Top prosecuters decide to go after 'price gougers'

[Dissipate]

Originally posted by: sandorski

Originally posted by: Dissipate

Originally posted by: sandorski

Originally posted by: charrison

Originally posted by: sandorski

Originally posted by: EagleKeeper
Price setting by the government does not work properly in a decent economic model.

Look at the East European and Soviet models of price controls.

Control prices and you will see less supply available.

Has nothing to do with Price Controls.

Sure it does. Going back to the generator example. If generators are selling for $5000 there will be a big rush to move any and every generator to that area from hundreds if not thousands of miles away. If the price remains capped at the original $500, those generators will not make it othe diaster area. It is that simple.

The mere fact that Generators are selling will bring more in. There is no need for a ridiculous monetary enticement.

The fundamental difference between Anti-Gouging and Price Controls, is that Price Controls always dictate Price, Anti-Gouging merely prevents excessive increases from normal Market Prices. Huge difference.

What is an 'excessive' increase? And what in the world, pray tell, is a 'normal' market price?

Oh, and please do give your answers to my scenario query above.

Charrisons example of 10x increase is definitely excessive.

So let's see here. If I open a lemonade stand and for 364 days a year I make $10 a day, but then one day I get a bunch of really thirsty people and I jack up my prices to make $1,000 on the 365th day, is that 'excessive' profits? I mean why is the nature of these 'excessive' profits limited to just areas of natural disasters? Is it not true that any 'drastic' increase in my profits is an indicator of me 'exploiting' people?

Am I not an exploiter of these extremely thirsty people on the street?

Your definition is completely ridiculous. People make 10x more than they did last year or even last week every single day. Your definition of 'excessive' profits would have a very good chunk of the entire economy shut down in a fortnight.

 

[charrison]

Originally posted by: sandorski

Originally posted by: Dissipate

Originally posted by: sandorski

Originally posted by: charrison

Originally posted by: sandorski

Originally posted by: EagleKeeper
Price setting by the government does not work properly in a decent economic model.

Look at the East European and Soviet models of price controls.

Control prices and you will see less supply available.

Has nothing to do with Price Controls.

Sure it does. Going back to the generator example. If generators are selling for $5000 there will be a big rush to move any and every generator to that area from hundreds if not thousands of miles away. If the price remains capped at the original $500, those generators will not make it othe diaster area. It is that simple.

The mere fact that Generators are selling will bring more in. There is no need for a ridiculous monetary enticement.

The fundamental difference between Anti-Gouging and Price Controls, is that Price Controls always dictate Price, Anti-Gouging merely prevents excessive increases from normal Market Prices. Huge difference.

What is an 'excessive' increase? And what in the world, pray tell, is a 'normal' market price?

Oh, and please do give your answers to my scenario query above.

Charrisons example of 10x increase is definitely excessive.

So when does it stop being excessive?

And then how do you stop those that dont really need a generator from buying one, because they still reflect "normal" market prices, when the market is in an abmornal state?

 

[sandorski]

Yup, so if you absolutely Need something now, I can charge an arm and a leg for it and you should just put or shutup? It doesn't work that way and is morally reprehensible.

 

[Dissipate]

Originally posted by: sandorski
Yup, so if you absolutely Need something now, I can charge an arm and a leg for it and you should just put or shutup? It doesn't work that way and is morally reprehensible.

What if you removed it from the market completely? Then I have no chance of getting what I want. Is that morally reprehensible as well? Or is it only morally reprehensible because you are making 'outrageous amounts of money?'

 

[sandorski]

Originally posted by: Dissipate

Originally posted by: sandorski

Originally posted by: Dissipate

Originally posted by: sandorski

Originally posted by: charrison

Originally posted by: sandorski

Originally posted by: EagleKeeper
Price setting by the government does not work properly in a decent economic model.

Look at the East European and Soviet models of price controls.

Control prices and you will see less supply available.

Has nothing to do with Price Controls.

Sure it does. Going back to the generator example. If generators are selling for $5000 there will be a big rush to move any and every generator to that area from hundreds if not thousands of miles away. If the price remains capped at the original $500, those generators will not make it othe diaster area. It is that simple.

