5 ms·

Here's my question, gas stations are closing here in NJ when running out of gas. Why aren't they jacking up the price to astronomical rates? There are lines f

by jbooth 14y ago

Here's my question, gas stations are closing here in NJ when running out of gas. Why aren't they jacking up the price to astronomical rates? There are lines for miles to the gas stations that have electricity. Is this a failure of capitalism in the face of human compassion or what?

codewright 14y ago
Price gouging during an emergency is illegal in NJ and Christie plans on going on the warpath after this is over.
- starnixgod 14y ago
  A price increase of more than 10% during or 30 days after a declaration of a state of emergency in NJ is prohibited. http://tinyurl.com/a7j2vgo http://tinyurl.com/a7j2vgo
- endtime 14y ago
  >Christie plans on going on the warpath Can you elaborate? Does he want to remove the anti-"gouging" laws?
  - codewright 14y ago
    >Can you elaborate? Does he want to remove the anti-"gouging" laws? Quite the opposite, he's a somewhat populist moderate Republican. He plans to prosecute people guilty of increasing their prices more than 10% during the crisis to full extent of the law.
    - gwright 14y ago
      This is perhaps good politics, but it is stupid economics. Restricting price changes during a crisis (or any time really) is a fantastic way to create shortages, delay the arrival of needed or substitute resources, encourage hording, and so on.
      - pyre 14y ago
        Do you really think that raising (e.g.) gas prices by a large margin will somehow redirect resources to getting more gas into those areas? * The gas stations without electricity aren't to get electricity any fast because the price of gas is higher. * Gasoline shipments aren't going to come any faster. * New gas stations aren't going to pop up as entrepreneurs move into the area to capitalize on increased demand for gas. A disaster isn't necessarily a 'market force.' No one is going to get supplies into a disaster zone faster because they are trying to turn a quick buck. Especially since it isn't like they can setup shop and expect the increased prices to persist.
        jlgreco 14y ago
        Raising prices will reduce the amount of gas people are willing to put into their cars when they finally do pull up to a working pump. If more people only fill up partially, then more people will be able to make due for a time.
        fr0sty 14y ago
        > The gas stations without electricity aren't to get electricity any fast because the price of gas is higher. If you can sell gas for $10/gal then it becomes worthwhile to get a generator and start pumping gas. If you can't sell gas at a premium you won't bother. You could say the same for anyone with a truck that has a bulk tank. If they could go house to house selling gasoline at a premium you can bet good money people would be trucking in thousands of gallons of fuel for generators. But that's price gouging so everyone goes without...
  - pyre 14y ago
    I assume it means that anyone caught price gouging during this emergency can't count on the law to look the other way. There will probably be a ton of political pressure and publicity ('bad publicity' from the perspective of a business caught gouging) in an effort to make an example of those retailers that attempt to take advantage.
  - dfc 14y ago
    The war will be for enforcement and fining: http://nj.gov/governor/news/news/552012/approved/20121027c.html http://nj.gov/governor/news/news/552012/approved/20121027c.h...
fr0sty 14y ago
New Jersey has an "Anti-gouging" law that makes it illegal for retailers to increase prices by more than 10%.
- jbooth 14y ago
  Thanks, my curiosity is sated.
001sky 14y ago
Is this a failure of capitalism No, not at all. All of the gas is in the hands of people who bought it. The supple constraints are not problems of incentives, they are problems of physics. Roads are down, plant is not working, traffic, security, etc. The reason anti-gouging laws exist is because jacking up prices has no benefit. It just keeps the poor people from having access to resources. 10 gallons of gas to a rich guy is not making the country or the economy better off, than if the gas is given to a poor/normal person, the day after a hurricane/earthquake, etc. The Feds are going to be on the Hook for $6-7B to fix NY and that's going to be paid by everyone in the country. Most people aren't going to benefit from that, except for the local people in NYC. But we do that as a country to make sure all of the right incentives are in place over the long run, not just opportunistically in the short run.
- deleted 14y ago
  [deleted]
- tptacek 14y ago
  The idea that "jacking up prices" has no constructive purpose is strictly incorrect . When you fix prices on gas, and the relative value of gas shoots up, gas gets allocated to the people whose time is least valuable. When you allow gas prices to float in the same situation, gas gets allocated to the people whose time is most valuable. Neither allocation is optimal; it is indeed unfair for all the gas to go to investment bankers. But that doesn't make it efficient or even fair for all the gas to instead go to the people who can get to the station earliest and wait in lines the longest. Equally importantly, when you fix prices instead of allowing them to float, you enable hoarding. People get gas who don't need the gas, because they're risk averse and overestimate the likelihood that they'll use up what they already have. So gas quickly runs out everywhere. If you leave the fixed price in place for long, eventually all the value that would have been captured by the station owners instead gets captured by the grey market (and the deadweight losses involved in transferring gas to that grey market). It's obviously not good social policy to allow gas station owners to charge $100/gallon for gas during a disaster. But it also seems pretty silly for prices to be capped at 10% of the pre-disaster spot price. Gas could easily float up to $10, $15/gallon (ie: the price of gas in Europe), motivate stations to find creative ways to supply that suddenly lucrative market, dampen the consumer urge to fill their tanks to 100%, and not bankrupt anyone (Americans famously overestimate the impact of gas prices on their daily lives).
ynniv 14y ago
Strict capitalism is heartless, and ruins society. If the only way to share is through dollars, the majority of the burden is placed on the poor. We pretend that capitalism is foundational because it is an easy way to control the vast complexity of resource sharing, but it isn't sufficient for a healthy civilization. Strict capitalism is a third world country, with all security and resources devoted to those with personal wealth.
- gwright 14y ago
  Could you define this 'strict capitalism' that you think 'ruins society'? There is a lot of evidence that other economic systems do ruin societies (communism, socialism, command economies, crony capitalism, etc) but generally capitalism is credited with being the most successful system for producing wealth and lifting people out of poverty.
  - ynniv 14y ago
    The emphasis is on "strict", not on "capitalism".
    - gwright 14y ago
      Yes, that is why I asked you define what you meant by 'strict'. What characteristic are you trying to identify with that term?
      - deleted 14y ago
        [deleted]
      - ynniv 14y ago
        The parent wondered why the price of gasoline was not currently astronomically high to reduce demand to meet supply. My response is that this means of sharing a limited resource disproportionally burdens those less wealthy. Over the long term it is reasonable to say that a resource has a high price. In the short term, strict capitalism would say that a wealthy businessman makes better use of that tank of gasoline than someone who is desperately hoping to transport their family out of a flooded house to stay with relatives in another city. That social burden created by the loss the family man endures doesn't carry a dollar amount, so a system based strictly on capitalism can't recognize that it has become poorer than if the resource had been shared in some other fashion.

