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Posted: 8/18/2004 3:54:21 AM EST

I've been hearing the media complaining vigorously
about price gouging in the wake of Charley and I
have a theoretical question:

Isn't what people are calling "price gouging" really
just capitalism at its purest form: product pricing
driven by supply and demand?

While I find the practice very predatory and terribly
unethical, should it really be illegal? I should have the
right to sell my wares for whatever price that I wish,
correct? Is this suddenly "illegal" due to the state of
emergency declaration?

This is going to sound kind of cold, but does the lack
of planning on some residents part justify the
implementation of price controls, which amounts to
the suspension of the free market?

Where am I wrong?
Link Posted: 8/18/2004 3:55:55 AM EST
I love capatilism, supply and demand are the way it should always work.

What we have in Florida right now is socalism. People will approve of it though, even people who would not normally approve of it.

A shame, isn't it?
Link Posted: 8/18/2004 4:03:41 AM EST
yes, supply vs demand. They can charge whatever they damn well please. Somebody ought to sue the state for that bullshit. On the other hand, if they want to be unfeeling bastards, then they can have their fun now, but feel the pain later as far as I am concerned. If I lived there I would make sure to organize a boycott. The government shouldnt be able to make free enterprise do anything, hell, they are used to paying high prices for stuff. Aren't they the ones who pay 4,000 for a hammer?
Link Posted: 8/18/2004 4:07:09 AM EST
So you are ok with the city raising water rates to 50 dollars a gallon simply because they can? Gas should be 50 bucks a gallon and so should milk in your world? All the grocers in town could charge a 50 dollar cover charge for entry into the store, as long as they agree not to undercut one another this would work perfectly. The laws of pure capitalism make all of these wonderful ideas.

Price gouging is taking unfair advantage of people when they can least afford it. I suppose you charge the mentally handicapped double if they have it, because that makes good business sense. This is a matter of being decent to your fellow citizens and neighbors.
Link Posted: 8/18/2004 4:07:28 AM EST
Think about it for a minute.

Florida has a high demand for generators, chain saws and water. If prices stay low, then there is really no incentive to bring in more. Lets say that I could load up a large U-Haul with these items take off work from my job and drive down there. Not only do I make money in doing it, but I also bring important supplies to people that need it. It is a win-win situation. There is no incentive to bring those things if I can't even cover the cost of gas and the rental is there? The law of supply and demand also states that if price is low and demand is high, you are going to have a shortage. People are buying more than what they need. That isn't a good situation after a natural disaster. It is a loose-loose situation and is nothing more than socialism.
An example of this would be the rationing of gas back in the '70s. The government capped gas prices so the demand overstripped the supply.
Link Posted: 8/18/2004 4:09:50 AM EST

Originally Posted By Stormtrooper:
yes, supply vs demand. They can charge whatever they damn well please. Somebody ought to sue the state for that bullshit. On the other hand, if they want to be unfeeling bastards, then they can have their fun now, but feel the pain later as far as I am concerned. If I lived there I would make sure to organize a boycott. The government shouldnt be able to make free enterprise do anything, hell, they are used to paying high prices for stuff. Aren't they the ones who pay 4,000 for a hammer?



I agree that it is certainly bad business. I can't
believe that any shop owner could live in the
community after engaging in this behavior. However,
this is just another case of the government
legislating morality so that "residents are not
victimized twice."



Link Posted: 8/18/2004 4:10:03 AM EST
"Price gouging" claims by the media are NOT genuine concern for people but a thinly veiled attack on capitalism.

The mdeia will be happy when gov't sets all prices.
Link Posted: 8/18/2004 4:10:31 AM EST

Originally Posted By lonegunman:
So you are ok with the city raising water rates to 50 dollars a gallon simply because they can? Gas should be 50 bucks a gallon and so should milk in your world? All the grocers in town could charge a 50 dollar cover charge for entry into the store, as long as they agree not to undercut one another this would work perfectly. The laws of pure capitalism make all of these wonderful ideas.

Price gouging is taking unfair advantage of people when they can least afford it. I suppose you charge the mentally handicapped double if they have it, because that makes good business sense. This is a matter of being decent to your fellow citizens and neighbors.



It is taking advatage of people who didn't really know better. It isn't like Charley suddenly came out of thin air. They had days to go buy the supplys. It was their own fault for not being prepared for a Cat4 storm.
Link Posted: 8/18/2004 4:10:39 AM EST
IMHO you've got it exactly right.
Supply and demand.
Let them charge whatever they want.
If you don't want to pay it, go somewhere else.

