The Colonial Pipeline hack has exposed another problem with our laws around price gouging - or raising prices excessively in a time of high demand/emergency. Gas stations on the east coast kept prices stable while they tried to handle long lines and people filling 8 cans of gas in their trunk (I counted!). Much of this was panic buying by buyers who did not need this amount of gas and limited needy buyers’ access to a limited product. A market economy (supposedly the US system) has an answer to this - the Law of Supply & Demand. The theory defines the relationship between the price of a given good or product and the willingness of people to either buy or sell it. Generally, as price increases, people are willing to supply more and demand less and vice versa when the price falls (thanks Investopedia). Instead, in the interest of making things fair, the US insists on price controls, which has made the situation much worse. Most economic experts believe that price controls often disrupt the market - which we have seen again. By the way, this is not a new phenomenon; study ammo, toilet paper and water/generators/plywood in a hurricane.
What would have happened if gas stations were allowed to raise prices to, say, $7 per gallon? On the demand side, some people would have got out of the line because they don’t need it this bad - maybe half the people? Good! Now, on the supply side. Would a distribution network have rerouted tanker trucks 10 hours away to the east coast to increase their price versus giving it to a station in Cleveland that might have enough supply for another week? Price controls effectively shut out market solutions and leave them to the US government to solve - and they never have any answers.
We need to either believe in the free market or believe in the ability of the government to manage the economy down to the level of gas stations. Life is not fair (or equitable in the latest linguistic twist)….most efforts to make it so fails miserably.
In Phoenix, I pay twice the price for electricity between 3 pm-8 pm daily - is this price gouging? My wife and I have actively managed (due to this pricing) to offload most of our electricity usage out of this time period while other families pay the higher premium. Market supply and demand working! This offloading of demand (gouging?) allows the utility to prevent investing large amounts of capital to build plants that are only needed for a few hours per day.
What is your solution to the pipeline failure? What is your issue with raising prices in an emergency?
We have become too reliant upon technology to operate every function of our lives as a society. What happened to being able to function once this technology fails as we saw with colonial. There seems to have been no thought of implementing manual overrides and control. The shutdown, in my opinion, should have only been temporary in the length of only a few hours. The understanding that the pipeline only supplies fuel farms, which generally stores enough fuel to support the normal demand for upwards of a month, would show that the shortage was self inflicted by the government, media, and panic buyers.
Raising prices, or what some call gouging, is a normal reaction to the market. As you stated with the law of supply and demand, prices will change as supply and demands shift. The question becomes, when does this become gouging? If we operate in a free market, then gouging does not exist and price controls should not exist. The consumer will determine what prices are too high. If the consumer is willing to pay then is it gouging? This needs to fall on the consumer and their understanding of what control and power they have upon prices.
We have become too reliant upon technology to operate every function of our lives as a society. What happened to being able to function once this technology fails as we saw with colonial. There seems to have been no thought of implementing manual overrides and control. The shutdown, in my opinion, should have only been temporary in the length of only a few hours. The understanding that the pipeline only supplies fuel farms, which generally stores enough fuel to support the normal demand for upwards of a month, would show that the shortage was self inflicted by the government, media, and panic buyers.
Raising prices, or what some call gouging, is a normal reaction to the market. As you stated with the law of supply and demand, prices will change as supply and demands shift. The question becomes, when does this become gouging? If we operate in a free market, then gouging does not exist and price controls should not exist. The consumer will determine what prices are too high. If the consumer is willing to pay then is it gouging? This needs to fall on the consumer and their understanding of what control and power they have upon prices.