Economics: The Value of "Price Gouging"

[Fife]

If it wasn't really really bad, then why the state have a rule against it??

[Speaker to Animals]

What is your solution to gougers creating artificial scarcity of necessities in order to gouge victims of a disaster?

Other than "that cannot happen", which I have shown numerous examples proving it happens all the time in lots of markets, without disaster, and we create regulations and various mechanisms (like a market maker) to restrain it.

No amount of repeating your script answers this simple question.

"Creating artificial scarcity" is a acid-trip-level construction in the context of "anti-gouging" or "anti-scalping" laws.

No amount of repeating your script changes objective reality.

End of story, bro. Finis.

It's the actual problem. I realize it's off-script for you, but that's the issue I would like addressed before we repeal anti-gouging laws for the welfare of the people.

The fact that you got nothing should have told you enough about your position.

This type of shit happens all the time. Everywhere, we implement various regulations and mechanisms to keep it from happening, not just during emergencies. If it weren't a problem, then NASDAQ wouldn't have designated market movers, states wouldn't have laws against ticket scalping, and there wouldn't be regulations regarding how much a drug company can fuck people over with their pharmaceutical patents.

Then here you clowns are acting all surprised anybody would bring this up. Please. It's not impressive.


Pro-tip: http://www.investorwords.com/1128/corne ... arket.html

That's what gouging does. It's illegal everywhere else. But you want to make it legal precisely when the stakes (people's lives) are highest. You should actually have to defend that position. But you don't. The script does not address any of this. You need to address it.

All forms of gouging come down to manipulating supply, usually by exploiting low liquidity or a temporarily restricted market area, but sometimes by trying to corner the entire fucking global market as the Hunt brothers tried to do back in '80. Markets generally try to preempt it and setup mechanisms to inhibit it. But somehow that shouldn't be the case for water and gasoline in a fucking disaster?? Get over yourselves and answer this shit.

[Speaker to Animals]

Right here, libbots:

Nelson Bunker Hunt and William Herbert Hunt, the sons of Texas oil billionaire Haroldson Lafayette Hunt, Jr., had for some time been attempting to corner the market in silver. In 1979, the price for silver (based on the London Fix) jumped from $6.08 per troy ounce ($0.195/g) on January 1, 1979 to a record high of $49.45 per troy ounce ($1.590/g) on January 18, 1980, which represents an increase of 713%. The brothers were estimated to hold one third of the entire world supply of silver (other than that held by governments). The situation for other prospective purchasers of silver was so dire that on March 26, 1980 the jeweller Tiffany's took out a full page ad in The New York Times, condemning the Hunt Brothers and stating "We think it is unconscionable for anyone to hoard several billion, yes billion, dollars' worth of silver and thus drive the price up so high that others must pay artificially high prices for articles made of silver".[1]

But on January 7, 1980, in response to the Hunts' accumulation, the exchange rules regarding leverage were changed, when COMEX adopted "Silver Rule 7" placing heavy restrictions on the purchase of commodities on margin. The Hunt brothers had borrowed heavily to finance their purchases, and, as the price began to fall again, dropping over 50% in just four days, they were unable to meet their obligations, causing panic in the markets.

So the evil socialist COMEX decided to nip this in the bud by restricting margins and wiping these merchant cunts off the map.

Or.. maybe COMEX is not really a socialist institution, but recognized that doing nothing about this kind of behavior could be disastrous.. Hmm..

[DBTrek]

1. Example of a monopoly, not of price gouging or ticket scalping.
2. No one has ever been forced to buy silver

Next.

[Speaker to Animals]

No examples of monopolies were given. Go back and study what is meant by the term. You are confusing supply with marketshare.

no one was ever forced to buy water either. Not really germaine to the problem presented here.

[DBTrek]

You’re right, with only 69% of a commodity that has available alternatives it wasn’t an attempt at a monopoly. I’m not seeing how it’s an anti-gouging or anti-ticket scalping issue either. Silver rule 7 is a rule against buying commodities on margin, not a rule saying no one can resell a concert ticket over list price.
Where’s the connection?

[Speaker to Animals]

You’re right, with only 69% of a commodity that has available alternatives it wasn’t an attempt at a monopoly. I’m not seeing how it’s an anti-gouging or anti-ticket scalping issue either. Silver rule 7 is a rule against buying commodities on margin, not a rule saying no one can resell a concert ticket over list price.
Where’s the connection?

Silver 7 was implemented to make it difficult to corner the market, and thus price gouge consumers. To price gouge you have to first corner the market, which means taking commodities off the fucking market. That is the problem you refuse to address.

You are arguing that it should be legal to deliberately take water and gasoline off the market during a crisis in order to price gouge, and justifying it by claiming it will lead to more water and gasoline. This is fucking ridiculous, DB.

[DBTrek]

You are arguing that it should be legal to deliberately take water and gasoline off the market during a crisis in order to price gouge, and justifying it by claiming it will lead to more water and gasoline. This is fucking ridiculous, DB.

Nah man, I’m arguing that the state shouldn’t forbid or discourage me from bringing more supply to the market simply because conditions have created a high demand.

[Fife]

deliberately take water and gasoline off the market during a crisis

Yes, yes of course! This is exactly what Walmart does!

No wonder there is so much collusion; Apu at the QuikEMart gets together with the Walton heirs and they all plot out a way to get all the water and gasoline "off the market!" Then they send their agents out to the border areas to shoot all the other vendors attempting to drive in to the zone with water and gasoline. It's a foolproof plan; at least until the Pam Bondi brigade comes in to foil the evil genius plan.

I can't believe you don't charge a cover for this kind of entertainment, Martin.

[Speaker to Animals]

deliberately take water and gasoline off the market during a crisis

Yes, yes of course! This is exactly what Walmart does!

No wonder there is so much collusion; Apu at the QuikEMart gets together with the Walton heirs and they all plot out a way to get all the water and gasoline "off the market!" Then they send their agents out to the border areas to shoot all the other vendors attempting to drive in to the zone with water and gasoline. It's a foolproof plan; at least until the Pam Bondi brigade comes in to foil the evil genius plan.

I can't believe you don't charge a cover for this kind of entertainment, Martin.

What the fuck are you even prattling about? I am unaware of Walmart engaging in price gouging. If anything, they fuck gougers in the ass by shipping in large amounts of supplies.

I think you crackers have no idea what gouging actually is. It's not just a high price. Low supply can result in a high price. I am not arguing that should be criminalized. I am talking about people hording supplies so they can sell a fraction of the supplies at huge markups. When we are talking about water and gasoline in the aftermath of some devastation, those people should be locked in a prison.

We are talking about people who have no problem with others dying so they can profit. To characterize them as odious pieces of shit would be less than English understatement.