Just filled up both my cars - wholesale gas prices going thru roof down south

The story can be found here:

Hunt Is On For Generators, Gasoline In Houston : NPR

 

If it was life and death, she should have the backup in place before it was needed.

Tom

 

Whether anti-price gouging (APG) law makes any economic sense at all is a very interesting debate, both for legislators and academia alike.

But I posted that story to simply point out that this is not some strawman arguments but does have life and death implications for some folks who may or may not have the wit or wherewithal to avoid it. I'm glad Home Depot chose to play it straight and fair in this instance. Good for them.

What really ticks me off are the tens of thousands who refused to evacuate and are now costing the system a lot of money and resources to rescue them. I live and work in Texas. My tax money is being used to subsidize these hard-headed cowboys who had plenty of warning and time to get out but chose to "ride it out" instead. They should be left to suffer.

 

The problem is you couch it as a strawman, as if the only choice was between being "gouged" versus not. And you ignore the consequences of the gouging rhetoric/witch hunt.

This I agree with, but with limitations. I agree with it in the case of maverick stubborness being an unreasonable burden on the system. However, I note that we don't have "mandatory" evacuations in this country in deferrence to the free-will/"libertarian" elements and their concept of property rights first. Until we are willing to back up mandatory with some force of law, we are going to have this problem. Obviously we don't have the resources to forcibly remove everyone during an emergency evacuation so enforcement would kick in after. Child endangerment charges should be considered for parents who keep their kids in true mandatory zones without attempting to evacuate.

In defense of some who remained, it would depend on specifics of their location and preparation. After the failed Rita evacuation folks were less likely to try again and instead were more likely to batten down the hatches. (I would have likely hunkered down assuming I could not get out after my Rita experience.) I knew people who spent several days on the road during Rita only to end up stuck trying to find shelter, out of gas, along the highway when the storm hit--or back home with nearly empty gas tanks. Some ended up with chronic back trouble as a result. So I really can't blame some of them for being less willing to cast their lot with Texas' inept evacuation planning.

Houston got lucky again with Ike because the storm surge was substantially less than feared. Eventually, if they don't get their act together, they are going to have a body count that makes Katrina's look trifling.

 

You presumed things about me and my posts and tried to couch in it your terms. I simply gave real life examples. You can interpret it any way you like, that's your prerogative. I've never implied any such thing as a "witch hunt". Again, please stop putting words in my mouth. It's quite childish in an adult forum like this.

If you'd like to discuss the merit of APG law I'm all ears. Otherwise I have no desire to play word games.

 

Bull, you were comparing it to looting, which brought me into this. I too am tired of your word games.

 

I have to agree with the other side. We have no right to buy fuel at any price. It's a pure and simple economic decision. If it's too high then pass on it. If it's too low then buy as much as you can. That's bare naked capitalism at its finest. Since our Capitalistic society 'won' the Cold War vs the Communists we should all be happy that everyone is so willing to embrace this system.

Those that charge too much will get a few suckers ( part of Capitalism ) but eventually they will have to fall into line or they will be completely shunned by the smart buyers.

 

I was hoping you knew what the word "analogous" means. Apparently not. Sorry.

 

Complete urban legend.

Anyone with an IQ over 70 who is responsible for caring for someone at home dependent on machinery that requires a continuous supply of electricity, will have at ready a generator and sufficient fuel on hand to power such a machine in the event of a power failure. And if such a story is indeed true, then that is the state's human resources agency failure for failing to recognize an incompetent person is the sole provider for a disabled child.

Again, a weak leftist, liberal argument that the public is so stupid and incapable for future and present planning that the government has to guide, plan, and micro regulate every facet of able bodied persons lives.

Give me a real reason to convince me the government is wiser at setting prices for merchants and we can continue a real debate on the issue.

Rick
#4 2006

 

I wish it was that low here in the UK!!

It's $7.70 equivalent for a US gallon here! And no hurricanes as an excuse!

 

Human incompetence will always be with us, no matter what economists like to assume. That's what makes economics an interesting debate, since there's theories on one side and strange human behaviors on the other side.

The story I posted showed that Home Depot chose to limit the generators it sold to one per customer, and when it ran out of them people had to wait in line til more came in. It also showed that HD didn't not engage in price gouging (for altruistic reason or because it wanted to stay within the law, we don't know) thus everyone who waited in line could buy one at a fairly regular price ($600) while supply lasted. This is pretty remarkable under such stressful market conditions.

