Do Not Gouge

Hat tip to The Political Vine, which points this out:

Governor Sonny Perdue signed an Executive Order today enacting Georgia’s price gouging statute to protect Georgia consumers from unlawful increases in gas prices and other products. The Governor’s Office has received today credible evidence that price gouging has occurred in parts of the state.

16 comments

  1. Bill Simon says:

    Actually, Chris may, I must grudgingly admit, have a somewhat valid point. It is the “free market” that tends to correct the supply-demand curve. If you cap the price of a commodity to be the price everyone will willingly pay and your supply is limited, you will run out of a commodity quicker than if you allowed the price-gouging/free market rampage to occur.

    However, I wonder if Chris feels the same about “farm support subsidies” that were enacted decades ago under federal guidelines to help support the agricultural industries all across the U.S.

    For that matter, how does Chris feel about the “minimum wage” price support? Or, is he like Hillary Clinton who said many years ago in response to a pizza shop owner complaining about the hike in the national minimum wage that “Well, you’ll just have to raise your prices on pizza.”

  2. Chris says:

    I’m opposed to farm supports – Why are we paying farmers not to grow, when we could be growing our gas as opposed to buying it from islamofacists.

    I’m also opposed to minimum wage, however unlike the dolts in the LP, I don’t wear that position on my sleave.

    And raising the price of pizza will just contribute to inflation which will cause politicans to want to raise minimum wage again. A vicious cycle.

  3. Bill Simon says:

    Because “price gouging” is not a….”good” sign of humanity and I can see why the Governor’s office decided to enact it. See, it’s not just Atlantans that would affected by the gouging…it is a lot of the “refugees” that just escaped the hell-hole of the Gulf Coast with nothing but the clothes on their back and some spare change.

    I can also see the point of your comment of “thanking” the Governor for taking an action that could lead to the supply running out faster.

    I admit “grudgingly” because his actions (had not the pipelines gotten back up to some operating capacity late yesterday afternoon) would likely lead to causing more pain on a wider basis. But, that doesn’t make me happy about agreeing with your point.

  4. waterboy says:

    Have you not seen the families devastated by hurricane Katrina? What do they need? FOOD & WATER….maybe we should run the prices way up on the food being taken to them so we can let Bill’s “free market” go to work. They can pay the “market” price or…..STARVE! Couple that with the comment by Chris that “I’m opposed to farm supports – Why are we paying farmers not to grow, when we could be growing our gas as opposed to buying it from islamofacists” – such uninformed comments go beyond stupidity. Hey Chris – if there is so much money being paid to farmers then why aren’t you cashing in???? Go get you some land, kick back and enjoy the good life!

    I’m for markets, but they don’t work in all situations or for all commodities. If we are to protect our borders, we must be able to produce our own food and yes, that means price supports for farmers. Double the prices paid to farmers and you’ll no longer need price supports. Farmers are price takers – they can’t pass the increased labor, environmental, fuel, or other production costs on to the buyer (you). Citizens freaked out yesterday, artificially driving up prices on fuel and our Governor stepped in to calm worries and restore order – and it worked! Gas prices settled down almost immediately.

    Now go get in your car with your $3.00/gal fuel and head to a drive-thru and enjoy your meal. In the mean time America will keep supporting the safe, plentiful food supply that we all enjoy.

  5. GAWire says:

    Congratulations, waterboy . . . you have officially proven that you do not understand what a free market economy is! You are horribly misinformed, and as much as I hate to admit it (for reasons that I don’t really understand, but it just doesn’t seem right, haha) I wholeheartedly agree with Bill.

    For the past 2 or 3 days, I have been hearing predictions about the gas increase, and I also hear how we should be contacting our legislators to let them know that we are furious over the gas prices, and how we should boycott, etc, etc, etc . . .

