Price Gouging Is A Myth

[Mike1951]

Yes "Price Gouging" exists. The definition of PG can be hard to put your finger on, but this one works for me:

Noun 1. price gouging - pricing significantly above the market price when no alternative retailer is available.

You mean like when Apple charged a lot for iPhones when they first came out then dropped the price later when demand slacked off?

You mean like when Toyota dealers charged full MSRP for a Prius at the same time they discounted non hybrids because of demand?

You mean like when airlines charge more for a plane ticket tomorrow than they do for the same trip next month?

You mean like when airlines charge more for a popular flight than a less full flight on the same day?

You mean like when union members get paid overtime?

You mean like when hotels in tourist areas have different rates for high season and low season?

You mean like when first run movie theaters charge $7 or more to see the same film that will later show at a $1 theater?

You mean like when ticket resellers charge different rates for different sporting events, concerts, etc?

You mean like when the shops inside the airport charge more than walmart for snacks or pharmacy items?

You mean like when the movie theater charges more for candy than walmart?

You mean like when phone companies charge higher rates during business hours than nights and weekends?

You mean like when movie theaters have lower matinee prices because demand is less that time of day?

You mean like when market forces like supply and demand affect prices every day?

I don't consider any of your examples to be essential purchases made at a critical time when there is no choice of supplier.

So they aren't valid at all. I'm sorry, anyone that charges more for an item that involved no increased cost to him, just because he wants to take advantage of someone's misfortune, should be hung!

[KBCraig]

I'm sorry, anyone that charges more for an item that involved no increased cost to him, just because he wants to take advantage of someone's misfortune, should be hung!

Oh, so you're the thought police? What if he charges that much so that he can get himself and his family out of the danger zone? What if he charges that much in order to pay for security and storm damage?

Here's the bottom line: you don't get to tell someone else what they can charge, nor why. You can shop elsewhere or do without. If everyone decides to do without, the price will drop.

[Mike1951]

I'm sorry, anyone that charges more for an item that involved no increased cost to him, just because he wants to take advantage of someone's misfortune, should be hung!

Oh, so you're the thought police? What if he charges that much so that he can get himself and his family out of the danger zone? What if he charges that much in order to pay for security and storm damage?

Here's the bottom line: you don't get to tell someone else what they can charge, nor why. You can shop elsewhere or do without. If everyone decides to do without, the price will drop.

As far as I'm concerned, a merchant who overcharges is no better than a thug who would rob him at gunpoint!

It's really the same thing!

[flintknapper]

Yes "Price Gouging" exists. The definition of PG can be hard to put your finger on, but this one works for me:

Noun 1. price gouging - pricing significantly above the market price when no alternative retailer is available.

You mean like when Apple charged a lot for iPhones when they first came out then dropped the price later when demand slacked off?

You mean like when Toyota dealers charged full MSRP for a Prius at the same time they discounted non hybrids because of demand?

You mean like when airlines charge more for a plane ticket tomorrow than they do for the same trip next month?

You mean like when airlines charge more for a popular flight than a less full flight on the same day?

You mean like when union members get paid overtime?

You mean like when hotels in tourist areas have different rates for high season and low season?

You mean like when first run movie theaters charge $7 or more to see the same film that will later show at a $1 theater?

You mean like when ticket resellers charge different rates for different sporting events, concerts, etc?

You mean like when the shops inside the airport charge more than walmart for snacks or pharmacy items?

You mean like when the movie theater charges more for candy than walmart?

You mean like when phone companies charge higher rates during business hours than nights and weekends?

You mean like when movie theaters have lower matinee prices because demand is less that time of day?

You mean like when market forces like supply and demand affect prices every day?

Huh?

Is it just me, or is anyone else having a hard time making the connection between what you have listed above and: Essential goods during a time of crisis (when no other alternative source is available).

[flintknapper]

The piece that you're not taking into account is that price control does not equal general availability.

