Supply and Demand Retards

[Lewkowski]

http://www.foxnews.com/us/2012/11/05...ng-east-coast/

Most loathsome, perhaps, were reports of people posing as FEMA and utility workers to gain entry into homes, then sticking up residents.
The gas shortage also brought out the worst in people. Long lines at gas stations prompted fights, and in Queens, one man was arrested after allegedly pulling a gun after other customers objected to him cutting in line. There were scattered reports of gas stations jacking up their prices, and some people were selling gas on Craigslist for up to $20 a gallon. State troopers were quickly deployed to gas stations in New Jersey and police were seen at New York filling stations.
A Staten Island man was arrested after he was caught hoarding gas after he filled up 30 five-gallon buckets with fuel from a station in upstate Orange. The man intended to bring the buckets of gas back to his Richmond Hill neighborhood where neighbors desperately needed it for cars and generators.
In addition to gas, hotel rooms, batteries and generators were going for well above their regular prices as desperate victims scrambled to survive. New York Attorney General Eric Schneiderman vowed to launch an investigation after receiving hundreds of complaints about inflated prices at supermarkets, hardware stores and gas stations.
"Our office has zero tolerance for price gouging," Schneiderman said. "We are actively investigating hundreds of complaints we've received from consumers of businesses preying on victims of Hurricane Sandy, and will do everything we can to stop unscrupulous individuals from taking advantage of New Yorkers trying to rebuild their lives."


Read more: http://www.foxnews.com/us/2012/11/05...#ixzz2BPJt0bXm


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Its like people don't understand the basic laws of supply and demand. If there is a shortage of something, the price *should* go up. If there is an overabundance it *should* go down. Why should disaster situations be any different?

[Ziggy Stardust]

Well, if that's an example of the Free Market in effect I can see why people are so eager to have it unchecked. Sounds like a great society to live in.

[Aimless]

Its like people don't understand the basic laws of supply and demand. If there is a shortage of something, the price *should* go up. If there is an overabundance it *should* go down. Why should disaster situations be any different?

Because there is very little value or justice in letting some people exploit other people in a disaster situation through price gouging to the extent of forcing desperate victims to choose between the law and their survival.

[Catgrrl]

Could the title be a little less 5th grade? Retard is such an immature word to use in a debate forum.

[Khendraja'aro]

Could the title be a little less 5th grade? Retard is such an immature word to use in a debate forum.

Hello? This is Lewk you're talking about.

5th grade is about the height of his intellectual horizon.

[Loki]

Well, if that's an example of the Free Market in effect I can see why people are so eager to have it unchecked. Sounds like a great society to live in.

In contrast to a society with constant shortages and a massive black market?

[Aimless]

Are we still talking about the disaster-plagued USA?

[Loki]

There have been pretty big shortages in gasoline in the worst-hit areas of NY/NJ actually...

[Aimless]

If the supply side is unusually inelastic due to disaster, is it possible to influence the demand side eg. by telling your customers they can't stockpile huge amounts?

[Loki]

Yeah, telling people to act irrationally is definitely going to work, Minx. I hear that telling criminals not to commit crimes works as well.

Even ignoring the point above, what do you do when supplies have been halved, while the demand remains the same? Create an ever more convoluted and unenforceable system? I never cease to be amazed by your constant belief that your notion of justice trumps reality.

[Aimless]

Sometimes when chicken is on sale at a huge discount at my local grocery store they say "only 1 per customer" and if you try to buy 2 they say "nuh-uh". I think it's some weird form of peace-time "rationing". The second point you make is of course an important problem but perhaps you can call in the UN to prop up the supply side to some small extent.

[Loki]

Sometimes when chicken is on sale at a huge discount at my local grocery store they say "only 1 per customer" and if you try to buy 2 they say "nuh-uh". I think it's some weird form of peace-time "rationing". The second point you make is of course an important problem but perhaps you can call in the UN to prop up the supply side to some small extent.

And if you come back? Or get someone to buy it for you? It becomes a problem when a large amount of money is at stake, Minx.

[Khendraja'aro]

In contrast to a society with constant shortages and a massive black market?

Ah, so we're talking about the USSR ca. 1980 now and not the US of A?

Or maybe Simbabwe?

[Loki]

Ah, so we're talking about the USSR ca. 1980 now and not the US of A?

Or maybe Simbabwe?

I don't get your point. Is it your contention that preventing firms from raising prices in the wake of a spike in demand or a sharp fall in supplies is a good thing?

[Aimless]

And if you come back? Or get someone to buy it for you? It becomes a problem when a large amount of money is at stake, Minx.

On the bright side, if you get someone to buy it for you then someone has likely made a voluntary decision to give up their "ration" and perhaps does not need it.

[Loki]

On the bright side, if you get someone to buy it for you then someone has likely made a voluntary decision to give up their "ration" and perhaps does not need it.

You give them part of the profit. You need to visit Eastern Europe if you want to know how black markets work.

[Aimless]

You give them part of the profit.

Which is great, more people profit more, and more fairly to boot. They can use their money to buy other necessities

[Lewkowski]

http://www.foxnews.com/opinion/2012/...price-gouging/

They just don't understand basic economics. Force prices down, and you keep suppliers out. Let the market work, suppliers come -- and competition brings prices as low as the challenges of the disaster allow. Goods that were in short supply become available. I discuss this in greater detail in my book, "No, They Can't: Why Government Fails-But Individuals Succeed."
After Hurricane Katrina, Mississippi Attorney General Jim Hood announced a crackdown on “gougers.”
John Shepperson was one of the "gougers" arrested. Shepperson and his family live in Kentucky. They watched news reports about Katrina and learned that people desperately needed things.
Shepperson thought he could help, so he bought 19 generators. He and his family then rented a U-Haul and drove 600 miles to an area of Mississippi left without power.
He offered to sell his generators for twice what he had paid for them, and people were eager to buy. But police confiscated his generators, and jailed Shepperson for four days. The police kept his generators.
Did the public benefit? No.
It's price "gougers" who bring the water, ship the gasoline, fix the roof, and rebuild cities. You might not believe me but will you believe Nobel Prize-winning economists Gary Becker, Vernon Smith and Milton Friedman? All three have said “ gouging” is good. Milton Friedman said, “price ‘gougers’ save lives.”


