. Natural disasters can hit any county in the United States. In fact, southwestern Florida is one of the least-hurricane-prone areas of the state. In Ohio we get tornadoes aplenty and, about once a century, gargantuan earthquakes. My sister did LOTS of planning, my friend, LOTS. The problem was, nobody knew where Charley would hit, and it deviated significantly from its expected path in the last few hours, by which time it was too late.

[Mr. Nice Guy]

If all these price controls come into being, then no one will be able to find a $2, $20, or a $200 dollar bag of ice, since all supplies will burn out and private companies will have little incentive to re-stock above the norm (if they are even able to).

We will then have the Department of Ice Assurance, with response teams in every state (except Alaska) that will have caches of solar-powered ice machines ready to deploy within 24 hours.

[Isaac Bartram]

http://hurricane.terrapin.com/

TROPICAL STORM EARL (Atlantic)
Last Advisory: Aug 16 2004 5:00AM EDT
13.2?N 67.2?W

This storm is following almost exactly the same path as Charley. I think it is more likely to hit TX or LA, but I think that's what they said about Charley. Luckily it's not very strong, it was just downgraded to a tropical wave, but anything can happen while it's over open water.

Maybe we'll have this discussion again next week. 🙂

[Slippery Pete]

Isaac -

I guess, by the logic of some posters here, that makes everybody in Texas, Louisiana, and Florida a complete idiot for living in a hurricane zone. Maybe the government should herd everybody into North Dakota. Cheers.

[scum]

Always a good idea to keep a couple of those "blue ice" packs around, they usually stay cold for a couple of days if they're in a plastic container. Might even be able to sell a few hundred "pre-frozen" ones to the unfortunates.

[fyodor]

Mark,

First, trying to describe your POV to a third party as "a sort of 'soft' Statism" hardly is calling you a Statist. Still, I think the attempt to influence behavior through mores or shame (ie, calling someone "scum") has certain overlaps with attempts to influence behavior through laws. There's big, important differences, but there's some similarity as well. If you find that offensive, sorry, but that's what I think and I'll back it up. It certainly has nothing to do with you personally.

Next, you say that my position implies that "if a group artifically inflates the price of a widget, then that is the market price."

Okay, let's analyze this. How does any group artificially inflate a price? What makes any particular pricing "artificial?" I (still) don't know what your understanding of the market is, but I'd say what makes a price "artificial" is coercion (usually centralled decreed). As long as cooperation sets the price with no coercion, that's what makes it a market. Why would the changes wrought by a disaster be any different than any other changes? Circumstances are constantly changing (even if rarely as radically as after a disaster), so how does one choose what is the "correct" market other than to base it on freely chosen cooperative behavior at any given time? Anything else is arbitrary!

As for price-fixing, I think I stand with most libertarians in being against government coercion to prevent such and in suspecting that as long as coercion is not involved ("play along with us, boy, or you're six feet under") such a scheme will not usually last long. As for temporary cartels, I will agree that whether to call them market "distortions" is indeed a matter of semantics.

As for "when a company increases its per-unit profit of 20% to 300%..., something is wrong," well if they do it by eliminating their competition with coercion or threat, then yeah, sure something is wrong. If they do it by entering a market that others haven't entered (yet?) for one reason or another, then more power to 'em! If they do it by being in the right place at the right time, well as Yogi Berra once said, I'd rather be lucky than good! Praise "Bob"!!!

[Isaac Bartram]

Slippery Pete

"....herd everybody into North Dakota...."

You're overlooking the dangers of boredom, depression and frostbite. Remember unintended consequences. 🙂

[fyodor]

Slippery Pete:

"What obligation? I never said any ice should be given away for free."

But you are saying ice vendors are obligated not to sell their ice for the price people are willing to pay. That's still an obligation, even if freeness isn't involved.

"Your comment about "failure to plan" is too stupid for words. Natural disasters can hit any county in the United States."

And that's why we should all plan for disasters, natural or otherwise. Now, I say that knowing that my own preperation could be better than it is. But if the shit hits and I'm screwed and richer people than I get the few, highly desired goods available, I'm not going to blame the vendors for making the pay they can, I'll blame myself for being unprepared and poor, the same way I blame myself for being too poor to retire, not others who are somehow supposed to take care of me.