Actually, (as concerns fuel) that is exactly my point. Supplies during times of crisis when a few million people are in need of fuel....virtually guarantees that gas stations will run out (at any price). The price of fuel only dictates WHO will get the fuel they need.

As has been mentioned before, keeping the price of gas low doesn't do single mothers or those on fixed incomes one whit of good if by the time they reach the gas station there isn't any gas to be had at *any* price.

There is also no benefit in those people finding a supply, but not being able to purchase enough of it to get them inland enough to find another source. Lets face it, at some point...the gas stations are going to run out. This should encourage folks to leave as early as is possible for them.

When demand increases exponentially, and supply doesn't increase to match, only an exponential increase in price can maintain equilibrium to ensure continued availability.

What? If supply doesn't match demand...then a certain amount of the public goes without, simple! What increased pricing does is: Provides incentive for merchants to bring in supplies from other areas (or suppliers) that they don't normally deal with. Any increased cost to the merchant is rightfully applied to the retail price of the goods, ideally keeping the same profit margin.

My argument isn't about what is and isn't "smart business" but about the steps that need to be taken to ensure that supplies continue to be available throughout the crisis.

Well....I will say with every confidence...it is NOT the intention of certain merchants to ensure there are supplies available by means of pricing. Using this logic, merchants (with the greatest of concern) would raise prices ten fold (twenty fold would be even better), then there would plenty of gas, perhaps even a surplus. I am much more inclined to think that an opportunity to make great profit (at the expense of a fleeing public) is the motivation. During normal times when other sources are available for essential items...then yeah...charge whatever you like (the market will or will not bear it). During times of crisis...if you have increased costs...pass that along (at the same profit margin)..and no will gripe.

There are some here that have labeled me a socialist for my views concerning temporary measures taken during times of crisis for the good of the public. It has been asserted that I favor government control over the price of goods. This is patently untrue. I prefer the government NOT be involved in most areas of our lives...but I realize that a limited government is necessary. Certain rules, regulations and restrictions are needed.

[flintknapper]

Just look at the buyouts and bailouts of banks and unqualified mortgage holders we have had lately. This is another example. Government controls and regulations allow banks to and homeowners to get into high risk loan situations, the lenders lose money predictably, and then the government bails everyone out using our money.

The REAL reason we have unqualified (bad) loans, and the reason this has come back to bite the financial institutes (and us) in the behind is GREED! It has nothing to do with what the government allows. Price gouging is just another example of greed ( but sugar coated as smart business).

In this case...(to prevent economic collapse) the government is the only entity with enough money (our tax dollars) to effect a remedy. No one likes that...but that is the current situation. Had the lenders, CEO's and shareholders not been so GREEDY..and allowed obviously high risk loans to be made..we wouldn't have this problem. This current mess... shows us all the results of greed on a large scale, but you don't consider how this line of thinking becomes ingrained in our businessmen/women early on when we allow (even encourage) greediness through price gouging.

How is this not socialist in nature to take my tax dollars and use them to pay someone else's mortgage, and also to buy the very banks who hold these bad loans? This is very much like the government owning the houses, controlling the money... these are the roots of socialism.

I agree completely on this point. However, I do not think this was in anyway the "plan" of the current government. There are certain liberal factions out there that would love for us to be a socialist nation, I pray that never happens.

But some of us readily support planting even more roots of socialism.

Please do not count me as one of them.

[pt145ss]

I'm sorry, anyone that charges more for an item that involved no increased cost to him, just because he wants to take advantage of someone's misfortune, should be hung!

It is not about how much the merchant paid for the item currently sitting on his shelf...it is all about how much it is going to cost the merchant to replace the items. For example: I have 10 One gallon jugs of water which I bought for $2.00/gal. and sell for $3.00/gal. Ike hits, demand goes up and supply is limited. Now in order to keep my shelf stocked with water, it will cost me $10.00/gal...so the replacement cost went up $8.00…these are referred to opportunity costs. This means if I wish to stay in business, I will have to charge more now, so I can afford to replace my stock.

