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Free Minds & Free Markets

Three Cheers for Price Gouging During Hurricane Florence

It’s called supply and demand.

Officials in states hit by Hurricane Florence are on the lookout for "price gouging."

People who engage in "excessive pricing" face up to 30 days jail time, said North Carolina's attorney general. South Carolina passed a "Price Gouging During Emergency" law that imposes a $1,000 fine per violation.

"Gouging" is an issue during every disaster because when supplies are short, some merchants raise prices.

These are "bad people," said Florida Attorney General Pam Bondi angrily during a previous storm.

Bad people?

I thought Republicans were the party that believed the market determines prices.

"Gougers deserve a medal," Nobel Prize-winning economist Milton Friedman once told me. That's because higher prices are the best indicator of which goods people want most.

This is a hard concept for people to understand.

"They're not heroes. They're scabs who prey off the desperate," wrote James Kirkpatrick in the comments after watching my latest video about this. "Only Stossel would praise greed," added Paul Nadrotowski.

I don't praise greed. Pursuing profit is simply the best mechanism for bringing people supplies we need. Without rising prices indicating which materials are most sought-after, suppliers don't know whether to rush in food, or bandages, or chainsaws.

After Hurricane Katrina, one so-called gouger was John Shepperson of Kentucky. Watching news reports, he learned that people desperately needed generators.

So Shepperson bought 19 of them, rented a U-Haul, and drove it 600 miles to a part of Mississippi that had no electricity. He offered to sell his generators for twice what he paid for them. People were eager to buy.

But Mississippi police said that was illegal. They confiscated Shepperson's generators and locked him up.

Did the public benefit? No. The generators sat in police storage (I suspect some cops took them home to use while Shepperson sat in jail).

Who will bring supplies to a disaster area if it's illegal to make extra profit? It's risky to invest in 19 generators, leave home, rent a U-Haul, and drive 600 miles.

"Being moral is loading up supplies and donating them to people in need," a person named Meirstein wrote on my YouTube page.

Yes, but in real life, not enough people do that to satisfy the needs of thousands of desperate people.

You can make a law against someone like Shepperson making extra profit, but you can't force apathetic people to bring in supplies.

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  • loveconstitution1789||

    Even with prime disaster pricing, it would cheaper that what FEMA wastes for taxpayers.

  • DajjaI||

    Yup. And I would add, one of the reasons that people are against price gouging is because they think they can do it themselves. I'm sure that many of the people who stocked up on stuff imagined how much they could sell it for. And another problem is that these bans discourage planning for disaster. And that makes us less resilient when something more serious comes along.

  • Leo Kovalensky II||

    Even pre-meditated hoarding is a signal to the market that demand is high (or about to become high) in a given geographic area.

    Gouging laws are hard to justify, if you actually believe in markets. Apparently the politicians referenced in this article (and many, many others) don't.

  • Jerryskids||

    "Being moral is loading up supplies and donating them to people in need," a person named Meirstein wrote on my YouTube page.

    Don't leave us hanging! We need to know - how many U-Haul's full of generators did Meirstein deliver to the flood victims?

  • Necron 99||

    I was FB blocked by my liberal sister's former wife - now identifying as a man, after he posted "the correct price of water bottles in an emergency is $0.00" I asked if he purchased water, rented a U-Haul, purchased fuel and drove six hours one way to deliver "free" water to the effected areas. Told him he could probably get the water donated if he would do the rest, but apparently only other people's time is worthless to him.

  • DiegoF||

    Nonsense. If they want $0.00 water there is plenty to go around, enough for everyone in the hurricane to drink. Just get it from the Puerto Rican government.

  • DiegoF||

    Also my consolation to your sister if her woke lesbian friends have been calling her a transphobic shitlord for breaking up with her man-wife.

  • Necron 99||

    Sorry that was unclear, they are still together, the former is wife is now a husband.

    Not sure if they are still gay or extra gay? My SJW hierarchy scale is broken.

  • operagost||

    I'm not sure if they get extra privilege credits because one of them is trans, or lose credits because one is now male. Maybe it's a push.

  • Earth Skeptic||

    Extra credit only if both of them trans (and maintain the gay level at 7 or above0.

  • Mickey Rat||

    An item that is not available to he sold is effectively priceless, so $0 is not exactly wrong, just not in the way meant.

  • Jerryskids||

    In a disaster area, $20-a-sheet plywood is preferable to $50-a-sheet plywood. Just like in a non-disaster area free lunches are preferable to lunches somebody has to pay for. Guess what? In a disaster area it's not a choice between $20-a-sheet plywood and $50-a-sheet plywood, it's a choice between $50-a-sheet plywood and no plywood at all.

    But this is all the medieval scholastic argument over the "just price", just like the teachers arguing that they "deserve" higher pay, that should have been settled by Adam Smith in 1776. But, no, we're all socialists now and we're agreed that the labor theory of value is more correct than the old capitalist theory of "whatever the market will bear".

  • Longtobefree||

    Laws like this are why artificially 'list prices' exist.
    You don't raise prices in a disaster, you remove 'good weather discounts'.
    Way back in pre-history (1970s), the bgingn federal government imposed wage and price controls to "fix" the economy it had broken. The cost of cars still went up, because the discounts from list price just went down.

    And if price gouging is a bad thing, why does the same government encourage hoarding?

  • Rich||

    "Be prepared for an emergency and avoid the 'excessive pricing' jail time."

  • DiegoF||

    Maybe the government needs an intervention like the hoarding apologists on TV.

  • Rich||

    Just wait until you see what Uncle charges for helium during the next emergency!