[jc]

True story:

Worked at a pharmacy a few blocks from my house. Call comes in at 2am while I'm sound asleep, needs an emergency prescription. Weren't many 24-hour pharmacies then but they could've gone to a hospital pharmacy. Happened a few times a year, nothing completely out of the blue. I'm not even the owner but in the name of customer service I go open up the store and fill the thing. Figure it's the nice thing to do and good for repeat business. Cocksucker had the nerve to give that high-pitched whistle-sound when I rang up the sale even though I didn't charge any extra and knew for a fact the two local chains charged more for that particular med. Decided to work for the impersonal chains afterwards, won't get called in the middle of the night and some low-paid schmuck has to ring up the sale so the customer knows bitching about the price to them won't do any good.

There's lots of assholes out there, including lots of us who think we aren't.

[joe]

matt, "Essentially what you're saying is that buyers should be able to dictate the price of a product that is currently not their property, but that they wish to purchase. Correct?"

Not exactly. I'm saying that, in an emergency, it is appropriate to limit the amount of profiteering. I don't believe that the victims of the storm should be able to demand their own price, but that extreme circumstances make it legitimate for the government to intrude on liberty in the cause of a greater good. Fighting price gouging is no different from closing off streets during a flood or ordering "lights out" during an air raid.

thoreau, "But I see practical problems even if we don't assume a strict laissez-faire position." I see practical problems all over the place, and am not claiming perfectability. In cases in which unregulated markets are particularly out of whack with the public good, and in which the self-correcting tendencies in markets won't kick in fast enough to deal with an emergency, laissez faire seems particularly ill advises.

jc, "someone who just bought a bag of ice for $20 could also give someone a cup of fucking ice, but they're hoarding it for themselves apprently. Sounds like a phony drawing of the line between merchants and everyone else" Everyone else needs it to be able to avoid suffering, pain, illness, or death. The merchants do not. That's a pretty big difference. ("I seem to recall the Nazis doing the same thing back in the day)" Fuck you very much.

[Eric Hanneken]

Let's try a thought experiment. In March, a retailer in Texas buys 100 bags of ice for $1 apiece. He intends to sell them for $5 each over the coming summer. Unfortunately, summer turns out to be unexpectedly mild. It is now late September, and no one has bought any of his ice. The retailer marks down his ice to $1 per bag. Customers see the bargain, and buy out his stock.

Did the customers who bought the ice bags at $1 apiece "gouge" the retailer? If not, is it immoral to sell bags of ice for $20 apiece, but okay to sell $1 at 1 ice bag apiece? In both cases, one side of the transaction is taking advantage of the other side's misfortune to increase his producer surplus.

[Mark]

Fyodor- We're going in circles, and I have work to do before the day ends, so I'll leave it at this:
You and I seem to have a fundemental disagreement. You seem to view anything that the market will allow as being morally acceptable. I think that it is entirely possible to act in a way that the market will allow and still be doing something immoral.

[fyodor]

Mark (whenever you can read this),

Hmmm. I say immorality is based on coercion and/or false pretense. "The market" is just one way of looking at cooperative behavior. Within the realm of cooperative behavior, one can go above and beyond, and that can be laudable. And maybe it's "too bad" or "a shame" when people have the opportunity to do that but don't. But yes, cooperative behavior is acceptable behavior, I have no problem with that. You have yet to give a convincing example otherwise. And I wonder why you are against government intervention when people are behaving immorally. Just a pragmatic thing? BTW, I'd say our differences go beyond that, but I shant repeat myself...

matt,

Joe's answer is what you get for overstating your case!

thoreau,

Joe's answer is what you get for understating your case! 🙂

joe,

"Everyone else needs it to be able to avoid suffering, pain, illness, or death. The merchants do not."

Surely you realize the merchants are not going to horde it for the hell of it! They'll sell it to someone. Forcing them to accept some arbitrarily determined price as opposed to what people are willing to pay accomplishes one of two things (or a combination thereof): 1. Distributes the good (ice or whatever) based on some other means than the ability to pay. Thus, poorer people may get it instead of richer people, if maybe they're friends of the merchant or if they get there first, or maybe they promise some other form of payment later, perhaps a blowjob, etc (make that: distributes the good based on some other means than the most immediate and visible ability to pay). 2. As we've discussed already, it decreases the interest of the merchant to provide said good. Your model of the situation seems to assume that nothing has changed for the merchant. As I and others have pointed out repeatedly, that's far from necessarily the case.

Oh well, another episode in Comments With Joe...

[Timon]

Just to quibble on a grossly exaggerated statement:

"In Ohio we get tornadoes aplenty and, about once
a century, gargantuan earthquakes."

