banjo bill-e - Posted - 10/02/2024:  09:08:02

After a hurricane, a guy in an unaffected state goes to Lowes and buys generators, tarps, and chainsaws, drives ten hours, sells them out of the back of the truck for twice what he paid for them. Is he:
A. a criminal who should be punished?
B. a welcome provider of needed supplies who deserves his profit?
C. or ??????
your comments invited.

STUD figmo Al - Posted - 10/02/2024:  11:09:42

Was the delivery..free..?

Might be more than what the Feds... Are dooin... :0/

chuckv97 - Posted - 10/02/2024:  11:21:06

quote:

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Originally posted by banjo bill-e

After a hurricane, a guy in an unaffected state goes to Lowes and buys generators, tarps, and chainsaws, drives ten hours, sells them out of the back of the truck for twice what he paid for them. Is he:

A. a criminal who should be punished?

B. a welcome provider of needed supplies who deserves his profit?

C. or ??????

your comments invited.

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It depends where one's heart is - as a strictly commercial enterprise or as a Good Samaritan. I'll let his/her conscience decide.  Personally I've been second-guessing my recent video and other posts re Kris Kristofferson and his passing.  I sometimes feel I'm profiting from someone's death.  argh....

banjo bill-e - Posted - 10/02/2024:  11:30:08

But would you buy a chain saw from him? And if you really, really needed that chain saw, would you curse him for profiteering or thank him for being there?

chuckv97 - Posted - 10/02/2024:  11:34:34

quote:

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Originally posted by banjo bill-e

But would you buy a chain saw from him? And if you really, really needed that chain saw, would you curse him for profiteering or thank him for being there?

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Not being in that circumstance, I don't know. I'd be grateful for the item I needed but wouldn't exactly hold the supplier in high regard if he was price gouging, taking advantage of vulnerable people. 

chuckv97 - Posted - 10/02/2024:  11:34:52

More trouble …
m.facebook.com/story.php?story...873932410

GrahamHawker - Posted - 10/02/2024:  11:37:18

What's the cost of petrol/gas for such a journey, I bet the miles per gallon isn't great. How much does he need to sell to cover that cost. Plus the cost of wear and tear. Plus the cost of time and it looks like he should be staying somewhere overnight and probably buying a few meals. How much did he sell, how much did he take. What is the profit overall? What are the expenses? He can be charitable if he wants but perhaps he can't afford to be charitable. Without the spreadsheet I'm not going to judge.

chuckv97 - Posted - 10/02/2024:  11:41:58

More madness,,
thedailybeast.com/wild-ice-pic...vastation

chuckv97 - Posted - 10/02/2024:  11:43:53

quote:

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Originally posted by GrahamHawker

What's the cost of petrol/gas for such a journey, I bet the miles per gallon isn't great. How much does he need to sell to cover that cost. Plus the cost of wear and tear. Plus the cost of time and it looks like he should be staying somewhere overnight and probably buying a few meals. How much did he sell, how much did he take. What is the profit overall? What are the expenses? He can be charitable if he wants but perhaps he can't afford to be charitable. Without the spreadsheet I'm not going to judge.

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I have no problem if he's just covering costs and making some profit for his time , but obvious price gouging isn't ok in my books. As to Bill's point, if I was desperate I'd likely pay whatever.

Edited by - chuckv97 on 10/02/2024 11:44:39

BanjoLink - Posted - 10/02/2024:  11:53:14

quote:

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Originally posted by banjo bill-e

But would you buy a chain saw from him? And if you really, really needed that chain saw, would you curse him for profiteering or thank him for being there?

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Bill ...... that's really funny (not ha ha funny), but because we have had no power, and trees down everywhere (took a day for me to cut downed trees to get out of my driveway), my wife and I drove to Atlanta to spend a few days with my son's family. Yesterday I went to a local Ace hardware and bought a new Stihl chainsaw ($700) as my old one is about worn out.  After leaving the store, which had plenty in stock (really surprising to me that they did), I started thinking about what I would have to charge just to break even if I loaded up my suv with saws and took them back home. I would not take them back and sell them for $1000 each, unless I already had buyers lined up.  But I sure would have been willing to have paid someone else $1000 to bring me one to Greenville.

it reminds me of an old knife trading tactic when someone was trying to buy or sell a pocket knife like one you owned exactly like it.  You would tell the other person to "give me a price" and "either I will buy yours or you have to sell me yours for that price".  It keeps both sides honest ....... or within the range anyway.

