Consider this scenario: You are thirsty -- worried that your baby is going to become dehydrated. You find a store that's open, and the storeowner thinks it's immoral to take advantage of your distress, so he won't charge you a dime more than he charged last week. But you can't buy water from him. It's sold out.
You continue on your quest, and finally find that dreaded monster, the price gouger. He offers a bottle of water that cost $1 last week at an "outrageous" price -- say $20. You pay it to survive the disaster.
You resent the price gouger. But if he hadn't demanded $20, he'd have been out of water. It was the price gouger's "exploitation" that saved your child.
It saved her because people look out for their own interests. Before you got to the water seller, other people did. At $1 a bottle, they stocked up. At $20 a bottle, they bought more cautiously. By charging $20, the price gouger makes sure his water goes to those who really need it.
Yes, yes. Because in the postapocalyptic wasteland of New Orleans, where the disaster hit right before payday and knocked out the ATMs, everyone has exactly the same amount of disposable cash on hand. Wealthy suburban soccer moms and dehydrated and destitute senior citizens should simply gather at the 7-11 and we can auction off the Poland Spring bottles to the highest bidder. Because Adam Smith's invisible hand of the free market is wise and just, even if it seems to be bitch-slapping the poor and needy.
I'm surprised that Stossel didn't go the extra mile and accuse local officials of being "ration babies," before grabbing the last bottle of water to wash his socks. I mean, he has the money presumably, so why not? Let the market rule.