President Trump: The NEW one and only politics thread

"Gouging" as a crime has never made any sense.

It actually serves a purpose in the grand scheme of things. Most people can understand it if they step back and think rationally. Although I already know people will argue with what I am about to post without addressing the realities because of "greed" or "what is fair" or "unconscionable behavior" or any other number of emotional reactions.

If the price of something that is suddenly in huge demand stays the same because of a government price control (ie -- a law against gouging), the item sells out anyhow. It just sells out way faster. There is no economic incentive for someone to not grab way more than they would if there was a higher price making them think twice about it. So relatively few people horde everything.

The store stocks up, and the first handful of people who come in grab everything in a panic buying spree. And that is that.

The gouging is the price moving in response to changing economic conditions. It's really that simple. Laws against those price moves are price controls. Price controls don't create added supply. In fact, they could make it so that added supply might take longer to hit the market, by destroying the price signals. So what is the purpose other than a useless emotional response of a law so people can feel like they are morally good?

Price controls in times of emergency actually have a negative consequence. Higher prices make it more likely that items will actually be in stock for those who most urgently need them. They create an incentive for people to take the minimum amount of what they might need. Let's say you want to buy a mask to wear for your commute on a train, but the mask costs $250. You might give a second thought to how necessary it really is, and not buy it. At the same time, a hospital might be willing to pay the $250 to protect a health care worker from the infected people he or she comes into contact with. That higher price actually made it more likely the masks will even be available to the hospital. It also creates a price signal that might push the manufacturer to hurry and ramp up production to meet all of the added demand.

 

I swear the only thing worse than how unfunny those picture memes you post over and over are, is that they are always about 10 gazillion pixels, so when I click on the thread they fill up my screen.