Wednesday, September 07, 2005

Gouge Away

I've read some incredibly stupid things in my life -- TV Guide, Son of Sniglets, Katherine Hepburn's Me. But this article by John Stossel, titled "In Defense of Price Gouging," just may be the dumbest yet. Here's just a sample:
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.


Norbizness said...

This pseudo-economist would be playing Mattel's "Game Theory For Kids" in the midst of a nuclear exchange.

I think his moustache now has legal grounds for a divorce from the rest of his body.

Otto Man said...

Actually, he'd probably follow Brit Hume's noble example and start buying up stock in McDonnell-Douglass.

Tokyo Joe said...

I am awe struck by hiw dumb his statements are. Isn't he the guy that used to do those great exposes with hidden cameras and dishonest car repairs? he should have stuck with what he knew.

Otto Man said...

Yeah, Stossel was pretty much 20/20's effort to clone Geraldo Rivera. And it seems they succeeded.

Actually, Geraldo's report from the Superdome was pretty impressive. He obviously still has a soul.

So Stossel is below Geraldo. Ouch.

InanimateCarbonRod said...

Oil companies came under new fire yesterday when it emerged that ExxonMobil's profits are likely to soar above $10 billion this quarter on the back of the fuel crisis.
That's $110 million a day, and more net income than any company has ever made in a quarter. It's also a stunning 69 percent increase over the same period a year ago and a 34 percent jump from the $7.6 billion Exxon made just last quarter.
``Do you realize President Bush has just given a tax break to ExxonMobil?'' thundered Rep. Ed Markey (D-Malden). ``Of all the companies in the history of the world that needed a tax break, this month, ExxonMobil should be at the bottom of the list.''

InanimateCarbonRod said...

If a woman is desperate enough to pay 20 bucks for a bottle of water, I bet she'd blow the guy, too. Wonder if Stossel would have a problem with that?