Price Gouging Actually Save Lives? Yep

Submitted by: Cajun247 5 years ago

Because everyone on the East Coast is gouging prices (food, water, gas, etc) this guy explains why price gouging is good
There are 73 comments:
Male 102
Price Gouging = making supplies available for the rich during any disaster!
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Female 355
Three 1 gallon tea jugs my mother has had since the dawn of time filled with well water 2 days before irene. Cost us nothing.

Candles of various smells accumulated over the last 10 years. Also cost practically nothing.

Maybe it`s growing up on farmland, or maybe it`s the fact that the closest store is 10 miles from here but the way people freak out before storms and get all weird about water, milk, bread and eggs is so alien to me, I actually had to go look up what price gouging meant before I even watched the video.




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Male 36,500
True @AntEconomist: if there were `more stock` it wouldn`t be `sold out` eh? Notice that @Squirlz? Limiting how many one can buy is really easy to `get around` and doesn`t really help create fair distribution. Unless you want the FBI involved...
It`s a financial risk for a store owner to massively over-stock before a storm, then not sell it! What can one do with 50,000 wind-up flashlights after the storm passes? (or misses?)

Extra costs (and risk) must lead to increased profits or it makes no financial sense to do it.

I know! We`ll get the GOVERNMENT to do it for us! (rationing) Look how well FEMA works, and it`s FREEEEE!
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Male 371
@LazyMe: It`s the "order more stock" part that is hand-waiving. The whole point of a shortage is that there isn`t more stock (or the "more stock" is hard to find, or that it takes time to produce, etc.). That`s why allowing the price to rise is a good idea. The higher price gives entrepreneurs the incentive to use extraordinary means to find and get more stock to where it is needed quickly.
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Male 10,440
It`s entirely possible that ordering more stock in such situations and then selling all of it at a the normal price would yield more profit to the store than gouging the normal stock simply because there are more people that can afford it and profit margins for day-to-day items are usually pretty high.
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Male 10,845
So ultimately `sales limits` have their own loopholes.
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Male 36,500
[quote]So why did he have stock in the first place? - Baalth[/quote]
*sigh* indeed!
To bring in extra stock would mean higher costs. If the store cannot raise prices to reflect these costs, they don`t make much (or any!) profit. So WHY bother?

Most stores won`t go "hog wild" gouging their customers, people would remember that and shop elsewhere in the future. But to simply run out of everything, THAT is better for whom exactly?
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Male 371
@Squrlz: "...whenever we had to put a limit on purchases, we`d restock ASAP. Why? Because the item was flying off the shelves and we were making profit off of every unit we sold."

You contradict yourself. If this was your behavior, then by definition there was no shortage.
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Male 36,500
Lee Doren is the man! Looking at this objectively, he`s right! Of course we FEEL bad when we see it, but feelings don`t get you food or water, eh?

vv @Baatlh - idk if you have a better system for the world`s economy (I haven`t read the replies yet) but I do think that 75% of all humans on the planet use `free enterprise` to one degree or another, eh? (this includes China)

If someone is willing to pay 7.3M for a picture, then that`s what it is worth! YOU don`t have to agree.
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Male 4,547
"The free market price represents the consensus opinion of literally every single person in the world."

This is literally a misrepresentation of the word literally.

It represents the highest price that it is capable of selling for. If there is only one item, its value is determined only by one person. Even if everyone else disagrees, by any factor. Suggesting that one person is stupid is perfectly reasonable.

Example: A $7.3 million picture of Kate Moss. Do you really think everyone agrees that`s how much it is worth? Most people? Many people? Or just 2 guys at an auction.

Sometimes, many people can be complete dumbasses, for example: This for example.
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Male 243
dingus
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Male 1,111
continued...

Changing the price tags on the items when stock is in danger of running extremely low (as it`s not exercised normally outside of extreme circumstances (save for gasoline)) is a simple one step process to regulate the items from the shelf rather than the cashier at walmart dealing with a mother of 4 demanding why she can`t buy more than one case of water even though she is ready and able to buy more.

Another example is that same mother of 4 sending her children back individually to buy the maximum amount of goods as set by the limit. Then you`re back to square one. Hoarders will have most of the resources and those in need (even with the money) will be out of luck.


