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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

#301

Post by atomi »

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…

> Have we lost all sense of humanity for the sake of our ideology?

There has been a lot of strict adherence to ideology in spite of critical thinking and logic going around lately.

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

#302

Post by kevingadd »

devcpp wrote: post #211
CaptArmchair wrote: post #153

Earlier quoted context omitted.

"No, you can't have more pie. You have had enough already." Literally any exasperated parent who has to deal with little children having a tantrum because they can't get what they want. Yes, that sounds harsh, but it's exactly how this works. Your statement is simply saying that society - you, me and everyone - should obediently and without criticizing enable those who can't cater to their own emotional needs; those…

So the State is your mom now? Have as much toilet paper as you want, we can make more. Have fun paying stupid prices.

If you've been paying much attention to how the populace is behaving you'd realize that the State is collectively our mom right now because people keep gathering in massive groups, showing up to work sick, touching their faces, and not washing their hands. Meanwhile employers insist that people show up to work sick and refuse to offer sick leave.

If left to their own devices the populace of this country would all succumb to plague. Who or what caused this situation is of course a matter of debate, as is the effectiveness of government response. In my country the response is pretty inept, but you can't exactly claim the free market would have solved it - it explicitly has not and people from industry have admitted as much.

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

#303

Post by gwright »

georgemcbay wrote: post #246
sneak wrote: post #216

Earlier quoted context omitted.

> I'll be extraordinarily surprised if shelves aren't completely full of those consumable within 7-10 days. Then why do we need any price-gouging laws? Who is harmed without them, if the supply remains intact?

People with short term need? 7-10 days is a long time to go without some things like food, cleaning supplies (particularly in time of pandemic), masks for those who actually need them like healthcare workers on the front lines, etc.

Have you noticed that the shelves are empty? The price gouging laws don't help that situation they create that situation. How are empty shelves better than the items available for 2x, 3x or even 5x the regular price for a short period of time?

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

#304

Post by yyy888sss »

smnrchrds wrote: post #276
yyy888sss wrote: post #259

Earlier quoted context omitted.

This whole problem was solved in Australia by all supermarkets rationing fast selling goods (1 pack toilet paper, handwipes, pasta etc per day) but keeping prices low.

I agree with the approach but not the instances. 1 pack of toilet paper lasts a good while so that's OK. 1 pack of pasta per day means you have to go back to store every day and expose yourself and others to danger.

Well they can only deliver so much pasta per day (the pasta factories are presumably already going full tilt) so the other option would be to massively raise the price... apparently not a popular option. You don't have to go back every day because there are 100s of other non perishable foods people aren't panic buying.

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

#305

Post by kevingadd »

pascalxus wrote: post #265

The crazy thing here is that they go after these gougers so aggressively for just selling a 20$ bottle of soap. And yet, predatory hospitals in the US can do x1000 times worse and not even get a slap on the hand. Hospitals are the #1 cause of bankrupcy in the US.

Good reason to

1) be pleased that we haven't let price-gougers achieve regulatory capture yet

2) be frustrated that the predatory hospital/insurance ghouls have not been displaced by Medicare For All or an equivalent like they have in most other civilized nations

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

#306

Post by stale2002 »

geofft wrote: post #249
stale2002 wrote: post #226

Earlier quoted context omitted.

> haven't seen evidence that e.g. Charmin is saying, "Thanks to higher prices, we're able to see more toilet paper" Do you honestly believe that manufacturers are currently at 100% capacity, and have been at 100% capacity for years? That's ridiculous. Manufacturers always have spare capacity. One simple solution is that they can increase hours that the factory runs (ex, by giving overtime pay). Or they can delay upgr…

I'm not claiming that manufacturers are at 100% capacity. I'm claiming (or more specifically, the person I quoted is claiming) that there isn't an underlying genuine shortage (i.e., that any inability to buy things in practice are caused by things other than "the product you want to buy literally hasn't been produced yet"), and so whether a manufacturer is at 100% capacity or 20%, they're still producing enough. That…

> I'm not claiming that manufacturers are at 100% capacity.

Cool. So that means that manufactures have spare capacity which they can use to make more product.

So, there is no real problem here with everyone buying a bit of extra toilet paper. Manufacturers, will just use that spare capacity, to fulfill that demand.

> the cause is something other than a need for the per-unit price to go up.

Ah, here is the mistake. The extra capacity that I am talking about, still costs extra money to activate. IE, running the factory for longer hours requires overtime pay, as one example.