As someone with an economics degree, you must undoubtedly be familiar with the concept of price and supply elasticity. In situations where supply is choked and other merchants cannot rush in to satisfy a steeply rising demand, the classical equilibrium point between the two curves (supply vs demand) moves vertically upward and could theoretically reach infinity as long as there's someone with enough money to buy the item at any cost. Price gouging often occurs under such circumstances.

Another thing worth mentioning too is that the total price of an item includes other things like wait time. That is, if you keep prices low enough some people (the not so wealthy) would be willing to wait longer in line to buy it, trading time for money. In any event, the market should clear once equilibrium is reached.

At least that's the theory. Now, when it comes to APG laws, the state in effect is putting in price control to keep prices artificially low. Whether this helps or hurts the general public is debatable. At first glance, it appears to be one way to subsidize the less wealthy. But there could be other reasons as well.

I suspect one of the reasons these laws have been enacted is to prevent stressed out humans from getting riled up and causing more disturbances in times of trouble. Like Bob Marley once sang, "A hungry mob is an angry mob...". I myself have had to live through a horrendous war. I know what shortages and outages feel like.

BTW, please refrain from using loaded labels such as leftist liberal blah blah. It weakens, not strengthens one's argument. And in case you're wondering, I'm not an Obama supporter. Far from it.

 

I've got less than 6 gallons left, and most stations I drive by have been out of gas for days.

I'm hoping for a return to normalcy SOON...

 

While the label was not primarily directed at you in particular (more so for the media which uses such off the wall stories for shock value to justify such anti "gouging" laws) you did implicate yourself to some degree by attempting to use such reports (or at least you appeared to) to bolster your stance in favor of anti "gouging" laws and schemes.

Of all the posts in favor of anti "gouging" laws, I have yet to see one which actually defines in a clear manner exactly what gouging is. Even the definition of our own law here in FL defines gouging as "unreasonable" prices. What's unreasonable? 10% higher than other surrounding stations? 20%?? More, less?? What defines a surrounding station?? Our state AG is actually subpoenaing so called "gougers" wholesale buys and correlating those records to prices charged. Just how invasive can a government get?? I'm so glad someone from the government can run my business for me when I get so confused with pricing...

What if a guy had 200 generators for sale across the street from Home Depot (which ran out and previously sold them for $600 each) from a semi trailer for $700 each? And let's assume he even bought them at a cheaper wholesale price than Home Depot. Maybe his brother owns Coleman and gave them to him for free... Would he be guilty of gouging? What if he then charged $800 each when he got down to 50 because the first 150 sold in 30 minutes? Is he gouging?? Or is he trying to prevent from being sold out quickly to someone else who will then sell them down the street for $900 each??

As I stated before in the past we use to have people come down from up north and do precisely that. The generators were more expensive than Home Depot, but when everyone else is out, well at least you could buy one if you chose. That does not happen anymore since the anti "gouging" laws were passed. If Home Depot runs out, you do not get a generator. Period. Rebuilding is severely curtailed (no electricity for power tools) and the areas remain inhabitable for a longer time after the hurricanes.

Anti "gouging" laws help large companies such as Home Depot and Lowes since they could care less about the status of their generator stock. They still have plenty of other building materials which will sell. Anti "gouging" laws do hurt the independents and the true entrepreneurs who risk their own capital and time to help fill a need and void. That's why when these laws are in place shortages abound. Tragedies and disasters happen. Not everything is the fault of a current governmental administration as many would have you believe.

I would love to see these violations handed down by the AG to retailers actually be fought in a court of law and go to an appellate court. The legal opinions (either for or against) would be of good read.

Rick
#4 2006

Jacobellis v. Ohio "I know it when I see it."

 

Rick,

1. I did not post the report to bolster the argument for/against APG law. I posted it in response to the strawman claim, that there's no life/death issues involved. The story was simply an example of how human lives could be at stake in times like these. You don't have to believe that story if you think it's just part of some liberal media hogwash. That's entirely up to you.

2. Every state that has APG laws on their books differ wildly in their definition of what "gouging" entails. Some are more specific than others, such as 25% over "normal" or "fair market condition". Or some other language like that. That's where these laws become murky and make for interesting discussion. I'm not for or against APG laws per se. I'd like to understand better why they're in place and why there are such variances from state to state. (Or why some states don't have them at all).