I live in Ohio, too, and "tornadoes aplenty" is, shall we say, sexing it up? From 1950 to 1995, Ohio averaged 14 tornadoes per year (range from 0 in '88 to 61 in '92 - high single digits to low teens rule the chart, though). That's 21st among the states. There are 88 counties in Ohio. Most counties have had 10 or fewer TOTAL since 1950.

As for "gargantuan" earthquakes, you might want to consult a Californian or an Alaskan. As I remember, the state itself has had only a few higher than 5.0 this century, and nearly all of those were centered in the Anna area in west-central Ohio. None were higher than 5.5 or so. Up here in NE Ohio, there seems to be a 5-ish quake every 12-15 years or so. These cause almost no damage partly because of the surface geology, partly because of the depth of the fault, and partly because it's a 5.0 magnitude, which is pretty weak and short-lived typically.

Now if you're talking of the New Madrid quakes that actually reversed the flow of the Mississippi twice in the 1811 & 1812, those were gargantuan (nobody knows for sure, but some estimates exceed 10.0). They were also near New Madrid, Missouri, which is not Ohio.

Talk about floods.

[fyodor]

"Your model of the situation seems to assume that nothing has changed for the merchant. As I and others have pointed out repeatedly, that's far from necessarily the case."

I want to elaborate that my point above is not to sympathize with the merchant per se, that is I'm not saying the "fair price" has changed, but rather that the incentives for the merhcant has changed such that what he would be willing to sell under typical circumstances might require a higher price to make it worth it for him to sell under the more dire circumstances. Of course I've gone over that already again and again and joe has yet to address the point. All he does is compare anti-gouging laws to air raids and make other such useless generalizations. Whatever....

[matt]

Joe:

So basically what you're saying is that buyers, by using the state, can force sellers to sell them merchandise at a "fair" price. That's basically what I said earlier except you put it in nicer sounding terms.

The market has a built in mechanism to correct for any overpricing. It's called competition. If some jackass tries ripping of consumers by charging too much then they will flock to the nearest competitor charging less. Also, just because the market price for something before the storm was, say $5, doesn't mean that's the market price after the storm. The temporary surge in demand can cause prices to rise...maybe double or triple what the price was before. But this rise in price encourages buyers to consume goods more efficiently and doesn't result in widespread shortages that price ceilings cause.

I don't know if you noticed my first post but I copied a few links on price gouging...if you'd like to read them here they are again:

http://www.mises.org/fullstory.aspx?control=1593

http://hnn.us/blogs/entries/6800.html

BTW...you answered my second question but not the first. You want to force business owners at the point of a gun (or if you prefer, through government enforced anti-gouging laws) to charge the price you deem to be fair and/or compassionate? How is this any more ethical or moral than allowing them to simply charge the market price for their goods?

[joesux]

Lefties, Statists and their ilk seems to get confused by "The Invisible Hand" and "The Market". To them, the market and the hand are real personalities acting with coordinated consciousness to profit from suffering. The market and the hand are simply useful shorthand descriptions of the result of numerous individuals negotiating their happiness and survival. The market dictates nothing. The hand strangles nobody. They are hypothetical constructs.

The state is a coordinated consciousness acting to grow and survive. It does dictate, and its minions do strangle (imprison/execute/beat to death during arrest) real individual humans. How does giving that malicious beast more authority help anyone in the long run?

It makes some sense that the lefties personify the market to create a recognizable enemy opposed to their scheme of collective dictatorship. Perhaps it helps support their view that people are innately evil, uncooperative, and blindly selfish. Somehow they ignore the spontaneous outpouring of charity that flows in the wake of every disaster.

Who needs some ice?

[AlGoreRhythm]

joesux: that is the best post I have ever read on Reason.

[joe]

How exactly would drastically raising your prices for a couple weeks every decade increase the supply of hotel rooms available during a rare emergency that produces a dramatic spike in demand that dissipates completely for the other 99.8% of the time?

[Mr. Nice Guy]

Okay, I'm really going to sound cold here, but these people live in a FUCKING HURRICANE ZONE. It happens so often that there is something called a "hurricane season" that happens EVERY YEAR. So, if you choose to live in Florida then.. I dunno.. maybe it would be a good idea to be prepared? Have a backup plan? Not expect your neighbor or the government to take up the slack? That's just me.

This "price gouging" thing is very perplexing. Is it better to have some scumbag offer you a $20 bag of ice or have no ice at all? Do these scumbags point guns to people's heads and force them to pay the markups? Or maybe some people would rather pay the $20 then to stand in line for three hours?

