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Craigslist Price Gouging Probed By NY AG After Sandy

helix2301 (1105613) writes | about 2 years ago

Businesses 1

helix2301 writes "Attorney General Eric Schneiderman's investigation of price gouging fuel on craiglist following Hurricane Sandy. Schneiderman's office is investigating some 600 price gouging complaints from New York City, Westchester County and Long Island."
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There is no such thing as price gouging (1)

A nonymous Coward (7548) | about 2 years ago | (#41918529)

If there is a shortage of gasoline, or flashlights, or toilet paper, there is going to be rationing. Heck, almost by definition, everything is rationed because nothing is infinite.

The only question is how the rationing works. There's a law of nature, almost as basic as the thermodynamic pressure/volume/temperature equation, that prices go up when there's more demand than supply, and drop for the reverse. Price is not just money; it includes time and effort. You can buy a prebuilt chair from a store, you can buy a kit from Ikea, or you can build it yourself. The division of the price into money, time, and effort varies among the choices.

So if the government makes it illegal to raise the money part of prices during a disaster, they haven't stopped the price from rising, they have just shifted it into time and effort. Truckers aren't going to make an extra effort to bring in extra supplies because they would spend more money to bring in the supplies (because it's a disaster and it's more work) and need to recover that money, but are forbidden from doing so,and they can make deliveries elsewhere for less money. So supplies dwindle, prices rise in non-money ways, and customers end up waiting in line for five hours as part of that price rise.

Same thing applies to flashlights, generators, toilet paper, everything.

The fastest way to get supplies into a disaster area is let the money prices rise, and leave rationing to the customers themselves. Smart customers who want to save money will buy supplies ahead of time when deliveries are easier and cheaper. Customers who don't really need the supplies will balk at the extra money and not buy, leaving it to customers who really do need the supplies. And if the money price rises enough from demand, outsiders will be lining up to bring in extra supplies, at extra cost, because they are bettng they can recover that extra cost. If government wants to help the poor, direct subsidies are a lot simpler and fairer.

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