Price gouging

[WaterH]

This topic has come up several times, most recently in the hurricane thread. I’ve heard the arguments on both sides, but Im curious what the consensus is. This is not really a political thing, so it may not go either way for Irate people. Whether you read on or not, Please vote in the poll.

My personal feelings are there is almost no such thing as price gouging. About the only thing I would apply that name to is doctors and lawyers fees. There is no person’s labor rate that is worth $50,000 an hour. Especially when you consider they don’t garentee their work. About the only people that might be worth those kinds of rates are an athlete that “is” the best in the world. (You can’t replace him)

When it comes to inanimate objects, the world revolves around buying at one price and selling at a higher price. Why is selling generators any different than selling real estate? Some times the market is fantastic, sometimes the market sucks. If I buy ten generators, hoping to make money in a hurricane, is anybody going to help me if there is no hurricane? So why do I have to help people who don’t prepare by giving them a fair deal?

Some people think food is differnt. That might be true if people were actually starving. In this country, that is nearly impossible. I think I heard that some people starved during Katrina, but it was people stuck in a nursing home that they didn’t know about. You won’t live long without water, but it takes a long time to starve. After Katrina, I was based in Boothville, LA. The only food store for 50 miles was over charging quite a bit, but I didn’t have to buy it.

 

[grumpy356]

Illegal or unethical???

 

[rockota]

only possible way to price gouge is in a true monopoly..

The only true monopoly is govt.

 

[clodhopper]

bacon

 

[Steve300xcw]

Well this oughtta go well

 

[Thumping]

I couldn't do it but I have a conscientious which it seems alot of people do not have. This isn't however, anything new. Read up on any of the "gold rushes". Those selling supplies are the ones that made bank.

Remember not that long ago the prices of new and used cars along with lumber.....

So, its really just the nature of the beast. Someone has something someone else "needs" is alot different than what someone else "wants".

The only thing I'm surprised about is the amount of people that seem surprised.

 

[grumpy356]

only possible way to price gouge is in a true monopoly..

The only true monopoly is govt.

Raising your prices when people are in a time of great tragedy or a state of emergency to take in extra profit is unethical.

Texas .. i believe the number is 25% increase in an emergency moves you from "what the market will bear" to Gouging.

Price gouging is illegal, and the Office of the Attorney General has authority to prosecute any business that engages in price gouging after a disaster has been declared by the governor or president. The attorney general has issued stern warnings about price gouging to businesses in times of disaster, but you should still be on your guard.

§17.46(b) of the Texas Deceptive Trade Practices-Consumer Protection Act provides that it is a false, misleading or deceptive act or practice to take advantage of a disaster declared by the Governor under Chapter 418, Government Code, or the President by:

1. Selling or leasing fuel, food, medicine, lodging, building materials, construction tools, or another necessity at an exorbitant or excessive price;
   
   or
2. Demanding an exorbitant or excessive price in connection with the sale or lease of fuel, food, medicine, lodging, building materials, construction tools, or another necessity.

Please note that high prices alone do not mean that price gouging has taken place, as businesses are generally allowed to determine the prices for their products. However, if a disaster has been declared by the Governor of Texas or the President, and businesses raise the price of their products to exorbitant or excessive rates to take advantage of the disaster declaration, then it is quite likely that price gouging is taking place, and you should file a complaint with our office concerning the incident.

 

[FlatLander]

My personal feelings are there is almost no such thing as price gouging. About the only thing I would apply that name to is doctors and lawyers fees. There is no person’s labor rate that is worth $50,000 an hour. Especially when you consider they don’t garentee their work. About the only people that might be worth those kinds of rates are an athlete that “is” the best in the world.

Why are they worth it? What do they provide?

(You can’t replace him)

The strongest men on earth are constantly replaced. Just like nearly every athletic accomplishment or record. Natural or not, there will be others. Again, what are they providing?

 

[Tiha]

I think it was desert storm and local company Caseys jacked up fuel prices. Nobody else did.

They got in trouble for it, had to pay the state a bunch of money.

I think it is free market, but the man says no apparently.

 

[rockota]

Raising your prices when people are in a time of great tragedy or a state of emergency to take in extra profit is unethical.

Texas .. i believe the number is 25% increase in an emergency moves you from "what the market will bear" to Gouging.

so government determines what is an appropriate profit margin.... that's unethical, IMHO.

