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$5000 per violation of price-gouging in CA

caloes.ca.gov

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

#131

Post by daenz »

EdgarVerona wrote: post #95

A lot of people in this thread are willfully ignoring some basic facts here. These products are being made in sufficient quantity for everyone. There is not a significant decrease in production. There is a significant increase in hoarding, and in many cases it is for the explicit purpose of creating artificial scarcity to increase the price of a product. This is not a case of toilet paper suddenly costing more to pro…

>A lot of people in this thread are willfully ignoring some basic facts here. These products are being made in sufficient quantity for everyone. There is not a significant decrease in production. There is a significant increase in hoarding, and in many cases it is for the explicit purpose of creating artificial scarcity to increase the price of a product.

You neglected to mention that demand is increased. If it wasn't, then people would be hoarding lysol wipes and reselling them year round. But they're not, because it only makes sense when demand has increased. The lack of correct pricing by the stores is incentivizing hoarders, because, given the increased demand, they can make a profit on the difference people will buy it at vs the difference that they can acquire it. The stores should be pricing in this increased demand.

If this is indeed a case of people "creating small niches of artificial scarcity so that they can profit", then I would like to hear your explanation as to why they aren't doing it with toilet paper all the time. Why can I ever buy tp in the stores? Shouldn't a hoarder have taken it all and is charging double somewhere online?

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

#133

Post by Scoundreller »

siruncledrew wrote: post #101
will_walker wrote: post #39

Earlier quoted context omitted.

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 li…

> Clorox, Charmin, Kleenex, etc are the ones jacking up the prices of supplies...

In a shortage situation, I suspect they dial-up the production of the higher-margin product lines.

The house-brand manufacturing line won't be the one that gets the extra shifts or equipment installed.

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

#134

Post by robomartin »

EdgarVerona wrote: post #95

A lot of people in this thread are willfully ignoring some basic facts here. These products are being made in sufficient quantity for everyone. There is not a significant decrease in production. There is a significant increase in hoarding, and in many cases it is for the explicit purpose of creating artificial scarcity to increase the price of a product. This is not a case of toilet paper suddenly costing more to pro…

I agree with the points you are making. I will add that hoarding does increase the cost of producing goods. If the toilet paper manufacturer needs to produce at 10x normal capacity because people are filling their car with the stuff, they will need to increase staff, work more shifts and maybe even buy/rent/build more production equipment.

Does this double, triple or quadruple costs? Likely not. Yet costs do increase, unless the manufacturer does not increase production capacity to match demand. In which case supply dwindles to zero, with predictable consequences.

The point is: No factory or service provider operates with 10x production capacity they can turn on at a moments notice, that would bankrupt any business instantly.

Perhaps the law we need is one to control hoarding behavior or the rate of change. With that you avoid shocking businesses with unreasonable step changes in demand.

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

#135

Post by ikeboy »

geofft wrote: post #122
ikeboy wrote: post #107

Earlier quoted context omitted.

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.

So, from a "does the market optimize for good outcomes" perspective, that seems even worse - goods (that are already produced) get hoarded and sometimes they don't even sell. This seems like it's not accomplishing the goals very well.

To be specific, the market+price gouging laws+Amazon blocking listings because of those laws is suboptimal. If Amazon hadn't blocked the listings, and more to the point, if Amazon had been known to act reasonably in prior instances, then there'd be more investment and people would accept lower returns. I know firsthand people told me they weren't buying these stuff wholesale to sell on Amazon because they expected Amazon to cause issues, and they were right.

I think if there'd be no price gouging laws and everyone expected to be allowed to sell on Amazon, people would end up pricing lower and there'd be more supply and competition.

There's also uncertainty because when Amazon was banning for price gouging they never made it clear what price level counted as gouging. Wholesale prices shot up, and it was unclear whether selling at a reasonable margin, but based on a higher cost, would be considered gouging.

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

#136

Post by amiga_500 »

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…

Might company bosses just keep doing their job because they are decent people?

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

#137

Post by logicchains »

chillacy wrote: post #103
logicchains wrote: post #90

Earlier quoted context omitted.

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.

Fun fact: one term for the informal economy is "System D": https://en.wikipedia.org/wiki/System_D

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

#138

Post by rahimnathwani »

EdgarVerona wrote: post #95

A lot of people in this thread are willfully ignoring some basic facts here. These products are being made in sufficient quantity for everyone. There is not a significant decrease in production. There is a significant increase in hoarding, and in many cases it is for the explicit purpose of creating artificial scarcity to increase the price of a product. This is not a case of toilet paper suddenly costing more to pro…

"There is a significant increase in hoarding, and in many cases it is for the explicit purpose of creating artificial scarcity to increase the price of a product."

People hoarding aren't trying to create artificial scarcity. They are buying because they anticipate scarcity, and want to either (i) be prepared, or (ii) profit from resale.

Hoarding has caused shortages which, in turn, justify the original hoarding. This is a sad situation, but capping prices isn't a solution. If anything, I would expect higher prices would discourage hoarding, resulting in a more even allocation of TP/whatever between people.

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

#139

Post by amiga_500 »

newbie578 wrote: post #97
avip wrote: post #79

Reading this thread is the official confirmation that Americans are out of their mind.

Absolutely, I cannot fathom how people are so anti-government that they cannot see the forest from the tree. These types of situations are textbook explanations for WAR PROFITEERING (except we are in a crisis instead of war).

It's because the default mindset is that everyone is horrible and motivated solely by profit.

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

#140

Post by rfrey »

frankharv wrote: post #71
blhack wrote: post #22

Earlier quoted context omitted.

What makes you think things will go back to normal in a week or so?

[flagged]

You were flagged because your post was inflammatory and content free. Plenty of peiple are expressing the same sort of view, but with actual arguments rather than simple minded sloganeering.

And I'm not sure what you mean about free speech... Perhaps you're in favor of the government compelling private citizens to not downvote you?

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