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Kasz216 on 27 June 2011
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sapphi_snake said:
Kasz216 said:


How does it make sense?  It's common sense actually, one just needs to actually think about it.  The  Research bears it out.

Two situations.

As it works now...

a Big Disaster is coming...

everbody rushes to the supermarkets and stock up.

The first 10 people or so through the doors end up buying 3-4 months worth of Fresh water and other supplies even though they have to and clean out the supplies.  Because that's exactly what happens in these cases because people panic and they're going to eventually use the water and food anyway. (Think of all the cases of cleaned out store rooms)

Companies have no incentives to rush product to the disaster areas ahead of the disaster area because they can make just as much selling their bottled water in a non-disaster area without having to pay their truckers disaster pay.

The government gets together aid and sends it down there.

Everyone outside of those first 10 people are screwed.

 

As it works in a "non" price fixing enviroment.  Word of a disaster is coming.  Stores jack up their prices.  People are forced to make real descisions and instead of buying 3-4 months of water instead only buy 2-3 weeks or so since the disaster is expected to last only 1-2 weeks.  

So more people out of the gate.  REGULAR people are saved, though it costs more per product.  (Hell all the rich people have probably left the area, because you know... they're rich, they have money to start again.)

Furthermore when stocks run out, drivers are sent to disaster areas to restock before the disaster hits because it means big profits.

In fact, areas and local buisnesses probably keep a larger stock then usual around disaster season... since if a disaster DOES happen, then it means big profits.  While in the above scenario, extra stock probably just means extra loss in storage space if a disaster doesn't happen which is more likely.  (Like Oil companies do with oil.  Which is why some oil companies have record profits even when gas prices are rising.  That's $5.60 for them to get gas to you with the gas they're buying now... however some of the gas your getting is gas they stored back when gas cost $3.20.  It's why private oil reserves exist and thankfully are so big.)

Entrepenures may come in from neighboring areas clearing out their local stores and start going door to door selling things like generators and water.  Or heck, maybe even locals stock up ahead of time knowing that not only will they be ready, but they can make a profit selling to their neighbors. 

 

Then, The government gets together aid and sends it down there.

 

Price is NEVER going to get so high that the product doesn't get bought... because the money makers need to sell their products to make money.  After the disaster it's all going back down to market value.

 

Makes sense when you really stop and think about it, no?  There are a lot of "Simple" issues there are huge misconceptions over, because people ignore the human element in economics. 

Formulas and charts create lots of flaws that never bear true in the real world, because Keynsian economists forget that the economy isn't non-living math.  The core base of the economy is people.  People are organic and can't be eaisly predicted.

 

Or, to put it in an economists words.

http://blogs.forbes.com/artcarden/2011/06/17/price-gouging-laws-hurt-storm-victims/

Your comment made no real sense at all. This situation would continue up 'till after the disaster, and would financially ruin people. Honestly, you libertarians are so paranoid when it comes to Government, but you sure love supporting the tyranny of corporations.

How doesn't it make sense?

Your lack of common sense when something is plainly explained out and you have no reasonable arguement against it is shocking.

It would continue up till after the disaster and would financially ruin people?  Again, why would this be?   It doesn't make financial sense for a company to bankrupt it's consumers... they need people to buy from them in the future as well.  Most stores afterall are run by small buisness owners who need to continue making a living. 

Furthermore if they gouge their prices to where people are going bankrupt, chances are that means they are going to be left with product.  Which if they're lucky will be worth regular market value shortly after the disaster.... and if their unlucky will be destroyed by the disaster itself.  Or you know.  Just taken in riots if too much of it stays around in stores.

Though even if your completely baseless statement was true...  which is worse?

A) A decent amount of people dieng and some being bankrupt

or

B) A lot more people dieing.

I'd take A all day long... I'd like to think you would too hence why you completely ignored the point.

This isn't some "crazy libretarian idea" so much as it is.... basic economics.


By greatly raising prices, it's far more likely that items will go to those who need it most... because only those who need them will pay the absorbant prices.  In areas with non-pricegouging needs.  Most goods end up wasted being bought up by people who's demand is minor, but who just happen to live closest to the stores.  After a disaster, if you usually drink bottled water... and your house was untouched, you'll probably still buy the same bottled water you'd always buy.  While those whose water is out, are deprived of water.  However if said bottled water costs 2-3X as much... you probably are going to drink out of the tap instead.