The hotel situation is little more grey. Even if there's a sudden spike in demand, they should honor their advertised prices. How they should be punished, I dunno.

[R C Dean]

Advertising one price and charging another can be fraud, so there is no need to drag in price gouging on the motel front. Of course, whther it is fraud depends on whether the prices were advertised as applying on the nights that the premiums were charged.

If not, then I don't see any fraud (its not fraud to charge a different price in August than you advertised for July) or any reason for the state to get involved.

joe, is there a principled basis for singling out motel operators as subject to state cost controls? Would you care to provide us with examples of any good or service that has been subject to state cost controls that has not, in the long run, would up in shortage? For real estate, look no further than the massive housing shortages in New York and San Francisco for an example of how cost control impacts that market.

[Patrick]

All hotels charge whatever the market will bear at any given moment, much like airlines. I've worked at three or four myself, and the rates always go up when there are few rooms left. There is no guarantee of any advertised price, unless you have a reservation - and even then if they run out of rooms (hotels overbook just like airlines) there is no guarantee that you'll get a room for the same rate somewhere else.

[Slippery Pete]

Joesux -

That's the stupides thing I've everread on Reason.

Nobody here has denied that the overwhelming reaction to tragedy is kindness and generosity. I certainly haven't. The fact that your fevered imagination has conjured demons for you to slay says more about your mental state than anything else.

[Mark]

Mr. Nice Guy offers a false dichotomy: $20 a bag, or no ice at all. While there is no doubt that the cost of supplying ice will go up after a disaster, there is also little doubt that some folks are taking unfair advantage.
The AP article on this subject mentions several other examples of gouging-tree removal at $11,000 a pop was one.
A defense of the free market does not require that one must defend all the actions of those operating within it. Let's be honsest and acknowlege that in a market, as elsewhere, some people will act in ways that are distasteful at best. This is especially true in the case of service providers who do not operate consistently in the area and thus have little compunction about burning customers.
This is not to say that price controls are the answer.

[Slippery Pete]

Matt -

You are completely wrong. It goes without saying that if most terrorized, desperate hurricane victims knew the prices they were being charged were outrageous, or were physically capable of finding alternative sources, then of course they wouldn't pay outrageously inflated prices. The simple fact is that price gouging only works in the very short term when people are terrorized, desperate, and temporarily out of options. This may not fit into your neat libertarian categories, but here in the real world where actual human beings live, that's why virtually everybody confronted with this phenomenon is repulsed by it.

[Highway]

I'm with Jeff Taylor. I've NEVER gotten the price of a hotel room for a billboard advertised price. Plus, from the story, they STILL paid less than I end up paying for motel rooms whenever I travel. I wonder, if you had gone to that hotel 2 weeks ago, would you get that billboard rate? If you didn't, was that gouging? And if you didn't then, would it be gouging now to charge the same thing they were charging before? This isn't exactly the best case against gougers. Checking Days Inn's website, a room for that same Days Inn in June 2005, on a weekday, 2 nights are shown at $84.99 per night. I know it's not quite the same time period, but it's about as close as I could get.

If the rates were higher than the ones shown on the back of the door ("This room's highest nightly rate is ____" has been on every hotel room door I've stayed at), I might get behind the gouging complaints. But trying to hold them to a bargain basement enticement billboard is not justified, in my opinion.

[s.m. koppelman]

Jeff, maybe you've never spent much time in an area dependent on seasonal tourism, but hotel operators in such areas base decisions on whether to add capacity on in-season occupancy rates, the six-month period when they aim to be nearly full. Aggregate hotel capacity across a metro area in such places tracks pretty closely to the load capacity of the area's airports.

Nobody adds hotel rooms and creates an in-season surplus for the sake of a once-in-twenty-years rush of hurricane evacuees -- which only occurs during the off-season, by the way. People tend not to go on beach vacations someplace going through six months of unrelentingly muggy 95-degree weather, daily thunderstorms and knots of mosquitoes everyehere you look.

[Mike Krempasky]

These idiots. I suppose we won't hear about everytime someone got a discount at a disney hotel in the OFF season, since supply was heavy. How on earth do they think that hotels make any money?

[pigwiggle]

Mr. Nice Guy-
I'm with you. Every year it's the same. Hurricane, flood, tornado; if you want to live in one of the few disaster prone places in the US you should be on your own. FEMA to the rescue, rebuild that house on the flood plane. Can't get private insurance for you beach house, federal subsidies to the rescue. Freeloading morons!

