Posted on 09/29/2005 11:36:23 AM PDT by JZelle
If you bought a home 10 years ago for $100,000 and just sold it for $300,000, have you engaged in price gouging? Most people would say "no," provided there were willing buyers and sellers of both sides of the transaction merely responding to the market at the time. As a result of hurricanes Katrina and Rita, some politicians have demanded prosecution of "price gougers." In many states, like Florida, "price gouging" is illegal. The Florida statutes say, "It is illegal to charge unconscionable prices for goods or services following a declared state of emergency." Hmmm, I know what the law means when says burglary or murder are illegal, but an "unconscionable price"? So I looked in Webster's Dictionary, and found unconscionable is defined as "excessive; extortionate" and gouge is defined as "to extort from or to swindle." As an economist, I know prices allocate scarce resources (like gasoline) and motivate future production. At some price, the quantity demanded and the quantity producers are willing to supply come together. If that price is high enough to provide producers a profit, they will be motivated to produce more.
(Excerpt) Read more at washingtontimes.com ...
If the lender charges you 35% interest per annum for your mortgage on that house, the gov't would nail it for usury under the same principle. The free market isn't allowed to work in many facets of the economy.
if oil companies were working within a total capitalist system, id buy it, but they arent. government subsidies need to stop for oil companies.
What are the subsidies?
It's only "price-gouging" if somebody else does it, especially if it's somebody you don't like.
So can we little people go out in our back yards and establish distilleries to make and sell gasoline, and perhaps alcohol, to anyone we want?
Can we go make our own guns and freely sell them, too?
Which is the cabal of 5 oil comapnies? The retail gasoline market is well diversified under any and every standard that is sued to measure market concentration.
The problem with debates about oil and gas is that 95% of people know nothing about the industry, yet feel no reason offering their opinions on it.
Only large corporate entities are capable of price gouging. Sarc
If I was forced to buy a house every week and all of the houses were sold by a strictly limited amount of companies that colluded to set the price, then yes, paying $300,000 for a $100,000 dollar house would be price gouging. There is competition in the housing market, however, so I can buy a cheaper one. There is no competition in the oil market, so I cannot buy cheaper gas from a different station. The point this article's writer tries to make falls flat as an apples-and-oranges comparison.
Your whole premise is incorrect. How limited do you think the number of companies is? What makes you think they collude? How many companies would need to be in on the collusion? Generally, collusion among companies is very difficult if there are more than 2 or 3. You would need LOTS of companies in on this collusion.
Colluding is illegal. Please provide proof of this before accusing American companies of fixing the price.
I don't believe in price gouging. We are a market based economy, if the price isn't what you are willing to pay, then don't buy it.
You can't buy cheaper gas, because if someone had cheaper gas, he/she would be sold out instantly. It's called Arbitrage.
But credit cards and advance payroll lending institutions can charge as much or higher. One place will get you for 300+%.
"There is no competition in the oil market, so I cannot buy cheaper gas from a different station. The point this article's writer tries to make falls flat as an apples-and-oranges comparison."
Maybe where you live, but not around Houston.
Today, I can pay $2.56/gal at Sam's Club, or I can drive less than a mile and pay $3.09 at Shell station.
Maybe you need to shop around more.
People say that all the time, and it just baffles me. As I drive home today after work, I will pass 10 gas stations. They all have different prices. 7-11 tends to be the most expensive. Albertson's is cheaper than everyone else, so the station is always jammed. If I want, I can go a little out of my way and get it even cheaper on the highway by stopping at a truck stop like Pilot or Flying J.
I agree with you. Also, a home if taken care of, appreciates in value. Gas, when you purchase it, burns up and is gone forever once you use it. So I agree. There is no comparison.
If you bought a home 10 years ago for $100,000 and just sold it for $300,000, have you engaged in price gouging?
I'm replying to myself.
In my last line, I am directly answering a question as to why there are not gas stations with cheaper gas than their neighbor.
The whiners always hit and run these threads.
I also wonder who is forcing him to buy gas. Some consider it a need, but in reality, it is a luxury. Unless you drive 30 minutes or more to work, you could ride a bike. if it is 10m, or less, you could walk.
People survived for the vast majority of human history without gas, why is it necessary to have it now?
People say that all the time, and it just baffles me. As I drive home today after work, I will pass 10 gas stations. They all have different prices. 7-11 tends to be the most expensive. Albertson's is cheaper than everyone else, so the station is always jammed. If I want, I can go a little out of my way and get it even cheaper on the highway by stopping at a truck stop like Pilot or Flying J.
Not having to wait in line is worth something to me too. I hate how the gas pump area is treated as a parking lot.
In the last thirty years the cost of a Mustang has gone up twice as fast as inflation. This increase matches the increase in wages of an auto worker. Is the auto worker gouging?
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