It also ignores the upstream cost increases... Did the raw material price increase? Did the shipping increase? Putting an arbitrary x%=gouging is exactly that - arbitrary.

And what (or more importantly, who) defines an emergency?

 

[Tiha]

so government determines what is an appropriate profit margin.... that's unethical, IMHO.

It also ignores the upstream cost increases... Did the raw material price increase? Did the shipping increase? Putting an arbitrary x%=gouging is exactly that - arbitrary.

And what (or more importantly, who) defines an emergency?

I am in Iowa and I knew the hurricane was coming, Do they not warn people down there?

Apparently not if they were so unprepared that now all the sudden this is an emergency.

 

[arse_sidewards]

only possible way to price gouge is in a true monopoly..

What makes a monopoly?

If the law says I need to hire someone with a license to do something and everyone with that license belongs to some professional organization that all but mandates they set their prices per a specific set of rules is that a monopoly?

(not specific to short term stuff like disasters, obviously).

 

[rockota]

I am in Iowa and I knew the hurricane was coming, Do they not warn people down there?

Apparently not if they were so unprepared that now all the sudden this is an emergency.

There was some warning, but as I understand it, the path changed much greater than predicted. Hearing once in 500-1000 year type of event.


To be fair to all of the victims, floods can be extremely hard to prepare for. Especially of this scale.

 

[bad zuki]

so government determines what is an appropriate profit margin.... that's unethical, IMHO.

What are your thoughts on .gov regulated medication prices?

IMHO price gauging isn't right. fair and simple. I just recall who does what in an emergency and adjust my buying habits accordingly.

 

[rockota]

What are your thoughts on .gov regulated medication prices?

IMHO price gauging isn't right. fair and simple. I just recall who does what in an emergency and adjust my buying habits accordingly.

highlighted is the beauty of the free market.

I don't agree with gov't controlling any industry... usually they just make it worse. Having said that, it takes (often) billions of dollars to bring a medication to market... If it's not profitable, no new medicines will be developed.

 

[Slander]

Bob Murphy and Tom woods break down why capping prices during a disaster actually leads to shortages much better than I ever could, listen, form your own opinion:

Ep. 2540 Two Disastrous Kamala Ideas | Tom Woods

Economist Bob Murphy joins me to discuss, in some detail, the proposal to ban "price gouging" by (of all people) grocery store owners, as well as to impose a

tomwoods.com

 

[grumpy356]

so government determines what is an appropriate profit margin.... that's unethical, IMHO.

It also ignores the upstream cost increases... Did the raw material price increase? Did the shipping increase? Putting an arbitrary x%=gouging is exactly that - arbitrary.

And what (or more importantly, who) defines an emergency?

I read it as… You set your profit margins way before the disaster.
And they are accepting if you want to make an extra 20% off of everybody else’s misery… in a time when competition can’t readily move in to create a fair market.

 

[Mikel]

Raising your prices when people are in a time of great tragedy or a state of emergency to take in extra profit is unethical.

Imagine that your entire state is devastated by some natural catastrophe and there is no fuel anywhere, with roads, power lines, all down.

If gasoline there can be sold at $20/ga, some entrepreneurial trucker from some unaffected area is going to venture there with his tanker and bring fuel to the people. As the supply increases, prices will go down.

If the government freezes prices to "normal levels", the people in that devastated state are going to be waiting for a very long time, because no one is going to risk life and limb for no profit.

The free market isn't always nice, but it works, because for the right incentive, we all work for our own benefit.

 

[Wheelin66bronco]

I voted Kamala just fuck up your poll

 

[Will12785]

I couldn't do it but I have a conscientious which it seems alot of people do not have. This isn't however, anything new. Read up on any of the "gold rushes". Those selling supplies are the ones that made bank.

Remember not that long ago the prices of new and used cars along with lumber.....

So, its really just the nature of the beast. Someone has something someone else "needs" is alot different than what someone else "wants".

The only thing I'm surprised about is the amount of people that seem surprised.

Let's say you have a business and you sell a product that had a steady supply chain for years. Something happens to disrupt your supply chain and you can't get new product. You don't raise your prices because you have a "conscience" you sell down the majority of your product before supply chain comes back on line, but your supplier is now charging you more than you sold the product for last time you bought it. What do you do then?

Let's take that a step further and say after a while the price decreases back to what you used to pay or even less? What then?