The goods at a set price are agreed upon by the consumer and the seller in a (perfect) free economic system. Setting limits on the purchase of items honestly falls outside of the economic system and is thus, extremely difficult to enforce.
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Male 1,111
Speaking from a business standpoint placing buy limits on items is easy to do. Assuming that it is one particular product, there is a set limit in stock, and it will be written off as so. It`s also easy to keep track of, assuming it`s one or two items.


But it`s extremely difficult to impose a `buy limit for all essential supplies, have each employee oversee it, and make sure everyone is done in time for said disaster to strike. Managing the anger and disruption caused by such techniques within the customer base would be nearly impossible to do.


While this approach is good in theory, and it is, I don`t disagree with the exploring the idea. It is fundamentally flawed in actual enforcement of said theory.

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Male 1,111
@jamie76

Well because you believe you`re in such a mental state to disagree with noted economists as well as the entire economic theory our country is based on please share what saves you from being so `small minded` and a `moron` as you are proposing a more difficult solution to enforce and you believe that no one`s idea but yours is correct. I believe that constitutes a "small mind"

So share what finishing school(s) you attended and what you course of study was so that we can derive the credibility you are basing your untested theory on.
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Female 5
Sure, relevant, but it took him 4 minutes of this to say `price gouging stops people stockpiling cheap necessities, so there`s more to go around.`
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Male 2,345
OldOllie

you really think that a black market of sufecient size could spring up in a situation where you have about 3-4 days to prepare??? are you joking? having lived in a few third world countries I have seen first hand how and why they start and trust me, they take longer then a couple days to organize and get running...
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Male 2,345
this is a total load of poo.

you simply place a buy limit on essential items. stores have been doing this for years during sales, wherein they advertise sales items and the fine print states "limit two per customer". Now the store does this to spread out the sale and bring in new customers and to create a sense of urgency in each customer.

PLACING BUYING LIMITS ON ITEMS UHHHHHHH SOLVES THIS FING PROBLEM.

this guy and those that defend this BS are small minded morons that cannot think of something as simple as placing limits on how much of each item you can buy...fing hell people, is that really hard to figure out????

morons, the lot of them.
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Male 15,832
[quote]The logical thing to do instead or raising prices in order to "make sure everyone gets some" is set a limit on how many you can buy on emergency goods.[/quote]
Congratulations! You just created a black market...idiot.

If a willing buyer and willing seller agree on a price for something, that`s exactly what it`s worth -- no more, no less. The free market price represents the consensus opinion of literally every single person in the world. Anyone who says he should be be given the authority to use the coercive power of government to force or prohibit people from engaging in consensual transactions of any kind is an arrogant prick who thinks he`s smarter than everybody else in the entire world combined. People like this should be hanged. (They don`t deserve the dignity of being shot.)
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Female 1,589

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Male 4,547
"Once that product is gone, there is no incentive for suppliers to bring in more."

Sigh...

So why did he have stock in the first place? The original incentive was "I can sell this for money". Now that the plan is working he`s giving up on it?

They profit from sales. If they do make a profit on each bottle of water, there is incentive to bring in more bottles of water to sell, to make more profit.

Same can be said of things like subsidizing oil companies.

"Hey steve, would you mind drilling for oil and making 75 million dollars a day in profit for it?"
"Why no US government, I would not"
"What if we give you $3 billion in subsidies?"
"Oh! Well if there`s money involved then sure!"

Nobody has ever had this conversation.
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Male 649
The logical thing to do instead or raising prices in order to "make sure everyone gets some" is set a limit on how many you can buy on emergency goods.
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Male 533
Besides, I said nothing along the lines of a `hard limit,` I said that it would be in peoples best interest if there was a tax (one that would provide more relief funds in such an occasion) on over-consumption in the event of a natural disaster. It would be a situational tax, that would help people in need, not profit for the state, unlike some you have to live with every day (gluttony tax). Deterring one from buying too much is much easier than trying to keep a store from capitalizing on a disaster.
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Male 1,745
This guy represents everything reprehensible in government today. We`re going to cause you to panic, raise prices and.. and... and this is GOOD for all you folk. Thanks Mr. Think Tank.