The mere fact that Generators are selling will bring more in. There is no need for a ridiculous monetary enticement.

The fundamental difference between Anti-Gouging and Price Controls, is that Price Controls always dictate Price, Anti-Gouging merely prevents excessive increases from normal Market Prices. Huge difference.

What is an 'excessive' increase? And what in the world, pray tell, is a 'normal' market price?

Oh, and please do give your answers to my scenario query above.

Charrisons example of 10x increase is definitely excessive.

So let's see here. If I open a lemonade stand and for 364 days a year I make $10 a day, but then one day I get a bunch of really thirsty people and I jack up my prices to make $1,000 on the 365th day, is that 'excessive' profits? I mean why is the nature of these 'excessive' profits limited to just areas of natural disasters? Is it not true that any 'drastic' increase in my profits is an indicator of me 'exploiting' people?

Am I not an exploiter of these extremely thirsty people on the street?

Your definition is completely ridiculous. People make 10x more than they did last year or even last week every single day. Your definition of 'excessive' profits would have a very good chunk of the entire economy shut down in a fortnight.

The total you made is immaterial and a Lemonade stand does not equate Need.

 

[Dissipate]

Originally posted by: sandorski

The total you made is immaterial and a Lemonade stand does not equate Need.

Say what? I know you typed words, but sense they are not making.

 

[charrison]

Originally posted by: sandorski

Originally posted by: charrison

Originally posted by: sandorski

Originally posted by: charrison

Originally posted by: sandorski

Originally posted by: EagleKeeper
Price setting by the government does not work properly in a decent economic model.

Look at the East European and Soviet models of price controls.

Control prices and you will see less supply available.

Has nothing to do with Price Controls.

Sure it does. Going back to the generator example. If generators are selling for $5000 there will be a big rush to move any and every generator to that area from hundreds if not thousands of miles away. If the price remains capped at the original $500, those generators will not make it othe diaster area. It is that simple.

The mere fact that Generators are selling will bring more in. There is no need for a ridiculous monetary enticement.

The fundamental difference between Anti-Gouging and Price Controls, is that Price Controls always dictate Price, Anti-Gouging merely prevents excessive increases from normal Market Prices. Huge difference.

They will sell and they will sell out if they are in great demand and the profit motive is removed. How much motive is there to haul a generator 500 miles if there no increased profit motive(why move it, if the profit is the same). And on top that, a more expensive resource will be conserved, where a scarce resource wth a price cap will make the shortages worse.

How did it make it there in the first place? There must be sufficient monetary enticement to get the generator there, this enticement doesn't end when the local supply runs out. Add in that these types of products generally move slowly and take up space and the existance of sudden Sales in a particular location will draw them in on its' own.

No one has/is suggesting removing Profits. Just removing excessive Profits. Profit motive exists prior to the disaster, excessive increases in Price are merely ways to force local consumers to pay outrageous amounts of money that was previously already Profitable for the Seller. That is Price Gouging, not Price Controls.

So tell me this. Say the monthly demand for a given area is 50 generators sold a month, but overnight there is an immediate demand for 50,000 generators. Do you sell them at current market value and then buy 6 more with the profits? Or do you sell them at market value at this point and invest those profits in getting as many generators as you can.

Remember some people truely need them and other merey want them.

HOw do you control who gets them in a fair manner so that scarce resource will benefit the most people.

 

[sandorski]

Originally posted by: charrison

Originally posted by: sandorski

Originally posted by: Dissipate

Originally posted by: sandorski

Originally posted by: charrison

Originally posted by: sandorski

Originally posted by: EagleKeeper
Price setting by the government does not work properly in a decent economic model.

Look at the East European and Soviet models of price controls.

Control prices and you will see less supply available.

Has nothing to do with Price Controls.

Sure it does. Going back to the generator example. If generators are selling for $5000 there will be a big rush to move any and every generator to that area from hundreds if not thousands of miles away. If the price remains capped at the original $500, those generators will not make it othe diaster area. It is that simple.