Read more: http://www.foxnews.com/opinion/2012/...#ixzz2BUX9wu8K

What incentive do people have (outside of charity) to drive 600 miles and provide extra supplies? Very little. The folks who will help regardless aren't going to be impacted by anti price gouging laws. On the margins though - the ones who will want to make a profit WILL go the extra mile to make money. The folks who need the supplies will be happy to pay extra and the folks who sell it will be happy to take days out of their normal schedule to make an extra buck. Capitalism at its finest.

[Khendraja'aro]

I don't get your point. Is it your contention that preventing firms from raising prices in the wake of a spike in demand or a sharp fall in supplies is a good thing?

Always so binary, Loki. You fall prey to the same problem as Lewk: You think in either "Yes" or "No" positions.

Are you telling me that you expect at least 15 hurricanes per month for the US, and as such, a permanent supply problem?

[Loki]

Are you telling me that having massive shortages and massive lines due to price controls is a good thing, even if it happens infrequently? Remind me who benefits from the massive loss of productivity resulting from people spending so much time looking for a place to buy gas and then waiting in line to get it?

[Khendraja'aro]

I'm not quite sure where to begin with your topsy-turvy logic, somewhere you must've made a wrong turn in your brain.

Let's make it simple: What exactly caused the shortage here? Price controls or the actual disaster?

You're allowed three guesses and the first two don't count.

[Aimless]

The disaster is, alas, a fact that cannot be made to have not happened

[Ziggy Stardust]

In contrast to a society with constant shortages and a massive black market?

I don't get your point.

I share your sentiment in the second post.

[GGT]

<snip>Its like people don't understand the basic laws of supply and demand. If there is a shortage of something, the price *should* go up. If there is an overabundance it *should* go down. Why should disaster situations be any different?

Uh, no....it's like you don't understand the dynamics of a DISASTER. Those shortages are aberrant results of normal supply/demand, and the "commodity" is needed for staying alive (heat, generators), recovery and clean-up (chain saws, transportation).

Would you say the same if Texans had a DISASTER and drinking water was the "commodity" in short supply?

[Loki]

I'm not quite sure where to begin with your topsy-turvy logic, somewhere you must've made a wrong turn in your brain.

Let's make it simple: What exactly caused the shortage here? Price controls or the actual disaster?

You're allowed three guesses and the first two don't count.

Price controls make shortages worse because it leads to hoarding and buying for the purpose of reselling.

Uh, no....it's like you don't understand the dynamics of a DISASTER. Those shortages are aberrant results of normal supply/demand, and the "commodity" is needed for staying alive (heat, generators), recovery and clean-up (chain saws, transportation).

Would you say the same if Texans had a DISASTER and drinking water was the "commodity" in short supply?

And people can't afford to pay an extra $2 a gallon for gas for a week. Their lives must not mean very much to them.

[Nessus]

I take it you would support FEMA airlifting a few thousand pairs of boot straps to the region?

[Illusions]

Anecdotally speaking as a person actually affected by the gas shortage, but I don't think that a price cap, or the threat of one, is what is keeping retailers from selling gasoline. The problem is more a lack of electricity for certain retailers, or a reduction or complete lack of supply coming in to sell. Besides that, I don't believe Schneiderman or Cuomo are speaking in reference to gas stations selling gas at around $4.50 a gallon, but people hoarding gas and trying to sell it at far more than this, like the $20 a gallon mentioned in Lewk's article quote.

[Ominous Gamer]

Removing the price fixing restrictions would just mean that the victim exploitation would happen without the middlemen. As it stands now, these victims are at least given a chance to work towards getting the necessities, even if it means standing in line, instead of the system only helping those that are able to throw cash at the problem and hope all will be better. Removing the price fixing restrictions could very well drive prices higher since the product would be in fewer hands, and there would be less competition. So the stores price it out of reach for 4/5ths of the population during a disaster, doesn't matter to them as along as that 1/5th is bringing in twice the profits at the end of the day.

[GGT]

Price controls make shortages worse because it leads to hoarding and buying for the purpose of reselling.

Gas supply is short because electricity supply is limited. Some stations had gas but no way to pump, some had electricity but ran out of gas. Would you be alright if gougers were selling electricity (via their gas-fueled generators) at double the price, even to places like hospitals or emergency shelters?

And people can't afford to pay an extra $2 a gallon for gas for a week. Their lives must not mean very much to them.

Either that's a callous and cynical view you have, or you don't understand Disasters. It's pretty tough to operate on cash when banks and ATMs are out of service at the same time, and people need gas to get to electrified areas just to get their cash.

[Lewkowski]

Uh, no....it's like you don't understand the dynamics of a DISASTER. Those shortages are aberrant results of normal supply/demand, and the "commodity" is needed for staying alive (heat, generators), recovery and clean-up (chain saws, transportation).

Would you say the same if Texans had a DISASTER and drinking water was the "commodity" in short supply?

I'd love for some enterprising businessman to truck in gallons of clean water several hundreds of miles. Of course they won't do that if they can't make a profit... (you see how this works yet? Minus the profit incentive you'll have fewer people willing to go to extraordinary lengths).