This guy is a total douche, giving mild examples.... he obviously doesn`t realize how bad price gouging can get. Maybe when he is dying of dehydration someone will charge him $10,000 for a bottle of water and he`ll take that experience to his next meeting of thinking douchebag`s tank of ideas.
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Female 87
What. rubbish. Utter toad is right. Does anyone really think it`s better having the likes of him running our lives than an elected government?
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Male 533
--impose emergency rationing laws


More government U MAD?

I`ve been reading the comments here and have heard some good arguments for rationing as opposed to price gouging. But government is NOT the tool to be setting those limits. Let the stores set those limits at their own will.--

The fact is, most of them look at it like this slimy little turd. They`ll just increase the price to profit off of a natural disaster.
I think it`s funny how people think it`s okay for the gov`t to save them from the natural disaster, but if the gov`t purposed to help the community ration its limited resources as part of that process; `oh, hell no.`
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Female 1
@chimmeychang
Limiting how much you can buy doesn`t really work because people just come back to buy again, or as we do in our family, each family member "buy" the allowed amount while mom pays for it all...
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Male 684
wouldn`t limiting the number of items you can purchase at the normal price do the same thing, many sales have a really good rate, but a maximum limit you can buy.In fact, it seems that would actually make more sense because even at an elevated price people will still get more than they need.
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Male 201
I`ll buy this BS when that wealth start to trickle down. The people gouging prices are not doing so to save lives nor to try and provide equal access - they are doing so to fatten their own goddamn wallet at the expense of others` panic. This is why from the municipal level up to the federal level we have services known as "emergency management."
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Male 303
His argument make economical sense. But people don`t like sense, they like cheap stuff. Then they declare it`s the shops greed that is the problem when actually the problem is their greed.
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Male 25,416
When we had a cyclone... the prices remained the same
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Male 1,540
I agree with other people on this forum. There are other ways to control purchasing of goods besides making it so most people can`t afford it.

And why did he use water as an example? I`ve said before, in the event the water supply actually does go down, anyone who actually is in/near the city is going to be dead anyways.
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Male 10,845
@[quote]hotel rooms[/quote]

You`re conflating goods with services.
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Male 10,845
[quote]impose emergency rationing laws[/quote]

More government U MAD?

I`ve been reading the comments here and have heard some good arguments for rationing as opposed to price gouging. But government is NOT the tool to be setting those limits. Let the stores set those limits at their own will.
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Male 1,360
this a big pile of bullpoo.
Just limit the amount a person can take and problem solved, and maybe fill loads of recepients with tap water and save few bucks.
Or the peolple of the country he`s from are stupid and there is no solution.
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Female 1,803
People don`t stockpile hotel rooms.

Unless they intend to resell them, like ticket scalpers who buy all the popular tickets so kids can`t see their favorite singers.
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Male 762
People don`t stockpile hotel rooms.
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Male 122
GAH... he kinda has a point, but holy hell it just feels so dirty and evil.
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Male 6,227
@AntEconomist: I`ve worked in a grocery store and occasionally would do the ordering. And whenever we had to put a limit on purchases, we`d restock ASAP. Why? Because the item was flying off the shelves and we were making profit off of every unit we sold.

Your statement that "there is no incentive for suppliers to bring in more" is nonsense.

In a nutshell, the difference between our positions is this: You want suppliers to be able to dramatically increase their profits by exploiting human misery and fear, and I don`t.
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Male 371
@Squrlz: Rationing doesn`t make more product magically appear. It merely spreads out the existing product. Once that product is gone, there is no incentive for suppliers to bring in more. Conversely, allowing prices to rise generates tremendous incentive for suppliers to bring in more. In short, rationing is like eating your seed corn. You`re ok for today, but you`re screwed thereafter.
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Male 3,894
Cont`d-- you don`t *need* to increase prices by 1000% because you know that you`ll sell every last unit you ship to the area, and your normal price is already giving you plenty of profit.
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Male 3,894
What about service goods? Like hotel rooms, or damage repair.

