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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

#401

Post by nostrademons »

dmix wrote: post #60
nostrademons wrote: post #35

Earlier quoted context omitted.

From a political standpoint, I see the point. Price gouging makes people extremely mad, and it redirects goods from poor people to wealthy people. When tempers are already fraying and maintaining social order is already difficult because of an emergency, the last thing a government needs is a nucleus for lots of pissed-off people to rally around. Remember that the first priority of any government is to keep itself in…

Pictures of empty shelves on social media is causing panic and driving more shortages. This is a lose-lose situation for gov interference. This sort of punitive response will always be far too late or too little to be effective anyway. The markets will respond far faster with supply than setting price ceilings and fining random opportunists will. So few people question whether it will actually work in the real world…

The point is to serve as a disincentive to ordinary people thinking "Oh, I can make a lot of money doing that."

It crossed my mind, when news of the coronavirus first broke, that I could make a lot of money speculating in toilet paper, canned goods, rice, and beans in the near future. (I did all my prep shopping 3 weeks ago, but didn't buy more than we personally needed as a family.) I didn't because a.) a little voice in my head said "Do you really want to be that asshole?" and b.) it occurred to me that it was very likely that powers that be (governments and market platforms like Amazon) were going to crack down very hard on scalpers, and it was not worth going to jail for. Turns out I was right about that - people are not going to jail (in the U.S. at least, I heard they may be in Europe), but they're facing $5000 fines per item or eating the cost of buying & disposing of the items because Amazon revoked their seller license.

The point of highlighting laws like this is so that people aren't tempted next time there's emergency to do the same thing.

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

#402

Post by gwright »

salawat wrote: post #387
gwright wrote: post #319

Earlier quoted context omitted.

The price float did not happen and what was the result? Empty shelves. Is that a satisfactory outcome from your standpoint?

Yes. Restocks will happen as quickly as possible, purchase limits will be put in place, and availability will be restored. Also, the privations created were entirely the results of these folks' poor behavior in terms of weighing the risks inherent to the logistics of their price gouging, and whether or not their sales platform would facilitate that behavior. Mayhaps they'd be well served returning their stock to the…

But if the price floated the empty shelf situation would have been mitigated.

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

#403

Post by erik_seaberg »

geofft wrote: post #104
whatshisface wrote: post #54

Earlier quoted context omitted.

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 thing…

Maybe if the gouging limit were higher than 10%, CVS could have filled an extra warehouse with Charmin and Purell last year just in case.

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

#404

Post by Noumenon72 »

kevingadd wrote: post #313
bob1029 wrote: post #256

Earlier quoted context omitted.

Allowing prices to directly track available inventory seems like an excellent approach. The problem will self-correct very quickly as 4-packs of toilet paper begin to exceed $20. As inventory is replenished, prices could begin to drop again. Yes - this sucks for someone who really wanted toilet paper that day, but at the same time it ensures more conscientious spending where absolutely required. I usually don't check…

"actively decide not to buy any that day" and not wipe your rear end after using the toilet? If you're out of paper towels or soap and the cost is 50x the usual you're just gonna not wash your hands? Think through the consequences here. Not everyone can afford to stockpile stuff like this in advance, some people live paycheck-to-paycheck. I've got a couple weeks of paper products in reserve typically, not 2 months wo…

Are you familiar with marginal analysis from economics? This is how markets work for everything. You are considering the one person with no TP, paper towels, or soap -- that is the person who will not be dissuaded from buying at any price. But there is always one person right on the edge of buying at the current price -- one who has a single roll left and can stretch it, or one who can just poop at work, or one who grew up wiping with corncobs and always thought of TP as a luxury anyway.

As the price goes up, those people drop out one by one. It is those marginal consumers, not the one who needs TP the most, who are price sensitive. This ensures that the person with no TP, paper towels, or soap is always able to get the TP that they need now. Even if there's only one roll left. The price may have to rise to $100 a roll to distinguish between them and the next-most-marginal consumer (who also has no TP, paper towels, or soap, but is willing to hold their poop for a day to save $100). That's the most efficient outcome and markets are great at finding it.

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

#405

Post by Noumenon72 »

bjourne wrote: post #116

It's amazing that it takes a pandemic for people to realize that "free market" isn't the solution to every problem in the world.

It's amazing that even when a pandemic produces a textbook example of a market redistributing supply to where demand is highest, people don't recognize how well markets work.

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

#406

Post by RareSoft »

EdgarVerona wrote: post #388
nate_meurer wrote: post #253

Earlier quoted context omitted.

> This is a case of consumers attempting to create small niches of artificial scarcity so that they can profit. A good example of this is in a related thread: https://news.ycombinator.com/item?id=22576225 The article describes how a couple of guys drove from store to store all across their state, buying up all of the antiseptic supplies in stock, and then trying to resell them online for as much money as they could p…

Jesus. Yeah, it's sick. There's another story along the same lines, to the tune of $70k in disaster profiteering: https://abc14news.com/2020/03/14/canadian-couple-make-more-t...

Is this not just the world we live in? Personally I agree with you but then I also consider how there are a handful of billionaires with more wealth than a huge portion of the global population and big pharma/ insurance companies charge so much that people are dying because they can't afford medication like Insulin.

If that's the way the world is then why should anyone be expected to behave any differently? It's not right to vilify these people while we give a free pass to everyone else doing equally unethical things.

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

#407

Post by grecy »

magnusss wrote: post #393
grecy wrote: post #377

Earlier quoted context omitted.

> I tend to rely on Kant’s categorical imperative: Would society be harmed if everyone behaved in this way? Hospitals in the USA marking stuff up 500 or 1000% ARE harming society already. If all shoe companies charged $400 for a $2 shoe, I believe society would be harmed, yes. If every company hired people as part time only so they didn't have to pay benefits, again, society would be harmed. The list goes on. Capital…

> Hospitals in the USA marking stuff up 500 or 1000% ARE harming society already. Agreed, that needs to be fixed. > If all shoe companies charged $400 for a $2 shoe, I believe society would be harmed, yes. A competitor would step in, charge less, and win the business. It would only be immoral if competition was quashed or impossible, such as in a hoarding situation. > If every company hired people as part time only s…

> I don’t see why this is true. The only benefit of moral significance is medical, and there’s no law of the universe that states that must be paid by an employer.

Most developed countries consider maternity leave, sick leave and compassionate leave (carer's leave) basic rights.

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

#408

Post by Noumenon72 »

Mountain_Skies wrote: post #14

How often does anyone get charged for this other than a few token made to be an example for the most egregious behavior? Price gouging laws seems to be mostly a threat rather than an actual attempt at regulating pricing. It's similar to how the police will arrest huge numbers of people during a protest and then drop the charges against almost all of them the next day. The backbone of the protest had been broken so it…

Yes, this law would make more sense as a norm to shame people from hoarding than as a strictly enforced market restriction.

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

#409

Post by jbay808 »

erik_seaberg wrote: post #397
anigbrowl wrote: post #353

Earlier quoted context omitted.

They can't realize their goal of profit if the scarcity doesn't exist, now can they?

Not everyone is scalping, but everyone is buying more for themselves because they're suddenly worried about future supply. There would still be a temporary shortage without the scalpers, maybe slightly less severe.

How much TP do people really need for themselves? Why are the shelves cleared out of TP and not, I don't know, dish detergent? Why is its future supply more in danger than any other good? If everyone coordinated buying a month's supply of TP one weekend, would all the stores really run out? I'm not so sure... At Costco it's hard to buy less than one month's supply at a time already, unless you have a big family
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