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I'm a huge fan of so-called "price gouging". Without the ability to increase prices the shelves would be bare. This is what happens in all countries with price

I'm a huge fan of so-called "price gouging". Without the ability to increase prices the shelves would be bare. This is what happens in all countries with price controls. You say price gouging, I say protecting society from itself.

trashtester 4y ago
There are three alternativies when supply is short: 1) Increase prices until demand matches supply. 2) Price controls, usually leading to empty shelves. 3) Rationing. 1 is preferrable in 99% of cases. 2 is always the worst. 3 is needed during extraordinary times, such as when a country is in an all-out war.
- 8note 4y ago
  1 is rationing too, just rationing to prioritize the wealthy. The more modern versions ration based on other things, like how to combat ticket scalping, bands release tickets through alternative means
  - trashtester 4y ago
    1 is the capitalist way while 3 is the socialist way to distribute goods. The first works best under normal market condition, as it encourages economic growth, while the latter works better under special conditions where the scarcity is severe, unavoidable and caused by temporary factors (such as a war).
mint2 4y ago
There isn’t a shortage of many items that have had large price increases like oreos. There is no shortage on a lot of items but the companies see opportunity to raise prices at will in the current climate simply because they can
- JumpCrisscross 4y ago
  > isn’t a shortage of many items that have had large price increases like oreos The wheat, the trucks, the oil and the labour that make every Oreo have increased in price. (We have amply-documented wheat, energy and logistics shortages worldwide.) Also, nobody needs Oreos. The concept of “price gouging” is economically illiterate, but the nonsensicality squares when applied to literal candy.
  - mint2 4y ago
    Look I am using Oreos as a general example but even gas prices do the same. Input costs may rise by x cents but the companies mark up prices by 5x because they can, not because they have a shortage. Gas prices are way higher than they should be but it’s not all the reasons the oil companies like to point to. They simply point to supply to distract from price gouging. The house is even trying to get the government to investigate that. Taking contrived narrow minded interpretations of comments and glaringly ignore rather apparent facts and then alluding that the original comment is “nonsensical” and “illiterate” makes your comment seem that it lacks substance and just wants to resort to debate using insults rather than actual facts and context.
    - JumpCrisscross 4y ago
      > companies mark up prices by 5x because they can, not because they have a shortage These are the same thing. Fuel is a competitive market. If people are paying a premium and producers aren't undercutting each other, it's less likely a conspiracy than math. The crack spread, i.e. "the differential between the price of crude oil and petroleum products extracted from it," has risen, but not much more than crude [1][2][3]. Given fuel, labor and shipping costs flow gap the traded price of gasoline to the price at the pump, that's not an unreasonable increase. Pumps aren't making much money. Refineries are doing well. And primary producers are making off like bandits. To the degree intermediaries are profiting it's because people are paying a premium to ensure supply. A hallmark of a shortage. > house is even trying to get the government to investigate that It's an election year and people swallow tripe. Gasoline is unusually transparent in that its primary (crude), intermediate (gas) and final (gas after transport + tax) forms are publicly priced. You can add up numbers to see who's making how much more than whom. If you find a way to take the RBOB, ship it to your town and pay the taxes while undercutting the local gas stations, I'm all ears--there is a thriving market of private petrol shipment for commercial use. > alluding that the original comment is “nonsensical” and “illiterate” Never my intention. Price gouging describes short-term, localized increases in prices of essentials. If Oreos prices are increasing nationally, it's not price gouging. Because it's widespread. And they're Oreos. What it might be is profiteering. But both profiteering and price gouging are closer to philosophy than economics. They're used when we perceive prices to be unfair, with the moral definition of fairness being invoked more than an economic one. To the degree we can define either, it's a sustained jump in profits following some calamity. (A steady-state seller, noting a jump in demand for e.g. fuel, might raise prices today, temporarily raising their margins, in anticipation of their higher input costs tomorrow.) Anti-gouging laws are shortage-aggravating, in some cases, inducing [4]. But it leaves us with a society that feels fairer in emergencies. That psychological benefit may be worth the cost paid. But it should be recognized for what it is: paying with shortages for a notion of fairness. [1] https://en.wikipedia.org/wiki/Crack_spread https://en.wikipedia.org/wiki/Crack_spread [2] https://www.eia.gov/outlooks/steo/marketreview/petproducts.php https://www.eia.gov/outlooks/steo/marketreview/petproducts.p... [3] https://www.bloomberg.com/opinion/articles/2022-05-09/crude-hovers-at-110-a-barrel-but-the-refinery-margin-makes-us-pay-a-lot-more?sref=5dj0X2VO https://www.bloomberg.com/opinion/articles/2022-05-09/crude-... [4] http://journal.apee.org/index.php/ajax/GDMgetFile/Parte1_2020_Journal_of_Private_Enterprise_Vol_35_No_4_Winter.pdf http://journal.apee.org/index.php/ajax/GDMgetFile/Parte1_202...
- bluedino 4y ago
  Why have Oreo skyrocketed in price, but not Rice-a-roni or Animal Crackers?

trashtester 4y ago

There are three alternativies when supply is short: 1) Increase prices until demand matches supply. 2) Price controls, usually leading to empty shelves. 3) Rationing. 1 is preferrable in 99% of cases. 2 is always the worst. 3 is needed during extraordinary times, such as when a country is in an all-out war.

