The killer tsunamis that yesterday ravaged Asia call to this economist’s mind discussions about price gouging. I don’t know the laws and legislation of Sri Lanka, Indonesia, and other countries whose citizens are now suffering so grievously, but I hope for the sake of these people that so-called price-gouging is not prohibited. (Hoping, alas, isn’t synonymous with predicting.)
To prevent the price of some staple good (say, lumber) from rising to its market level in the wake of a natural disaster is to camouflage the underlying reality. The underlying reality is that the disaster (1) appreciably reduced supplies of lumber available in the devastated area – both by destroying inventories of lumber and by destroying supply lines; and (2) appreciably increased the demand for lumber in these areas. In short, the underlying reality is that the value of lumber to people in these devastated areas is now significantly higher than it was just before the tidal waves hit. These people need lumber more than they did before, and there's less lumber immediately available.
This reality is unfortunate, but it is, well, real. Being real, it must be dealt with. It cannot be hollered, hoped, dreamed, prayed, or legislated away. And it means that the welfare of the people whose homes and businesses (not to mention love ones) were destroyed is much lower than it would have been had the tsunamis not hit.
You are a very disturbing human being........and I use the term "human" very loosely. |
