Price Gouging?

[LCHIEN]

I can see both sides of the issue.

For those already in some sort of civil stress, having to pay more than usual for goods and services seems like a cruel blow, it would go against the christian sort of nature we profess to have. Hence the public outrage.

On the other hand for the Businessman, either "temporary" or "full time", there are extenuating circumstances.
The businessman who keep his store open longer and later has to pay people to come to work when they would rather be home with their families and protecting or repairing their homes. Or they may already have worked 12 hours that day... Or they have to navigate floods or snow drifts to come to work. He may have to pay them double or triple to work in those circumstances. Maybe rent refrigerator trucks, generators and pay expediting fees to get more supplies in quickly. Should we not reqward those who make these extra efforts?

The man from Oklahoma who bought every portable generator in Enid and rented a truck to bring them to Houston (I just made all that up for an example) right after Hurricane Rita and sold them for three times the list price on the 2nd day of power outages that would last in some cases 2 weeks... Is he gouging? Took time off his regular job, risked money speculating on generators and truck costs with no guarantee the outage was going to last. For people without air conditioning, medical needs, food spoiling, the price is worth it.

So if generators were cheap a week before the storm, should not have the consumer bought it then instead of waiting until after the storm? He gambled and lost, against the entrepaneur from Oklahoma.

Services - like tow trucks in winter storms? Are they entitled to special rates when they have to go out in the worst weather at the most inconvenient time to ply their trade and work exceptionally long hours?

Like I said, I can see both sides.

[jackellis]

When wholesale electricity prices in California soared back in 2000 and 2001, I remember meeting with some folks who owned large portable generators that they had lugged out to the West Coast. As they approached California, the government instituted price controls, so those portable generators continued on up to the Pacific Northwest, where there were no price controls.

These guys understood that as more supply came into California, prices would drop. That didn't bother them. Price controls did. Some of you may remember gasoline rationing in the 1970s. Long lines and panic buying, until the rationing scheme was dismantled. Prices rose a few cents but the lines disappeared. Same thing in 2008. Prices rose, folks slowed down and cut out unnecessary driving, and refiners went from making big profits to losing big money (I own some stock in an oil refiner).

I understand people are vulnerable after a disaster, but then again many folks who live in places that are susceptible to disasters forget about disaster preparedness. That tempers my sympathy because we're all paying something for their lack of preparation.

I agree with Loring's post, with perhaps one additional thought. Making a quick buck is ingrained in our culture. I don't have a problem with that so long as I don't have to bear the consequences when the quick buck artists lose their shirts. But time after time these folks screw up by not exercising a bit of restraint. I've seen it happen time and again.

[gsmittle]

Like Loring, I'm torn on this issue. On one hand, sellers should be allowed to make a profit. OTOH, tripling the price of a commodity after a natural disaster could be gouging.

I remember in this area on Sept. 11 that many gas stations raised their prices to over $10.00 a gallon (IIRC the price on Sept. 10 was below $2.00). OTOH, everybody and their kid sister was filling up every container they had. What happens to the gas station owner when he runs out of gas and can't get more?

It's a complicated problem, without an easy one-size-fits-all solution. Years ago (1986, I think), I was driving back to Austin for grad school during a REALLY bad snow/ice storm. After 20 hours of driving, I was still in Oklahoma and needed a motel room for the night. The first Motel 6-level place I stopped advertised "$18.95 a night" (or some reasonable price like that—it's been a while and I don't remember the exact price), but when I went in to register the manager quoted $50. and wouldn't budge. I left, went down the street, and got a room for less than $20. Was the first motel price gouging? Was there only one room left? Beats the heck out of me—all I knew was the room was more than I could afford.

The next morning I got to Dallas, which had 6 inches of solid ice, and sat on a bridge behind a jacknifed 18-wheeler for six hours. I don't know what the tow trucks were charging, but gas was pretty high. Ah, the stupidity of youth…

g.