 

[Mikel]

I read it as… You set your profit margins way before the disaster.
And they are accepting if you want to make an extra 20% off of everybody else’s misery… in a time when competition can’t readily move in to create a fair market.

Prices do many things. One of them is to transmit information on market conditions. In a catastrophe, supply goes down (communications and logistics fail), while demand goes up (everyone desperately wants food, fuel, etc).

The supply/demand curve looks for a new equilibrium point, where those resources can be used most efficiently. Those higher prices do two things: They ensure those products are bought by those who want/need them the most, and open the door to more supply, which in a free market, eventually lower prices.

It's when government stops this process, when people get screwed. All in the name of "fairness".

It happens every single time.

 

[75cruisin]

Im Just curious what you are selling and for how much?

 

[rockmup]

Let's say you have a business and you sell a product that had a steady supply chain for years. Something happens to disrupt your supply chain and you can't get new product. You don't raise your prices because you have a "conscience" you sell down the majority of your product before supply chain comes back on line, but your supplier is now charging you more than you sold the product for last time you bought it. What do you do then?

Let's take that a step further and say after a while the price decreases back to what you used to pay or even less? What then?

Thank you 8lb 9oz baby jesus, I was just coming to post that.

 

[TrailTamer]

I think price capping in a disaster area is ‘ok’ as long as it’s rationed. Example; 5 generators per a suburb neighborhood block and expected to share it. Although I can see how logistics to accomplish this can be difficult.

Granted, I think it’s on them whoever chose to not evacuate in an expected disaster area like the hurricane Helene. Hurricanes aren’t like a tornado where it’ll spawn in your lawn without warning.

 

[Thumping]

Let's say you have a business and you sell a product that had a steady supply chain for years. Something happens to disrupt your supply chain and you can't get new product. You don't raise your prices because you have a "conscience" you sell down the majority of your product before supply chain comes back on line, but your supplier is now charging you more than you sold the product for last time you bought it. What do you do then?

Let's take that a step further and say after a while the price decreases back to what you used to pay or even less? What then?

Again, I have a conscientious and can't knowingly just fuck someone over.

You do have a point and I understand what you're getting at but that does not justify raising the price 1000%. However it happens all the time and every time there is a limited supply of any certain item.

Some people can take advantage of other people even in desperate situations and sleep well....I cannot.

 

[KarlVP]

MERGE!!!!

 

[posford]

east_beast Come fuck up this thread and not the hurricane would you?

 

[bad zuki]

highlighted is the beauty of the free market.

I don't agree with gov't controlling any industry... usually they just make it worse. Having said that, it takes (often) billions of dollars to bring a medication to market... If it's not profitable, no new medicines will be developed.

Right. And who pays for that funding? Every single tax payer and then more by who need the medication. You know American companies charge other countries less for the same medication right? They can sell at lower costs because it doesn't actually cost that much to produce medication.

Let's say you have a business and you sell a product that had a steady supply chain for years. Something happens to disrupt your supply chain and you can't get new product. You don't raise your prices because you have a "conscience" you sell down the majority of your product before supply chain comes back on line, but your supplier is now charging you more than you sold the product for last time you bought it. What do you do then?

Good example. I'd think this falls under normal business practices and not an emergency situation though. (I'm not using widgets....)
You are selling for what you believed is current market rate, you raise prices accordingly once prices rise. The consumer has the right to go to another supplier.

Let's take that a step further and say after a while the price decreases back to what you used to pay or even less? What then?

Still normal business. If you bought something at XX, and the price goes to X. You have the option to sell at a loss and at market value or wait until prices come back up and sell then. The consumer can decide to go somewhere else. It's a great reason of why stock isn't the end all be all investment and needs to be managed. Like scalpers who buy tech products. It can go up or down.

 

[east_beast]

east_beast Come fuck up this thread and not the hurricane would you?

I've said my piece. Folks just can't understand that there are two variables at play in these situations. They want to take advantage of normal market conditions in a situation where social conditions have changed drastically. It carries a different risk factor with it but they want to be sheltered from those risk factors to take advantage of the economic opportunity. They want to have their cake and eat it too. Ignore the reality of the full scope of the situation. They're acting like academics who've never stepped outside of a classroom or socialists who think socialism just hasn't been done right yet.

 

[Filthy McChevy]

Some stuff is ridiculously overpriced. Like cat scratchers made of layers of cardboard for 8 to 10 bucks.