Monday, September 08, 2008

Fill-in-the-Blank Price-Gouging Article

Art Carden of the Mises Institute provides: "A universal, fill-in-the-blank article discussing the economics of price-gouging laws. Whenever there is a natural disaster, you can just fill in the relevant blanks for a complete analysis of the economics of the situation."

Fearing increases in the prices of basic items as a result of (disaster ____), officials in (state or municipality _____) have declared a state of emergency whereby restrictions on "price gouging" are now in effect. According to (politician or law enforcement official ____), the law is designed to protect innocent consumers from "unconscionable" increases in the prices of food, gasoline, ice, electric generators, and home-repair services.

The unintended, unseen consequences, however, are predictable, unfortunate, and avoidable. Price controls and price-gouging laws make matters worse rather than better.

Consider the case of (hapless merchant _____), who was fined $___ and sentenced to ___(months/years) in jail for increasing the price of (goods ____) by ___%. The bitter irony is that (merchant _____)'s (goods _____) were confiscated and taken to a secure location, where they (rotted/melted/remain to this day). The citizens of (town _____) are still without (good _____), and the very person who tried to provide them with (good _____) faces prosecution.

3 Comments:

At 9/08/2008 10:57 AM, Blogger Jeff Lehner said...

Very good.

 
At 9/08/2008 2:23 PM, Blogger bob wright said...

"...the law is designed to protect innocent consumers from "unconscionable" increases in the prices of food..."

I would like to see a law that protects consumers from unconscionable increases in the price of government.

The U.S. Congress can't manage their own affairs - let alone the affairs of a $14 trillion economy.

 
At 9/08/2008 4:10 PM, Blogger OBloodyHell said...

> The U.S. Congress can't manage their own affairs - let alone the affairs of a $14 trillion economy.

Sure it can.

Just far, far more ineptly than any rational person would want to be The Way Things Are Done.

 

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