In situations like this people just need to remember who is profiting from their suffering and do their business accordingly afterward. That should drive those leeches out of business and you don't have to resort to socialism to do it.
Link Posted: 8/18/2004 4:12:30 AM EST

Originally Posted By TheCynic:

Originally Posted By Stormtrooper:
yes, supply vs demand. They can charge whatever they damn well please. Somebody ought to sue the state for that bullshit. On the other hand, if they want to be unfeeling bastards, then they can have their fun now, but feel the pain later as far as I am concerned. If I lived there I would make sure to organize a boycott. The government shouldnt be able to make free enterprise do anything, hell, they are used to paying high prices for stuff. Aren't they the ones who pay 4,000 for a hammer?



I agree that it is certainly bad business. I can't
believe that any shop owner could live in the
community after engaging in this behavior. However,
this is just another case of the government
legislating morality so that "residents are not
victimized twice."






How can that be bad business!!!! If you took that aproach your shelves would be bare, and you would be broke. Don't ever run a business if you take that aproach.
Link Posted: 8/18/2004 4:14:09 AM EST

Originally Posted By lonegunman:
So you are ok with the city raising water rates to 50 dollars a gallon simply because they can? Gas should be 50 bucks a gallon and so should milk in your world? All the grocers in town could charge a 50 dollar cover charge for entry into the store, as long as they agree not to undercut one another this would work perfectly. The laws of pure capitalism make all of these wonderful ideas.



No, they are not wonderful ideas. People will remember
that your business screwed them and will no longer
patronize your business (or even organize a boycott).


Originally Posted By lonegunman:
Price gouging is taking unfair advantage of people when they can least afford it. I suppose you charge the mentally handicapped double if they have it, because that makes good business sense. This is a matter of being decent to your fellow citizens and neighbors.



Please don't assume that I would do this just because I
asked if the government should be outlawing it...

I say that we are either a capitalistic economy or we are
not - you can't have it both ways.
Link Posted: 8/18/2004 4:16:22 AM EST
[Last Edit: 8/18/2004 4:30:09 AM EST by garandman]

Originally Posted By lonegunman:
So you are ok with the city raising water rates to 50 dollars a gallon simply because they can? .




This question shows almost a criminal ignorance of the free market.

The fact that you asked the questions ALMOST requires your voting rights be stripped from you.

In a disaster like this -

1. The "cost" of water is NOT what the city paid historically to get that water. The cost of water is teh cost of where they get the NEXT gallon of water. You DO want the city (whoever really) to be able to CONTINUE supplying water right, or do you want them to go out of busines when they sell the existing gallon of water??

2. When one vendor "gouges" on prices, that opens the door for the next guy to undercut their prices. And then the third vendor to undercut those prices. In other words, "price gouging" is simply supply and demand pushing prices up, CREATING OPPORTUNITY for someone else to open a business for themselves, AND then progrssively drive prices down to levels BELOW the pre price gouging prices. {Edited to add} It is during these times someone comes along and also invents a better mousetrap, advancing technology, cuz one persons "greed" opened the door for someone else.{/edit}

These are just the simplest examples of why the free market is the best way to go, and "price gouging" is ESSENTIAL to the existence of capitalism.



Link Posted: 8/18/2004 4:17:14 AM EST

Originally Posted By VTHOKIESHOOTER:

Originally Posted By TheCynic:
I agree that it is certainly bad business. I can't
believe that any shop owner could live in the
community after engaging in this behavior. However,
this is just another case of the government
legislating morality so that "residents are not
victimized twice."






How can that be bad business!!!! If you took that aproach your shelves would be bare, and you would be broke. Don't ever run a business if you take that aproach.



Simply from a PR perspective. Charging $10 for a $2 roll
of toilet paper because you can means that you may make
a ton of cash for the short term, but your reputation would
be harmed, thus, damaging future profits.

Link Posted: 8/18/2004 4:17:44 AM EST
Exactly, that is what I was saying. Now what was said about charging a $50 cover charge to a grocer on a regular basis is just ludicrous. If they tried that then people would figure out a way to circumvent that by bringing business elsewhere, or someone else would just open a store with regular prices and put the others out of business.

It is not right to take advantage of a situation to make money? people do it every day. Klintons did it, so does the Bush family, and all the other so called representatives of the people. Jesse Jacksons Rainbow coalition is just that - an organization that takes advantage of the fact that they are black.

So it happens every day under a politcal guise and it is ok, but your average 2nd class citizen trys to do it and it gets looked down upon. Another vicious double standard.

Supply vs Demand is also met by take my business elsewhere when people don't want to pay rediculous prices.
Link Posted: 8/18/2004 4:18:09 AM EST
How good of you to ask: http://www.mises.org/fullstory.aspx?control=1593

Price Gouging Saves Lives
by David M. Brown
[Posted August 17, 2004]

In the evening before Hurricane Charley hit central Florida, news anchors Bob Opsahl and Martie Salt of Orlando's Channel 9 complained that we "sure don't need" vendors to take advantage of the coming storm by raising their prices for urgently needed emergency supplies.