    Let me tell you right now: the legislators and even our leaders in Congress can’t do anything about this right now. Sure there are political issues in this overall situation, but if you are unhappy with those who are politicizing this horrible issue, I encourage you to contact Sen. Schumer’s (D-NY) office and the DNC to let them know that their politicizing this issue before it even began is certainly not appreciated, and Republicans won’t forget about that, but we would actually rather focus on relief right now.

    But, as far as the market goes . . . until we can convince the oil industry (from the fields all the way too the pumps) that we don’t want their product, their isn’t much we can hold over their heads.

    What I am saying is that the market will take its course, and ultimately adjust for gas prices. The increases do not give any legitimate reason to attack the free market system.

    I HAVE seen the devastation from Katrina. I will be heading down there with my organization to help in reilef efforts. I can tell you that this devastation and the other issues that have come about from it, such as gas increases are not the fault of the market economy, nor is this Haley Barbour’s fault (y’all have to read this article on the Huffington Post by RFK, Jr blaming Katrina on the MS Gov — it’s so out there, even for a Kennedy!).

    It is all a horrible tragedy and there is going to be affects on all of us, but the market will ultimately come thru to make sure our economy isn’t affected more than absolutely necessary.

  6. waterboy says:

    Wire – you need to read my earlier post again. My comments were in regard to price gouging, not oil supply. The gas price increases are ARTIFICIAL – as proven with the Gov’s announcement. I understand perfectly what a free market is…I also know when someone is being arrogant.

  7. Decaturguy says:

    It is interesting to see that when the going gets tough Governor Perdue’s theory of government is economic socialism.

    Whatever happened to letting the free market system work? The panic yesterday was not caused by a shortage of gasoline, it was caused by people freaking out and hoarding gasoline because they believed that there would be a shortage. The only way to tame this “panic” and to make sure that there would be supply available the next day is to raise prices! With this panic going on, if prices had remained at a reasonable prices, no gas station in town would have any gas available today and the city and the whole state would be crippled as a result.

    So, it is not reassuring to me that Governor Perdue so readily embraces economic socialism, so that suburban voters think he’s doing something, rather than letting capitalism work.

  8. GAWire says:

    I’ve been called worse things than arrogant, and I see what you are saying, but these affects on prices at the pumps are all apart of the market’s due course when a situation like this occurrs.

    Bill’s “Free Market” that you refer to will indeed go to work, and it will ultimately protect our economy from taking significant dives.

    In reference to people needing food (and this isn’t necessarily relating to anything waterboy posted) . . .

    The advantages of a free market economy in times like this is that we have organizations that are dedicated to coming to the rescue when tragedies like this occur, not to mention the religious organizations and churches that come to aid when people are in need. One of the main setbacks in Asia during the Tsunami was the fact that they didn’t have hardly any local churches or religious organizations and there is nothing even close to a domestic relief organization in those countries, so American and other international NGO’s gladly came to the rescue.

    Anyways, our relief organizations are there to help with those needing food, so those people ARE NOT affected by price increases in that market area. Therefore, the market can adjust for the economic loss in the food sector and the people needing food will receive it free of charge. It’s a beautiful system; however, it is somewhat ideal and we are seeing that now.

    When gangs and looters are roaming New Orleans and Southern MS stealing anything they can, and killing anyone in their way – the system which is there for everyone’s benefit (including those looters) is thrown off. Let’s be clear about this situation – the far majority of the people looting are not just trying to steal a loaf of bread to feed their families. The majority of the people who are looting are stealing DVD players, jewelry, guns and other valuable items that they can sell or enjoy for own personal gain. If people are needing food, they can receive it, but they must go thru the proper channels which include registering with and being searched by the National Guard, police or whomever is there to protect the citizens from harm.

    One example: yesterday a group of evacuees were taken from the Superdome to the Baton Rouge River Center. After given food, water and clean clothes, donated by churches and organizations in BR, the people proceeded to break out and loot downtown Baton Rouge.

