7 ms·

During a shortage: Commodity is available. Commodity is affordable. Pick 1.

by wtfrmyinitials 7y ago

formercoder 7y ago
3) government intervenes
- deleted 7y ago
  [deleted]
- deleted 7y ago
  [deleted]
- 3fe9a03ccd14ca5 7y ago
  Now the commodity is neither available nor affordable!
  - omginternets 7y ago
    ... but it can be more intelligently allocated. Sometimes an ideal market is the worst possible thing.
  - formercoder 7y ago
    I generally favor markets but one of the main reasons we have a federal government is to do everything required in this type of situation. Stay away as much as you can, but be there when we need you.
- deleted 7y ago
  [deleted]
- wheelie_boy 7y ago
  That's just rationing, the same thing as 'commodity is affordable'. Or maybe you're expecting it to not be a real shortage?
- wpietri 7y ago
  That's my preference. Markets are generally great, but in extreme conditions intervention is necessary. This happens in non-governmental markets, too. For example, I know stock exchanges and commodities markets have all sorts of mechanisms to prevent market failure.
- jolmg 7y ago
  And does what? make more supply appear from thin air?
  - formercoder 7y ago
    Resource allocation that favors public wellbeing over market efficiency.
    - jolmg 7y ago
      Market efficiency is precisely about public wellbeing. Concretely, what are you suggesting? In face of limited supply, there's only 2 choices: keep the prices low or raise the prices. The former accelerates supply depletion; the latter helps maintain supply availability. You're asking for the government to come in and pull a third choice out of their sleeve, but I don't see such a choice. If you're the government, concretely, what would you do? EDIT: Now, if you suspect price gouging, that's different. wtfrmyinitials was referring to a genuine shortage, though.
      - formercoder 7y ago
        That’s true if the proposed intervention is simply price caps, as opposed to rationing.
    - daxorid 7y ago
      A bottle of isopropanol, prior to this event, cost approximately 79 cents. The only change to resource allocation we need is a psychological one: specifically, to accept the idea that prepping, even at a very small level, is not insane.
    - DuskStar 7y ago
      And does what? Mandates that hand sanitizer not exceed some price/oz? There'll still be shortages, because some whales will buy it all. Mandate caps on the amount that a person can buy? I suppose hospitals are fucked then, and that's assuming that people don't circumvent the restrictions anyways. So the only way to "solve" the issue is to add more supply, and "price through the roof" is as good a way to get more supply (and possibly better) as the government mandating more production.
- Proziam 7y ago
  4) People take preventative measures. It's not that hard to have some extra cleaning supplies, non-perishable food, and water around. I don't understand the desire to have the government spend a multiple in tax dollars for what I could just keep in the house myself?
  - mrguyorama 7y ago
    Plenty of people can't afford to buy toilet paper in bulk. What do you recommend for them?
    - Proziam 7y ago
      If everyone who could afford to handle their own lives and responsibilities did, the role of government could actually be to prop up the bottom x% and keep things stable. If 90% of people make no preparations, there's no possible way to respond in a way that you can save everyone from a serious disaster. Sadly, whether you think it's 70% or 90% that could get themselves organized and take responsibility for their own security makes little difference in the real world because almost nobody actually does. The world went from victory gardens to big brother and people seem to prefer it this way.
sp332 7y ago
"Available" for a price people can't pay is still a reduction in availability.
- whatshisface 7y ago
  People have some flexibility, though, in the price they are willing to pay. So it is not as bad as an empty shelf.
- daxorid 7y ago
  There's no kinder way to say this: People who make fun of "doomsday preppers" and cast social opprobrium to those who chose to lengthen their own personal supply chain can go get fucked. Zero sympathy to those who cry of shortages or price gouging, but thought it more prudent to buy NVDA at astronomically ridiculous earnings multiples than spend three dollars a week on a few extra household supplies at a time when said supplies were cheap.
orev 7y ago
To mitigate the price rise during a shortage, I have been thinking about an insurance-type structure. If a supply runs short, there’s a very real need for people to actually produce the product, but that can result in having to call more people in to work, longer hours, overtime, etc. And there’s also the extra cost of delivery. With an insurance structure in place to provide funds during these situations, it would allow a quicker response without as much of a spike in prices. Companies could draw the funding for these increased costs from the insurance instead.
- ThJ 7y ago
  This is what futures contracts are for. They are settled with a physical delivery or in cash, depending on the contract. Futures trading is a prediction market. If you produce a commodity, you could, for example, place a sell order that is settled on a certain date in the future, and if you’re lucky, the market price will be below that of the price set in the order. The buyer of the future will then purchase the commodity from you at the agreed price, or for cash settled futures, he’ll pay you the difference. If the market price is higher, the difference is paid to the buyer, if the future is cash settled.