8note 4y ago
1 is rationing too, just rationing to prioritize the wealthy. The more modern versions ration based on other things, like how to combat ticket scalping, bands release tickets through alternative means
- trashtester 4y ago
  1 is the capitalist way while 3 is the socialist way to distribute goods. The first works best under normal market condition, as it encourages economic growth, while the latter works better under special conditions where the scarcity is severe, unavoidable and caused by temporary factors (such as a war).

mint2 4y ago

There isn’t a shortage of many items that have had large price increases like oreos. There is no shortage on a lot of items but the companies see opportunity to raise prices at will in the current climate simply because they can

JumpCrisscross 4y ago
> isn’t a shortage of many items that have had large price increases like oreos The wheat, the trucks, the oil and the labour that make every Oreo have increased in price. (We have amply-documented wheat, energy and logistics shortages worldwide.) Also, nobody needs Oreos. The concept of “price gouging” is economically illiterate, but the nonsensicality squares when applied to literal candy.
- mint2 4y ago
  Look I am using Oreos as a general example but even gas prices do the same. Input costs may rise by x cents but the companies mark up prices by 5x because they can, not because they have a shortage. Gas prices are way higher than they should be but it’s not all the reasons the oil companies like to point to. They simply point to supply to distract from price gouging. The house is even trying to get the government to investigate that. Taking contrived narrow minded interpretations of comments and glaringly ignore rather apparent facts and then alluding that the original comment is “nonsensical” and “illiterate” makes your comment seem that it lacks substance and just wants to resort to debate using insults rather than actual facts and context.
  - JumpCrisscross 4y ago
    > companies mark up prices by 5x because they can, not because they have a shortage These are the same thing. Fuel is a competitive market. If people are paying a premium and producers aren't undercutting each other, it's less likely a conspiracy than math. The crack spread, i.e. "the differential between the price of crude oil and petroleum products extracted from it," has risen, but not much more than crude [1][2][3]. Given fuel, labor and shipping costs flow gap the traded price of gasoline to the price at the pump, that's not an unreasonable increase. Pumps aren't making much money. Refineries are doing well. And primary producers are making off like bandits. To the degree intermediaries are profiting it's because people are paying a premium to ensure supply. A hallmark of a shortage. > house is even trying to get the government to investigate that It's an election year and people swallow tripe. Gasoline is unusually transparent in that its primary (crude), intermediate (gas) and final (gas after transport + tax) forms are publicly priced. You can add up numbers to see who's making how much more than whom. If you find a way to take the RBOB, ship it to your town and pay the taxes while undercutting the local gas stations, I'm all ears--there is a thriving market of private petrol shipment for commercial use. > alluding that the original comment is “nonsensical” and “illiterate” Never my intention. Price gouging describes short-term, localized increases in prices of essentials. If Oreos prices are increasing nationally, it's not price gouging. Because it's widespread. And they're Oreos. What it might be is profiteering. But both profiteering and price gouging are closer to philosophy than economics. They're used when we perceive prices to be unfair, with the moral definition of fairness being invoked more than an economic one. To the degree we can define either, it's a sustained jump in profits following some calamity. (A steady-state seller, noting a jump in demand for e.g. fuel, might raise prices today, temporarily raising their margins, in anticipation of their higher input costs tomorrow.) Anti-gouging laws are shortage-aggravating, in some cases, inducing [4]. But it leaves us with a society that feels fairer in emergencies. That psychological benefit may be worth the cost paid. But it should be recognized for what it is: paying with shortages for a notion of fairness. [1] https://en.wikipedia.org/wiki/Crack_spread https://en.wikipedia.org/wiki/Crack_spread [2] https://www.eia.gov/outlooks/steo/marketreview/petproducts.php https://www.eia.gov/outlooks/steo/marketreview/petproducts.p... [3] https://www.bloomberg.com/opinion/articles/2022-05-09/crude-hovers-at-110-a-barrel-but-the-refinery-margin-makes-us-pay-a-lot-more?sref=5dj0X2VO https://www.bloomberg.com/opinion/articles/2022-05-09/crude-... [4] http://journal.apee.org/index.php/ajax/GDMgetFile/Parte1_2020_Journal_of_Private_Enterprise_Vol_35_No_4_Winter.pdf http://journal.apee.org/index.php/ajax/GDMgetFile/Parte1_202...
bluedino 4y ago
Why have Oreo skyrocketed in price, but not Rice-a-roni or Animal Crackers?