[Mr. Nice Guy]

"there is also little doubt that some folks are taking unfair advantage."

Mark, with all due respect, I think you missed my point that no one is forcing anyone to pay the $20. To say that the scumbags have an "unfair advantage" is to assume that people are physically prohibited to say "no".

If some asshole offered me a $20 bag of ice to keep my Hungryman meals from rotting, I would tell him to fuck off. If I needed that ice to preserve my daughter's medication, and I was too much of a moron to not have a backup plan, then I would pay it with a smile.

[wellfellow]

Why should it be illegal to be a scumbag, if they are in fact scumbags? If I spoil a suprise birthday party, or burp in a restaurant or am a cheap tipper, do we really need the gov't involved?

[jc]

Can't people double up in rooms and split the costs? Or are these people still so heartless and insistent on private comfort that they won't share a room with a stranger even during a natural disaster?

[fyodor]

Mark,

How the hell do you even define "unfair advantage" or a "distasteful" price? Unfair is when you don't get what you were promised, not when someone asks a price that's higher than under different circumstances!

joe,

First of all, you're missing the point that Taylor and others here have made that charging more than the advertised price is not a practice limited to disaster times. Next, while it's true that motel room availability is likely less effected by immediate circumstances and price flexibility as a bag of ice, that doesn't mean it's not effected at all. If a hotel proprietor would have to offer extra incentives to get his staff to show up right after a disaster or else he would have to take on extra responsibilities him or herself, then charging the higher price might be necessary to make it worthwhile to rent rooms at all rather than just shut down temporarily. After all, a motel is more than just walls!

[fyodor]

I see my affect was erroneously in effect! 🙂

[Ammonium]

Where do I register to be one of the special people who gets to buy a cheap hotel room while all the commoners sleep on cots in a high school gym?

[Mark]

Mr. Nice Guy, et al.-I wasn't calling for price controls, or governmental intervention of any sort. I am suggesting that we call businesses that screw people what they are: scum.
It's true that no one forces anybody to pay $20 for ice. Unless, that is, you have established a cartel or monopoly. My position is simply that taking advantage of a market distortion to put the screws to consumers who are already having problems is repugnant. It's the difference between can and ought to.
I fail to see why some defenders of the free market(a correct position) insist on taking the position that charging the highest price the market will bear, even when the normal mechanisms are out of whack, is ethically acceptable.
BTW-I agree that FEMA should let the idiots who didn't bother to insure themselves properly hang. It is precisely because of meddling in the market(subsidies of insurance companies, state and federal insurance, etc.) that we have this recurring unprecidented crisis.

[Rick Barton]

Jeff A. Taylor:

I've always thought anti-gouging laws should be called pro-shortage laws, but that's just me.

Just you, and also the weight of history. Anti-gouging laws hurt the very folks that they're supposedly trying to protect by stifling supply, which prolongs shortages and insures that the highest legal price is the one that will prevail for a much longer time. This encourages a situation where poorer people have to pay, at least, convenience store prices for a prolonged period. More affluent folks have an easier time finding suitable substitute products than poorer people.

Without government intervention, the higher prices inspire more vendors to come into the market for nice profits. This, of course, increases the supply and then lowers the market price. Capitalism tends to work well when it is allowed to prevail.

The best argument against anti-gouging laws is that no entity has the right to force someone not to sell a product or service above or below a sanctioned price in absence of a mutually consented contractual agreement. When governments or organized crime operations do that they are, of course, being quite unethical.

On Motels:

Remember, that in the months after the disaster, the motel owners are not going to do as well as they expected since people tend not like to vacation is storm ravaged areas. The higher prices that they charge distressed locals will probably only defray part of the loss that they will take. When someone comes to stay in a motel in the weeks and months that follow the storm, and the motel is not getting as much patronage because of the effects of that storm, the customer certainly doesn't feel obligated to give the motel owner a better rate because of his plight. Some motel owners may choose to help out their neighbors. But, it is only fair that it should be their choice.

Joe:
"We're talking about human beings whose homes have just been destroyed and have nowhere to turn.

And I think that compassion is nice, but there is no good reason to attempt to force it.

"We don't always allow the market to operate unhindered, because of the harms that occur. Kiddie porn is one example. Price gouging during emergencies in another."

Whoa! Bad comparison. We don't allow kiddie porn because it's kids. Price "gouging" laws restrict adults.

[joe]

"joe, is there a principled basis for singling out motel operators as subject to state cost controls?" No. IMHO, it is wrong across the board to price gouge during an emergency for the necessities of life.