3. As for the government's role in price control, it should be noted as well that as long as the state is involved in passing out food, water, ice, medicine, and other life necessities (i.e. taking the place of normal market mechanisms) the state is already involved in altering market forces (using tax payers subsidized money no less) and suppressing any potential price increases that could very well result from severe shortages. Should we tell the state to get the hell out of the way and let the market work its capitalistic magic there too? I'm pretty sure some enterprising entrepreneurs would gladly come in and sell ice for $20 a bag or water for $10 a bottle.

Where do we draw the line here?

 

Yes, I do know what analogous means, it is you how seems to have a comprehension problem. Looting is not analagous to gouging. One is a sale, the other is theft. Furthermore, gouging is fuzzy bit of perspective (especially since one doesn't know the seller's cost basis), while looting is not.

So I advise you to brush up on your vocabulary before you make accusations of others playing wordgames. Your false "analogies" and strawman arguments don't cut it.

p.s. I don't care whether you've lived next to refineries, it doesn't appear you've ever worked in any facilities like this. Those of us who have see the weakness in your arguments.

 

Shawn,

My apologies if my English is not up to your standard. I was born in a poor third world country. Let me try to explain my analogy another way.

Under normal circumstances, the state lets people roam about freely during any time of day or night (at least in this country). But when there's an emergency such as Ike, the state invokes emergency rules to limit people's movement. The reason for the curfew, in this case, is to prevent theft and looting.

Under normal circumstances, the state lets people engage in free commerce without much interferences (other than a few regulations here or there plus a few other laws thrown in like anti-trust and so on). But when there's an emergency such as Ike, the state invokes emergency rules to limit how much merchants can profit from selling products that are in short supply (or perceived by the public to be in short supply, as in the case of panic buying). The reason for the price control, in this case, is to discourage price gouging and, perhaps, to prevent public riots.

The two laws are not the same, and the analogy is not meant to compare looting to price gouging. Hope I've made it clearer this time.

Apologetically yours.

 

I drove my 2008 Prius from WI to FL Sept 11 to 13. I normally find the lowest gas prices in GA. From the time I entered GA until I departed on I75, gas had gone up 50 cents a gallon. I never experienced FL gas prices lower than GA, but it was that way. I don't understand why the pump price of gas a $147/barrel is not much lower (if not higher) than gas at $98/barrel today. For those who don't want the Government in our lives to protect us from "ourselves", then there are lots of countries starting with Iraq that you might like to live in. This time the State of Florida did something right by keeping the State Of Emergency in place.

 

Actually it wasn't. I heard the same report on NPR.

The reporter picked one woman from a line outside a Home Depot then waited with her as the line snaked inside. She got her generator for $600+ ( admitting that she had no intention to pay for it when the bill came ); then rode with her to get gas for it; waiting in line as it snaked to the pump; then rode with her to her home which was mostly wrecked; and watched her fire it up. Her 50 y.o. son (brother) with a breathing problem was waiting in a motel room.

Yes she WAS that stupid. You could hear it between every word she said.

 

A few stations around here (northeast) have started receiving shipments. It's going to be a while before the price comes down, though.

 

In Florida, Attorney General Bill McCollum today is serving subpoenas to four companies, seeking information about reported gas-price gouging. The state has received more than 350 complaints. "We will not tolerate gouging for greed," McCollum said. Florida is serving the subpoenas to the corporate offices of Flying J, Dodge's Gas Stores, Valero and Pilot Travel Centers.

So far, a Florida official says the highest report of gouging was $5.50 for a gallon of regular unleaded. At another fuel station in Miami, the price Saturday was $4.87 for regular unleaded and $5.09 for premium, the Miami Herald reported. Most South Florida stations are selling gas for under $4 a gallon.

... And in North Carolina, Gov. Mike Easley declared a state of "abnormal market disruption" on Friday, and directed the state Attorney General to enforce the price gouging statute. "As a result of Hurricanes Gustav and Ike, oil refineries in Texas and Louisiana have temporarily interrupted some gasoline supplies to the pipelines that serve North Carolina. Therefore, there may be temporary limitations on our gas supply. However, wholesale gas prices are up less than 20 cents a gallon over the last few days. Therefore, consumers should not see prices rise substantially more than this rise in the wholesale price," the governor said.


Are motorists getting gouged on gas prices? - Deep Background - msnbc.com