1) The Usual crowd of freepers who cannot be bothered to actually read the article but feel compelled to display what they "think" about the rapacious mercantilists, blah blah blah
2) The other set of freepers who may actually read the article but are so overcome with resentment against the exploiters and profiteers, or lugubrious sentiment for the exploited that any appeal to common sense is lost on them.
3) A few hardy souls who actually have some understanding of markets, how they work, and how market based solutions are the best, even in a time of crisis.
This is mostly for crowd number three.
And who don't give a d*mn that God forbade usury.
I'm for #3. Now is not the time to panic. Give the markets time to settle down.
Some (like raising the price of gas) is just survival. If a gas station knows their next delivery of fuel is going to be $3.39 a gallon, then they are going to need that much cash flow to get it, even though the fuel already in the tanks only cost $2.34.
I have no problem with # 3
Anybody who doesn't know that doesn't have an opinion worth listening to.
The alternative to forbidding price gouging would be to publicize every company that does it.
You bring up a few good points, but maybe what is needed is a natural disaster plan that includes agreeable per person rates at the hotels. The participating companies can annually sit down and set the rates by negotiating with the towns and cities in which they operate.
For about 4 days following 9-11-01, gas prices locally (about 2000 miles away from NYC and WDC) jumped to over $7 per gallon. No reason. No justification. Nothing but kneejerk price gouging.
By the next week, gas prices returned to normal (9-10 prices).
Price gouging is no different than the looting. Just because it is a business, it doesn't have the right to literally steal from customers. [I am lenient with those along the gulf who are stranded and are 'looting' food and clothing. Many of them lost everything except the clothes on their backs and may be stranded for days. But those looting TVs, computers, etc., -- dang, I could have used a new pc --- just bought a new one -- lol -- are just thieves.]
Nice preemptive strike. LOL.
Anyone who disagrees with the article probably has not read it, is too full of resentment to appreciate it, or has no understanding how markets really work.
Cool.
But, silly.
Ignore the politics and see what you end up with. It'll be an entirely different system than the one you cherish. John Lott et al ought to reflect upon that.
However, you cannot ignore what Georgia did.
They floated the rumor that they might run out of gasoline.
The resulting panic caused gas lines, panic topping off of the tanks, and the gas station owners raising the prices by the quarter hour. Some raising the price as much as a dollar at a time.
Disaster areas have unstable demolished markets, and so there are a lot of situations where sale prices vary within a huge range. It's common to have one person buy a flashlight at ten times the price that someone else paid a few minutes earlier. The role of government is to first meet all life and death emergencies with aid free of charge, and second to provide communications so all the sellers and buyers can find each other so prices can stabilize.
But there is another side to that coin. When everything settles down one would hope that people would have memories and by that I mean they should vote with their walletts by remembering those charging usury prices and those simply charging what the market will bear. There is a difference.
One thing that all the "It's not really gouging", folks seem to be missing here is that gas is not a Luxury, it's a necessity. If it were T-Shirts or some other item that people did not need in order to survive, I would have to agree with the market will take care of itself statement.
Supply and demand solves the problem by itself.
When there is a limited supply, not everyone gets what they want. Price caps don't change that.
Items are simply worth what someone is willing to pay for them.
It's wonderful that charities choose to make things available at lower or no cost during a crisis.
It's also appropriate for our government to help provide essential items during a crisis.
However, it's not the place of the government to force private individuals to be charitible, nor is it fair.
Those who plan well should be rewarded for their efforts, and those who plan poorly shouldn't be rewarded equally with those who planned better.
Free market? Supply and demand? If left alone these mechanisms will correct them selves and be stronger and better than before. That’s just me, I could be wrong. (sarc)
By the way, Demo-rat Gov. Granholm in Michigan has declared an energy emergency. Detroit gets another handout. (puken and convulsions) Perhaps we’ll see Detroit residents brandishing assault weapons if they don’t get their way. My apologies, they already do that.
He sounds like Neal Boortz
This from NealzNuze for today.
GAS PANIC IN ATLANTA --HIGHER PRICES WOULD HAVE SOLVED IT.
When you hear the words "price gouging" uttered by somebody .. even if that somebody is the governor of a state .. you know that you are listening to someone who (a) has a limited understanding of the basics of free-market economics; or, (b) is a politician more interested in pandering to ignorance than in leading.
That describes Atlanta yesterday.
Yesterday afternoon I drove to the WSB studios to participate in a joint AM 750 WSB / Channel 2 fund raising venture. On the way I saw that cars were lined up on the streets waiting to get into gas stations. The panic was on. Word had spread throughout the metro area that there was going to be a fuel shortage. Everyone, it seems, was filling up everything they had that could hold gasoline.