"Would you care to provide us with examples of any good or service that has been subject to state cost controls that has not, in the long run, would up in shortage?" I'm not talking about the long run. The motel operators aren't raising their prices during the long run. I'm talking about a state of emergency, which is by definition an event of limited duration.

[Rick Barton]

"Gouging" is such an unfair term to describe any voluntary transaction, even when it is the result of a situation that at least one of the parties likely would be better off had it not occurred.

"Gouging" is a much better term to describe taxation.

[Chuck]

According to the details I read, in at least one of these cases the guests *already had reservations*, only to find the price changed when they got there, after a 2-3 hour drive. On the other hand, I agree that this is fraud, and no special "price gouging" laws are needed. Personally, I favor just calling them looters and shooting them on the spot.

I live in Fort Myers, and we just got our power back yesterday. Some people here are still without power--it's difficult to really appreciate that until you've spent an August night in south Florida without air conditioning. And we have had heat indices in the 105 range ever since Charley came through. With all the people out working in the midday sun to get their property cleaned up, I'm surprised we haven't had more cases of heat stroke.

To address some of the comments above about assuming risk: EVERY region of the country has weather or other uncontrollable risks. Tornados in the Midwest, earthquakes and fires in the West, blizzards in the Northeast...I don't see any areas that are particularly immune, so I frankly see no reason to single out people in Florida as silly or moronic for living in a "high-risk" area. Nor do i see them as being stupid for not buying flood insurance, when everyone knows that FEMA will bail them out in the end. Who's the stupid one here, the people who save their own money by not buying the insurance or the taxpayers who continue to tolerate this?

[fyodor]

joe,

You address the long-run implications with addressing the short-run implications I've brought up.

Chuck,

In light of the details you've brought up, I would agree that the practice constituted fraud and is actionable totally in lieu of so-called gouging laws.

Mark,

Perhaps charging a higher price in times of disaster violates your sense of ethics, but there's good reasons the rest of us don't see it that way. Much good is accomplished through self-interest, and many merchants (including motel proprietors, joe!) might not supply their goods or services if they weren't charging higher than normal prices (regardless of whether it was law or "mores" that constrained them). And even if some people would supply the goods and services at normal prices, I still say it's rather easy and downright nasty for you in the comfort of where ever you're connected to the internet to disparage those actually offering goods and services in a disaster area because you think they should be philanthropic. That's right, people who charge less than the market would enable them to are being philanthropic, pure and simple. In my book, (enlightened) philanthropy is a good thing, but you don't call someone scum for not living up to that standard. As I've already touched on, how do you know you would be philanthropic in the same situation you require others to be? And how do I know you would be? And then also, where do you draw the line? Do bakers who don't distribute food to the hungry every day also scum?

In sum, praise those who are charitible, sure, but don't disparage those who aren't but who are still providing valuable goods and services at prices that reflect how valuable they are.

[fyodor]

joe,

Make that: You address the long-run implications without addressing the short-run implications I've brought up.

[Eric Hanneken]

joe,

Raising the price of a room won't create any new rooms in the short run, but it will decrease the scarcity of rooms. People will double up, or stay for a shorter period of time. They will also consider substitutes for hotel rooms, such as the houses of friends or entrepreneurial strangers, trailers, and tents.

[Eric Hanneken]

Sorry, that last sentence was bad. I'd like to rewrite it: "They will also consider substitutes for hotels rooms, such as trailers, tents, and the houses of friends or entrepreneurial strangers."

[Xrlq]

Advertising one price and charging another can be fraud, so there is no need to drag in price gouging on the motel front. Of course, whther it is fraud depends on whether the prices were advertised as applying on the nights that the premiums were charged.

I don't follow that. Advertising one price today and charging another price tomorrow may not do much for your credibility, but it is not a fraud unless the original ad was fraudulent. If someone can show that the hotel owners posted ads in which they claimed they'd charge $X, knowing all along that they were going to charge $Y, then the state should go after them for violating fraud and/or truth in advertising laws. If they refused to honor confirmed reservations at the previously agreed price, then both the state and the aggrieved parties should go after them for that. But if all they did was advertise in good faith that they intended to charage $X, then change their mind and raise the price to $Y when the circumstances warranted it, they haven't done anything wrong.

[fyodor]

Eric,

Because it takes labor to properly operate a motel, and because that labor may become increasingly scarce in times of disaster, allowing room rental prices to rise in times of disaster may very well increase their supply in comparison to what the supply might be otherwise in that particular circumstance (if not necessarily compared to what it would be under normal circumstances, although even that might be marginally affected).

