$5000 per violation of price-gouging in CA • Hacker News Board

Re: $5000 per violation of price-gouging in CA

#101

Post by siruncledrew » Sat, Mar 14, 2020, 4:09 PM UTC

will_walker wrote: post #39

whatshisface wrote: post #4

Price isn't just the cost of buying something, it's the reward for producing it. If we see too many price gouging laws, then you can expect shortages as companies find themselves unable to justify extreme measures that would otherwise increase production (at great expense). Secondly, I would expect that localities with price gouging laws will discover that their goods are being re-routed to other places without those…

This isn’t the companies being punished - it’s the opportunists. These vultures are driving to every small pharmacy and clearing out all the masks and sanitizer. Now that Amazon & EBay have cracked down on reseller gouging, some are sitting on stockpiles through the midst of a pandemic. * https://www.nytimes.com./2020/03/14/technology/coronavirus-p...

Yes, for some reason people complaining about the supply-demand economics of price gouging laws seem to think Clorox, Charmin, Kleenex, etc are the ones jacking up the prices of supplies...

Manufacturers producing enough quantities to sell is not the issue. The assholes that swoop in and buy out all the stock in a store temporarily to quickly turn around and sell the items for much more are doing the gouging. It's like going to the gas station right after a refill with a big-rig tanker during a time of high demand, filling up all the gas from the station, and then sitting next to the now-empty gas station all day and charging people 500% more for gas.

That is why stores are now implementing quantity limits for certain supplies, so people don't just hoard them for profit and to deny everyone else access to buying the supplies.

Re: $5000 per violation of price-gouging in CA

#102

Post by pgt » Sat, Mar 14, 2020, 4:09 PM UTC

Taxes working as intended?

Re: $5000 per violation of price-gouging in CA

#103

Post by chillacy » Sat, Mar 14, 2020, 4:10 PM UTC

logicchains wrote: post #90

bernawil wrote: post #32

Earlier quoted context omitted.

Most stuff is bought by scalpers and sold on the black market anyway

It's not a black market if it's a market for legal goods, it's just a market.

Just not one where sales tax is paid I presume. It’s at least not part of the “formal economy” that will show up on a public profit and loss sheet.

Re: $5000 per violation of price-gouging in CA

#104

Post by geofft » Sat, Mar 14, 2020, 4:10 PM UTC

whatshisface wrote: post #54

geofft wrote: post #37

Earlier quoted context omitted.

Isn't price-gouging usually (and definitely in this context) about someone who bought an item at a standard wholesale price and is reselling it at a markup? That's not about the reward for producing it, that's about the reward for being in the right place at the right time. You can still try to argue that it's economically reasonable to reward people for being in the right place at the right time (to incentivize peop…

Well, from the perspective of the buyer it doesn't matter if you're buying it for 20x the price from CVS or from Joe Schmoe Markup Inc. It matters to CVS, but that's their problem.

For the most part, CVS isn't producing it, they're reselling it. I agree it doesn't matter which reseller is gouging, but it does matter to me whether I'm paying a markup to someone who was clever enough to hoard important goods (and thereby incentivizing hoarding) or whether I'm paying for increased cost of production (and thereby incentivizing production).

Markets are a way of managing information. That's why things like "the stock market went up" or "the stock market went down" matter: it communicates what people believe about whether things are underpriced or overpriced. In turn, those beliefs are only worth paying attention to if participants have some reasonable information about the things they're buying and selling. While my individual purchase of a $50 bottle of hand sanitizer is a small drop in a bucket of information, it is conveying information, and everyone else paying for it absolutely does influence the market. When we communicate that we're willing to pay $50 for a bottle of hand sanitizer even if the cost of production has not gone up, it tells resellers that they should start hoarding. A clever reseller will stop selling their reserves entirely and wait for discovered prices to max out. That does matter quite a bit to me as a buyer!

Re: $5000 per violation of price-gouging in CA

#105

Post by maxerickson » Sat, Mar 14, 2020, 4:11 PM UTC

AsyncAwait wrote: post #92

whatshisface wrote: post #72

Earlier quoted context omitted.

I'm not sure how the parent thinks it will help with shortages, but sales tax adds to the price that the consumer pays. On sales tax holidays you see prices go down.

The problem, from what I saw, is hoarders having stock piled 17,000 hand sanitizers and the like, not official stores selling them for too high a price.

In a country of 300 million people, a few semi trucks worth of hoarding isn't doing much of anything to availability of any particular product.