The mere fact that Generators are selling will bring more in. There is no need for a ridiculous monetary enticement.

The fundamental difference between Anti-Gouging and Price Controls, is that Price Controls always dictate Price, Anti-Gouging merely prevents excessive increases from normal Market Prices. Huge difference.

What is an 'excessive' increase? And what in the world, pray tell, is a 'normal' market price?

Oh, and please do give your answers to my scenario query above.

Charrisons example of 10x increase is definitely excessive.

So when does it stop being excessive?

And then how do you stop those that dont really need a generator from buying one, because they still reflect "normal" market prices, when the market is in an abmornal state?

Your price is $500. The more you Sell at $500 the more profit you make. Let's be realistic here, these are rather localized events and don't exceed Domestic supply and immediate demand for these products do not increase everywhere at the same time. Most places these products are gathering dust with the occassional purchase. Gouging takes advantage of a Localized event and the people there who are compelled to buy the product out of Need.

 

[charrison]

Originally posted by: sandorski
Yup, so if you absolutely Need something now, I can charge an arm and a leg for it and you should just put or shutup? It doesn't work that way and is morally reprehensible.

The question is not of need, but who needs it worse in the event of this hypothetical diaster.

And your typical homeowner need for a generator are pretty low on the list.

 

[charrison]

Originally posted by: sandorski

Originally posted by: charrison

Originally posted by: sandorski

Originally posted by: Dissipate

Originally posted by: sandorski

Originally posted by: charrison

Originally posted by: sandorski

Originally posted by: EagleKeeper
Price setting by the government does not work properly in a decent economic model.

Look at the East European and Soviet models of price controls.

Control prices and you will see less supply available.

Has nothing to do with Price Controls.

Sure it does. Going back to the generator example. If generators are selling for $5000 there will be a big rush to move any and every generator to that area from hundreds if not thousands of miles away. If the price remains capped at the original $500, those generators will not make it othe diaster area. It is that simple.

The mere fact that Generators are selling will bring more in. There is no need for a ridiculous monetary enticement.

The fundamental difference between Anti-Gouging and Price Controls, is that Price Controls always dictate Price, Anti-Gouging merely prevents excessive increases from normal Market Prices. Huge difference.

What is an 'excessive' increase? And what in the world, pray tell, is a 'normal' market price?

Oh, and please do give your answers to my scenario query above.

Charrisons example of 10x increase is definitely excessive.

So when does it stop being excessive?

And then how do you stop those that dont really need a generator from buying one, because they still reflect "normal" market prices, when the market is in an abmornal state?

Your price is $500. The more you Sell at $500 the more profit you make. Let's be realistic here, these are rather localized events and don't exceed Domestic supply and immediate demand for these products do not increase everywhere at the same time. Most places these products are gathering dust with the occassional purchase. Gouging takes advantage of a Localized event and the people there who are compelled to buy the product out of Need.

And that is exactly why it is a scarce resource and why it is in very high demand during such a diaster.

And you still have not answered how you much sure a scare resource would make into the hand of those that would do the most good with it. It iappears it is s quesiton you dont want to answer

 

[sandorski]

Originally posted by: charrison

Originally posted by: sandorski

Originally posted by: charrison

Originally posted by: sandorski

Originally posted by: charrison

Originally posted by: sandorski

Originally posted by: EagleKeeper
Price setting by the government does not work properly in a decent economic model.

Look at the East European and Soviet models of price controls.

Control prices and you will see less supply available.

Has nothing to do with Price Controls.

Sure it does. Going back to the generator example. If generators are selling for $5000 there will be a big rush to move any and every generator to that area from hundreds if not thousands of miles away. If the price remains capped at the original $500, those generators will not make it othe diaster area. It is that simple.

The mere fact that Generators are selling will bring more in. There is no need for a ridiculous monetary enticement.

The fundamental difference between Anti-Gouging and Price Controls, is that Price Controls always dictate Price, Anti-Gouging merely prevents excessive increases from normal Market Prices. Huge difference.

