The Perfect Economic Storm

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The current hurricane season has been the most active since records of storms have been kept. Scientist and pundits around the globe have developed theories regarding the increasing number of storms; global warming, natural cycles and divine punishment are just some of the ideas being talked about. Whether these catastrophic storms are caused by manmade emissions or an angry and vengeful deity is not entirely clear. What is crystal clear are the economic effects of these storms and the exacerbation of negative effects by government meddling.

While hurricane Wilma was still hundreds of miles from South Florida , pounding the resort town of Cancun , local officials were warning Floridians about the penalties for price gouging; subsequently, some individuals were incarcerated for 'gouging' consumers. David Medina of Miami Beach was charged with selling overpriced generators he purchased in North Carolina, and David Bercovicz was arrested for selling cases of water that he bought in Tampa that usually retail for five dollars for ten. ''We are simply not going to tolerate price-gouging in this state,'' Was the obvious gratuitous quote from Charlie Crist, Florida 's Attorney General and gubernatorial candidate. Though laws pertaining to "gouging" are nebulous and subjective, the results of these laws are very obvious.

When it comes to these so-called gougers, people have a choice: they can choose not to buy the products, which will discourage other folks from spending time and money procuring these items for retail. But what if there are no generators available at the usual outlets or if you just don't care to wait 12 hours for "free" rationed FEMA water and ice? Is that FEMA water and ice really free? Nope! How much does it really cost? No one can say for sure, but looking at how government usually overpays for things, you can bet ten dollars for a case will probably look like a bargain. Who pays for the overpriced FEMA water? Entrapped taxpayers do. Do they have a choice? No, you can ignore the "gouger" standing on a street corner but not the government's tax collector ( IRS ) unless you don't mind joining Mister's Bercovicz and Medina in prison.

Florida 's Public Service Commission, which regulates monopolistic utilities, apparently has a different concept of gouging than the state Attorney General. Recently the commission, allegedly on its own gumption, proposed and passed a 16% surcharge on consumers to pay FPL (Florida Power and Light) for revenues lost during the 2004 storm season. This means that consumers will pay for electricity they did not use in order to ensure a government regulated and sanctioned monopoly its profits.

After Wilma passed through South Florida , an unprecedented number of people were left powerless (electrically speaking). Many gas stations were also left without electrical power and in turn also without the ability to pump gas. Lines at gas stations that did have electricity stretched for miles the first couple of days after the storm. Those lines subsided as the days passed; by the fifth day as more stations regained power, lines were nonexistent. Now some legislators in Florida , claiming that they have the public's best interest at heart, want to force gas station owners to buy generators. Laws forcing gas station owners to buy generators will only serve to drive up the price of generators and gasoline for Floridians. Rest assured that these gas station owners who can't count on forcefully obtained handouts from the Public Service Commission for lost sales will find the most economically efficient way that will allow them to stay open after the next hurricane.

Miami Dade and Broward County officials also seem to be blind to the most basic principles of supply and demand. Despite the fact that tens and perhaps hundreds of thousands of roofs were damaged, bureaucrats and politicians from both of these counties refuse to allow out-of-state contractors to perform repairs. This will not only result in longer waits for repairs but higher prices as well. The fact that the local contractors are heavy contributors to local political campaigns probably had no influence on the counties' decision.

With many meteorologists, environmentalist and even evangelical preachers forecasting busy storm seasons for much of the foreseeable future, one can't help but wonder how what economic liberty we have left will survive. If these dire predictions come true and politicians get their way, most people in areas vulnerable to hurricanes better get used to paying dearly for electricity they don't use, sitting helplessly in the dark, standing in lines for hours to get "free" water and ice, living with leaky roofs and paying exorbitant gas prices.

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Emiliano Antunez's picture
Columns on STR: 47

Emiliano Antunez, Lives in South Florida  and never ceases to be amazed by the arrogance, stupidity and malevolence of the great majority of our "elected  representatives".  The voters are revolting.