I would say there is such thing as gouging, but I would think it would be more in the lines of when a gas station was getting gas for the same price as before a disaster, yet doubling the price when they had not done anything extraordinary to get it nor distribute it.

banjo bill-e - Posted - 10/02/2024:  12:44:18

Let's say the sellers motive is pure profit, he sees an opportunity and exploits that to the best of his ability, maybe doubling his money after all expenses, or even more. Have his actions aided or harmed those in the hurricane path? It is easy to call him despicable, and many have, but those critics did NOT drive ten hours to sell those goods, and without the opportunity for a windfall there would be no chainsaws and generators for those eager customers. So in this case, can "greed" be "good?"

Bill Rogers - Posted - 10/02/2024:  12:47:22

I once bought an all-Vega parts banjo for $175; parted it out for a total of $600. Was I price-gouging? Of course not; that’s a typical, though uncommon, transaction. As to the example posed above, I agree that it depends on costs. If the seller is making more than aobut 10 percent profit under the circumstances, he or she is price-gouging and rather unethical. That said, it’s an illustration of how capitalism works.

chuckv97 - Posted - 10/02/2024:  12:54:18

I don’t think greed is ever good ,, again, if he’s covering his expenses and time (including 10 hours driving) and makes a 10% profit like Bill R mentioned, I’m ok with it.
The problem with unethical behaviour is that it can influence young people when they see it growing up , leading to more unethical behaviours from them.

banjo bill-e - Posted - 10/02/2024:  13:31:15

A similar situation with gas supplies. Would you prefer to pay $15/gallon at stations along the evacuation route, or be stranded at a station without fuel? Studies show that at regular prices we will soon have shortages in any emergency, as people will tend to top off tanks out of worry, purchasing fuel that they don't really need. But would they still do that at higher prices? Would higher prices mean that only those who truly needed that fuel would pay for it, so more available for those who need it?

STUD figmo Al - Posted - 10/02/2024:  13:36:00

quote:

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Originally posted by GrahamHawker

What's the cost of petrol/gas for such a journey, I bet the miles per gallon isn't great. How much does he need to sell to cover that cost. Plus the cost of wear and tear. Plus the cost of time and it looks like he should be staying somewhere overnight and probably buying a few meals. How much did he sell, how much did he take. What is the profit overall? What are the expenses? He can be charitable if he wants but perhaps he can't afford to be charitable. Without the spreadsheet I'm not going to judge.

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That's where i was going with me question...

Thanks Graham...

chuckv97 - Posted - 10/02/2024:  13:43:27

quote:

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Originally posted by banjo bill-e

A similar situation with gas supplies. Would you prefer to pay $15/gallon at stations along the evacuation route, or be stranded at a station without fuel? Studies show that at regular prices we will soon have shortages in any emergency, as people will tend to top off tanks out of worry, purchasing fuel that they don't really need. But would they still do that at higher prices? Would higher prices mean that only those who truly needed that fuel would pay for it, so more available for those who need it?

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Hmmm... raising prices to lower demand,, interesting reversal on Economics 101

donc - Posted - 10/02/2024:  14:04:32

We had a local couple who went to Costco during the pandemic. They cleaned out the shelves on certain items like toilet paper and masks. Somehow they were identified by someone. Their ultimate trial was in the court of public opinion. The verdict was hard and swift. They claim that they were extremely afraid of going without so they went overboard. The concluding remarks from the reporters were anything but kind.

chuckv97 - Posted - 10/02/2024:  14:28:31

How about grocery stores and their high prices lately?… does anyone know if they’re gouging or are there other reasons?

STUD figmo Al - Posted - 10/02/2024:  15:21:59

quote:

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Originally posted by chuckv97

How about grocery stores and their high prices lately?… does anyone know if they’re gouging or are there other reasons?

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Our $ has no value..becose they just keep printing..

Owen - Posted - 10/02/2024:  15:56:11

Is there a significant diff between gouging and charging what the market will bear? Or is it simply as Bill R. said ^^: "... how capitalism works."?

Bill-e, I'm not sure I understand the question: "Would higher prices mean that only those who truly needed that fuel would pay for it, so more available for those who need it?"    i.e. how much does "truly" add to "need"? ... and who makes the assessment?   In any event, I suspect that the ability to pay might be a bigger factor than "true need"  .... Maybe I'm wrong, but I doubt that in emergencies a person that figures (?) he needs something does much analysis comparing his need to that of others.

Edit: We found that on the fly-in reserves the locals were v-e-r-y hesitant to buy stuff when it's "best before" date approached.   In one instance we were at the store on a Thursday and there was a shopping cart of 28 oz. tins of canned tomatoes at 25 cents per [probably 2005ish... no gouging].   We bought several, and actually commented about leaving them for others.  Well, on Friday, the cart looked untouched, so we bought a few more, again mentioning that others needed the "good deal" more than we did.   And whaddaya know??... ditto on Saturday.  I don't think we had to buy canned tomatoes again that year. 