In the days since the hurricane hit, many other reporters and public officials have voiced similar sentiments. There are laws against raising prices during a natural disaster. It's called "price gouging." The state's attorney general has assured Floridians that he's going to crack down on such. There's even a hotline you can call if you notice a store charging a higher price for an urgently needed good than you paid before demand for the good suddenly went through the roof. The penalties are stiff: up to $25,000 per day for multiple violations.

But offering goods for sale is per se "taking advantage" of customers. Customers also "take advantage" of sellers. Both sides gain from the trade. In an unhampered market, the self-interest of vendors who supply urgently needed goods meshes beautifully with the self-interest of customers who urgently need these goods. In a market, we have price mechanisms to ensure that when there is any dramatic change in the supply of a good or the demand for a good, economic actors can respond accordingly, taking into account the new information and incentives. If that's rapacity, bring on the rapacity.

Prices are how scarce goods get allocated in markets in accordance with actual conditions. When demand increases, prices go up, all other things being equal. It's not immoral. If orange groves are frozen over (or devastated by Hurricane Charley), leading to fewer oranges going to market, the price of oranges on the market is going to go up as a result of the lower supply. And if demand for a good suddenly lapses or supply of that good suddenly expands, prices will go down. Should lower prices be illegal too?

In the same newscast, Salt and Opsahl reported that a local gas station had run out of gas and that the owner was hoping to receive more gas by midnight. Other central Florida stations have also run out of gas, especially in the days since the hurricane smacked our area. Power outages persist for many homes and businesses, and roads are blocked by trees, power lines, and chunks of roofs, so it is hard to obtain new supplies. Yet it's illegal for sellers of foodstuffs, water, ice and gas to respond to the shortages and difficulty of restocking by raising their prices.

If we expect customers to be able to get what they need in an emergency, when demand zooms vendors must be allowed and encouraged to increase their prices. Supplies are then more likely to be sustained, and the people who most urgently need a particular good will more likely be able to get it. That is especially important during an emergency. Price gouging saves lives.

What would happen if prices were allowed to go up in defiance of the government?

Well, let's consider ice. Before Charley hit, few in central Florida had stocked up on ice. It had looked like the storm was going to skirt our part of the state; on the day of landfall, however, it veered eastward, thwarting all the meteorological predictions. After Charley cut his swath through central Florida, hundreds of thousands of central Florida residents were unexpectedly deprived of electrical power and therefore of refrigeration. Hence the huge increase in demand for ice.

Let us postulate that a small Orlando drug store has ten bags of ice in stock that, prior to the storm, it had been selling for $4.39 a bag. Of this stock it could normally expect to sell one or two bags a day. In the wake of Hurricane Charley, however, ten local residents show up at the store over the course of a day to buy ice. Most want to buy more than one bag.

So what happens? If the price is kept at $4.39 a bag because the drugstore owner fears the wrath of State Attorney General Charlie Crist and the finger wagging of local news anchors, the first five people who want to buy ice might obtain the entire stock. The first person buys one bag, the second person buys four bags, the third buys two bags, the fourth buys two bags, and the fifth buys one bag. The last five people get no ice. Yet one or more of the last five applicants may need the ice more desperately than any of the first five.

But suppose the store owner is operating in an unhampered market. Realizing that many more people than usual will now demand ice, and also realizing that with supply lines temporarily severed it will be difficult or impossible to bring in new supplies of ice for at least several days, he resorts to the expedient of raising the price to, say, $15.39 a bag.

Now customers will act more economically with respect to the available supply. Now, the person who has $60 in his wallet, and who had been willing to pay $17 to buy four bags of ice, may be willing to pay for only one or two bags of ice (because he needs the balance of his ready cash for other immediate needs). Some of the persons seeking ice may decide that they have a large enough reserve of canned food in their homes that they don't need to worry about preserving the one pound of ground beef in their freezer. They may forgo the purchase of ice altogether, even if they can "afford" it in the sense that they have twenty-dollar bills in their wallets. Meanwhile, the stragglers who in the first scenario lacked any opportunity to purchase ice will now be able to.

Note that even if the drug store owner guesses wrong about what the price of his ice should be, under this scenario vendors throughout central Florida would all be competing to find the right price to meet demand and maximize their profits. Thus, if the tenth person who shows up at the drugstore desperately needs ice and barely misses his chance to buy ice at the drugstore in our example, he still has a much better chance to obtain ice down the street at some other place that has a small reserve of ice.

