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Economists who defend disaster profiteers are wrong

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Re: Economists who defend disaster profiteers are wrong

#281

Post by paranoidrobot »

robocat wrote: post #207
paranoidrobot wrote: post #193

Earlier quoted context omitted.

> nobody would be buying a million masks to hoard in a bunker right now. No, that's correct, because you can't (profitably) buy a million masks to hoard them right now. If you'd done it on January 1 though, you'd have been able to buy as many masks as you liked. Selling them now? Is this the height of the crisis? Perhaps. > Real people don't behave like this. They do, but most people don't have millions of dollars to…

> This is why I've not seen a roll of toilet paper on shelves in my local supermarkets or stores for three months now Three months ago was January 14th. Perhaps you are being a mite hyperbolic?

Sorry, yes. It just feels like three months.

Mid February is when Toilet Paper, Kitchen Towels, Facial Tissues, and Hand Sanitiser disappeared. My understanding is that masks went earlier, but I don't have direct knowledge of those.

There were no purchase limits then, and now every time they're restocked there's a pile of people buying up every single one of them in record time. There's video from my local supermarket of a whole pallet stacked high with toiletpaper being delivered, and disappearing in minutes.

Re: Economists who defend disaster profiteers are wrong

#282

Post by catherd »

TeMPOraL wrote: post #257
AnthonyMouse wrote: post #103

Earlier quoted context omitted.

> A billionaire who wants to stockpile a million masks just in case definitely not "more important" than a million poor people getting 1 mask each. Real people don't behave like this. A billionaire can't make personal use of a million masks and there is no point in stockpiling them during a crisis just in case there is some future crisis. They're not going to be worth more a year from now than they are today because…

> And willingness to pay is a pretty good proxy when marginal utility falls off pretty quickly with quantity. I don't understand why people aren't talking about how disposable PPE defies this point at the low end. Hoarding a million masks doesn't make you better off than buying a thousand, but buying ten N95 masks is as good as buying zero. Masks, gloves, even hand sanitizer are consumables, so getting a little bit o…

Probably because despite how the media is portraying things, people are concerned and can actually act out of altruism. Plus, individuals who are practicing social distancing probably don't need to go through PPE like you would in an intensive care ward.

I'm in China and have sold over 30,000 masks to the US (not for profit, but I don't have the cash to just donate them). We've sold to hundreds of different individuals at this point, and none of them are using the buying patterns you describe. The only people buying more than a hundred or so are buying for employees, hospitals, or doing a good job of lying about their intentions. Everyone is buying just a few and making them last.

So far I've personally taken one 10-pack of KN95s from our stock (of which I use 4 so far, on rotation. the other 6 are still in the pack), and about 5 surgical masks. There are strategies for extending the life if you do a little research.

The vast majority of regular people just aren't currently using PPE in the way you describe. After reading up on it, personally I think there's a useful middle ground between throwing away masks like you would in an ICU and completely doing without.

Sanitizer and gloves I know less about. But we do sell gloves and nobody is ordering more than a few boxes of those, either.

Re: Economists who defend disaster profiteers are wrong

#283

Post by goatinaboat »

wccrawford wrote: post #274
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…

Actually, there was a post on HN from a guy who makes medical masks that isn't ramping up production as much as he can. The article's headline was basically just that, trying to get as many clicks as possible. The real story was that last time there was a shortage, he did ramp up production. But after the shortage ended, his customers dried up immediately and he was left with paying unemployment for all the new worke…

His masks cost 10c where Chinese-made masks cost 2c.

Once you factor in the cost of this crisis as an externality, the cost of Chinese-made anything skyrockets. Outsourcing is a bait-and-switch, always was.

Re: Economists who defend disaster profiteers are wrong

#284

Post by xphilter »

AnthonyMouse wrote: post #100
xphilter wrote: post #97

Earlier quoted context omitted.

You are comparing adjudicating the worth of a non changeable attribute of a human to the minimum cost of labor. If you can’t see the difference between the two then I don’t know what to do. There slippery slope arguments then there are just silly arguments.

There are many people with disabilities that prevent them from doing ordinary work but who could do certain jobs with lower productivity. A minimum wage is essentially telling these people that they are worthless and should sit in a room doing nothing even though they want to work and feel useful, and in many cases this makes their lives substantially worse because they both feel useless and have less income when the…

Right. And there’s no way to have an exception just like there is today. I can’t tell if you’re all be obtuse on purpose. Is this some sort of political movement to equate minimum wage to eugenics? As is now conservatives care about the poor, disabled, and minorities? What’s crazy is that I agree with OP of this thread that economists should refrain from saying what’s moral. But that’s because most economists are just old white men, and I doubt they’re able to judge what’s moral better than others.