Edited by - Owen on 10/02/2024 16:04:02

chuckv97 - Posted - 10/02/2024:  16:14:16

quote:

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Originally posted by STUD figmo Al

quote:

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Originally posted by chuckv97

How about grocery stores and their high prices lately?… does anyone know if they’re gouging or are there other reasons?

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Our $ has no value..becose they just keep printing..

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I'm probably dense on this subject, but how does printing more money affect prices?  Where do those extra greenbacks go? 

steve davis - Posted - 10/02/2024:  16:19:00

Everything goes up in trouble-spots.
How much did plywood go up in price locally a week before the hurricane?

eagleisland - Posted - 10/02/2024:  17:02:15

quote:

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Originally posted by chuckv97

quote:

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Originally posted by STUD figmo Al

quote:

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Originally posted by chuckv97

How about grocery stores and their high prices lately?… does anyone know if they’re gouging or are there other reasons?

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Our $ has no value..becose they just keep printing..

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I'm probably dense on this subject, but how does printing more money affect prices?  Where do those extra greenbacks go? 

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It's actually fairly basic economics. Printing more money affects prices because the real value of the goods remains constant, but in an inflationary economy, a fixed item - say, a kilogram of rice - costs more than it did because demand remains the same - or increases - but the unit of money is worth less because there's more of it.

 Consider the (comparatively) recent history of Zimbabwe, in which hyperinflation was in play. The citizens wanted nothing more than to pay for food - our kilogram of rice - and could find that the price had doubled, even tripled or more - in several days because the money was worth less each day. And that's because the government kept printing more of it. Look up hyperinflation on Wikipedia to learn more about that. Same rules apply to regular inflation, just less dramatically.

eagleisland - Posted - 10/02/2024:  17:12:52

quote:

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Originally posted by chuckv97

How about grocery stores and their high prices lately?… does anyone know if they’re gouging or are there other reasons?

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Other reasons. Grocery store profit margins are incredibly low - check out their profit margins and they're among the least profitable large businesses out there. A grocery store operating at a 3% profit margin is doing really well - and that includes the fact that grocery stores make most of their money not by selling food, but by selling shelf space to major brands.

Meantime, their suppliers are facing increased costs of production, processing, packaging and transportation. These increased costs are passed on to you at the checkout counter.

To the previous question of "price gouging," let me offer this anecdote. Egg costs around here more than doubled during the height of the pandemic. And there were several reasons for that. In addition to the added production and transportation costs, our state had recently enacted animal welfare laws demanding that all eggs sold in the US had to be produced in a "cage free" situation, which is much more expensive from a production standpoint. Suppliers complied, but still had to stay in business. They raised prices. Demand dropped in return, but the higher prices made it possible for the egg producers to stay in business, and for us to continue getting eggs - if we were willing to pay for them. Enough people were.

There's a blog I know of that's well worth following - it's called Marginal Revolution (marginalrevolution.com). It's run by two highly respected economics professors. They consider all manner of things with an economics perspective - and a bunch of things just because they're intriguing. You might find it fun - I know I do!

chuckv97 - Posted - 10/02/2024:  17:18:02

Since $ was taken off the gold standard it seems like a house of cards to me. I can see why an over abundance of , say, cans of peas means they’ll be worth less per can,, but I can’t get my head around dollar bills doing the same. I’ll go study up…

eagleisland - Posted - 10/02/2024:  17:47:12

quote:

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Originally posted by chuckv97

Since $ was taken off the gold standard it seems like a house of cards to me. I can see why an over abundance of , say, cans of peas means they’ll be worth less per can,, but I can’t get my head around dollar bills doing the same. I’ll go study up…

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Well said, brother!  We used to barter - a bushel of wheat for your chicken, Neighbor! It worked well small-scale. The concept of money broadens out the goods and services we can buy, and it would be hard to argue that's not advantageous to most of us.

But consider the idea of a dollar bill as a unit of measure. You are absolutely right that gold has an intrinsic value - in fact, the world's economy was set upon it at the Bretton Woods Agreement in 1944, where the value of the US dollar - which became the basis of global trade - was based on the idea that the US dollar was based on the value of gold.

Richard Nixon messed that up in the 1970s when he essentially caused all major world currencies to become free-floating.