    My point is that the procedures and efforts to help the people down there are being impeded on multiple levels. The looters are causing great additional stress to those trying to help, but also leaders and others who are trying to politicize this issue, as well as those that are trying to take advantage of the devastation thru gas and oil prices are all compounding this situation. So, when we freak out about gas, and begin to pass blame on Governor Perdue or other leaders that are actually trying to help and protect citizens, we are only adding to the stress of the overall situation.

  9. memberg says:

    Hmmm, D.G.:

    “The only way to tame this ‘panic’ and to make sure that there would be supply available the next day is to raise prices!”

    If the public could be convinced there was enough gas, would the panic not be tamed? Also, how about gas stations just closing? Just as abstinence is the surest form of BC, I can say with 100% certainty that if gas stations with gas to sell closed early that they’d still have gas to sell the next day.

    “With this panic going on, if prices had remained at a reasonable prices, no gas station in town would have any gas available today”

    Do you really think the aggregate capacity of the unfilled portions of panicked Atlantans’ gas tanks surpasses the aggregate capacity of Atlanta gas stations’ stores? Even assuming that it does, do you think in ONE day that all these cars could get to all that unsold gas? Please.

    “…and the city and the whole state would be crippled as a result.”

    Obviously, Atlanta doesn’t run without gas. No one could drive in from Snellville or Locust Grove to work in the Galleria. But, in your situation, it isn’t that there’s no gas – it’s just that all the gas is in the cars. In that case, people could surely get around just fine until a few days or so had passed and the filling stations were full again.

    So, D.G., it’s pointless to get into a economics discussion here really, especially about such broad terms as “free market economy, “economic socialism,” and “capitalism.” Just ask yourself if the essence of capitalism in a free market supports price gouging. If your answer is yes, then you and the other Neal Boortz libertarians should go live on a desert island and charge each other $10 a gallon for gas.

  10. Mouth of the South says:

    The free market will, eventually, prevent “price gouging.” Pirce gouging beiung defined as taking a super profit based on scarcity or market-control or something that allows one seller to demand a premium ABOVE MARKET PRICE. Gouging exists in situation where the open market is specifically disclaimed as a applicable ssytem for adjusting prices because it assumes elastic demand and supply. But in Atlanta, that is not the case. Demand is somewhat elasctic, but without substitute transportation systems, most people cannot substitute alternative means. Supply is somewhat elastic, but right now, it is ineleastic, and thus price gouging can happen and the market cannot bring it down.

    I agree that the price gouging executive order is probably not a good idea. (I didn’t read the text, maybe it prevents profits of over $50/gallon or something that will have little effect before the market drives prices down again).

    I just wanted to point out that market forces will work over a longer period of time IF the assumptions underlying market theory remain true.

    Also, GaWire, what organization are you going down to New Orleans with?

  11. Decaturguy says:

    Memberg,

    Every gas station I drove by today had no gas to sell because everyone ran out and hoarded gas yesterday even at $4 a gallon. There was obviously a demand for gas higher than even that price. The price, then, probably should have been higher.

    Free market economics is simply how to allocate scarce resources. If supply is going down, and demand is going up, the price rises. It’s really not that hard.

    When demand skyrockets, and supply is decreasing, the price simply cannot remain stable … that is unless you are a socialist and want the government to protect you from high prices. Maybe you are.

  12. Bill Simon says:

    I’d like to correct something here that people like Decaturguy and The Governor have said: Filling-up your car with gasoline, even if you “top-off” often, is not “hoarding.”

    Hoarding is stockpiling for future use, and usually keeping your supply hidden. Since an automobile uses gasoline in order to run, it is difficult to make the claim of “hoarding” since you cannot easily store the gasoline anywhere else but where you immediately use it.

    Just a minor detail…and, it’s just my opinion…

  13. Melb says:

    But it is hoarding when people are going to walmart and buying all the gas containers and filling up 5 of them. I saw more than a few doing this and I heard all the containers at walmart and other stores are selling out.

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