If a hotel keeps up regular prices, is one person going to go and rent out all the rooms so they can "stock up," leaving everyone else without rooms? NO! In 2004, after hurricane Charley, there were companies charging over $10,500 for the removal of each dead tree. Really? If prices were kept normal, would "tree-removal-capability" have gone out of stock?

Again, no. Price gouging is a despicable testament to the amount of greed in this country, and if you`re so worried about people buying up all your product, then limit the amount each person can buy.

If your stores are too lazy to do that, then use your city government to impose emergency rationing laws.

Furthermore, he argues that the increased prices will attract more sellers to the area. Look: when the market for a certain good has grown so drastically, and you`re aware that they`ll sell like hot-cakes, you don`t
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Male 3,894
I want to hit his smug face.

Don`t try to come up with some excuse--this is about greed. It`s always about greed.
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Female 193
Disgusting.
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Male 68
Stopped listening at "Hey everyone"
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Male 7,123
The chap is an utter toad. In England we`d call him a spiv. Well, back in the day.
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Male 6,227
@TheWindy- "Tough to argue"?! ~head desk~

Watch me refute 100% of the greed-driven stupidity of this video with one word: Rationing.
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Female 1,589
It`s tough to argue this.
The only solution I can think of is that not all supermarkets gouge their prices. That way if something is sold out at one store (where everything with cheap, or at a regular price) than people can still go to the other store.
Or, you know, people could be civil and only take what they need.
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Male 267
@MrBored123
Yeah, the guy in this video is 100% wrong, I`m not going to argue that. lol
I guess I`m naive in thinking that some shop owners would have common decency and sell their products at a normal price, but limited quantity. Either way, they`re going to sell everything at a much more rapid pace than usual, and end up making a profit.
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Male 6,227
Ahhhh, the miracle of the Free Market: charging poor people who`ve had their houses destroyed by a hurricane $20 a gallon for gas is a GOOD THING. Who knew?! I bet this fine fellow gets extra credit back at his conservative think tank for publishing his brilliant ideas on YouTube.
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Male 52
@uscbadfish

Wow, you just blew my mind by agreeing with me, that never happens on the internet ;-).
And I do agree with you on it being a good idea in general to ration the amounts given out at stores, I was just thinking that the free market logic proposed in the video doesn`t lead to this solution. I`m just saying it must rather be imposed by the government.
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Male 267
@MrBored123
You and your sneaky Canadian logic. lol
You got me. I`ll agree that if someone is going to be the looting/rioting type, they`ll probably trash the store anyway. I just think that in the context of this video, looking out for everyone, and not just the rich, limiting items sold is a good idea.
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Male 4,807

Wow.. Way to plug your crap at the end....Also, can`t you just get water from the tap?
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Male 432
Yeahhhhh I don`t agree with you buddy.
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Male 1,011
When a hurricane comes here and someone tries to buy everything for themselves, they kick them out of the store.
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Male 1,451
Limit 4 per customer.

Duh.
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Male 3,364
Sigh. This guy is an idiot. If I, as a consumer, feel it`s necessary to buy all the water or tunafish in a store, and I`m a millionaire, I can still easily afford to do so after the price-gouging has taken place. So, big no on this guys thinking. Don`t be surprised if you see this douchebag running for office on the Republican Tea-bag party ticket some day.
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Male 52
@LoserTheBoy

They often limit the amount of items you can buy in a sale, because they want you to come for the sale item, but hope you will buy a lot of other stuff so you make it profitable. Often the sale items are not sold at a profitable price, so they don`t want you to get too many of those. On the other hand if there is a shortage of supplies there is no economic incentive to limit the amount per customer. Except as uscbadfish mentioned, consumer outrage, which is difficult to control anyway.
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Male 688
Price gouging is never good. It`s a solution to a problem that shouldn`t exist in the first place.

If you already have your stuff in advance you don`t need to worry about it at all. If you`re stupid and don`t have a disaster kit easily limiting the sale of # of items works fine.

This guys a moron.
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Male 52
@uscbadfish

That might be true if the consumer utters their outrage by destroying your store, but if you have customers like that they will destroy your store in any case when the stuff runs out. No matter if you sell all your stuff to the first or to the first 20 customers.

Maybe he should buy a gun ;-).
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Male 2
Rationalizing your greed 101.

