Bring on the 'price gougers'

Boston Globe via Townhall.com ^ | August 23, 2004 | Jeff Jacoby

[Tom D.]

This article has new currency with Frances approaching eastern Florida.

My sister-in-law's family lives in and around Vero Beach, Florida. Last evening he mother was waiting in a very long line at Home Depot trying to get plywood. There were long waits while people bought plywood faster than trucks could bring it in. HD was limited each customer to six sheets.

Imagine that the law allowed the price of plywood to triple. More businesses would be willing to haul plywood from more places. With more supply, people could spend time actually boarding up and preparing rather than waiting in line. If plywood became more expensive, perhaps some people would forgo putting plywood on garages and people further from the coast might forgo plywood all together, thus decreasing demand. This would also shorten the lines and give more people time to get boarded up and out of the way. As it stands though, the cost has shifted from dollars to time spent in lines.

As indicated above, when any good is in short supply, there needs to be a rational way to ration that good. Cost is the best way to do that because it simutanelusly decreases demand and increases supply.