Indeed, under this second scenario—the market scenario—vendors are scrambling to make ice available and to advertise that availability by whatever means available to them given the lack of power. Vendors who would have stayed home until power were generally restored might now go to heroic lengths to keep their stores open and make their surviving stocks available to consumers.

The "problem" of "price gouging" will not be cured by imposing rationing along with price controls, either. Rationing of price-controlled ice would still maintain an artificially low price for ice, so the day after the storm hits there would still be no economic incentive for ice vendors to scramble to keep ice available given limited supplies that cannot be immediately replenished. And while it is true that rationing might prevent the person casually purchasing four bags of ice from obtaining all four of those bags (at least from one store with a particularly diligent clerk), the rationing would also prevent the person who desperately needs four bags of ice from getting it.

Nobody knows the local circumstances and needs of buyers and sellers better than individual buyers and sellers themselves. When allowed to respond to real demand and real supply, prices and profits communicate the information and incentives that people require to meet their needs economically given all the relevant circumstances. There is no substitute for the market. And we should not be surprised that command-and-control intervention in the market cannot duplicate what economic actors accomplish on their own if allowed to act in accordance with their own self-interest and knowledge of their own case.

But we know all this already. We know that people lined up for gas in very long lines during the 1970s because the whole country was being treated as if it had been hit by a hurricane that was never going to go away. We also know that as soon as the price controls on gas were lifted, the long lines disappeared, as if a switch had been thrown restoring power to the whole economy.

One item in very short supply among the finger-wagging newscasters and public officials here in central Florida is an understanding of elementary economics. Maybe FEMA can fly in a few crates of Henry Hazlitt's Economics in One Lesson and drop them on Bob and Martie and all the other newscasters and public officials. This could be followed up with a boatload of George Reisman's Capitalism: A Treatise on Economics, which offers a wonderfully cogent and extensive explanation of prices and the effects of interference with prices. Some vintage Mises and Hayek would also be nice. But at least the Hazlitt.

"Price gouging" is nothing more than charging what the market will bear. If that's immoral, then all market adjustment to changing circumstances is "immoral," and markets per se are immoral. But that is not the case. And I don't think a store owner who makes money by satisfying the urgent needs of his customers is immoral either. It is called making a living. And, in the wake of Hurricane Charley, surviving.

Link Posted: 8/18/2004 4:18:15 AM EST

Originally Posted By Stormtrooper:
yes, supply vs demand. They can charge whatever they damn well please. Somebody ought to sue the state for that bullshit. On the other hand, if they want to be unfeeling bastards, then they can have their fun now, but feel the pain later as far as I am concerned. If I lived there I would make sure to organize a boycott. The government shouldnt be able to make free enterprise do anything, hell, they are used to paying high prices for stuff. Aren't they the ones who pay 4,000 for a hammer?



That is exactly how it ought to work.
Link Posted: 8/18/2004 4:19:05 AM EST
There are legitimate reasons for protecting against price-gouging. Here in AZ, a while back, we had a pipeline burst that caused a shortage of gasoline. Gas prices skyrocketed to ~$3/gallon. Understandable. Shortly thereafter, there was another "scare" that had absolutely no effect on supply, but the gas stations were somehow able to make people think and assume that there was a shortage and raised the prices again. There are no anti-gouging laws in AZ, so it was "tough" until the media was able to put the issue to rest and word-of-mouth got out regarding the BS and prices went down.
Link Posted: 8/18/2004 4:20:53 AM EST

Originally Posted By garandman:

Originally Posted By lonegunman:
So you are ok with the city raising water rates to 50 dollars a gallon simply because they can? .




This question shows almost a criminal ignorance of the free market.

The fact that you asked the questions ALMOST requires your voting rights be stripped from you.

In a disaster like this -

1. The "cost" of water is NOT what the city paid historically to get that water. The cost of water is teh cost of where they get the NEXT gallon of water. You DO want the city (whoever really) to be able to CONTINUE supplying water right, or do you want them to go out of busines when they sell the existing gallon of water??

2. When one vendor "gouges" on prices, that opens the door for the next guy to undercut their prices. And then the third vendor to undercut those prices. In other words, "price gouging" is simply supply and demand pushing prices up, CREATING OPPORTUNITY for someone else to open a business for themselves, AND then progrssively drive prices down to levels BELOW the pre price gouging prices.

These are just the simplest examples of why the free market is the best way to go, and "price gouging" is ESSENTIAL to the existence of capitalism.






Amen!!!!!
Link Posted: 8/18/2004 4:21:52 AM EST
[Last Edit: 8/18/2004 4:23:13 AM EST by Hokie]
having the government interfer with captialistic enterprise is one more step towards ...