They will sell and they will sell out if they are in great demand and the profit motive is removed. How much motive is there to haul a generator 500 miles if there no increased profit motive(why move it, if the profit is the same). And on top that, a more expensive resource will be conserved, where a scarce resource wth a price cap will make the shortages worse.

How did it make it there in the first place? There must be sufficient monetary enticement to get the generator there, this enticement doesn't end when the local supply runs out. Add in that these types of products generally move slowly and take up space and the existance of sudden Sales in a particular location will draw them in on its' own.

No one has/is suggesting removing Profits. Just removing excessive Profits. Profit motive exists prior to the disaster, excessive increases in Price are merely ways to force local consumers to pay outrageous amounts of money that was previously already Profitable for the Seller. That is Price Gouging, not Price Controls.

So tell me this. Say the monthly demand for a given area is 50 generators sold a month, but overnight there is an immediate demand for 50,000 generators. Do you sell them at current market value and then buy 6 more with the profits? Or do you sell them at market value at this point and invest those profits in getting as many generators as you can.

Remember some people truely need them and other merey want them.

HOw do you control who gets them in a fair manner so that scarce resource will benefit the most people.

You Sell as many as you can, but you don't Gouge. You keep trying to paint this in some positive light, as a method to Best serve the Need, but the Seller can't insure that simply by raising Prices. Let's say the Seller was just trying to raise sufficient Cash to bring in product in greater numbers, will that Seller reimburse the few who paid the excessive Price after everything is done? I highly doubt it, he/she will just pocket it and hope no one cares. Perhaps if the Seller did reimbuse after the fact we wouldn't be having this conversation at all.

I'm sure if the Seller needed Cash fast they could find it through other and more efficient ways. Ways where he/she didn't have to wait for Consumers to pay the excessive Prices in the first place before making more orders.

 

[sandorski]

Originally posted by: charrison

Originally posted by: sandorski
Yup, so if you absolutely Need something now, I can charge an arm and a leg for it and you should just put or shutup? It doesn't work that way and is morally reprehensible.

The question is not of need, but who needs it worse in the event of this hypothetical diaster.

And your typical homeowner need for a generator are pretty low on the list.

Increasing the Price doesn't assure anything except that those who can afford it can get it. If assuring the right people get it is the primary concern, you Sell only to those you think Need it.

 

[sandorski]

Here's an example that shows why excessive Prices don't assure that Need will be met:

Using $500 Generator sold for $5000

1) Store Owner requires Generator to run Refrigerators. Can afford $5000, Need is kinda questionable, but his/her stuff won't go bad.

2) Ben Affleck requires Generator to run his hair dryer. $5000 is no problem, hell, throw another in the truck to run the Hot Tub. Need is, well, who wants to see him with messy hair? 😀

3) Retired woman requires Generator to power her husbands Respirator. Can not afford $5000, Need is absolute and immediate.

Merely raising the Price does nothing towards efficient distribution, just distribution to those who can afford it.

 

[Red Dawn]

LOL @ those who say companies price gouge for the good of the customers:roll::laugh:

 

[conjur]

Originally posted by: smack Down

Originally posted by: charrison

Originally posted by: sandorski
So raising prices dramatically on Product when it's most needed is acceptable? It's not just Oil/Fuel where gouging occurs, but also plywood and other materials/products. It is taking advantage of peoples fears in the most unacceptable ways. Raking in excessive Profits from the desparate when the good citizen should be doing the opposite.

At the same time high prices encourage effecient distribution and conservation of a product. High prices also enourage more supplies to be brought in quicker.

Say after a hurricane a guy trucks in generators they he purchased for $500 and sold them for $5000. Many would call this gouging, but it in effect it would ensure the generators go to who needs them most. If those generators we sold for $600 they would rapidly be sold and would end up powering homes rather than powering medical supplies in a nursing home or being used to get needed infrastructure repair done.


Keeping prices low during a shortage will only worse the supply conditions.

The generatedors would go to how can pay the most and not the opnes who need them the most.

To the rich go the spoils.