by jbooth 14y ago

codewright 14y ago

Price gouging during an emergency is illegal in NJ and Christie plans on going on the warpath after this is over.

starnixgod 14y ago
A price increase of more than 10% during or 30 days after a declaration of a state of emergency in NJ is prohibited. http://tinyurl.com/a7j2vgo http://tinyurl.com/a7j2vgo
endtime 14y ago
>Christie plans on going on the warpath Can you elaborate? Does he want to remove the anti-"gouging" laws?
- codewright 14y ago
  >Can you elaborate? Does he want to remove the anti-"gouging" laws? Quite the opposite, he's a somewhat populist moderate Republican. He plans to prosecute people guilty of increasing their prices more than 10% during the crisis to full extent of the law.
  - gwright 14y ago
    This is perhaps good politics, but it is stupid economics. Restricting price changes during a crisis (or any time really) is a fantastic way to create shortages, delay the arrival of needed or substitute resources, encourage hording, and so on.
    - pyre 14y ago
      Do you really think that raising (e.g.) gas prices by a large margin will somehow redirect resources to getting more gas into those areas? * The gas stations without electricity aren't to get electricity any fast because the price of gas is higher. * Gasoline shipments aren't going to come any faster. * New gas stations aren't going to pop up as entrepreneurs move into the area to capitalize on increased demand for gas. A disaster isn't necessarily a 'market force.' No one is going to get supplies into a disaster zone faster because they are trying to turn a quick buck. Especially since it isn't like they can setup shop and expect the increased prices to persist.
      - jlgreco 14y ago
        Raising prices will reduce the amount of gas people are willing to put into their cars when they finally do pull up to a working pump. If more people only fill up partially, then more people will be able to make due for a time.
      - fr0sty 14y ago
        > The gas stations without electricity aren't to get electricity any fast because the price of gas is higher. If you can sell gas for $10/gal then it becomes worthwhile to get a generator and start pumping gas. If you can't sell gas at a premium you won't bother. You could say the same for anyone with a truck that has a bulk tank. If they could go house to house selling gasoline at a premium you can bet good money people would be trucking in thousands of gallons of fuel for generators. But that's price gouging so everyone goes without...
- pyre 14y ago
  I assume it means that anyone caught price gouging during this emergency can't count on the law to look the other way. There will probably be a ton of political pressure and publicity ('bad publicity' from the perspective of a business caught gouging) in an effort to make an example of those retailers that attempt to take advantage.
- dfc 14y ago
  The war will be for enforcement and fining: http://nj.gov/governor/news/news/552012/approved/20121027c.html http://nj.gov/governor/news/news/552012/approved/20121027c.h...

