3 ms·

> 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 experi

by 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.
  - JumpCrisscross 3y ago
    > some shelves might be bare the day before the storm but that doesn't mean people aren't prepared I remember a study on New York following Hurricane Sandy. Fuel was out. Drugs were supplied. Because nobody was incentivised to bring in extra fuel before the hurricane hit; there was no margin to incentivise it. But there was an incentive to bring in drugs, because dealers could make a killing selling at a premium. Price-gouging laws are the price of keeping the peace with a population illiterate in basic economics. (And in any case, there is always a black market in play.)
    - Brybry 3y ago
      Gas stations can't pump if they don't have power. That's generally why there's a lack of fuel. Sometimes they have backup power or power companies prioritize them. In the south, local media will help notify which gas stations are operable. More fuel won't solve that problem. For Sandy they had more issues than just pumps without power. 40% of their supply was reduced before the storm even hit from shutting down refineries. And then the refineries suffered damage. Storage tanks were damaged. Pipelines were inoperative. They couldn't fill delivery trucks. [1][2] For a typical hurricane, why would there even need to be extra fuel over normal supply? In a hurricane people are driving less. They're staying home. The only extra fuel will be from generators and hoarders. Price increases would probably decrease hoarders but it wouldn't turn refineries back on and magically make more gas. [1] https://www.preventionweb.net/english/hyogo/gar/2015/en/bgdocs/Haraguchi%20and%20Kim,%202014.pdf https://www.preventionweb.net/english/hyogo/gar/2015/en/bgdo... [pdf][page 6] [2] https://www.nbcnewyork.com/news/local/sandy-storm-anniversary/remember-the-gas-shortage-after-sandy-is-energy-infrastructure-better-fortified-now/3926937/ https://www.nbcnewyork.com/news/local/sandy-storm-anniversar...
      - JumpCrisscross 3y ago
        > stations can't pump if they don't have power. That's generally why there's a lack of fuel. They’re a gas station. They’re sitting on a fuel source. Why do you think it isn’t economical to install a generator? (Or even lease one.) > why would there even need to be extra fuel over normal supply Emergency vehicles. Trucks bringing supplies for repairs. People checking in on each other. People coming back from evacuation or leaving to find peace of mind. Also returning to normal life. And it’s not about extra fuel. It’s about maintaining supplies. New shipments aren’t coming in, which means supplies need to be rationed. New shipments come in slower than they would if prices could rise; nobody serving the general population is incentivised to rush. > increases would probably decrease hoarders but it wouldn't turn refineries back on and magically make more gas Emergency shortages are all about distribution, not production. There is plenty of gas in the world in a disaster. It just isn’t making it to disaster victims. (Well, it is. But you have the pay the cab driver cash to pay the guy by Riverside Park for a can at $20/gallon.)
orangepurple 3y ago
I have been through multiple natural disasters in the Houston Texas area over some years and I have seen first hand that these price caps cause shortages resulting in people that need supplies not being able to obtain them. The people wanted price caps in the name of preventing price gouging and the state state obliged: the majority of people get nothing and everyone is happy.

by Brybry 3y ago

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.
- JumpCrisscross 3y ago
  > some shelves might be bare the day before the storm but that doesn't mean people aren't prepared I remember a study on New York following Hurricane Sandy. Fuel was out. Drugs were supplied. Because nobody was incentivised to bring in extra fuel before the hurricane hit; there was no margin to incentivise it. But there was an incentive to bring in drugs, because dealers could make a killing selling at a premium. Price-gouging laws are the price of keeping the peace with a population illiterate in basic economics. (And in any case, there is always a black market in play.)
  - Brybry 3y ago
    Gas stations can't pump if they don't have power. That's generally why there's a lack of fuel. Sometimes they have backup power or power companies prioritize them. In the south, local media will help notify which gas stations are operable. More fuel won't solve that problem. For Sandy they had more issues than just pumps without power. 40% of their supply was reduced before the storm even hit from shutting down refineries. And then the refineries suffered damage. Storage tanks were damaged. Pipelines were inoperative. They couldn't fill delivery trucks. [1][2] For a typical hurricane, why would there even need to be extra fuel over normal supply? In a hurricane people are driving less. They're staying home. The only extra fuel will be from generators and hoarders. Price increases would probably decrease hoarders but it wouldn't turn refineries back on and magically make more gas. [1] https://www.preventionweb.net/english/hyogo/gar/2015/en/bgdocs/Haraguchi%20and%20Kim,%202014.pdf https://www.preventionweb.net/english/hyogo/gar/2015/en/bgdo... [pdf][page 6] [2] https://www.nbcnewyork.com/news/local/sandy-storm-anniversary/remember-the-gas-shortage-after-sandy-is-energy-infrastructure-better-fortified-now/3926937/ https://www.nbcnewyork.com/news/local/sandy-storm-anniversar...
    - JumpCrisscross 3y ago
      > stations can't pump if they don't have power. That's generally why there's a lack of fuel. They’re a gas station. They’re sitting on a fuel source. Why do you think it isn’t economical to install a generator? (Or even lease one.) > why would there even need to be extra fuel over normal supply Emergency vehicles. Trucks bringing supplies for repairs. People checking in on each other. People coming back from evacuation or leaving to find peace of mind. Also returning to normal life. And it’s not about extra fuel. It’s about maintaining supplies. New shipments aren’t coming in, which means supplies need to be rationed. New shipments come in slower than they would if prices could rise; nobody serving the general population is incentivised to rush. > increases would probably decrease hoarders but it wouldn't turn refineries back on and magically make more gas Emergency shortages are all about distribution, not production. There is plenty of gas in the world in a disaster. It just isn’t making it to disaster victims. (Well, it is. But you have the pay the cab driver cash to pay the guy by Riverside Park for a can at $20/gallon.)

orangepurple 3y ago

I have been through multiple natural disasters in the Houston Texas area over some years and I have seen first hand that these price caps cause shortages resulting in people that need supplies not being able to obtain them. The people wanted price caps in the name of preventing price gouging and the state state obliged: the majority of people get nothing and everyone is happy.