During a shortage: Commodity is available. Commodity is affordable. Pick 1.

formercoder 7y ago

3) government intervenes

deleted 7y ago
[deleted]
deleted 7y ago
[deleted]
3fe9a03ccd14ca5 7y ago
Now the commodity is neither available nor affordable!
- omginternets 7y ago
  ... but it can be more intelligently allocated. Sometimes an ideal market is the worst possible thing.
- formercoder 7y ago
  I generally favor markets but one of the main reasons we have a federal government is to do everything required in this type of situation. Stay away as much as you can, but be there when we need you.
deleted 7y ago
[deleted]
wheelie_boy 7y ago
That's just rationing, the same thing as 'commodity is affordable'. Or maybe you're expecting it to not be a real shortage?
wpietri 7y ago
That's my preference. Markets are generally great, but in extreme conditions intervention is necessary. This happens in non-governmental markets, too. For example, I know stock exchanges and commodities markets have all sorts of mechanisms to prevent market failure.
jolmg 7y ago
And does what? make more supply appear from thin air?
- formercoder 7y ago
  Resource allocation that favors public wellbeing over market efficiency.
  - jolmg 7y ago
    Market efficiency is precisely about public wellbeing. Concretely, what are you suggesting? In face of limited supply, there's only 2 choices: keep the prices low or raise the prices. The former accelerates supply depletion; the latter helps maintain supply availability. You're asking for the government to come in and pull a third choice out of their sleeve, but I don't see such a choice. If you're the government, concretely, what would you do? EDIT: Now, if you suspect price gouging, that's different. wtfrmyinitials was referring to a genuine shortage, though.
    - formercoder 7y ago
      That’s true if the proposed intervention is simply price caps, as opposed to rationing.
  - daxorid 7y ago
    A bottle of isopropanol, prior to this event, cost approximately 79 cents. The only change to resource allocation we need is a psychological one: specifically, to accept the idea that prepping, even at a very small level, is not insane.
  - DuskStar 7y ago
    And does what? Mandates that hand sanitizer not exceed some price/oz? There'll still be shortages, because some whales will buy it all. Mandate caps on the amount that a person can buy? I suppose hospitals are fucked then, and that's assuming that people don't circumvent the restrictions anyways. So the only way to "solve" the issue is to add more supply, and "price through the roof" is as good a way to get more supply (and possibly better) as the government mandating more production.
Proziam 7y ago
4) People take preventative measures. It's not that hard to have some extra cleaning supplies, non-perishable food, and water around. I don't understand the desire to have the government spend a multiple in tax dollars for what I could just keep in the house myself?
- mrguyorama 7y ago
  Plenty of people can't afford to buy toilet paper in bulk. What do you recommend for them?
  - Proziam 7y ago
    If everyone who could afford to handle their own lives and responsibilities did, the role of government could actually be to prop up the bottom x% and keep things stable. If 90% of people make no preparations, there's no possible way to respond in a way that you can save everyone from a serious disaster. Sadly, whether you think it's 70% or 90% that could get themselves organized and take responsibility for their own security makes little difference in the real world because almost nobody actually does. The world went from victory gardens to big brother and people seem to prefer it this way.

sp332 7y ago

"Available" for a price people can't pay is still a reduction in availability.

whatshisface 7y ago
People have some flexibility, though, in the price they are willing to pay. So it is not as bad as an empty shelf.
daxorid 7y ago
There's no kinder way to say this: People who make fun of "doomsday preppers" and cast social opprobrium to those who chose to lengthen their own personal supply chain can go get fucked. Zero sympathy to those who cry of shortages or price gouging, but thought it more prudent to buy NVDA at astronomically ridiculous earnings multiples than spend three dollars a week on a few extra household supplies at a time when said supplies were cheap.

orev 7y ago

To mitigate the price rise during a shortage, I have been thinking about an insurance-type structure. If a supply runs short, there’s a very real need for people to actually produce the product, but that can result in having to call more people in to work, longer hours, overtime, etc. And there’s also the extra cost of delivery. With an insurance structure in place to provide funds during these situations, it would allow a quicker response without as much of a spike in prices. Companies could draw the funding for these increased costs from the insurance instead.

ThJ 7y ago
This is what futures contracts are for. They are settled with a physical delivery or in cash, depending on the contract. Futures trading is a prediction market. If you produce a commodity, you could, for example, place a sell order that is settled on a certain date in the future, and if you’re lucky, the market price will be below that of the price set in the order. The buyer of the future will then purchase the commodity from you at the agreed price, or for cash settled futures, he’ll pay you the difference. If the market price is higher, the difference is paid to the buyer, if the future is cash settled.