Gouging

JD northgate76 at GMAIL.COM
Tue Aug 30 23:54:24 MDT 2011


On Wed, Aug 31, 2011 at 12:14 AM, John A. Quayle <blueoval57 at verizon.net>wrote:

>  At 12:48 AM 8/31/2011, Paf Dvorak wrote:
>
> At 09:41 PM 8/30/2011 -0400, you wrote:
>
> **         ** *Jacob is arguing that gouging is a good thing? It's
> basically theft......................*
>
>
> Maybe you should have actually read the article before making up your mind.
> Here's the part you might have read:
>
>  Let’s take a hypothetical example. Let’s say that a hurricane hits the
> Outer Banks in North Carolina and that people are desperately in need of ice
> on the islands. One store has 50 bags of ice on hand. Immediately, it raises
> its price from $5 a bag to $25 a bag.
>
> When the price of ice soars, it communicates valuable information to
> consumers on the island. The new, higher price says to them: You need to
> conserve your use of ice.
>
> At the same time, the new, higher price imparts valuable information to
> producers on the mainland: You need to produce more.
>
> And it also sends a message to entrepreneurs: Here is an opportunity to
> make a nice, hefty profit in a very short period of time. Entrepreneurs buy
> ice on the mainland at $3 a bag, rent boats, take the ice to the island, and
> sell it for $20 a bag,
>
> Gradually, as the supply of ice increases on the island, the price starts
> to decrease, which sends messages to everyone: Consumers learn that the need
> to be over-cautious on the use of ice is diminishing, and producers and
> entrepreneurs learn that there is less urgency in getting ice to the
> islands.
>
> What people like Cooper fail to understand is that there is only a limited
> supply of ice and everything else during an emergency. All the laws and
> pronouncements in the world can’t change that fact. The issues are: How are
> those particular items are going to be allocated and how best to alleviate
> the situation?
>
>
> After Hurricane Andrew (I was living in s.fl at the time) I had a friend
> who had a fish market and the power was out. He had literally tons of ice
> and was selling it for $1 a bag. It smelled like fish! I bought enough to
> fill the back seat and floor of my car at the time (a '72 Checker Marathon).
> I was able to sell the ice for $10 a bag...it required driving in
> semi-hazardous conditions to bring ice to those who I knew who needed it.
>
>
> *         $10 a pop was stealing................ "semi-hazardous
> conditions"? Was your life ever in jeopardy?
>
> *
>
> Some stranger saw that I had this ice and wanted to know if she could buy
> some. When I told her the price she accused me of gouging. I poured her bag
> on the ground.
>
> I say if you want your government to interfere in the free market you
> shouldn't be allowed to have any ice or water or food in an emergency. I
> sure as hell aren't going to supply it.
> Need chain saws and generators? Drive to the next big city and see if they
> have any in stock or do without.
>
>
> **
>         ** *How much is enough and how much is too much?
> *
>


Whatever the market determines.  If you are dragging a sack of gold across
the desert and some guy comes along with a Checker Marathon full of water
and bagged ice and he offers you a gallon and an icebag for 10 pounds of
gold each, do you tell him to keep on driving because he is a price gouger?
If you do, all he has to do is follow you along in first gear, wait for you
to drop dead, then salvage the gold.

JD
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