That is how the increase in price would cause capacity to be used more, and for the local shortages to be solved faster.

Marginal cost generally increases in the short term, as temporary, but expensive methods are used to reactive unused capacity.

In the long term, cost per unit goes down, because of economics of scale. But in the short term, you have to do things like pay overtime pay, ect.

The expensive short term costs are why the increase in price helps increase short term capacity.

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

#307

Post by gwright »

bouk wrote: post #78
radu_floricica wrote: post #47

Prices being elastic is good for people, in a vast majority of cases. It makes sure things get distributed more or less proportional to need, as opposed to just random or worse than random. Case in point: I luckily found some hand gel still for sale online. Probably the very last one around here. So I stocked up - not resale quantities (thought it would have been trivial) but definitely more than I needed - something…

You're justifying your own unethical behavior by painting yourself as a rational economic agent, when you could also just not buy more than necessary and leave some for other people.

Sigh. The fact remains that perfectly rational actors have concluded that they may not want to be shopping for the next two, three, or four weeks. That means purchasing more now for your own completely rational use.

If everyone does that at the same time, you'll have a shortage.

One thing that might limit the shortage is higher prices, as it makes people purchase less, and incentivizes production and delivery.

One thing that most definitely will not help the shortage is limiting the price increases (i.e. price gouging laws).

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

#308

Post by rsynnott »

gruez wrote: post #288
yyy888sss wrote: post #264

Earlier quoted context omitted.

Australian supermarkets are refusing refunds on all of these hoarded goods.

I wonder whether that's legal or not. Presumably they bought the goods before this thing blew up and the terms of sale at the time of purchase allowed for returns. Are stores allowed to retroactively change their return ploicy? Do they have a "we can deny returns for any reason" clause in their return policy? Is that legal?

I think where supermarkets give refunds at all for non-defective products, it’s generally discretionary.

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

#309

Post by jbay808 »

altacc wrote: post #197
daenz wrote: post #131

Earlier quoted context omitted.

>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'…

The idea that the correct solution to this is that supermarkets should be charging the same as the profiteering hoarders (say $20 for a small hand sanitiser and $40 for a pack of toilet rolls) is totally insane to me. This isn't some mythical free market model in a textbook, this is the real world, where real people live. Luckily society in general, through its laws, social judgement, etc... agrees to some extent tha…

Also, supermarket operators are not irrationally leaving free money on the table. They have their own reasons for not adjusting prices -- all the free market advocates lecturing the supermarket managers about econ 101 principles should try running a supermarket themselves, and see how kindly the market reacts to their strategy.

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

#310

Post by geofft »

stale2002 wrote: post #306
geofft wrote: post #249

Earlier quoted context omitted.

I'm not claiming that manufacturers are at 100% capacity. I'm claiming (or more specifically, the person I quoted is claiming) that there isn't an underlying genuine shortage (i.e., that any inability to buy things in practice are caused by things other than "the product you want to buy literally hasn't been produced yet"), and so whether a manufacturer is at 100% capacity or 20%, they're still producing enough. That…

> I'm not claiming that manufacturers are at 100% capacity. Cool. So that means that manufactures have spare capacity which they can use to make more product. So, there is no real problem here with everyone buying a bit of extra toilet paper. Manufacturers, will just use that spare capacity, to fulfill that demand. > the cause is something other than a need for the per-unit price to go up. Ah, here is the mistake. Th…

> The extra capacity that I am talking about, still costs extra money to activate

You're claiming that both

a) not enough toilet paper exists to satisfy genuine demand

b) in order to meet that demand, they need to raise prices

I agree that it is theoretically possible that not enough toilet paper exists, and I agree that there exist ways to increase production that involve spending more money. Both of those are different from saying that in reality not enough toilet paper exists, and in reality manufacturers need (or even want) to increase capacity by increasing per-unit expenses. That's what my question is about.

More importantly, those seem like testable claims. Again - have any toilet paper (or hand sanitizer, or whatever) manufacturers raised prices? Have any of them said that they're unable to supply enough to meet demand? Have any of them said they could meet demand better if they could raise prices?

And back on topic, have any of them found themselves unable to raise prices because of price-gouging laws? I'm pretty sure that if a manufacturer raises prices, and if resellers pass that cost on to consumers (and do not disproportionately increase their margins), that isn't price gouging, and therefore resellers can actually charge more, and therefore they can actually accommodate manufacturers charging more, and so we have nothing to worry about. Do you disagree with that?

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