fr0sty 14y ago

New Jersey has an "Anti-gouging" law that makes it illegal for retailers to increase prices by more than 10%.

jbooth 14y ago
Thanks, my curiosity is sated.

001sky 14y ago

Is this a failure of capitalism No, not at all. All of the gas is in the hands of people who bought it. The supple constraints are not problems of incentives, they are problems of physics. Roads are down, plant is not working, traffic, security, etc. The reason anti-gouging laws exist is because jacking up prices has no benefit. It just keeps the poor people from having access to resources. 10 gallons of gas to a rich guy is not making the country or the economy better off, than if the gas is given to a poor/normal person, the day after a hurricane/earthquake, etc. The Feds are going to be on the Hook for $6-7B to fix NY and that's going to be paid by everyone in the country. Most people aren't going to benefit from that, except for the local people in NYC. But we do that as a country to make sure all of the right incentives are in place over the long run, not just opportunistically in the short run.

deleted 14y ago
[deleted]
tptacek 14y ago
The idea that "jacking up prices" has no constructive purpose is strictly incorrect . When you fix prices on gas, and the relative value of gas shoots up, gas gets allocated to the people whose time is least valuable. When you allow gas prices to float in the same situation, gas gets allocated to the people whose time is most valuable. Neither allocation is optimal; it is indeed unfair for all the gas to go to investment bankers. But that doesn't make it efficient or even fair for all the gas to instead go to the people who can get to the station earliest and wait in lines the longest. Equally importantly, when you fix prices instead of allowing them to float, you enable hoarding. People get gas who don't need the gas, because they're risk averse and overestimate the likelihood that they'll use up what they already have. So gas quickly runs out everywhere. If you leave the fixed price in place for long, eventually all the value that would have been captured by the station owners instead gets captured by the grey market (and the deadweight losses involved in transferring gas to that grey market). It's obviously not good social policy to allow gas station owners to charge $100/gallon for gas during a disaster. But it also seems pretty silly for prices to be capped at 10% of the pre-disaster spot price. Gas could easily float up to $10, $15/gallon (ie: the price of gas in Europe), motivate stations to find creative ways to supply that suddenly lucrative market, dampen the consumer urge to fill their tanks to 100%, and not bankrupt anyone (Americans famously overestimate the impact of gas prices on their daily lives).

ynniv 14y ago

Strict capitalism is heartless, and ruins society. If the only way to share is through dollars, the majority of the burden is placed on the poor. We pretend that capitalism is foundational because it is an easy way to control the vast complexity of resource sharing, but it isn't sufficient for a healthy civilization. Strict capitalism is a third world country, with all security and resources devoted to those with personal wealth.

gwright 14y ago
Could you define this 'strict capitalism' that you think 'ruins society'? There is a lot of evidence that other economic systems do ruin societies (communism, socialism, command economies, crony capitalism, etc) but generally capitalism is credited with being the most successful system for producing wealth and lifting people out of poverty.
- ynniv 14y ago
  The emphasis is on "strict", not on "capitalism".
  - gwright 14y ago
    Yes, that is why I asked you define what you meant by 'strict'. What characteristic are you trying to identify with that term?
    - deleted 14y ago
      [deleted]
    - ynniv 14y ago
      The parent wondered why the price of gasoline was not currently astronomically high to reduce demand to meet supply. My response is that this means of sharing a limited resource disproportionally burdens those less wealthy. Over the long term it is reasonable to say that a resource has a high price. In the short term, strict capitalism would say that a wealthy businessman makes better use of that tank of gasoline than someone who is desperately hoping to transport their family out of a flooded house to stay with relatives in another city. That social burden created by the loss the family man endures doesn't carry a dollar amount, so a system based strictly on capitalism can't recognize that it has become poorer than if the resource had been shared in some other fashion.