The panic, of course, created that shortage that previously was only a rumor. Even when there is no shortage of gasoline, there is simply no possible way to keep the underground tanks at every service station full if everyone is going to try to fill up their car at the same time. There simply aren't enough tanker trucks on the road to do the job. When rumors create a panic and creates a demand that the marketplace can't meet, it's time for the mechanisms of the free market to take control.
There has never in the history of the world been a better way to allocate scarce resources than to simply allow the law of supply and demand to take its course. Whenever government steps in to interfere, shortages occur and chaos often reigns.
The way to handle the gas panic in Atlanta yesterday was to RAISE PRICES! It's not price gouging. It's the law of supply and demand at work. Today there will be people in Atlanta who might not be able to drive their own cars to work, to doctors appointments or to buy groceries who would otherwise be driving if gas stations throughout Atlanta had raised their prices in response to the increased demand and limited supply.
Let me explain:
As the panic spread, and the demand increased, the prices at the pumps were pretty much unchanged ... for a while. As a result people decided to top off every vehicle they owned .. .no matter how much gas remained in the tank. The predictable result was that stations soon ran out of fuel. The word spread, and more people hit the streets to fill more cars. Today people in Atlanta will find that many gas stations still have their pumps shut down. Throughout the night tanker trucks were busy trying to replenish the stations, but there simply aren't enough trucks to meet this demand. Another supply problem.
So .. what was the solution? For the politician the solution may have been to pander to the electorate by talking about imposing fines on gas station operators who "overcharge", whatever that means, consumers. The real solution, though, was to increase prices in response to the increased demand and limited supply. This is what the uninformed and the political class call "price gouging."
Let's take a look at what would have happened if the free market had been allowed to do what it has always done so well -- when left alone -- and that is to allocate scarce resources. If gas prices had risen strongly yesterday (as they in fact did at some stations) then people would have given a second thought to filling every car they own. If the prices were, say, $5 a gallon, consumers would have purchased what they thought they might need to get through the next few days, and would have started making plans for conservation., Certainly few people would have been shuttling back and forth filling up every car they owned. As a result, the gas that one consumer didn't pump into his second or third car because the price was so high would have been gas available for someone to put into the car they actually needed to get to work.
Keeping the prices artificially low encouraged over-consumption and hoarding.
The truth is that when Georgia's Governor Sonny Perdue signed an executive order late yesterday afternoon threatening heavy fines on gasoline retailers who, as he said "overcharge" customers, he became a part of the problem and not a part of the solution. His statements were a signal to the people that there was a crisis in gasoline supplies, and to get out there and fill up everything they could while he held the prices down. Today Atlanta drivers will experience the results of the governor's actions.
This whole price gouging nonsense was also front and center last year when four hurricanes ripped through Florida. Entrepreneurs abandoned plans to rush needed supplies and commodities to South Florida when politicians started pandering to voters with dire threats of fines and even jail time for evil price gougers. The marketplace simply wasn't allowed to respond properly to increased demand .. and shortages resulted.
Here's an example I used yesterday. Hotel and motel rooms. In the aftermath of the hurricane -- especially Hurricane Charley -- there was a huge demand for rooms for displaced hurricane victims. So, here come the politicians with their laws restricting what motel owners could charge for rooms. The result was that fewer families could find a place to stay. Here's why: A family of four arrives seeks shelter at a hotel where rooms rates are being held down by anti-price gouging laws. They decide to get two rooms when one would do. One room for mom and dad, the adjoining room for the children. Along comes the second family of four, only to find that there are no more rooms. Sorry, out of luck. Now, if prices had been allowed to rise with the demand that first family might have decided to make do with one room instead of two. That would have left a room available for the next family to arrive.
This is a problem borne of economic ignorance. Our hideous government schools do a pathetic job of teaching the very basics of free market economics. The ignorance of the public is then exploited by politicians for votes and support.
And thus it will ever be.
I was actually going to call the "Savage Nation" last night because this topic was under discussion. Dr. Savage was calling for immediate energy price caps because of what he stated was a supply side monopoly. Had I called, this is what I would have said:
Although the Supply Side may be monopolistic, you neglected to address the demand side. Give the FREE MARKET TIME to WORK!
Consumers have the option of:
1] Driving less.
2] Carpooling.
3] Using public transportation.
4] Getting a smaller more fuel efficient car.
5] Increasing home energy efficiency by adding insulation, installing thermopane windows, etc.
6] Turning down the home thermostat somewhat and dress more warmly.
7] Install alternative energy systems in the home.
8] Some combination of the above.
Less consumption would ultimately force prices downward to more reasonable levels. This is how the free market works and has always proved to be a superior method of cost containment than artificially imposed price caps.
Yes, the "free" market. This same market that these companies paid lobbyists on Capitol Hill to shut out all competetors. Go to hell you bum.