Anyway it's ALL about supply and demand. Petro prices go nowhere but up...guess why! ACOG prices go nowhere but up, guess why! Hesse no longer manufactures firearms under that name, guess why!
Link Posted: 8/18/2004 4:22:39 AM EST

Originally Posted By jtb33:
There are legitimate reasons for protecting against price-gouging. Here in AZ, a while back, we had a pipeline burst that caused a shortage of gasoline. Gas prices skyrocketed to ~$3/gallon. Understandable. Shortly thereafter, there was another "scare" that had absolutely no effect on supply, but the gas stations were somehow able to make people think and assume that there was a shortage and raised the prices again. There are no anti-gouging laws in AZ, so it was "tough" until the media was able to put the issue to rest and word-of-mouth got out regarding the BS and prices went down.



Isn't this an example of the free market "policing"
itself? I fail to see how this is an example of where
the government needed to be involved (assuming
the statement in red was a defense of anti-gouging
laws).

Link Posted: 8/18/2004 4:27:03 AM EST

Originally Posted By jtb33:
There are legitimate reasons for protecting against price-gouging. Here in AZ, a while back, we had a pipeline burst that caused a shortage of gasoline. Gas prices skyrocketed to ~$3/gallon. Understandable. Shortly thereafter, there was another "scare" that had absolutely no effect on supply, but the gas stations were somehow able to make people think and assume that there was a shortage and raised the prices again. There are no anti-gouging laws in AZ, so it was "tough" until the media was able to put the issue to rest and word-of-mouth got out regarding the BS and prices went down.



The price of gas in your area went up X amount because there was a suitable set of purchasers willing to pay that price for gas, that you weren't does not negate the fact that the gas dealers could ( and should ) get what the market will bare.

Gas was worth ~$3/gallon because there were enough customer willing to pay that. I bet they coudl have raise dit to `$6/gallon and still had enough customers.

Capatilism is great, until it is your ox being gored?
Link Posted: 8/18/2004 4:34:36 AM EST
Well, if you let it go long enough, it will correct itself, but the short-term repurcussions would be disasterous. My gas budget (between myself and my wife) is about $300/month. Due to our jobs, carpooling isn't an option since I may need to stay an hour longer one day, than the next, and I'd never know beforehand. If gas went to $6/gallon (we already drive fuel-efficient 4cyl cars), that would triple our costs to $900/month and pretty much blow away our budget. We'd have to spend less on entertainment and pleasure expenditures. Now imagine this on a larger-scale. The economy would be absolutely horrible for a while (years) until the market corrected itself. Most people cannot "work from home", and most people must drive to work. We have a pretty much non-existant mass transportation system here in AZ.
Link Posted: 8/18/2004 4:35:13 AM EST

Originally Posted By hielo:
Capatilism is great, until it is your ox being gored?



Exactly! The key is to not have your ox gored. Capitalism is like Darwinism.
Link Posted: 8/18/2004 4:35:21 AM EST
Link Posted: 8/18/2004 4:37:25 AM EST

Originally Posted By TheCynic:

Where am I wrong?


People should prepare better and lay in their own stocks of supplies so they have stuff ready, its true. But jacking up prices by several hundred per cent is excessive and should be controlled. People should not be making excessive profits off the misery of others.
Link Posted: 8/18/2004 4:40:59 AM EST
I agree that supply and demand are the best economic model. I am opposed to privatizing basic utilities like water, electricity and infrastructure. Shutting down refineries and electrical generators, just to drive up prices, sabotages the suppy and demand model. It's just too easy for a few people to drive millions of people into crisis just for the sake of a fat commision check. I'm paying some of the highest electrical rates in the country due to Enron's executive misconduct.

Since I'm legally prevented from going into their offices to negotiate a better deal, I support government oversight of basic needs, including price averaging.
Link Posted: 8/18/2004 4:43:53 AM EST
[Last Edit: 8/18/2004 4:47:03 AM EST by CAMPYBOB]
Link Posted: 8/18/2004 4:44:33 AM EST

Originally Posted By jtb33:
Well, if you let it go long enough, it will correct itself, but the short-term repurcussions would be disasterous. My gas budget (between myself and my wife) is about $300/month. Due to our jobs, carpooling isn't an option since I may need to stay an hour longer one day, than the next, and I'd never know beforehand. If gas went to $6/gallon (we already drive fuel-efficient 4cyl cars), that would triple our costs to $900/month and pretty much blow away our budget. We'd have to spend less on entertainment and pleasure expenditures. Now imagine this on a larger-scale. The economy would be absolutely horrible for a while (years) until the market corrected itself. Most people cannot "work from home", and most people must drive to work. We have a pretty much non-existant mass transportation system here in AZ.