The REAL reason we have unqualified (bad) loans, and the reason this has come back to bite the financial institutes (and us) in the behind is GREED! It has nothing to do with what the government allows. Price gouging is just another example of greed ( but sugar coated as smart business).

In this case...(to prevent economic collapse) the government is the only entity with enough money (our tax dollars) to effect a remedy. No one likes that...but that is the current situation. Had the lenders, CEO's and shareholders not been so GREEDY..and allowed obviously high risk loans to be made..we wouldn't have this problem. This current mess... shows us all the results of greed on a large scale, but you don't consider how this line of thinking becomes ingrained in our businessmen/women early on when we allow (even encourage) greediness through price gouging.

I’ll preface this by saying that I am not an economist.

The real problem here is a result of a government that tries to be to socialistic. At a point in time, the government, in an attempt to stimulate the economy and increase home ownership, created Fannie Mae and a “secondary mortgage market.” Fannie Mae is/was a Government Sponsored Entity (GSE)…meaning it is privately owned but was allowed certain Government entitlements …i.e. being able to issue government secured bonds for the purpose of financing home mortgages. This was done so that small banks could offer mortgage loans without having to tie up any of their own liquid assets (because they get their money from fannie mae)…essentially becoming a loan servicer…not a “lender.”

Because fannie mae is a GSE they are not required to have the same amount of oversight so no one in the gov. is keeping an eye on them. In order to meet the demands of the smaller banks, fannie mae over leveraged their assets to the point where they can’t survive and require a bail out.

This is the problem…we have a secondary market created by our gov. with limited competition because no one gets as sweet of a deal as fannie mae and freddy mac. There are a few others in the secondary market but they are not anywhere as big because the can not borrow money for as cheap as fannie mae and freddy mac…which results in the disastrous economy.

Point 1…the gov. has never done well at running a “business.”
Point 2…in the case the gov. was being socialistic instead of letting the free markets take care of it.
Point 3…socialism does not work and capital prevails.
Point 4…the gov. can be as dangerous to us as any foreign enemy.

[KD5NRH]

Price gouging is just another example of greed ( but sugar coated as smart business).

Do you own any luxury items, like extra guns or paintings on the wall? What drove you to work to pay for those, if not greed?

[flintknapper]

Do you own any luxury items, like extra guns or paintings on the wall?

Please define "extra guns". Yes, we have paintings on the wall, and other furnishings (furniture,etc) in our home.

What drove you to work to pay for those, if not greed?

I am confident I can anticipate your argument. Doubtless... you are of the ilk that proclaims "Greed is Good".

Before we embark upon what is certain to take up many pages of discussion, let me ask you what your definition of "greed" is? This will probably tell "the story" as it were.

My definition is as follows:

Basically a practice with no consideration beyond the betterment of your own conditions with no regard to others…. (a lustful desire for wealth).

Very different from simple “self-interest” (the desire to improve your welfare), in that greed is the desire to improve your own welfare regardless of the impact it has on others.

Let the philosophical, Theological and Societal debate begin!

[The Annoyed Man]

How does the D.A. go about prosecuting a myth crime is it like the game warden arresting the guy for hunting unicorns out of season

I'm betting if you wander around with a rifle in Kansas, and tell the game warden you're hunting manatees, they'll find some way to charge you.

thats whats wrong with L.E. these days they are just looking for a way to put you away

Lord help us... another LEO Bashing post....

[flintknapper]

thats whats wrong with L.E. these days they are just looking for a way to put you away

Lord help us... another LEO Bashing post....

Yup, I feel sorry for 99% of them. You know it has to be a largely thankless job.

Hopefully, we can all stick up for them whenever possible (which is most of the time).

[Xander]

thats whats wrong with L.E. these days they are just looking for a way to put you away

Lord help us... another LEO Bashing post....

Yup, I feel sorry for 99% of them. You know it has to be a largely thankless job.

Hopefully, we can all stick up for them whenever possible (which is most of the time).