[matt]

Sigh...a few links on "price gouging":

http://www.mises.org/fullstory.aspx?control=1593

http://hnn.us/blogs/entries/6800.html

[joe]

fyodor, increasing prices in response to increased costs would not, in my book, count as price gouging. But the cost of tree removal plus reasonable profit did not suddenly rise to $11,000. There has to be some room for reasonableness here.

And to those ready to shed tears because motel operators having the most profitable month of their lives might have the state checking their books, and end up having a slightly less profitable month - boo fuckity hoo. We're talking about human beings whose homes have just been destroyed and have nowhere to turn.

[thoreau]

First, I won't defend those who promise one price at the time a reservation is made and then try to charge a different price from what was mutually agreed. That's fraud.

Second, I won't even defend the "morality" of charging more during times of crisis.

What I will observe is that it's stupid to rail against the laws of supply and demand. Demand goes up, price goes up. It might not be fair, and it might not be moral, but complaining about it is like complaining about hurricanes. It might not be fair, but it is inevitable.

[fyodor]

Well Joe, if you're so concerned, by all means DO SOMETHING YOURSELF to alleviate their suffering. But the entrenpeneurs charging what people are willing to pay are not to blame, and since entrepeneurs are ALWAYS out to make a profit (generally enough speaking), tracking their prices to costs does not determine fairness. Also, there are other costs besides the ones you can show on paper, such as the extra time and hassle it takes to do something under difficult circumstances, perhaps when you'd rather be doing something else as well, like taking care of your own problems. Yes, Joe, I know we're talking about human beings, and that's why the libertarian rag is called Reason, because we reject such ignorant calls to emotion. There's no way the State could effectively figure out when a price cap is or isn't limiting supply, and so capping prices will inevitably limit badly needed goods and services to those human beings you implicity claim to have a monopoly on caring about. Some compassion. And if you get upset that some people make more money when there's a disaster, well fuckin' boo-hoo to you.

[joe]

thoreau, that's a cop out. I support sending ambulances and rescue personnel, at taxpayer expense, to accident scenes where cars go over cliffs. Am I to abandon this belief because of the uselessness of "railing against the law of" gravity?

[joe]

I'm not upset about people making money during a disaster, or at any other time, fyodor. Your need to impute hostility to the profit motive to me, rather than debate the actual issue I raised, is telling. Perhaps you should have accused me of hostility towards the renting of sleeping quarters - it would be about as relevant to the conversation, and about as accurate a description of my objections.

I'm upset about some of the consequences of some of the actions some of the people take to make some of the money. We don't always allow the market to operate unhindered, because of the harms that occur. Kiddie porn is one example. Price gouging during emergencies in another.

"I know we're talking about human beings, and that's why the libertarian rag is called Reason, because we reject such ignorant calls to emotion." Would any of the Reason staff like to comment on the assertion that the name Reason refers to a willingness to exclude concern for human beings from the list of factors considered appropriate for conversation?

[fyodor]

Joe, I think Thoreau was probably weighing in on the conversation I had with Mark more than the one I was having with you.

Thoreau, I think the point of Mark's line of reasoning, whether he realizes it or not, is a sort of "soft" Statism, or Statism without the State, where people's actions are influenced by the quasi coercion of social disaproval rather than the outright coercion of the law. I think this area is ripe for interesting albeit marginally important debate with regard to whether such soft or quasi coercion should operate under the same rules as outright coercion, but in lieu of getting into all that, I agree that railing against those who charge more during times of disaster is rather futile. Should we also rail against those who pass homeless people without tossing them a dime? Seems to me a whole shitload of railing would be necessary to have a very small affect on the level of philanthropy. And personally, I believe that not doing good is not the same as doing bad. But either way, I think affecting tangible incentives will have much greater effects on behavior in the long run than shame and moralizing.

Hope that helps! 🙂

[fyodor]

joe,

Apologies. I suppose in your world that addresses the issue. I've explained above why it doesn't so I won't repeat myself now.

[joesux]

fyodor: If joe includes post-storm opportunity costs, post-storm risk premiums and a sackful of other "soft costs", he might see that for some, asking $20 for ice is actually reasonable and possibly generous. There might even be a "forsaken revenue cost" to an iceman who sold for $5 when the market would bear $20. It becomes a larger game of definitions and line-drawing.