That you have to spend less on entertainment and pleasure activites matters not a wit to me, I am in business to maximize my profit, not ensure that you are suitably entertained (unless entertainment is my product).

Gas companies are not required to take your budget in mind when setting their prices, only what the market will bare.

Can't afford their product, get a horse, or a bicycle. Or walk.
Link Posted: 8/18/2004 4:45:18 AM EST
The solution is simple if you are a buisness owner and think that charlie or another hurricane might hit your area jack up your prices BEFORE the storm hits. By doing this you are not gouging you just have higher prices than everybody else. I am not talking about the $50.00 bag of ice prices but something 1 1/2 to 2 times higher than normal. This way whoever really needs the goods can probably get them and the person who just wants more than he needs will not buy so many. Yes, the owner will loose money if the storm does not hit but everything in buisness is a gamble. If the Gooberment trys to say that you are gouging all you have to do is prove that your prices were the same before the storm hit. Now if the gooberment has your number and wants to set aexample well your screwed.
Also why didnt all those people have supplies pre stored? They knew before hand that the storm would probably hit and they live in FLORIDA, no matter what they should be ready for a hurricane. Seems that they have a big one every 5 years or so.



Omni
Link Posted: 8/18/2004 4:46:40 AM EST

Originally Posted By CAMPYBOB:
i heard of a homeowner that was going to be charged $10,500 for a guy to cut up a tree that fell on his house.

normally, that would cost $500-1000.

i don't care if the mutherfucking arborist was a card-carrying red communist or a dyed in the wool capitalist in the tradition of andrew carnegie...i would have shoved the muzzle of a rifle up his ass and run his highwayman's ass right back out of florida.

what is going on in florida has nothing to do with ANY economic system.

it's nothing more than a few shitstain human beings reverting back into the worthless pile of cytoplasm they have always been.



yeap !
Link Posted: 8/18/2004 4:47:12 AM EST

Originally Posted By CAMPYBOB:


i don't care if the mutherfucking arborist was a card-carrying red communist or a dyed in the wool capitalist in the tradition of andrew carnegie...i would have shoved the muzzle of a rifle up his ass and run his highwayman's ass right back out of florida.




Which is the PROPER response to price gouging.

Either that or saying "Hey, I can beat his price. I'll open my own arborist business and undercut his prices."

The WRONG response is "Waaaaahhhhh - big gov't come save me from the meanie."

Link Posted: 8/18/2004 4:50:39 AM EST

Originally Posted By tcsd1236:

Originally Posted By TheCynic:

Where am I wrong?


People should prepare better and lay in their own stocks of supplies so they have stuff ready, its true. But jacking up prices by several hundred per cent is excessive and should be controlled. People should not be making excessive profits off the misery of others.



What is excessive profit?

Lets take an FFL transfer as an example (Hey I just got mine also <s>).

You send out a copy of your FFL, takes about a minute along with a stamp, for the average dude, lets round itup to $1.00.

You recieve the weapon and post it to yuor bound book. Another dollars worth of time. Average fee for a transfer is $25.00

SO you make $23.00 on a two dollar expenditure of time. Is that excessive profit, oir is it what the market will bare? SHould you instead offer that transfer for $2.40 to recoup your expenditure and a tidy 20% profit?

If I have a can of soup, and someone is willing to pay me 5,000% over what I paid for that can of soup, why should I not take that profit? (leaving aside any personal moral or ethical reasons, capatilism does not deal with ethics or morality).

If we want to argue for temporarily imposed socialism, imposed by the state, then you will ahve to agree that there are other times that the state can interject itself in your dealings. That to me is unacceptable.
Link Posted: 8/18/2004 4:51:17 AM EST
Link Posted: 8/18/2004 4:54:07 AM EST
[Last Edit: 8/18/2004 4:57:14 AM EST by hielo]

Originally Posted By CAMPYBOB:
i heard of a homeowner that was going to be charged $10,500 for a guy to cut up a tree that fell on his house.

normally, that would cost $500-1000.

i don't care if the mutherfucking arborist was a card-carrying red communist or a dyed in the wool capitalist in the tradition of andrew carnegie...i would have shoved the muzzle of a rifle up his rectum and run his highwayman's ass right back out of florida.

what is going on in florida has nothing to do with ANY economic system.

it's nothing more than a few shitstain human beings reverting back into the worthless pile of cytoplasm they have always been.



Almost. You have the right to say no thanks, they move on to the next person and you move on to the next arborist.

Do you want that tree off your house right now and are you willing to pay for the arborists time, or are you willing to wait until that arborist has no other paying customers and can get to you at your price? If there are people willing to pay him 11k to remove the tree right the fuck now, why should he accept your job, at .5k? Why is your job at .5k more important than the one where someone is willing to give him 11k?

