Just in Time for Halloween!

[paft.livejournal.com]

I suppose it’s appropriate that we get this truly scary, fanged, and drooling glimpse of the face of modern capitalism on October 31st. CNBC Senior Editor John Carney has decided to weigh in on the subject of price gouging during a disaster.

What’s striking is the bland cluelessness, a level of naivete that, feigned or not, borders on the murderous. After pointing out that, once a few of these layabouts experience having to pay, say, $100 for a case of bottled water, they’ll have received a salutary lesson in being prepared for disaster, Carney observes:

One objection is that a system of free-floating, legal gouging would allow the wealthy to buy everything and leave the poor out altogether. But this concern is overrated. For the most part, price hikes during disasters do not actually put necessary goods and services out of reach of even the poorest people. They just put the budgets of the poor under additional strain.

Right. The poor never have to do without “necessary goods and services” in normal times, so they certainly won’t have to do without them during disasters like floods and hurricanes! For the most part, anyway. And if a few poor people are unlucky enough not to be part of that “most,” seeing a few bodies of neighbors who’ve died from hypothermia or thirst will teach the rest of those lazy beggars a lesson about the dangers of overconsumption!

Carney apparently believes the plight of many people during a disaster is about dickering over prices rather than access to resources that could save lives. “This is a problem better resolved,” he declares, “through transfer payments to alleviate the household budgetary effects of the prices after the fact, rather than trying to control the price in the first place.”

Of course, this is only going to help those people who managed to survive in a "marketplace" where the prices of goods are jacked up to the point where they end up having to choose what live-saving goods to purchase. Potable water? Uncontaminated food? Dry warm blankets? Hey, if you can't afford all of them that's just now how the marketplace works, buddy, and if you or a member of your family ends up not making it because you chose wrong, those are the Randian breaks.

Surely the transfer payment you get later will compensate for having to watch them die.

But wait! There's more! Carney has followed this post up with another mentioning merchants giving away perishable goods, in which he asks:

Clearly, people could pay market prices for the perishing goods. Does the fact that they aren't mean consumers are gouging merchants? Should this be illegal?

Is this man from another planet?

*

Comments

[politikitty.livejournal.com]

No. No it wasn't. The articles were pretty shameful attempts at "gotcha journalism".

I only meant that we should be aware that the Red Cross hands out debit cards.

[dwer.livejournal.com]

do they also allow prices to go through the roof at the same time?

[politikitty.livejournal.com]

I'm pretty sure the Red Cross is not in a position to dictate prices at all.

But they are in a position to mitigate the effects of raising prices. And collectively we can do more to redistribute through the Red Cross and FEMA than we can by artificially holding prices too low. When prices are too low, we have folks who will get more gas than they need, 'just in case', and will do so because they suffer no consequence.

If that gas station runs out of gas (and they do. I've lived in Texas long enough to see it happen a million times), it doesn't matter how needy or how wealthy the person is trying to get gas. They're shit out of luck. They can't go back and ask folks if they really needed to purchase that last gallon, and would they consider only buying what they need.

They can say "This line is insane. I can only give gas to the next 30 people. I'll triple the price and take the next thirty people willing to pay that." Folks can then assess their options and decide if they can find other options. Carpool. Take the smaller vehicle (Oh my god. You would not believe how many folks try to take all their vehicles out of harms way, instead of thinking that a family of four can fit in one car). Realize they're far enough outside the storm path that they're very likely to be safe.

And it's extends beyond gas. In Houston for Rita, people who evacuated Galveston couldn't get out in time because the folks in North Houston sat on the freeway creating too much traffic. And then there was so much traffic, folks were running out of gas, causing more traffic. We got so lucky that Rita veered at the last minute, because our evacuation system completely collapsed and leaved most of Galveston and Houston completely exposed.

Without price, how can you organize who should be evacuating first when a full panic means that nobody can evacuate?

