Gut Rumbles

September 04, 2005

quote of the day

I disagree with this statement:

Price "gouging" is purely in the mind of the beholder, and there's no way to distinguish between it and the necessary signals that the market must have to ensure the most efficient use of resources. The price "gougers" are (often, if not always) the people who will have incentives to satisfy market needs as quickly as possible, and ensure that the economic recovery will occur. That some people may "unfairly" take advantage of this is a price we have to pay, and it's a small one compared to the alternative.
rand simberg

First, I'm tired of hearing about the insulin and ice bullshit. My brother has been diabetic since infancy and he takes two shots every day. He buys insulin that DOES NOT require refrigeration. That breakthrough happened more than a dozen years ago, and it's allowed him to do things that he never could before.

So, I don't want to hear any crap about somebody selling ice for $10 a bag "saving lives." That bastard is lining his wallet, that's all.

I don't see anything wrong with people making a profit from ANY goods or services they offer. But I think Rand is looking at this situation too simplistically. I have no doubt that the price of plywood and shingles will rise dramatically after what Katrina did to the Gulf Coast. The price of gasoline will, too. That's fair.

But gouging people is a lot different from the law of supply and demand. I agree that price-fixing by the government is a big mistake, and I don't want to see bureaucrats having those kinds of brain-farts.

Making a decent profit is one thing. Unbridled greed is another. I'm damn surely no economist, but I can't see how buying a generator for $350, hauling it to the hurricane-ravaged area and then selling it for $5,000 just because someone is desperate enough to pay that price for it is morally defensible.

It may be that infamous "Law of Supply and Demand," but it's still a shitty thing to do in my book.


I am about as much a paleo-conservative free market man as anyone..and I agree with you right down the line on this one.
There is a place in Hell (or at least a temporary residence) for blood sucking bastards like those you describe.
As Hank might have said, I'd love to spit some beechnut..."

Posted by: Randy (TexasReb) on September 4, 2005 11:59 AM

In your scenario, the choice is between paying $5,000 for a generator, or not having one at all. What's wrong with someone paying the money? Or should everyone be made dependent on the government bailing them out?

I wouldn't drive into New Orleans for much less than that.

Posted by: David on September 4, 2005 12:59 PM

Pay 10 bucks for the ice, or I will find someone who will. Don't like it? Get your OWN ice.

Greedy fucktard I may be, but a greedy fucktard that is doing something no one else is. Suck it up.

Posted by: Yogimus on September 4, 2005 01:28 PM

Well said Acidman. As for those who have, and will, excuse scum-sucking greed, because "why would anyone lift a finger in an humanitarian gesture - when they could line their pockets off the back of their fellow man's misfortune - I hope someday you'll have to depend on the kindness of strangers and live to eat those words.

You're the sludge on the bottom of the gene pool's septic tank. It's the people like you who took the civil out of civil society.

Posted by: Libby on September 4, 2005 01:39 PM

I reckon the reason that I never retired with several millions in the bank was because of some personal ethics. I have never begruded anyone a profit-but I do call gouging just because one can ,a legalized form of extortion-kind of like income taxes used for income redistribution. The fact that it is legal doesn't stop the fact that it is still hi-jacking the public. I, as most business people in my area had the opportunity to hi-jack after the hurricanes hit last year. But instead of extorting all the profit that we could we loaded our vehicles with plywood and chain saws and went to work helping our neighbors-instead of hi-jacking we actually lost money. But that is what a civilized society is about-helping the ones who need help and are trying to help themselves. Primitive thinkers hi-jack with the every man for himself logic. RE: the chaos on the streets of New Orleans.

Posted by: GUYK on September 4, 2005 01:41 PM

In your scenario, the choice is between paying $5,000 for a generator, or not having one at all. What's wrong with someone paying the money? Or should everyone be made dependent on the government bailing them out?

I wouldn't drive into New Orleans for much less than that.

This is an either/or question that not only misses the whole gawdblessed point.
In time of need, people with a concience will help their fellow man..make little money in the bargain? Sure. But not take advantage of anothers misery.
If you dont see the difference, then that is your problem, Dave.

