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Economists who defend disaster profiteers are wrong

economist.com

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Re: Economists who defend disaster profiteers are wrong

#11

Post by SftwrSvior81 »

alexmingoia wrote: post #4

Increased production doesn’t occur because the economics don’t work, it doesn’t occur because there’s just no way to physically ramp up production that fast. That’s not really a critique of the economics. If production could be increased that fast the manufacturers would. An important point the article didn’t address is that high prices direct resources to more important uses. If prices are very high then hospitals m…

> high prices direct resources to more important uses

I don't think that that is always true. High prices will redirect scarce resources to those who have the means and desire to pay for them. That doesn't necessarily mean that those uses are more important, regardless of how one defines what it means for the resource usage to be important.

Re: Economists who defend disaster profiteers are wrong

#12

Post by aaron695 »

This article is garbage, we had hospitals wasting supplies at the start because they assumed their price fixed PPE supply would last forever. Now they use plastic bags.

And we have a Texas factory saying if the government will just pay for a long contract they will ramp up supply.

https://www.washingtonpost.com/business/2020/02/15/coronavir...

So this is not about disaster profiteers.

This is about total and utter incompetence of hospitals planning ahead.

Which happens every day, just it's happening to a lot of people at once compared to your grandmother who died last year of a preventable issue because the bureaucrats in the hospital didn't care and doctors are to specialised to know about the world around them.

Re: Economists who defend disaster profiteers are wrong

#13

Post by bpodgursky »

alexmingoia wrote: post #4

Increased production doesn’t occur because the economics don’t work, it doesn’t occur because there’s just no way to physically ramp up production that fast. That’s not really a critique of the economics. If production could be increased that fast the manufacturers would. An important point the article didn’t address is that high prices direct resources to more important uses. If prices are very high then hospitals m…

https://www.dallasnews.com/news/watchdog/2020/04/03/if-you-i...

> “Last time he geared up and went three shifts a day working his tail off,” the mayor recalled. “As soon as the issue died, he didn’t have any sales. He had to pay unemployment for all these people, and he had to gear down.”

It's not a "physical limit" problem, it's that the costs incurred by rapid ramp-up for a temporary spike in production outweigh the payout -- you're asking businesses to bankrupt themselves to spike production which will fall off in four months... and they're stuck with equipment that hasn't paid itself off, and employees which cost unemployment and benefits.

There needs to be an increase in prices NOW (or some other explicit subsidy) to possibly justify the cost.

Re: Economists who defend disaster profiteers are wrong

#14

Post by pjkundert »

modsWork4appl wrote: post #10
olliej wrote: post #8

By the logic of economists slavery and indentured service, etc are good ideas. Because by economist logic anything that produces more money is better, irrespective of the cost accrued by others. Slavery, and follow on policies of indentured service, crop sharing, etc are the only reasons the pro-slavery states maintained economic relevance as long as they did.

I could see indentured servitude being acceptable. Btw, is debt different?

The best indentured servant is the one who thinks they are free.

Debt is the money of slaves.

Re: Economists who defend disaster profiteers are wrong

#16

Post by perl4ever »

alexmingoia wrote: post #4

Increased production doesn’t occur because the economics don’t work, it doesn’t occur because there’s just no way to physically ramp up production that fast. That’s not really a critique of the economics. If production could be increased that fast the manufacturers would. An important point the article didn’t address is that high prices direct resources to more important uses. If prices are very high then hospitals m…

I was able to get kleenex and paper towels saturday because the grocery store is now limiting people to one purchase per day.

I am sure there are people who need more than that, and any system of rationing should allow for exceptions.

But when people insist that a "free" market is inherently correct, it's no different from insisting that your OS scheduler is perfect even though some processes never get to run

https://en.wikipedia.org/wiki/Starvation_(computer_science)

Re: Economists who defend disaster profiteers are wrong

#17

Post by vlan0 »

SftwrSvior81 wrote: post #11
alexmingoia wrote: post #4

Increased production doesn’t occur because the economics don’t work, it doesn’t occur because there’s just no way to physically ramp up production that fast. That’s not really a critique of the economics. If production could be increased that fast the manufacturers would. An important point the article didn’t address is that high prices direct resources to more important uses. If prices are very high then hospitals m…

> high prices direct resources to more important uses I don't think that that is always true. High prices will redirect scarce resources to those who have the means and desire to pay for them. That doesn't necessarily mean that those uses are more important, regardless of how one defines what it means for the resource usage to be important.

Yep, and if we need proof of that. See NBA COVID testing.

Re: Economists who defend disaster profiteers are wrong

#18

Post by jimmaswell »

SftwrSvior81 wrote: post #11
alexmingoia wrote: post #4

Increased production doesn’t occur because the economics don’t work, it doesn’t occur because there’s just no way to physically ramp up production that fast. That’s not really a critique of the economics. If production could be increased that fast the manufacturers would. An important point the article didn’t address is that high prices direct resources to more important uses. If prices are very high then hospitals m…

> high prices direct resources to more important uses I don't think that that is always true. High prices will redirect scarce resources to those who have the means and desire to pay for them. That doesn't necessarily mean that those uses are more important, regardless of how one defines what it means for the resource usage to be important.

Exactly this. Why is Scrooge McDuck buying the entire supply of something somehow better than evenly distributing it? I can't believe people actually think making toilet paper $20 a roll is the correct outcome instead of rationing with price controls. Maybe it's the Ferengi mentality of people seeing themselves as the exploiters.

Re: Economists who defend disaster profiteers are wrong

#19

Post by quotemstr »

To lots of people, so-called "price gouging" feels wrong, so it must be wrong. Disaster pricing can't just be morally wrong: it has to be economically wrong too. We must make the science fit our intuition, the braying crowd says, and not the other way around. Reality doesn't work that way.

The trouble is that when we want something to be true, we find all sorts of specious ways of demonstrating this truth, and in the process, fall afoul of confirmation bias, sampling bias, various statistical errors, and good old-fashioned wishful thinking. Consequently, whenever I see a paper that goes with the grain of internet outrage activism, I apply a very high standard of evidence. It's too easy to believe something that tells people what they want to hear.

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