...make the normal market reaction too slow and unweildy to effectively meet the demand and achieve a reasonable, decent distribution of goods. Human beings with sould recognize this, and don't take the opportunity to screw their neighbors during their time of need.

Price-fixing does nothing to correct the deficiency of supply. There is no more ice at any price. Fixing is a disincentive to preparedeness. If one thought he could get $20 for ice, he might drive a reeferful into the eye of the storm, or if one learned that ice cost $20 he might lay in a larger stockpile for himself. Both individual choices help reduce suffering.

By dictating what human beings should do, by asserting his notions of decent and reasonable as superior, joe has declared his position as ultimate moral authority for all. Thus my handle.

Slippery: I don't see the demons. I wonder why others do.

[Brendan Perez]

There's nothing mandatory about having a generator or motel room. Like gasoline, these things will be back in normal supply shortly.

If I were an innkeeper during a disaster like this, I would want my rooms going to those who needed them the most and put to their best use. I couldn't see charging 109 for a room that I charged 39 for yesterday. But as many people have pointed out, hotels do it all the time.

I could see inversely charging people based on occupancy ie., 59 for 1 person, 49 for 2, and 39 for 3+ with the idea that if the 1 person really needs the room, they will pay more then the 2 or the 3 who would more effectively utilize the room and its space. I would rather have each room full of 2 or more people, then just one.

I also had an idea for trying to ensure that my limited supply of hypothetical generators went to people who needed them the most. I know it has flaws, but I still think it's better than one price no matter what and I know the second part of it has a little social engineering in it.
The idea would be marked price increases, with post-disaster rebates.
If you really need a generator right now, you will pay more. If it's too much, maybe you and the neighbor can make some kind of arrangement and then two households will benefit. After the disaster, you can claim the rebate on the pre/post-disaster price difference. No returns of any kind, of course.

The rebate idea could be applied to gasoline, rooms, anything in short supply during a disaster.

[Russ D]

and of course I notice the typo after clicking "post".

[Mr. Nice Guy]

"The simple fact is that price gouging only works in the very short term when people are terrorized, desperate, and temporarily out of options."

So it's impossible for a person, even in dire circumstances, to tell a gouger to fuck off? You deny individuals their responsibility to make correct decisions for themselves (even if these decisions are the most difficult ones)?

[Mr. Nice Guy]

"There's lots of assholes out there, including lots of us who think we aren't."

The most brilliant point made in this string so far. I think Buddha said it, or maybe jESUS cHRIST.. 🙂

[joe]

"The market has a built in mechanism to correct for any overpricing. It's called competition. If some jackass tries ripping of consumers by charging too much then they will flock to the nearest competitor charging less." This is a perfectly reasonable model for describing the way prices come to a stable, reasonable point under normal circumstances. This natural tendency of prices to find the center, and allow goods to be most efficiently provided and distributed, is a wonderful thing.

But during an extreme event of limted duration, an event that dramatically increases the need for the goods and limits the supply, the severe constraints on time and on the supply chain make the normal market reaction too slow and unweildy to effectively meet the demand and achieve a reasonable, decent distribution of goods. Human beings with sould recognize this, and don't take the opportunity to screw their neighbors during their time of need.

Oh, and fyodor, about my "not answering" your question about the increases in supplier costs, was this a little too thick for you, "fyodor, increasing prices in response to increased costs would not, in my book, count as price gouging?"

[fyodor]

"that's why virtually everybody confronted with this phenomenon is repulsed by it."

Oh, so you're in the majority on this one so that proves you're right, eh? Wonder if you'll appreciate that argument on issues where you're not with the majority.

"It goes without saying that if most terrorized, desperate hurricane victims knew the prices they were being charged were outrageous"

Of COURSE they know the prices are "outrageous" in that they're much higher than usual.

"or were physically capable of finding alternative sources, then of course they wouldn't pay outrageously inflated prices."

It's because under such circumstances there may be no one else AVAILABLE to provide the same services at lower prices that they pay the higher-than-normal price. And that's the reason the sellers charge the higher prices, not because the buyers have suddenly lost their ability to reason! You seem to postulate mass temporary insanity. If that's the case, then the sellers (who are in the same area) should be excused for the same reason. You seem to think the sellers are highly crafty scheming evil wizards while the buyers are mindless terrorized zombies. It may be an emergency situation, but they're still just fricken people, on both sides.

[Rick Barton]

joe, oops I capitalized your name. Sorry about that.

[Rick Barton]

joe, oops I capitalized your name. Sorry about that.