4 ms·

Temporarily and in a localized way, yes. For example, if there's a natural disaster, and the people in power aren't dumb, they'll let prices float instead of p

by vasco 3y ago

Temporarily and in a localized way, yes. For example, if there's a natural disaster, and the people in power aren't dumb, they'll let prices float instead of putting caps in place, and everyone will be incentivised to rent big trucks full of water bottles and sell it for 20-50x the normal price. For the affected people it makes sense because now they can drink water, and if the prices were controlled nobody would make the drive. Eventually enough people do the drive or the disaster passes and prices normalize. At the moment it's hard to explain what is happening but it might be more complex than just "nothing to see here". I've come to realize that reality is more nuanced than Milton Friedman made it out to be (and he did too later in life).

true_religion 3y ago
I guess all people in power must be dumb because every county has laws against grifting necessary essentials in a natural disaster. It’s possible your point does apply to normal price shifts when supply for something like electronics becomes constrained but right now your example detracts from understanding that.
- lobocinza 3y ago
  > I guess all people in power must be dumb Some are smart psycopaths. The issue isn't dumb in power but dumb people voting. People get outraged by price gouging so populists create laws against it. Even though those laws don't make economic sense they make political sense. Most of the time IMO state agents will just ignore price gouging because they know it is a necessary evil but if the need arises they can always intervene in prices, say they are doing something and save face. But this destroys the economy if done often. It's not black and white.
  - true_religion 3y ago
    I think it makes more economic sense for the government to directly subsidize necessities by shipping them in and controlling the price or giving them away for free. This is what FEMA does in the US. What does not make sense is a world where people have to buy disaster issuance just to make sure they can afford water when a hurricane strikes.
Brybry 3y ago
> if there's a natural disaster, and the people in power aren't dumb, they'll let prices float instead of putting caps in place I think most states that experience natural disasters have price gouging laws that make it illegal to raise prices, during a declared emergency, beyond the level required by increased costs. Or at least I know Louisiana[1] and California[2] do. And here in Louisiana we've had a lot of disasters and it generally works (sometimes gouging still happens). [1] https://legis.la.gov/legis/Law.aspx?d=85680 https://legis.la.gov/legis/Law.aspx?d=85680 [2] https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=396&lawCode=PEN https://leginfo.legislature.ca.gov/faces/codes_displaySectio...
- MostlyStable 3y ago
  "Works" in the sense that it keeps prices from going to high. Fails in that it prevents people from preparing adequately for forseeable disasters and bringing in more of the things people need in a disaster. In my opinion, disasters that have some level of predictability (hurricanes are the best example) shouldn't have price gouging laws. If you were allowed to raise your prices arbitrarily high, and you knew a hurricane was coming, what would you do? Bring in as many of the goods as you thought you could get higher prices for as you could. This results in an equilibrium where lots more water, food, batteries, etc. gets brought in, prices rise only somewhat, and no law is necessary. Now, I agree that for disasters that aren't forseeable (like earthquakes), you lose the signalling value, so I'm more amenable to it.
  - Brybry 3y ago
    I think implying people aren't able to adequately prepare for hurricanes in Louisiana is begging the question. I've lived here for almost 40 years, through a lot of hurricanes, and that is not my experience. Sure, some shelves might be bare the day before the storm but that doesn't mean people aren't prepared, that they aren't able to get the things they need, or that the current method does not work. And when the power is out for a week+ for a whole region (goes beyond the supplies urban locals typically prepare) then government uses the national guard to hand out MREs and/or bottled water in commercial parking lots. This is very rare.
vineyardmike 3y ago
Yikes. If the people in power are really smart though they’ll protect their constituents against greedy opportunists and fund the water transportation at cost. Maybe even paid for by taxpayers.
- feoren 3y ago
  > If the people in power are really smart though they’ll protect their constituents They have no incentive to do so. If they were actual human beings with functioning consciences maybe, but we often see people use the word "smart" to mean "ruthless asshole without a functioning moral compass". Those people assume everyone else would torture their own grandmother for an extra dollar just like they would, and so everyone who's not abusing the system to its fullest extent is just dumber than them. So in fact the people who are likely to be in power, who have absolutely no incentive to protect their constituents, will likely be in on the con as much as they can, and will actually call themselves "smart" for doing so.
  - vineyardmike 3y ago
    Many US states actually have price gouging laws. In the US, during a natural disaster, many places deploy emergency personnel employed by the government (eg national guard) to pass out water and aid. I’d say the US ranks highly among developed nations as “politicians who are assholes due to bad incentives”. Thankfully not everyone behaves like an economics textbook.
JohnFen 3y ago
> For the affected people it makes sense because now they can drink water Only the rich people. It does nothing for everyone else.
yndoendo 3y ago
Wouldn't Texas and their electric infrastructure and pricing be that defines the reality of price floating while showing people in power are dumb? As showing by the lack of regulation to weather treat your power infrastructure? So cold that the water pumps to cool nuclear power plants freeze? So cold that the natural gas lines freeze? So low in quality that they cannot be connect to the national electric infrastructure to allow for non-price gouging use during national disasters, hot or cold? Shouldn't it be humanity that takes offense in a natural disaster instead of financial exploitation?
deleted 3y ago
[deleted]

by vasco 3y ago

true_religion 3y ago

I guess all people in power must be dumb because every county has laws against grifting necessary essentials in a natural disaster. It’s possible your point does apply to normal price shifts when supply for something like electronics becomes constrained but right now your example detracts from understanding that.