It's the just-in-time nature of distribution. Demand doubles from "normal" and all of the sudden nothing is sitting on the shelf.

Re: $5000 per violation of price-gouging in CA

#106

Post by [deleted] » Sat, Mar 14, 2020, 4:11 PM UTC

ikeboy wrote: post #58

Dangeranger wrote: post #27

Earlier quoted context omitted.

When people charge 10-20X more for something that could have been purchased in a local store before the “arbitrage” businesses purchased all the inventory, that is clearly price gouging.

It depends on the details. The recent NYT article about buying in stores and selling online mentioned that more than 50% of the sale price could be eaten up in shipping and other fees.

[deleted]

Re: $5000 per violation of price-gouging in CA

#107

Post by ikeboy » Sat, Mar 14, 2020, 4:11 PM UTC

rickyc091 wrote: post #96

ikeboy wrote: post #58

Earlier quoted context omitted.

It depends on the details. The recent NYT article about buying in stores and selling online mentioned that more than 50% of the sale price could be eaten up in shipping and other fees.

"A nearby liquidation firm was selling 2,000 “pandemic packs,” leftovers from a defunct company. Each came with 50 face masks, four small bottles of hand sanitizer and a thermometer. The price was $5 a pack. Mr. Colvin haggled it to $3.50 and bought them all." "He quickly sold all 2,000 of the 50-packs of masks on eBay, pricing them from $40 to $50 each, and sometimes higher. He declined to disclose his profit on the…

Have you subtracted all the losses on the products that didn't sell?

When I sold on Amazon, every so often I'd be able to 10X my money on a product, but it was rare and balanced out by the many more times that I would lose money on a product or have to write off completely because it didn't sell.

Re: $5000 per violation of price-gouging in CA

#108

Post by seibelj » Sat, Mar 14, 2020, 4:11 PM UTC

geofft wrote: post #87

seibelj wrote: post #31

Earlier quoted context omitted.

Free market capitalism has lead to the greatest standard of living ever experienced in the history of the world, especially for citizens on the lowest rungs of society. It may be at odds with your quibbles of modern society, but when viewed holistically I’m so happy that we have clean water, tons of nutritious food, computers, etc. etc. etc.

> clean water Your clean water generally comes from your government-run water supply, not from a private company. Many of the important discoveries in water purification were made by people who didn't stand to profit from it personally, including English doctor John Snow, German scientist Moritz Traube (who funded himself as a wine reseller), US government contractor George W. Fuller, British officer Vincent Nesfield…

You are on another planet. The USSR collapsed, east Germany collapsed, Cuba is a joke, China is capitalist, you are living in fairy land.

The government may support a lot of research but the government’s tax base derives from entrepreneurs who create a healthy free market. No socialist utopia exists and you live in a good society because of economic freedom. None of this is news to most people, and me telling you this I guarantee will make no difference to you given how brainwashed you seem to be.

Nothing is stopping you from moving to Cuba. Good luck!

Re: $5000 per violation of price-gouging in CA

#109

Post by hirundo » Sat, Mar 14, 2020, 4:11 PM UTC

I think that setting a price on something is best considered as a form of speech, even if it isn't exactly the same thing. A price is a statement of the value you believe that a thing has. As a free speech advocate I believe people should be able to express such value judgments freely with few constraints.

A price signal is similar to other signals we can make with speech, in that it has the potential to change behavior for good or bad. There have certainly been many bad signals via ordinary opinion that have caused harm. But most of us believe that the net benefits are such that bad speech should rarely be suppressed. I think that the same is true of bad price signals.

It isn't that well crafted laws cannot differentiate between good and bad speech or good and bad prices. They can. It's that such laws are the exception rather than the rule. So it's better policy to decentralize such decisions, so that bad ones can't be made for everyone.

Re: $5000 per violation of price-gouging in CA

#110

Post by aeternum » Sat, Mar 14, 2020, 4:11 PM UTC

sxyuan wrote: post #88

I see some commenters saying that preventing price gouging will take away the incentive to produce more of a certain good when the demand increases. This doesn't make sense to me. If, under normal market conditions, producers already make X amount (of , say, toilet paper) due to Y demand at price Z, when the demand spikes to 2Y, if you can produce and sell 2X goods at the same unit cost, you can double your profit wi…

Most suppliers cannot simply produce 2Y the goods at the same price. Switching lines involves retooling and, risk, and/or overtime, all of which are expensive.

If that switch can be done for under the price cap, then the price should remain under the price cap anyway due to competition. If it cannot, then shortages will result.