RALEIGH – North Carolina Attorney General Josh Stein loves to identify issues that will get him good press by jumping on a bandwagon, one that’s leaning very hard to the left. This time Stein jumped onto the anti-price gouging wagon, offered a hand aboard by a media that has near universal ignorance on the economics or ethics involved.
“In the aftermath of a natural disaster, Good Samaritans often undertake selfless acts to help their neighbors or complete strangers.
Others try to take advantage of people’s desperation with high prices.
In North Carolina, charging high prices for goods and services during disasters can be illegal, in violation of the state’s anti-price-gouging laws. And on Friday, when Gov. Roy Cooper declared a state of emergency due to Hurricane Florence, that put the state’s anti-price gouging laws into effect.
They will remain in place until the state of emergency ends, some time after the storm.
“My office is here to protect North Carolinians from scams and frauds,” Attorney General Josh Stein wrote on his office’s price gouging web page. “That is true all the time — but especially during severe weather. It is against the law to charge an excessive price during a state of emergency. If you see a business taking advantage of this storm, either before or after it hits, please let my office know so we can hold them accountable.”
Anyone found guilty of price gouging can be forced to refund customers who were scammed, and can also be forced to pay a $5,000 fee for each instance of price gouging they engaged in.”
How noble of you, Mr. Stein.
Now, this approach is hardly relegated to Democrats; plenty of Republicans take it as well. However, it makes no difference who is pressing the issue and promising ‘justice’ – it’s a Big Government approach that benefits no one, and likely makes supply issues worse on the margin.
Five grand every time some bureaucrat agrees that you charged too high a price for an item? Is that not a tad draconian? (Stein will really terrorize the price gougers, but those violent mobs destroying property get nothing but praise.)
Further, punishing people for charging too high prices is immoral, plain and simple. A person who owns said items, whether they are necessary items or not, is under no obligation to sell them, let alone sell them for a price the government deems acceptable during an emergency.
“In North Carolina, price gouging has been illegal since 2003. Then-Gov. Mike Easley signed the ban into law following numerous complaints about high prices during Hurricane Fran in 1996 and Hurricane Floyd in 1999.
News & Observer reports from the time show that after Hurricane Fran, one of the big opportunities for exorbitant prices was tree and debris removal. One man was even arrested for charging an elderly woman $18,000 to remove two fallen trees — the equivalent of nearly $29,000 today — according to a 1996 News & Observer article.”
Of course it was a Democrat that instituted the feel-good law. The problem is that when a law leads to the arrest of a man for charging too much for tree removal, the government has far too much power.
Sympathies for the elderly woman, aside, the man did not steal $18,000 from her. She willingly paid it, and he was arrested?
Not only is it a violation of property rights, it makes for awful economics. Despite the narrative around high prices during emergencies, price actually serves a great function in meeting equilibrium in a market. Whether that market is generators, or batteries, or fuel; markets clear best at particular prices. That price changes as supply and demand factors fluctuate, and if it is kept arbitrarily low (by asinine price gouging laws) it can lead to dwindling supply as hoarders load up.
Just ask Venezuela how fixing prices works out as far as shortages of basic, vital goods goes.
Or follow the simple logic of this tutorial that explains the individual motivations that factor into free markets, and why keeping that market free is the best option.
Eventually the Left-leaning papers like the N&O pay lip service to the economic truths represented in the above video.
“Opponents of price gouging laws argue that if businesses could charge higher prices there would not be shortages, since gas stations and grocery stores would be charging higher prices and thus less likely to run out of supplies. The theory is that people would buy only what they need instead of hoarding, and there would be more bread, gas, ice and other supplies to go around.
“If prices are allowed to rise as the demand increases, this ‘hoarding’ behavior will become increasingly more expensive and therefore discouraged,” wrote economist Roy Cordato of the conservative John Locke Foundation think tank. “In other words, the higher price encourages conservation right at the time when it is most needed. This will leave more gasoline in the tanks at the gas stations where it is available for those who really need it both before the hurricane and during its immediate aftermath, instead of in the tanks of cars that are sitting in people’s garages or driveways.””
Even then, it was hard for the N&O writer to even put these “theories” in print. His inclusion of Cordato’s quote is so obligatory you can practically hear him whining about it.
That makes sense, since Leftists have the hubris to think government knows best when it comes to markets, and even bathrooms, apparently.
So be careful of areas where anti-price gouging laws are followed too closesly – there just might not be anything left to buy.