lobocinza 3y ago
> I guess all people in power must be dumb Some are smart psycopaths. The issue isn't dumb in power but dumb people voting. People get outraged by price gouging so populists create laws against it. Even though those laws don't make economic sense they make political sense. Most of the time IMO state agents will just ignore price gouging because they know it is a necessary evil but if the need arises they can always intervene in prices, say they are doing something and save face. But this destroys the economy if done often. It's not black and white.
- true_religion 3y ago
  I think it makes more economic sense for the government to directly subsidize necessities by shipping them in and controlling the price or giving them away for free. This is what FEMA does in the US. What does not make sense is a world where people have to buy disaster issuance just to make sure they can afford water when a hurricane strikes.

Brybry 3y ago

> if there's a natural disaster, and the people in power aren't dumb, they'll let prices float instead of putting caps in place I think most states that experience natural disasters have price gouging laws that make it illegal to raise prices, during a declared emergency, beyond the level required by increased costs. Or at least I know Louisiana[1] and California[2] do. And here in Louisiana we've had a lot of disasters and it generally works (sometimes gouging still happens). [1] https://legis.la.gov/legis/Law.aspx?d=85680 https://legis.la.gov/legis/Law.aspx?d=85680 [2] https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=396&lawCode=PEN https://leginfo.legislature.ca.gov/faces/codes_displaySectio...

MostlyStable 3y ago
"Works" in the sense that it keeps prices from going to high. Fails in that it prevents people from preparing adequately for forseeable disasters and bringing in more of the things people need in a disaster. In my opinion, disasters that have some level of predictability (hurricanes are the best example) shouldn't have price gouging laws. If you were allowed to raise your prices arbitrarily high, and you knew a hurricane was coming, what would you do? Bring in as many of the goods as you thought you could get higher prices for as you could. This results in an equilibrium where lots more water, food, batteries, etc. gets brought in, prices rise only somewhat, and no law is necessary. Now, I agree that for disasters that aren't forseeable (like earthquakes), you lose the signalling value, so I'm more amenable to it.
- Brybry 3y ago
  I think implying people aren't able to adequately prepare for hurricanes in Louisiana is begging the question. I've lived here for almost 40 years, through a lot of hurricanes, and that is not my experience. Sure, some shelves might be bare the day before the storm but that doesn't mean people aren't prepared, that they aren't able to get the things they need, or that the current method does not work. And when the power is out for a week+ for a whole region (goes beyond the supplies urban locals typically prepare) then government uses the national guard to hand out MREs and/or bottled water in commercial parking lots. This is very rare.

vineyardmike 3y ago

Yikes. If the people in power are really smart though they’ll protect their constituents against greedy opportunists and fund the water transportation at cost. Maybe even paid for by taxpayers.

feoren 3y ago
> If the people in power are really smart though they’ll protect their constituents They have no incentive to do so. If they were actual human beings with functioning consciences maybe, but we often see people use the word "smart" to mean "ruthless asshole without a functioning moral compass". Those people assume everyone else would torture their own grandmother for an extra dollar just like they would, and so everyone who's not abusing the system to its fullest extent is just dumber than them. So in fact the people who are likely to be in power, who have absolutely no incentive to protect their constituents, will likely be in on the con as much as they can, and will actually call themselves "smart" for doing so.
- vineyardmike 3y ago
  Many US states actually have price gouging laws. In the US, during a natural disaster, many places deploy emergency personnel employed by the government (eg national guard) to pass out water and aid. I’d say the US ranks highly among developed nations as “politicians who are assholes due to bad incentives”. Thankfully not everyone behaves like an economics textbook.

JohnFen 3y ago

> For the affected people it makes sense because now they can drink water Only the rich people. It does nothing for everyone else.

yndoendo 3y ago

Wouldn't Texas and their electric infrastructure and pricing be that defines the reality of price floating while showing people in power are dumb? As showing by the lack of regulation to weather treat your power infrastructure? So cold that the water pumps to cool nuclear power plants freeze? So cold that the natural gas lines freeze? So low in quality that they cannot be connect to the national electric infrastructure to allow for non-price gouging use during national disasters, hot or cold? Shouldn't it be humanity that takes offense in a natural disaster instead of financial exploitation?

deleted 3y ago

[deleted]