Edited by - eagleisland on 10/02/2024 17:48:00

banjo bill-e - Posted - 10/02/2024:  17:52:07

Prices do influence our behavior. When we see what we think is a bargain we tend to want to buy more of it, and when the price seems too high we buy as little as possible. So, yes, raising price to limit demand is exactly Econ 101 and applies whenever supply is limited but demand is high. But if raising prices during an emergency is illegal then the prices stays low relative to demand, so the limited supply will be quickly consumed. Thus the question: would you rather pay more and have what you NEED available, or is it more important to prevent profiteering?

chuckv97 - Posted - 10/02/2024:  18:05:32

I guess I’d pinch my nose and have what I need available, despite high prices. It’s unfortunate that too many folks will sell their soul for a few extra bucks. (but then, I’m not perfect either)

banjo bill-e - Posted - 10/02/2024:  18:40:08

Do you think that is a decision which you should be able to make for yourself?

chuckv97 - Posted - 10/02/2024:  18:52:16

Bill, if you’re suggesting there should be government interference, I’d say no to that. As flawed as the system might be at times, flawed bureaucrats running things could be worse.

South Jersey Mike - Posted - 10/02/2024:  19:27:43

I think those people will have their own exhibit when the next species is visiting the museum of human extinction.

AndrewD - Posted - 10/03/2024:  04:21:12

quote:

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Originally posted by banjo bill-e

Prices do influence our behavior. When we see what we think is a bargain we tend to want to buy more of it, and when the price seems too high we buy as little as possible. So, yes, raising price to limit demand is exactly Econ 101 and applies whenever supply is limited but demand is high. But if raising prices during an emergency is illegal then the prices stays low relative to demand, so the limited supply will be quickly consumed. Thus the question: would you rather pay more and have what you NEED available, or is it more important to prevent profiteering?

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This rather assumes that paying more for necessities is a freely available choice. As usual you have started a discussion that can only be continued by straying into a banned topic. So I'll just ask you to opine on the morality of artificial restriction of otherwise elastic supply to maintain high, or extremely high, margins, which is the nature of most price gouging and profiteering.

In your theoretical case,  if you assume the  fantasy of efficient and frictionless markets, the guy making a 100% net profit on goods freely available elsewhere will be quickly undercut by the guy who is happy with 50% and so on until we get a price that reflects input costs,  risk free returns, risk, cost of carry, transport costs, storage costs, opportunity cost and other pesky factors that don't seem to have been covered in your Econ 101 course.

STUD figmo Al - Posted - 10/03/2024:  04:48:38

Course...
All thos folks in the disaster area..may be without power or internet..
Soo.. it may be easyer ..n..cheaper..
Fer them to use ..Crypto...currency..... :0/

AndrewD - Posted - 10/03/2024:  05:17:53

quote:

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Originally posted by STUD figmo Al

Course...

All thos folks in the disaster area..may be without power or internet..

Soo.. it may be easyer ..n..cheaper..

Fer them to use ..Crypto...currency..... :0/

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No power. No internet. That would make it impossible to use crypto. Just about the only thing I use hard cash for nowadays is the coin box at the club that lights up the snooker tables. But I still have a stash of cash just in case.

STUD figmo Al - Posted - 10/03/2024:  05:21:22

quote:

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Originally posted by AndrewD

quote:

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Originally posted by STUD figmo Al

Course...

All thos folks in the disaster area..may be without power or internet..

Soo.. it may be easyer ..n..cheaper..

Fer them to use ..Crypto...currency..... :0/

---

No power. No internet. That would make it impossible to use crypto. Just about the only thing I use hard cash for nowadays is the coin box at the club that lights up the snooker tables. But I still have a stash of cash just in case.

---

Mebee you can see...

Why...

It may be...cheaper... ;0)

I'de glady pay you ..Tuesday..fer a hamberger today.... ;0)

banjo bill-e - Posted - 10/03/2024:  07:09:06

No Andrew, I am not assuming anything. I am not talking theoretical cases here but actual ones. Both the opportunist and the fuel prices come from real events, though I have no knowledge of the actual prices and profits involved. My questions are designed to provoke conversation, and the nature of the conversation which I am interested involves people's attitudes and values, not their politics, although legalities are very much a part of the story, as both cases are illegal. My question is: should this be illegal, and why? Are those laws helpful or are they based on illogical emotion?
Is the desire to prevent profiteering sufficient reason to suffer the resulting shortage of needed items during an emergency? Is $15/gallon--today only---too much to pay for fuel? And is "today" the same as every other day? And, who should decide that question?