It is a basic time/value equation.

Please explain.
Link Posted: 8/18/2004 4:54:33 AM EST
Link Posted: 8/18/2004 4:57:18 AM EST
[Last Edit: 8/18/2004 4:59:46 AM EST by CAMPYBOB]
Link Posted: 8/18/2004 4:58:08 AM EST

So-called price gouging doesn't take advantage of anyone. It forces people to self-ration. If price controls are in place, people are more likely buy up to the imposed item limit. It also forces people to plan ahead for the next time.

I don't remember where I heard this example, but I didn't come up with this. Let's say there's a hurricane coming and it takes the average vehicle about 1/2 tank of gas to get to a safe area. There is a fixed amount of gas in the area because deliveries to gas stations has been suspended until after the storm has passed.

Price fixing has everyone filling up and topping off. People with 3/4 tank will top off the tank so they have the gas for the return trip, meaning they're using resourses they really don't need to get to safety.

Free-market pricing will raise prices so people will buy only the minimum they think they'll need. People with 1/2 tank or more will wait to add gas in the safe area. People with empty tanks will only put in about 1/2 tank. This system means gas won't run out as quickly and is available to more people. More people can get to safety, so free-market system saves lives.

The same theory can be applied to other goods. Instead of everyone in one neighborhood having a chainsaw and a wheelbarrow, you're more likely to have several neighbors working together and sharing a chainsaw and wheelbarrow. Essential supplies tend to go where they are required without shortages.
Link Posted: 8/18/2004 5:00:08 AM EST

Originally Posted By CAMPYBOB:
What is excessive profit?

when you feel the front sight spreading your ass open, you can pretty much assume at that point that you have exceeded 'fair market value' and that you are deserving of swift kick that will shortly follow your kind offer to 'help me out for a price'.




So you are saying that might makes right? What happens if your arborist has his crew well armed and has the barrells of their guns up your wifes ass? Is that the kind of negotiating you want?

I don't, I want to state a price and have it either acepted, rejected or negotiatied. If we can come to a metting of minds, all well and good, if not, there are other fish in the sea. Time to move on, you are left with your problem and I can get to a customer who wants to actually pay me for my service. Obviously, that person, who is willing to pay me my fee values my service enough to agree to my price, why should I not provide the service to that client as opposed to being forced to provide it to you?
Link Posted: 8/18/2004 5:00:09 AM EST

Originally Posted By hielo:
What is excessive profit?


If we want to argue for temporarily imposed socialism, imposed by the state, then you will have to agree that there are other times that the state can interject itself in your dealings. That to me is unacceptable.


I would primarily be concerned with the ale of life-sustaining proucts..water, ice, things that you need to get by in the time of crisis. Those things should not be sold at huge profits.

I have seen instances of this..the ice storm back in 1998 when we were up in the North country and generators were going for thousands, and even the "rescueing" FD's had some guys up there that were independently charging people to pump out basements. Just wasn't "right", taking advantage of people in need like that.

Congrats on the FFL. Hope you can build up a good customer base in your area. As you know, most of my regulars were collectors, and the year away last year while deployed caused most of them to find other sources to go through. Its been a slow year as a result, aside form the various medical problems I had this spring that kept me off my feet and surfing the net.
Link Posted: 8/18/2004 5:01:47 AM EST

Originally Posted By CAMPYBOB:
You have the right to say no thanks, they move on to the next person and you move on to the next arborist.

i would accept your reasonable estimate with kind acceptance and a healthy tip.

i would reject your high estimate with a polite refusal.

I WOULD MEET YOUR ATTEMPT AT EXTORTION WITH A HARD RIGHT CROSS TO YOUR JAW.

wrap extortion, taking advantage of folks and thievery in your 'capitalism' flag all you want. try flying that flag in my face and you will get exactly what you deserve.



And what is that, that I deserve?

You have a 'right' to my time, service or product, because you think you do? Are you out of your mind?
Link Posted: 8/18/2004 5:04:44 AM EST
Link Posted: 8/18/2004 5:07:42 AM EST
[Last Edit: 8/18/2004 5:16:54 AM EST by garandman]

Originally Posted By CAMPYBOB:
i would accept your reasonable estimate with kind acceptance and a healthy tip.

.




That's the problem. "Reasonable" is a subjective value judgment.

Consider the things that affect "reasonable" -

1. What were the arborsits costs to mobilize all his equipment and personnel?? Having had trees cut down myself, it can be in the thousands of $$

2. What other business opportunities did he forego to come see you?? there IS such a thing called "opportunity cost" which EVERY businessman knows up close and personal

3. you used the term "normally" this would ahve cost $500 - 1,000. Newsflash - this situation AIN'T normal.