Just limit the number of items that can be sold to each customer. They do it in a sale, they can do it ahead of a potential disaster.
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Male 267
@MrBored123

But wouldn`t it also be in his best interest to serve as many people as possible, to avoid outrage from the consumers? I`d be pissed as hell if, say, 7-11 sold all of their water/food/milk to one person.
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Male 533
--"In fact a poor person would be much more inclined to steal those supplies if they were both essential and overpriced. Where are your economic principles then?" --

Thus making the perfect storm for that post about those supposedly-on-the-heels-of food riots
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Male 533
How about rationing in the incident of a natural disaster? Where, instead of profiting off of a natural disaster/possibly getting fined for gouging, individual households are taxed on their over-consumption, so that more disaster relief can be provided in such an incident. Either route sounds like garbage, and one side of it seems to just be in it for the cash. In the event of a natural disaster, a store is going to sell out of all their stock in these commodities anyway, just the wealthier few get more first.
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Male 7,123
Rationing.
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Male 52
@uscbadfish

It`s not in the individual interest of the store owner to set limits to what he sells. His goal is to always maximize sales.
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Male 10,440
Ahh, HTWW. Sometimes what he says makes sense, I`ll give him that. But often he is dead wrong and acts like he`s sure about everything, and he comes out looking like an ignorant as*hole.

As for this...

He never explains how it is that price gouging is good for the poor. If you`re poor, you can`t afford it so you`re screwed anyway.

In fact a poor person would be much more inclined to steal those supplies if they were both essential and overpriced. Where are your economic principles then?

And finally...

Ever hear of "Limit X per customer"??
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Male 52
His affiliation with the CEI which he only mentions in the end is a clear statement that he is on the side of big corporations which profit the most from price gouging. He uses arguments that superficially take into account the "greater good", but actually only promote profits of big corporations.

As antagonizer mentioned his argument towards poor people doesn`t make a lot of sense as it can well be that they can`t even buy one water bottle at 10$/bottle. At the same time a rich man could come in and buy all of the water bottles for 10$/bottle, leading to the same situation of no supplies left.

The only realistic solution is for local government institutions in afflicted areas to stock up on the necessary items and distribute them fairly among the residents. The free market can`t do that, but anybody from the CEI would never argue against free market ideals that have been proved not to support any greater good, just look at the industrial revolution.
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Male 267
Why don`t the stores just set a limit on what you can buy?
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Male 52
From the Wikipedia on the Competitive Enterprise Institute "CEI is funded by donations from individuals, foundations and corporations. Past and present funders include the Scaife Foundations, Exxon Mobil, the Ford Motor Company Fund, Pfizer, and the Earhart Foundation.[4] CEI cites its major issues of concern as environmental policy, regulation and economic liberty, legal and constitutional matters, and health and safety. Among the methods used to implement the organization`s agenda are various press releases and policy papers, testifying at governmental hearings, suits against various governmental agencies, paid advertising, editorial and op-ed pieces, open letters, books, and NGO operations. CEI`s last television ad campaign (to date), entitled A Bright Future For Some,[5] focused on energy policy and global warming, criticizing policies advocated by former Vice President Al Gore. The CEI ad aired nation-wide in March and April, 2008."
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Female 1,803
Makes perfect sense to me. If people weren`t inherently selfish bastards, price gouging wouldn`t be necessary. People prove time and again they don`t base their decisions on what`s best for the greater good, e.g., people who refuse to change how much they waste and pollute.

Hopefully people evolve before we make ourselves extinct.
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Male 955
I`m not really certain I would consider this price gouging as much as it`s changing prices based on demand, which in this certain situation in his local economy makes sense.

Price gouging on gas for example is a bit different, usually we end up seeing prices being arbitrarily high.
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Male 508
Somewhat of a sophistical argument. His thing is that `poor people` get there and the supplies are all gone, but what if `poor people` get there and they can`t afford the supplies? Same thing, only they lose again. Gouging isn`t better...it`s just another way rich folk win.
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Male 10,845
Link: Price Gouging Actually Save Lives? Yep [Rate Link] - Because everyone on the East Coast is gouging prices (food, water, gas, etc) this guy explains why price gouging is good
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