Re: Economists who defend disaster profiteers are wrong

#285

Post by ric2b »

wpietri wrote: post #162
nostromo wrote: post #151

Earlier quoted context omitted.

Isn't your comment a critique of all free markets? Food is largely a free market in the US. A billionaire could buy a billion dollars worth of beef tomorrow. But they don't, because why would they? And in fact, markets have done a better job of feeding people than any centralized planning system has. I don't see why masks would be any different.

Free markets are not magic sparkle ponies. They're good at certain kinds of optimization. They're bad at others. Disasters are a known case when markets fail.

Fail as compared to what? Is there a system that handles disasters so well that no one complains? Or that does much better without sacrificing in other relevant areas?

Re: Economists who defend disaster profiteers are wrong

#286

Post by Nursie »

roenxi wrote: post #227
michaelmrose wrote: post #218

Earlier quoted context omitted.

This assumes that people actually behave rationally. Do we have actual numbers on rich people buying TP during the present crisis? If most people including the rich are going to hoard anyway a rising price just transfers more money to sellers when many need it most. Worse it incentivizes people to buy for resale if the price is trending upward. TP selling for 200% that is headed to 400% shortly is a smarter buy than…

> This assumes that people actually behave rationally. There isn't an alternative. If you assume people behave irrationally you may as well send the army in straight away. People are often stupid but rarely irrational given what they can understand. There is pretty solid evidence that people with money are the ones who spend it rationally. And besides a private buyer's opinion of what is rational is just as valid as…

> There isn't an alternative.

Of course there is - look at how people actually behave given various stimuli, rather than presuming enlightened rationality.

Enlightened rationality does not govern real actions, we know this, we have ample evidence of this, and making economic forecasts on this basis has been repeatedly exposed as a fools game.

Re: Economists who defend disaster profiteers are wrong

#287

Post by koheripbal »

wccrawford wrote: post #274
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…

Actually, there was a post on HN from a guy who makes medical masks that isn't ramping up production as much as he can. The article's headline was basically just that, trying to get as many clicks as possible. The real story was that last time there was a shortage, he did ramp up production. But after the shortage ended, his customers dried up immediately and he was left with paying unemployment for all the new worke…

Yeah, it's kind of impossible to argue that production costs haven't gone up for manufacturers. I have an employee who we need to still go into the office for some manual work 2x a week - he asked that we pay for an Uber for him because he doesn't want to ride public transport.

That's just one of many additional costs companies that struggle to continue working are paying.

Some degree (within reason) of increased prices for an high-in-demand product is a necessary if you want to convince employees to work longer hours and through tough conditions.

...not to mention many of their underlying fabric costs are probably higher as well.

Re: Economists who defend disaster profiteers are wrong

#288

Post by ric2b »

TeMPOraL wrote: post #267
sokoloff wrote: post #248

Earlier quoted context omitted.

Because at some point, TP will go back to $0.50/roll essentially permanently. You can’t be sure that you’re buying on a sustained upswing in prices.

And yet this doesn't deter people from buying stocks.

Because people don't buy stocks with the expectation that they'll remain flat in the long term. They expect them to increase in value over the long term.

Re: Economists who defend disaster profiteers are wrong

#289

Post by ric2b »

michaelmrose wrote: post #222
AnthonyMouse wrote: post #133

Earlier quoted context omitted.

Someone who couldn't afford $20 for something that lasts more than a month? If this person exists it's because they place a below-average value on toilet paper, not because they don't have $20. And there aren't enough millionaires for their toilet paper buying habits to have a meaningful effect on the market unless they each start buying millions of rolls, which is a ridiculous hypothetical with no chance of really h…

Rolls of TP don't last a month in most households. They normally last 1 to 2 days. You either own a bidet or need to see a doctor.

Most households have more than one person, so in that case the $20 is no longer for a single person.

Re: Economists who defend disaster profiteers are wrong

#290

Post by charlesu »

sparkie wrote: post #231
kaitai wrote: post #61

Earlier quoted context omitted.

Yep. The flaws of that system are becoming clearer and clearer, not that you'd see it from the responses you're getting. "If people can't pay for housing, they deserve to be homeless! If people can't pay for healthcare, they deserve to be sick and die! Without a profit motive, we cannot do anything for our fellow man! It would be immoral to serve without profit, or to look for the greater profit to society!" Housing…

Who is "we?" I have a question, if you don't mind answering. What are you doing personally to help the homeless and less fortunate than yourself? I get that it is easy to sit behind a keyboard and complain that other people aren't doing enough. The way to help people isn't to demand that other people pay more, but to use your own resources for the causes which are most important for you. Simply giving more money to t…

You and the poster above you have fundamental differences in how you understand the world. He seems to believe in a world of abundance and you seem to believe in a world of scarcity, not simply limited resources but literal scarcity.

Why do you take it as fact that there isn't enough to go around? Are you sure that's the case?

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