"I can calculate the motions of heavenly bodies, but not the madness of people." ~ Isaac Newton
Gouge Me, Please!
As Hurricane Frances approached the Florida coast, elected officials all over the state have taken advantage of the situation by placing their mugs on our boob tubes, and therefore increasing their political capital. Miami-Dade State Attorney Katherine Fernandez-Rundle was one of those boob-tube mugging politicos. In numerous appearances, she reminded viewers that gouging would not be tolerated and informed them of a "hotline" where all those who thought they were being gouged could call and lodge a complaint. The Janet Reno prot'g' made it clear "gougers" would meet the full force and wrath of the State Attorney's Office.
What is "gouging"? Well, according to the publicity-hounding politicians, it's charging more for a good during an emergency situation than during periods of business as usual. These declarations by our elected officials not only put to rest the myth of a free market in the United States, they also make life more dangerous and difficult for its inhabitants. These "anti-gouging" laws ignore the realities of economics and the simple, real and irrefutable laws of supply and demand.
Television newscasts were filled with busybody reporters questioning prices at local gas stations and convenience stores. A gratuitous story about some folks selling plywood on a street corner for $50 a sheet (regular price: about $32) was met with haughty indignation from the news anchors. Should selling plywood that sells in a store for $32 on a corner for $50 be considered a crime? Let's review the facts.
Every time a storm nears, people in its path rush out to stock up on supplies or purchase materials necessary to protect their properties. This naturally creates a higher demand for these products and in turn creates shortages. This mad rush is accompanied by hard-to-find parking and stores crowded with shoppers who in their altered states of mind become devoid of all common courtesy (if they had any to begin with).
So if on your way to a hardware store to purchase some plywood, you ran into someone selling plywood for $50 a sheet, and after thinking about the hours you would spend parking and braving the crowds (and perhaps ending up empty-handed), you might decide that the $50 price is fair and maybe even a bargain under the circumstances. Then after your plywood purchase, you find a rare sight of a gas station without lines; you notice the price is $3.25 per gallon. You might decide that skipping an hour wait, without worrying about the station running out of gas before you reach the pump, is well worth an extra dollar and change a gallon. Then there's an individual at the gas station selling Parmalat milk and other non-perishable goods at double the store price. You decide to buy a few things on the spot and avoid the crowded parking, long lines and irate customers at your local supermarket. At the end of the day (actually you saved about half a day if not more), you spent about an extra $220 (if you bought what you actually needed, not enough to supply the 82nd Airborne Division). Is that worth avoiding parking lots filled to capacity, lines filled with individuals that make you wish for more cataclysmic events, and avoiding the uncertainty of whether you will be able to purchase the product you came for? That's actually a choice you should make, not one any politician should make for you.
Laws against "gouging" exist even in the absence of cataclysmic events. Usury laws and rent controls are just a couple of examples that come to mind. Yet governments are not so quick to cry "gouging" when they overcharge captive taxpayers for unnecessary or substandard services. In Miami-Dade County were the State Attorney vigorously pursues "gougers," one-year education for a single child in public school cost roughly $11,000. The education in Miami-Dade public schools is by most standards sub-par and at a cost that's close to double the tuition of the best private schools in the county, that offer not only superior education but also safer environments, and more parental input.
Obviously, politicians do not rage against those culpable for offering substandard education and other government services at a hyper-inflated price (because that would be themselves). If the term "gouging" could ever be used correctly, it would be to describe taxes paid to the government, where what's paid is for the most part lost in an orgy of legalized corruption, waste and malfeasance, with little if any service rendered to the "gouged" taxpayer.