 

[3chordcharlie]

Te same idea in economics that says high prices will lead to increased supply, quickly driving prices back down to 'normal profits' (note: not necessarily the 'usual retail price') assumes that people have information about a market; i.e. that they would know something about the availability of a good. Misinformation in a market like the one for generators may well have lead to a prolonged period during which supply was seen to be short, and prices stayed high.

I think a good definition of excessive prices in crisis zones would be setting the price so high as to artificially reduce your own supply; in effect if you have many people willing to pay the usual cost or higher for the good, and you choose to turn them away waiting for a much higher price, I think that is gouging (which incidentally means I agree with Dissipate about seller option B being worse, though his set of options is certainly a false dichotomy).

 

[Dissipate]

Originally posted by: 3chordcharlie
Te same idea in economics that says high prices will lead to increased supply, quickly driving prices back down to 'normal profits' (note: not necessarily the 'usual retail price') assumes that people have information about a market; i.e. that they would know something about the availability of a good. Misinformation in a market like the one for generators may well have lead to a prolonged period during which supply was seen to be short, and prices stayed high.

I think a good definition of excessive prices in crisis zones would be setting the price so high as to artificially reduce your own supply; in effect if you have many people willing to pay the usual cost or higher for the good, and you choose to turn them away waiting for a much higher price, I think that is gouging (which incidentally means I agree with Dissipate about seller option B being worse, though his set of options is certainly a false dichotomy).

How is it a false dichtomy? Nowhere did I say they were the only options.

The logical fallacy of false dilemma, which is also known as fallacy of the excluded middle, false dichotomy, either/or dilemma or bifurcation, involves a situation in which two alternative points of view are held to be the only options, when in reality there exist one or more alternate options which have not been considered.

The seller could give his stuff away for free, or even obey the price gouging laws. But these options make buyers better off than witholding entirely. Hence, not wanting to list every single possible thing a seller could do with his stuff, I left them off the list. My point was that if the aim of the price gouging doctrine is to increase the welfare of buyers during a crisis, it would also include witholding wares for sale, and would in fact punish witholders more than price gougers. But it says nothing about this.

 

[charrison]

Originally posted by: Red Dawn
LOL @ those who say companies price gouge for the good of the customers:roll::laugh:

I laugh at those that think artificial price controls will fix shortages.

 

[charrison]

Originally posted by: sandorski
Here's an example that shows why excessive Prices don't assure that Need will be met:

Using $500 Generator sold for $5000

1) Store Owner requires Generator to run Refrigerators. Can afford $5000, Need is kinda questionable, but his/her stuff won't go bad.

2) Ben Affleck requires Generator to run his hair dryer. $5000 is no problem, hell, throw another in the truck to run the Hot Tub. Need is, well, who wants to see him with messy hair? 😀

3) Retired woman requires Generator to power her husbands Respirator. Can not afford $5000, Need is absolute and immediate.

Merely raising the Price does nothing towards efficient distribution, just distribution to those who can afford it.

And those that can afford it are usually the ones that need it most. Fixing the price when a resource is in shortage only insures that those that get there first get the resource. In this case the shopkeeper, ben affleck and retiremed woman would not likely even have a chance to get one.

 

[Red Dawn]

Originally posted by: charrison

Originally posted by: Red Dawn
LOL @ those who say companies price gouge for the good of the customers:roll::laugh:

I laugh at those that think artificial price controls will fix shortages.

If there are shortages the cost of the product doesn't matter. What's funny is that you actually believe that those who jack the prices up care about anything other than profit.

 

[3chordcharlie]

Originally posted by: charrison

Originally posted by: sandorski
Here's an example that shows why excessive Prices don't assure that Need will be met:

Using $500 Generator sold for $5000

1) Store Owner requires Generator to run Refrigerators. Can afford $5000, Need is kinda questionable, but his/her stuff won't go bad.

2) Ben Affleck requires Generator to run his hair dryer. $5000 is no problem, hell, throw another in the truck to run the Hot Tub. Need is, well, who wants to see him with messy hair? 😀

3) Retired woman requires Generator to power her husbands Respirator. Can not afford $5000, Need is absolute and immediate.