Eulalie - Posted - 10/03/2024:  07:34:21

My cynical opinion is that price gouging is a normal outcome of our economic framework, as monopolization is the logical—and intentional—outcome of the exponential growth of a business with a goal of market capture. It is in fact immoral to profit from the misery of others, but our economic system rewards such practice handsomely. We forget that the "invisible hand" that guides our economy (Adam Smith) was an accepted concept because (most of) our founders had a moral compass (not Hamilton), and assumed that outrageous and immoral behavior would be checked. This is no longer the case.

steve davis - Posted - 10/03/2024:  08:21:07

Prices have always gone up.That's just a given.

Owen - Posted - 10/03/2024:  08:33:26

Yesterday a doc was on CBC radio was bemoaning that he was starting his practice with about $300,000 [school/education] debt. I wondered aloud about how much different that is from when my wife and I started out [teaching, btw, not MDing]  .... my student loan was close to my gross first year pay, and my wife's was somewhat more, and fwiw, we had no trouble paying off our loans.   

So just now I "looked it up" ....average MD salary in MB is about $305,000.  Acknowledging that extrapolation is frequently misapplied and that individual circumstances can vary markedly, does the doc have a legitimate complaint?  Did the [relative] price go up?

chuckv97 - Posted - 10/03/2024:  08:48:12

The doc has no complaint, imo. The price of educating oneself , without checking stats, I believe is about the same, as evidenced by your examples, Owen. I told my kids not to worry about student loan debt,, if you work at something you enjoy you’ll have a better life.

banjo bill-e - Posted - 10/03/2024:  08:52:42

The doc made a wise investment. Those pursuing expensive art history majors, uh, maybe not so much.

steve davis - Posted - 10/03/2024:  09:40:42

SMVTI was $900/yr. for 2 years and a diploma in Automotive Technology.
Our graduates had years of 95% employment in shops and dealerships.

I used my knowledge to maintain my own boat and truck equipment saving a lot of money on hiring stuff done when lobstering or dragging for sea urchins.

Owen - Posted - 10/03/2024:  10:18:38

.... and furthermore and more importantly .... back when schmucks like me were making $1.00 per hour, a bottle of beer in the pub [or two draft, and a 10 cent tip] was typically a dollar.  It's been a while since I've been in a pub, so I'm guessing that an hour at minimum wage now might buy 2 beers in the pub.  Did the price go up/down?

In '74 I moved from MB to NWT to work.   In MB, beer at the vendor was $3.05 a dozen. On one of the first days up there, I got out a fiver and, "I'll have a dozen Canadian please."  The guy sets the box up and says, "That'll be 6 dollars."   I wasn't watching all that closely, so said, "I just wanted a dozen, not a 24."  He replied dryly: "That is a dozen."    

But, but, but my gross pay had jumped almost 50% .... and as a bonus I met my soon-enough-to-be wife .... all's well that ends well. 

Owen - Posted - 10/04/2024:  10:27:43

I guess this qualifies as hearsay ... I've heard that the workers on the "power crews" that go into areas after natural disasters to get things up and running are paid a pizzpot of doh-rey-me.  I've not tried to refute/verify it, but the figure I got was $3000/day for a hydro worker.   The split between worker and whatever agency might be involved wasn't known; ditto for what expenses might be covered.   Supposedly it's lucrative enough that workers re-arrange their holidays in order to participate.   Like I said .... I've not checked into it.   [To my knowledge, "Where there's smoke there's fire." typically doesn't materialize out of thin air.]

If somebody's willing to pay it, I'd be a nut to pass it up???

banjo bill-e - Posted - 10/04/2024:  14:19:46

^^ I would pass it up because I'm not going out into a storm and do whatever is done to restore power. I am thankful that some will, and they deserve a good payday for the hard and dangerous work that they do.

STUD figmo Al - Posted - 10/05/2024:  01:09:21

There are many folks n services we should be greatfull for..

One might be Fire Fighters n Rescue Teams..

steve davis - Posted - 10/05/2024:  07:07:19

When there were more local farms there was much less price gouging.
Prices were more stable over longer periods of time.

Owen - Posted - 10/05/2024:  07:40:35

If $3000 is a good payday, why not a better payday [$5000?] or even a great payday [$10,000??] ?   So long as an insurance company, or a government, is footing the bill should I care?   I hope* nobody's inferring that there's a positive relationship between gratitude and $$.

* - but I'm not 100% sure.  

steve davis - Posted - 10/05/2024:  07:58:21

There need to be limits on what can be charged for something.
Anything allowed with no parameters is extremely reckless and unfair.
We can't set our own limits because this can disregard the needs of our neighbors.
When we set prices it should be done with everyone's interests at heart.