4. Ever consider the fact that HE is prolly being "price gouged" by the gas stations, hotels, restautrants, etc etc etc that are his business costs? He DOES have to apy expenses to stay in business ya know.

5. What special permits (read: tax on businesses) were required by gov't to operate under these conditions (Boortz JUST did an example of special permits gov't requires in these circumstances)

6. What is his insurance company charging him to operate in a hurricane zone, with dozens of unique threats and difficulties?? I've seen workers comp bills put arborists OUT OF BUSINESS under "normal" circumstances.

7. Isn't he entitled to "hazard pay" for being away from his family for possibly weeks at a time, working 20 hour days, with bitchy people like you who shove a rifle barrel up his ass?

Want me to go on??? And idea how fast these costs add up??

Typically people who complain about prices DO NOT understand the complexities of being in business.

Link Posted: 8/18/2004 5:12:32 AM EST
Link Posted: 8/18/2004 5:12:47 AM EST

Originally Posted By garandman:
Typically people who complan about prices DO NOT underatnd the complexities of being in business.




A big +1 on this Gman!
Link Posted: 8/18/2004 5:15:12 AM EST

Originally Posted By CAMPYBOB:
So you are saying that might makes right?

not at all.

i'm saying my response will vary in proportion to your pricetag.

What happens if your arborist has his crew well armed and has the barrells of their guns up your wifes ass? Is that the kind of negotiating you want?

i do not negotiate with pirates and thieves.

i send them packing.

how fast and easy the packing goes is determined by the thief, himself.

I don't, I want to state a price and have it either acepted, rejected or negotiatied. If we can come to a metting of minds, all well and good, if not, there are other fish in the sea.

again, re-read what i typed above. ido NOT negotiate with pirates and thieves...and based on your price, i'm the one that makes the call as to 'who' wears the eyepatch.

if i called you on the day prior to the hurricane and you tell me it's gonna be $500 to cut up my tree and then turn around and tell me it's $10,500 because "business is good"...i'm gonna give you something more than business to think about.

Time to move on, you are left with your problem and I can get to a customer who wants to actually pay me for my service. Obviously, that person, who is willing to pay me my fee values my service enough to agree to my price, why should I not provide the service to that client as opposed to being forced to provide it to you?

extorionists always move on to the easiest mark.

rest assured, my 'problem' will soon be solved by folks that i would be proud to call a friend or business associates.



CampyBob, you just don't understand the concepts involved here, Read GarandMans fine explanation. It might open your eyes.

Kinda sad that an otherwise upstanding, intelligent person such as yourself can be so deluded in this matter.
Link Posted: 8/18/2004 5:18:37 AM EST
Link Posted: 8/18/2004 5:19:53 AM EST

Originally Posted By Sweep:
Last year I did a reline job (competely gut the inside of the chimney and reline it with a new flue). I charged approx. $3,200 for two days work. A little less than half that was profit. Six months later, right in the middle of my busy season, I had another customer that needed a reline that was almost exactly like the one I had done for $3,200. But this time I charged approx. $4,100 because they wanted it done right then! I started on it 4 days later when normally it would have been a month for me to get to it. I did it on a weekend and worked 12 days straight.

So am I guilty of price gouging? I don't think so. They paid an extra $900 for getting moved ahead of the line and for my valuable time.

...and yeah, I charge extra for having to deal with the insurance comapnies. They can take up anywhere between 3 to 8 hours of my time writing the report then having to explain it to them.



Classic time/value equation Sweep. Any of these naysayers take even one economics course? (or own their own business?)
Link Posted: 8/18/2004 5:22:20 AM EST
Link Posted: 8/18/2004 5:25:40 AM EST

Originally Posted By Sweep:

Originally Posted By hielo:

Originally Posted By garandman:
Typically people who complan about prices DO NOT underatnd the complexities of being in business.




A big +1 on this Gman!



I remember working for my uncle when he owned this business I now own. He was paying me $10 an hour. He was charging $65 to sweep a factory built firepalce and chimney and it took us about 30 minutes to do the job and I did most of the work. I remember thinking, "I'm only getting $5 for the job and he's getting $60! He isn't paying me enough!"

Then after I bought the business I remember thinking, "Damn! He was paying me too much!!!"



This is exactly why I pay allof my employees on a profit/loss schedule. THe more value they bring to my business the more they make. I have a janitor that does nay number of things that adds real value to my business that makes as much as a CAT scan technician.
Link Posted: 8/18/2004 5:26:24 AM EST
Link Posted: 8/18/2004 5:27:18 AM EST
[Last Edit: 8/18/2004 5:28:28 AM EST by Sweep]
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