  • Chris_Virginia||

    This is exactly what I came to comment about. All these obstructionist laws do is create a more complicated work-around but don't actually "solve" anything.

  • DiegoF||

    Pam Bondi is a statist animal rights fanatic demagogue and Florida Republicans are worthless. Well not to worry there will soon be one less in office, after they elect their new socialist governor. Their new black socialist governor. In Florida, I repeat. But no, the Republican future looks damn bright; no sweat!

  • Mickey Rat||

    These laws have nothing to do with economic efficiencies, it is entirely politicians reacting to the negative emotional state of their constituents. There is no loss for the politician to stand up to the "meanness" of the market, because the angry voters will not associate the shortages caused by gouging laws with the policy. This is a case where the mob cannot handle the truth.

  • Hank Phillips||

    But... but Germany's Jesus Christ, as he was nicknamed in U.S. papers in the 1930s, called for the death sentence for profiteers seeking personal enrichment from war. Presidents Bush and Clinton also called for the death sentence for marijuana profiteers during the War on Drugs. So if Stop Global Warming is the moral equivalent of war, and altruism is good, it makes perfect sense to imprison--if not execute--these selfish speculators for crimes against the Common Good.

  • Sevo||

    Believe it was Jeb Bush who, during a FL hurricane, outlawed 'price gouging', so those generators all the FL-residents could really have used stayed in Home Depot warehouses all over the south.
    I know if I were a FL-resident, I'd have sent Jeb a sincere "Fuck You" letter.

  • CDRSchafer||

    After Harvey occurred, gas prices were not permitted to rise in San Antonio, where no flooding occurred. So to fill up, people waited in line for hours as idiots topped off their tanks. People who were caught near empty sat in line for hours rather than just pay maybe $10 bucks a gallon or so to buy enough to get them through the week.

    Great solution.

  • Dillinger||

    jailing people for raising market prices is law-gouging.

  • KeithO||

    Hmmm, while I generally agree with the free market playing out, this is a bit bullshitty. We are not talking about the marketing settling, and you know it. We are talking about disaster relief. And to say we wouldn't know what to send if we don't raise prices exponentially is just 100% idiotic and a way to play into 'your' narrative. There is a high water mark, another thing you know, that will push goods past the fair and free market, and make them only accessible to the well off, financially, which tends to be a very, VERY low percentage caught in these situations. You see, money allows you to leave for your winter house while the disaster strikes, and return when it's all been cleaned up.

  • Brendan||

    So your real concern is making sure the well off don't get any supplies either?

  • Johnny Lawrence||

    And as Stossel alluded, nothing about price-gouging prevents donations from "moral people." Voluntary donations and government disaster relief (we can argue about that separately) will still exist—they are just supplemented by the price-gouging.

    If those avenues were sufficient, there'd be no need for price-gouging.

  • Unicorn Abattoir||

    No, he's saying that since certain items are only accessible to the well off, he's driving a Corolla instead of a Ferrari and it's not fair.

  • D-Pizzle||

    "Hmmm, while I generally agree with the free market playing out..."

    No you don't.

    "We are not talking about the marketing settling, and you know it."

    No, that is exactly what we are talking about. It really isn't that hard to understand.

    "There is a high water mark, another thing you know, that will push goods past the fair and free market, and make them only accessible to the well off, financially, which tends to be a very, VERY low percentage caught in these situations. You see, money allows you to leave for your winter house while the disaster strikes, and return when it's all been cleaned up."

    Then please explain how anti-gouging laws actually HELP the less well-off. We're listening...

  • Johnny Lawrence||

    I'd absolutely argue that price-gouging laws do more to help "the needy" in disaster areas than do anti-price-gouging laws.

    I've got the ability to spend $20 for a case of bottled water and $10/gallon for gas—if I do it, it lowers the number of "needy" folks in the wake of a disaster, and the charities/government can focus on those folks.

    If I can't get bottled water—even at $20/case—welp, lump me into the "needy folks," despite my financial situation. I'd still need water.

  • Unicorn Abattoir||

    You see, money allows you to leave for your winter house while the disaster strikes, and return when it's all been cleaned up.

    Which further reduces demand for supplies in the affected region. Not exactly a crime against humanity.

  • Brendan||

    Allowing people to make extra money by coming from far away to deliver supplies to regions in distress adds incentive for people to come from far away and enter areas in distress to deliver supplies.

    This can only help the people in those areas.

  • CDRSchafer||

    But then who will there be to look pathetic and unhelped for the TV cameras?

  • ace_m82||

    How dare you tell consumers what their "fair" price is? How much hubris must you have to think that you know what something is worth to someone else!

    If someone buys X for $1000, we know something very important, that X is worth more than $1000 to them. You don't like that, so you want to stop them from buying anything!

  • Sevo||

    KeithO|9.19.18 @ 11:53AM|#
    "Hmmm, while I generally agree with the free market playing out, this is a bit bullshitty. We are not talking about the marketing settling, and you know it. We are talking about disaster relief."

    Not any more.
    Now we're discussing your idiocy.

  • mysmartstuffs||

    Ayn Rand is flicking her shriveled bean to the sheer evil of this clickbait headline.

  • Earth Skeptic||

    But in the inverted world of the young progressive pseudo-socialist everthing should be free, including (and especially) information.

    So claiming that elevated prices can actually help more people get resources will just annoy them. And suggesting that these experiences might teach people lessons about planning and preparing will just confuse them.

  • Earth Skeptic||

    But in the inverted world of the young progressive pseudo-socialist everthing should be free, including (and especially) information.

    So claiming that elevated prices can actually help more people get resources will just annoy them. And suggesting that these experiences might teach people lessons about planning and preparing will just confuse them.

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