You could try to be more dictatorial about it. Only the edges are allowed to buy gas and leave. But that requires people to act so far outside the scope of normal behavior, I don't think we can say that it has the possibility for greater success.

[paft.livejournal.com]

pk: They can say "This line is insane. I can only give gas to the next 30 people. I'll triple the price and take the next thirty people willing to pay that." Folks can then assess their options and decide if they can find other options. Carpool. Take the smaller vehicle (Oh my god. You would not believe how many folks try to take all their vehicles out of harms way, instead of thinking that a family of four can fit in one car). Realize they're far enough outside the storm path that they're very likely to be safe.

And if they aren't "far enough outside the storm path that they're very likely to be safe?"

The poor already have fewer options than the rich in the event of a hurricane. They typically don't have second homes to go to, don't have jobs they can easily take time off for to get out of harms way ASAP, don't have reliable transportation to begin with. Tripling the price of essentials makes them even more vulnerable and "shit out of luck."

[politikitty.livejournal.com]

And the other scenarios? Like I've said, there are plenty of folks who can buy less gas, take a more efficient vehicle, carpool or decide to stay at home.

It's about convincing those people who can make different choices to make different choices. When the people in North Houston clog I-45 so that it takes 18 hours to make a 4 hour trek, the people trapped closest to the storm are stuck staying in their unsafe houses.

And like I said, I am all for immediate cash assistance for the poor so that they can afford essentials.

You act as though we can prevent shortages, which we can't.

How do you decide who is shit out of luck? You've been riding my ass about how unfair it is to make that decision, but it's a decision that has to be made. Anti-price gouging and anti-hoarding laws have not stopped shortages in disasters, so additional policy is clearly needed to make your policy work.

What is it? If you don't have one, don't try to make me feel guilty about the poor when you have no better answers for them.

[paft.livejournal.com]

pk: And the other scenarios? Like I've said, there are plenty of folks who can buy less gas, take a more efficient vehicle, carpool or decide to stay at home.

The other scenarios still leave a lot of the poor "shit out of luck." A good disaster response needs to take into account the most vulnerable citizens. That's why there are laws against price-gouging and hoarding.

pk: It's about convincing those people who can make different choices to make different choices.

I don't think that getting rid of price-gouging during a disaster is going to do that. To borrow an analogy used by that very smart professional mocker, Stephen Colbert, it's like taking down the stop signs at a busy four way stop on the grounds that, without them, rational self-interest will kick in and traffic will eventually move smoothly. First of all, the "learning process" would be lethal for some people. Second, the result is likely to be more or less permanent gridlock.

The reaction to outrageous price-gouging of someone rushing to get away in advance of an oncoming Category 5 storm is not likely going to involve stepping back and thoughtfully working out what would be best for everyone. If the person has the money, they're likely to mutter some curses, pay it and load up their car. If they don't, they are not going to hang around dickering. They're more likely to panic and try (probably vainly) some place with items the can afford, OR just give up and go back home, OR organize a few like-minded pals with base-ball bats to break a few windows and grab stuff.

Yes, people will sometimes wait until the last minute to evacuate in advance of a hurricane, sometimes because they underestimate the danger of a storm, sometimes because they honestly have little choice. People will make dumb decisions because they have a false sense of invulnerability. People will make unsafe decisions because they don't have many options. A good, humane disaster response takes those factors into account.

pk:And like I said, I am all for immediate cash assistance for the poor so that they can afford essentials.

And what's to prevent profiteers from just raising their prices even more?

pk: You act as though we can prevent shortages, which we can't.

No, we can't. We can, however, minimize their effects.

Anti-homicide laws don't prevent all murders. Anti-theft laws don't prevent all theft. Anti-rape laws don't prevent all rape. The existence of these laws, however, do reduce the incidence of murder, theft, and rape.

pk: How do you decide who is shit out of luck?

I leave that decision to aid agencies who do that kind of triage. I do know that it's way beyond the point of that person saying "I don't have enough cash to pay for that bottled water the guy is charging $100 a case for."