Merely raising the Price does nothing towards efficient distribution, just distribution to those who can afford it.

And those that can afford it are usually the ones that need it most. Fixing the price when a resource is in shortage only insures that those that get there first get the resource. In this case the shopkeeper, ben affleck and retiremed woman would not likely even have a chance to get one.

And here we have the classic economist's error of equating 'need' with 'willingness to pay'. Economics, prices, and 'efficiency' have nothing to do with need or optimal outcomes, never have, never will.

 

[charrison]

Originally posted by: Red Dawn

Originally posted by: charrison

Originally posted by: Red Dawn
LOL @ those who say companies price gouge for the good of the customers:roll::laugh:

I laugh at those that think artificial price controls will fix shortages.

If there are shortages the cost of the product doesn't matter. What's funny is that you actually believe that those who jack the prices up care about anything other than profit.

Profit will ensure there is more production of scarce produce, artificially capping pricing will not guarantee that the product shows up.

 

[sandorski]

Originally posted by: charrison

Originally posted by: sandorski
Here's an example that shows why excessive Prices don't assure that Need will be met:

Using $500 Generator sold for $5000

1) Store Owner requires Generator to run Refrigerators. Can afford $5000, Need is kinda questionable, but his/her stuff won't go bad.

2) Ben Affleck requires Generator to run his hair dryer. $5000 is no problem, hell, throw another in the truck to run the Hot Tub. Need is, well, who wants to see him with messy hair? 😀

3) Retired woman requires Generator to power her husbands Respirator. Can not afford $5000, Need is absolute and immediate.

Merely raising the Price does nothing towards efficient distribution, just distribution to those who can afford it.

And those that can afford it are usually the ones that need it most. Fixing the price when a resource is in shortage only insures that those that get there first get the resource. In this case the shopkeeper, ben affleck and retiremed woman would not likely even have a chance to get one.

Ridiculous.

 

[Red Dawn]

Originally posted by: charrison

Originally posted by: Red Dawn

Originally posted by: charrison

Originally posted by: Red Dawn
LOL @ those who say companies price gouge for the good of the customers:roll::laugh:

I laugh at those that think artificial price controls will fix shortages.

If there are shortages the cost of the product doesn't matter. What's funny is that you actually believe that those who jack the prices up care about anything other than profit.

Profit will ensure there is more production of scarce produce, artificially capping pricing will not guarantee that the product shows up.

Profit is one thing and I'm all for that but hiking up the price during a disaster to take advantage of the disaster is another...it's called Price Gouging

 

[Dissipate]

Originally posted by: 3chordcharlie

Originally posted by: charrison

Originally posted by: sandorski
Here's an example that shows why excessive Prices don't assure that Need will be met:

Using $500 Generator sold for $5000

1) Store Owner requires Generator to run Refrigerators. Can afford $5000, Need is kinda questionable, but his/her stuff won't go bad.

2) Ben Affleck requires Generator to run his hair dryer. $5000 is no problem, hell, throw another in the truck to run the Hot Tub. Need is, well, who wants to see him with messy hair? 😀

3) Retired woman requires Generator to power her husbands Respirator. Can not afford $5000, Need is absolute and immediate.

Merely raising the Price does nothing towards efficient distribution, just distribution to those who can afford it.

And those that can afford it are usually the ones that need it most. Fixing the price when a resource is in shortage only insures that those that get there first get the resource. In this case the shopkeeper, ben affleck and retiremed woman would not likely even have a chance to get one.

And here we have the classic economist's error of equating 'need' with 'willingness to pay'. Economics, prices, and 'efficiency' have nothing to do with need or optimal outcomes, never have, never will.

Economics has nothing to do with optimal outcomes? HuH? If that were true then a respectable economist would say that all economic systems produce the same optimality of outcomes and that no two economic systems are 'better' or 'worse.' This is ridiculous. For instance, only a Marxist ideologue would claim that communism is the best economic system or that there is no difference in the quality of outcomes between communism and capitalism.