Price gouging is a major thing now the Dem candidate has issued a statement on what she will do to stop the situation….I like the thought but it will be a fart in a hurricane.

First people do not understand the practice of price gouging…..and this article tackles the practice and tries to explain it so we all can grasp what is going on.

Price gouging in the popular imagination has a “know it when you see it” quality, but it is actually a well-developed body of law. A typical price-gouging claim has four elements. First, a triggering event, sometimes called an “abnormal market disruption,” such as a natural disaster or power outage, must have occurred. Second, in most states, the claim must concern essential goods and services. (No one cares if you overcharge for Louis Vuitton handbags during a hurricane.) Third, a price increase must be “excessive” or “unconscionable,” which most states define as exceeding a certain percentage, typically 10 to 25 percent. Finally, the elevated price must be in excess of the seller’s increased cost. This is crucial: Even during emergencies, sellers are allowed to maintain their existing profit margins. They just can’t increase those margins excessively.

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Price-gouging bans are broadly popular—except among economists. The reason is that, in the perfect world of simple economic models, allowing sellers to charge whatever they want during periods of heightened demand is actually a good thing: It signals to the rest of the market that there’s money to be made on the product in question, which in turn leads to more supply. Accordingly, prohibiting gouging leads to less production of essential goods and services. Plus, letting prices rise helps ensure that the product will be sold to the people who value it the most.

Here, regular people seem to understand a few things that economists don’t. During an emergency, such as a natural disaster, short-term demand cannot be met by short-term supply, setting the stage for sellers to exploit their position by raising prices on goods already in their inventory. The idealized law of supply and demand predicts that new investors would rush in, but the real world doesn’t work like that. A short-term price spike won’t always trigger the long-term investments needed to increase supply, because everyone knows that the situation is, by definition, abnormal; they can’t count on a continued revenue boom. During a rare blizzard, sellers might jack up the prices of snowblowers. But investors aren’t going to set up a new snowblower-manufacturing hub based on a blizzard, because by the time they had any inventory to sell, the snow would long be melted. So after the disruption, all goes back to normal—except with a big wealth transfer from the public to the company that raised prices.

https://www.theatlantic.com/ideas/archive/2024/08/economists-kamala-harris-price-gouging/679547/

So is Harris pandering?  I think so.

Vice President Kamala Harris called for a federal ban on “price gouging” on groceries. From a strictly economic standpoint, there are so many things wrong with this proposal that I don’t know where to begin.

But the worst of it isn’t in the policy analysis — it’s in what this pandering says about the chances of a serious discussion of difficult issues with the American voter.

Let’s start with the policy analysis. Even without referring to the current situation, there are three well-known problems with a ban on price gouging. First, grocery stores typically have extremely low profit-margins, on the order of 2 percent or less, reflecting their limited pricing power in a competitive industry. So this is not the right sector — if there ever is one — to target with price-controls.

Second, it is very difficult to define price gouging. How do you distinguish it from a rise in prices owing to shortfalls in supply or surges in demand?

Third, any controls on prices will constrain incentives for producers to bring additional goods and services to markets. This is why price-controls usually lead to shortages more injurious than the price increases they are designed to stop.

Harris’s call for price controls on groceries is more pandering than policy

I want to hear specifics….ideas are good but specifics will convince me.

Will this be just another promise that will be swept under the rug of the Oval Office?

You tell me.

I Read, I Write, You Know

“lego ergo scribo”