http://www.washingtonpost.com/blogs/wonkblog/wp/2012/11/23/black-friday-is-a-bunch-of-meaningless-hype-in-one-chart/
Monday, November 26, 2012
Friday, November 2, 2012
OMG...They're Price Gouging!
We've been inundated with stories and reports of the devastation caused by the Frankenstorm, by Sandy, on the east coast. Specifically, New Jersey and New York were hit pretty hard and experienced the destruction many have already in states farther south and along the Gulf of Mexico. This storm is called a 'once in a lifetime' event. The drumbeat of 'global warming' is louder and louder to explain the causes for this seemingly freak event. But, if one actually engages in research, looking into the past to see any trends, one finds that this is not a real unusual event. Check out the records for that area in the 1950s and 60s. We have had a period of a few decades run together of relative calm, and we assumed that was the long-run normal. Ooops.
Now, to the real cause for my diatribe, the powers that be are up in arms over price gouging. From rental cars' prices rising almost a 1000% to generator prices, the cry of unfairness reaches our ears from many in the media who actually have finally experienced a hurricane disaster first-hand. Instead of preying like peeping toms, like prurient vultures upon others in Red States, they claim a special status as 'real' victims, as if their sufferings are worse than those in Mississippi, or South Carolina after their severe hurricane experiences. Gasoline shortages, public transportation failings, electricity outages affecting millions, all of this the antecedents set in place by those who would do good using the government's powers. Limiting the generating plants because of environmental concerns (on the absolute edge of marginal benefit compared to the all-too real marginal costs they now know personally) to refineries, that megalopolis of the northeast was living at the edge of capacity in normal times, no excess capacity to carry them in times of need.
Into this fray, storming in like the cavalry come entrepreneurs who have access to semi-trucks and means of conveyance to bring in goods in high demand. They bring generators, chain saws, food, vehicles, tarps, and other items that are oh so wanted after a tree smashes one's house and car. These individuals labeled 'jackals' by the media offer their goods at prices well above those found a week ago in stores in the area. This is so heinous, most of the jurisdictions have passed laws forbidding such increases in prices to a limit of 10% above normal. The governments have imposed a price ceiling. Guess what results from price ceilings? Chronic shortages. People who would voluntarily pay a much higher price than is normal are limited in their options by a do-good gov't who only has their 'best' interests in mind. Families that would have a generator now do not. Households that would have lumber and tarps to cover the damage from further incursions of weather, now do not. Is the beneficent gov't helping them? Not really. In fact, that same gov't is hampering recovery efforts in the way FEMA, EPA, OSHA, etc. are regulating each and every aspect of activity. We wouldn't want an individual to get injured using a chain saw to cut a tree apart that blocks a road, so we prohibit that activity unless done to a strict standard. (I bet the individual wielding the chain saw doesn't want to be injured either, but he also wants his road open days faster than the gov't would accomplish. Wanna bet he is a bit careful in his use of the chain saw absent any safety regulations? To assume otherwise is to assume him an idiot.)
When demand shifts to the right, increasing beyond previous levels, prices rise in market economies. Price is a data point loaded with so much information for both consumers and suppliers. When that information is corrupted by a do-good gov't, by a beneficent, paternalistic power, a disjointedness ensues. We call this chaos, as if the storm did not do enough by itself but requires more 'assistance' by that oh-so-caring organization. When prices rise, suppliers notice an opportunity to benefit and work in ways they did not before. Suppliers supply, they take risks and efforts to move demanded goods to the area. They incur sometimes great costs in these efforts, and must be rewarded above those costs. (See my other blog post about charitable activity in disaster areas being a totally different thing, in no way opposing the efforts stated here.) When a gov't limits this reward, guess what? Families have a much lower standard of living in these transitionary times between before, and after recovery.
Lastly, one must wonder at the justice (oh so hated and reviled in its application now) of a paternalistic government's 'home turf' of fanboys experiencing the real effects of that same nanny-state.
Now, to the real cause for my diatribe, the powers that be are up in arms over price gouging. From rental cars' prices rising almost a 1000% to generator prices, the cry of unfairness reaches our ears from many in the media who actually have finally experienced a hurricane disaster first-hand. Instead of preying like peeping toms, like prurient vultures upon others in Red States, they claim a special status as 'real' victims, as if their sufferings are worse than those in Mississippi, or South Carolina after their severe hurricane experiences. Gasoline shortages, public transportation failings, electricity outages affecting millions, all of this the antecedents set in place by those who would do good using the government's powers. Limiting the generating plants because of environmental concerns (on the absolute edge of marginal benefit compared to the all-too real marginal costs they now know personally) to refineries, that megalopolis of the northeast was living at the edge of capacity in normal times, no excess capacity to carry them in times of need.
Into this fray, storming in like the cavalry come entrepreneurs who have access to semi-trucks and means of conveyance to bring in goods in high demand. They bring generators, chain saws, food, vehicles, tarps, and other items that are oh so wanted after a tree smashes one's house and car. These individuals labeled 'jackals' by the media offer their goods at prices well above those found a week ago in stores in the area. This is so heinous, most of the jurisdictions have passed laws forbidding such increases in prices to a limit of 10% above normal. The governments have imposed a price ceiling. Guess what results from price ceilings? Chronic shortages. People who would voluntarily pay a much higher price than is normal are limited in their options by a do-good gov't who only has their 'best' interests in mind. Families that would have a generator now do not. Households that would have lumber and tarps to cover the damage from further incursions of weather, now do not. Is the beneficent gov't helping them? Not really. In fact, that same gov't is hampering recovery efforts in the way FEMA, EPA, OSHA, etc. are regulating each and every aspect of activity. We wouldn't want an individual to get injured using a chain saw to cut a tree apart that blocks a road, so we prohibit that activity unless done to a strict standard. (I bet the individual wielding the chain saw doesn't want to be injured either, but he also wants his road open days faster than the gov't would accomplish. Wanna bet he is a bit careful in his use of the chain saw absent any safety regulations? To assume otherwise is to assume him an idiot.)
When demand shifts to the right, increasing beyond previous levels, prices rise in market economies. Price is a data point loaded with so much information for both consumers and suppliers. When that information is corrupted by a do-good gov't, by a beneficent, paternalistic power, a disjointedness ensues. We call this chaos, as if the storm did not do enough by itself but requires more 'assistance' by that oh-so-caring organization. When prices rise, suppliers notice an opportunity to benefit and work in ways they did not before. Suppliers supply, they take risks and efforts to move demanded goods to the area. They incur sometimes great costs in these efforts, and must be rewarded above those costs. (See my other blog post about charitable activity in disaster areas being a totally different thing, in no way opposing the efforts stated here.) When a gov't limits this reward, guess what? Families have a much lower standard of living in these transitionary times between before, and after recovery.
Lastly, one must wonder at the justice (oh so hated and reviled in its application now) of a paternalistic government's 'home turf' of fanboys experiencing the real effects of that same nanny-state.
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