libertopia

The Price Gouging Myth

TKC, aka The Pub Crawler, speaks to an issue that hits close to home—literally. He links to a WaPo article that makes me shake my head in disbelief.

Georgia Gov. Sonny Perdue (R) signed an executive order Wednesday authorizing state sanctions against gas stations that gouge consumers.

"I do not believe there is an energy emergency in this state, but we will not tolerate our citizens perceiving the fact there is by exorbitant price-gouging prices," he said. "Frankly, when you prey upon the fears, the paranoia of citizens, it is akin to looting in a different sort of way, Perdue said, according to news reports.

As it happens, Sonny Perdue is the first Republican Gov. of Georgia since Reconstruction. Sure we’ve had ‘conservative’ Democrats in the Governor’s Mansion (awful architecture) over the years. The most notable of which is Zell Miller, who served during the Clinton era. It’s also worth noting that Miller’s politics have changed significantly, along with the rest of the South over the last decade or so. This has obviously contributed to the current political landscape in America.

Like Zell, Perdue is a former Democrat State Senator. Unlike Zell, Sonny quite shrewdly switched his party affiliation a couple of years ago, in order to win his Gubernatorial bid. So far he’s not been noticeably worse than any other Republican and certainly not as bad as his former Democrat colleges…until now. What on earth is he thinking? Well, among other things, reelection. Ironically, Perdue will probably ‘earn’ political points for ‘compassion’, while few will recognize that his own words indict his gross misuse of government power: "Frankly, when you prey upon the fears, the paranoia of citizens, it is akin to looting in a different sort of way” Sounds like the old pot and kettle, eh?

With respect to so-called “price gouging”, I experienced the fueling-frenzy in Georgia yesterday. I hit the pumps before rush hour, so I only paid $3.69 per gal., in addition to waiting in line for about 45 min. Look, when demand exceeds supply, prices rise. Why is this ‘news’? It’s because economic ignorance runs rampant—plain and simple. Political and economic ignorance is precisely the raw material from which a massive club is fashioned by the state—with popular consent no less—to bludgeon and plunder its oblivious constituents. I could only wish that the previous sentence were hyperbole. Slow, deep breaths. Slower, deeper breaths. Alright, in order to regain my composure, I’ll let TKC have the last word, as it is spot-on.

If I am selling something then I should not be artificially limited by government to simply recouping my costs plus a non-market determined profit. I should be able to sell anything I want for any amount I can get for it. If you don't want to buy it then don't. If you can find someone down the street selling for less then take your business there.

How about this for an example: Are we going to haul home owners before a state commission for driving up the price of homes? Should we use the government to insist that you only sell your home for what you first paid for it plus any improvements and call it fair trade or should we allow someone to sell their home for whatever they can get for it because demand has skyrocketed?

posted by Robert @ Thursday, September 01, 2005