Posted by: Randy (TexasReb) on September 4, 2005 02:19 PM

Pay 10 bucks for the ice, or I will find someone who will. Don't like it? Get your OWN ice.

Greedy fucktard I may be, but a greedy fucktard that is doing something no one else is. Suck it up.

Posted by Yogimus at September 4, 2005 01:28 PM

Bullshit..your a vulture who gives the free market a bad name. Fuck you. Dont even flatter yourself into thinking you actually provide a service to anyone.

Posted by: Randy (TexasReb) on September 4, 2005 02:33 PM

Sorry, it's price gouging.

If I'm a gasoline retailer, and I just filled my tanks with gas at $2.55, and I usually add 30 cents, so I've been selling my gas for $2.85, then along comes the Great Atlanta Panic, and I bump my prices $2.00, I'm gouging. There's no way you can call it anything itself.

Do I have a right to gouge? Legally, maybe. Morally, never.

Do we change the laws to make gouging illegal? No, because to do that would be imposing price controls, and ALL retailers would then sell gas at the maximum.

We did that with the WIN (Whip Inflation Now) program started by Gerald Ford and continued by Jimmah, and the result of WIN was that our economy was just about drowned.

Nope, we leave it alone, and when that gouging retailer is forced to lower his prices again after the supply resumes, we shun him and he goes out of business.

Posted by: Rivrdog on September 4, 2005 02:44 PM

It's unfortunate that extremely stupid people are allowed to read Ayn Rand books.

The United States has a long history of outlawing profiteering. If simpletons who squeal "FREE MARKET!" all the time had their way, a paramedic could refuse to treat you until you signed over the deed to your house and agreed to allow your wife to perform oral sex on him.

The stupid do not understand that the "free" in "free market" describes a situation where neither party is UNDER DURESS. A hurricane victim who needs ice to preserve food for his family is under extraordinary pressure not normally present in a free market. In situations like that, the law has traditionally stepped in and forced profiteers to behave reasonably.

If Atlas Shrugged is the only book you ever read, you need to get your sorry ass to the bookstore and improve your education before you make a goddamn fool of yourself.

Posted by: Steve H. on September 4, 2005 03:42 PM

They have insulin that doesn't require refrigeration?

My last roomate was a diabetic. The whole refrigeration thing seemed like a pain in the ass. I'm surprised he doesn't use the non-refrigerated kind.

On the other hand, he's a flake and a cheapskate.

Posted by: ErikZ on September 4, 2005 09:26 PM

Why condemn a 10:1 windfall in Bruce's ice sales, when no one would say a thing about a 10:1 win at gambling? I could make up a tearjerk story about how the gambling windfall was gained at the expense of some slot addict's kids, and you'd tell me to buzz off.
Why not consider the risks that Bruce took with his time, labor and money: buying the ice, renting the truck, and driving? There was a chance that the roads to the disaster area would be blocked by nature or FEMA goons, and he'd lose his entire investment.
Think about the people buying his $10 ice: who are they, and why would they pay so much? My guess is they're grocers or restauranteurs who are willing to buy $100 in ice, to avoid the spoilage of $1000 in food. Maybe if Bruce hadn't brought his truckload of ice, they couldn't re-open as quickly, and the food shortage would be worse. How do you feel about trashing hundreds of pounds of food, when people are hungry?
You might counter that people should have trucked in ice out of goodness, but the fact is, they didn't. The Milk of Kindness might be sweet, but there's a very limited supply of it. Capitalism isn't always nice at the extremes, but it gets the job done when it counts.
If you bet $10 at a casino, odds are you'll lose it all. Put down $10 on Bruce's gamble, and at least you'll get a bag of ice.

Posted by: ispdrudge on September 5, 2005 06:53 AM

Price gouging is morally abhorrent. Appeals to the law of supply and demand in this context are totally are wrong-headed. All this establishes is the price at which the gouging can take occur. It is irrelevant to the ethics of the situation. Acidman is talking about price setting in extraordinary situations. In such situations, power imbalances between buyers and sellers can lead to extremely high market clearing prices. At such moments, we, as moral beings, intervene and set bounds on the normal operation of the market. These limits can be self-imposed. We shouldn't necessarily need government to tell us what is moral.

Posted by: Max on September 5, 2005 09:42 AM
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