What do you think of anti price gouging laws in times of crisis? \ stacker news ~Politics_And

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What do you think of anti price gouging laws in times of crisis?

968 sats \ 21 comments \ @SimpleStacker 8h Politics_And_Law

Here in LA, there's been a lot of talk about price gouging rents after the wildfires. With this many people displaced, and a city already short on housing, it's no surprise that competition for housing has become incredibly fierce.

As it turns out, and I didn't know this until recently, California already has an anti-price gouging law prohibiting landlords from raising the advertised rent more than 10% during an emergency. The thing is, the law doesn't have any real teeth because it only regulates the advertised price. Due to bidding wars and negotiations, the actual price settled on can be much higher.

Personally, I think people should save their moral outrage for something else. In the end, all the prices do is determine who gets re-housed, not how many people get re-housed. It's understandable if you think it's unfair that the rich people are able to outbid the poor people for housing---but this has always been true, even in non-crisis times. You should focus your moral attention more on how many people can get re-housed, and that means focusing more on supply than on price.

As I mentioned in this other post on economic communication, this is yet another example of stop thinking about price and start thinking about quantity.

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43 sats \ 0 replies \ @Signal312 3h

This is one of those ideas that pops up immediately after a disaster. And yes, people get outraged over it.

To a lot of us on this forum, it seems like the whole "price gouging is evil" idea should be able to be debunked in a few seconds, just with thinking it through.

Still, people get all worked up about it. It's probably a combination of bad education, and not knowing how to think. And sometimes "righteous outrage" just feels good, gives you something to talk about.

154 sats \ 1 reply \ @kepford 7h

Anti price gouging laws do more harm but sound noble.

They cause shortages as the natural price system that regulates supply based on demand is destroyed
They destroy market forces for more suppliers to enter the market. Higher prices are a market signal for new entries into a market.
They distort time preference. If costs spike and I need a good more than you and I can afford it I buy it and those that don't really have to have it now will wait for prices to come down.

Once you see the issues with "price gouging" you can't unsee them. One problem though is that in the case of housing the state already manipulates the market to such an extent that it makes it VERY hard for the market to correct the imbalances.

stop thinking about price and start thinking about quantity.

Start thinking and stop being emotional. Start being rational and think about the second and third order consequences of action.

I often say the biggest failure in fighting socialism/communism/marxism is the failure to attack price controls and understand the price system. It is an amazing thing to watch how millions of humans set the prices for goods spontaneously. People get all excited about AI doing things yet do not even understand how the world around them works.

103 sats \ 0 replies \ @kepford 6h

Let me add an example.

Lets say there is a natural disaster in a region. Lumber is needed by those affected.

Lets assume a society of heartless greedy people and no charity. The stores raise their prices on lumber by double or triple. Joe Dirt who hasn't really suffered from the disaster planned to build a fence but since prices sky rocketed decides he should wait. Maybe he just can't afford the prices.

John Doe is affected and he needs lumber to prevent looters from getting into his house and stealing his valuables. While the price for this lumber is high it is worth the price to him. Since the prices are high the store hasn't run out of the lumber he needs. He fixes up his property and protects his valuables.

Now, Sam a lumber supplier 100 miles away hears about the price hikes. He thinks. Hmm, I can make some cash quick. I will drive over there and start selling. He undercuts the price of the local business and still makes a massive profit.

Now the local business owner is pissed off. He is getting no business so he lowers his prices and offers delivery, something this new market entrant isn't able to do. Now you have competition driving the price back down.

Ok, lets look at what happens in a society filled with well meaning people that support price controls.

Joe Dirt is planning to build his fence and goes to the store and buys his lumber. Prices haven't really changed. Because of price controls there is no signal for people to postpone their spending on lumber.

John Doe goes to get his lumber to protect his house and finds that lumber is sold out. Others needed it and bought it all up. Now no one has lumber that wasn't fast enough to get to the store.

Sam, the lumber supplier sees what is going on but because it would cost him more money to move to this town there is little market incentive to move into the new market and add supply. He's not allowed to increase the price due to the laws.

Because there are well meaning people, some charities come in and help but this is only charity. The greedy capitalists have little incentive to enter the market.

Now, this might seem a bit contrived as an example I hope that helps. Incentives are key to how the world works. If you don't understand incentives you don't understand bitcoin. If you don't understand price controls I'd argue you don't understand bitcoin.

Price controls are a socialist idea. Price controls are very fiat. Fiat is a form of price control on money.

73 sats \ 12 replies \ @Undisciplined 4h

I am certainly not surprised to hear that California has already adopted this commie nonsense.

There are so many work arounds to these things. I've heard of key fees, extraordinary security deposits, ridiculous application fees. The market participants will find ways to approach the market price.

In the short-run, like you said, these policies don't increase supply. Even worse, in the medium-run they reduce the supply.

59 sats \ 0 replies \ @Bell_curve 3h

California passed a law limiting security deposits to one month but I agree with your main point.

Similar thing happened after the city passed a 'mansion tax' for any house sold for over 5 or 10 million (I forget the exact threshold). People found ways to circumvent restriction i.e. buy my furniture or my plants for 1 million.

If the place is furnished, you can increase rent on furniture etc

48 sats \ 10 replies \ @SimpleStacker OP 4h

Mainly I think it's a distraction from the bigger issues. A misallocation of attention, if you will. The attention should be focused on future mitigation/prevention and on rebuilding.

30 sats \ 8 replies \ @Undisciplined 4h

I agree. The problem is that incentivizing rebuilding runs counter to the (stated) political priorities of those in power.

The best way to rebuild would be to repeal all the regulations that make providing housing unattractive currently. You'll know the specifics way better than me, but that's going to touch on tenants' rights, environmental protections, housing equity, zoning, etc.

62 sats \ 7 replies \ @SimpleStacker OP 4h

It's a mess. And, by the way, I mentioned to a colleague today that I was frustrated with the state because articles from the WSJ were warning about California's forest management years before this, and she said these are just conservative talking points to avoid talking about climate change.

I literally can't even.

30 sats \ 0 replies \ @Bell_curve 3h

People whose only response is "conservative talking points" are by definition NPC

43 sats \ 5 replies \ @Undisciplined 4h

So many people are just the NPC meme "Everything is due to climate change and the only solution is communism." Or however it goes, exactly.

49 sats \ 4 replies \ @SimpleStacker OP 4h

I'm not even a "climate denier" or whatever they want to call it.

I just think you can do two things at once. I don't understand why people can't grok that.

I also think liberals are at a point where they've internalized, "every criticism is a right-wing ploy"

30 sats \ 3 replies \ @Undisciplined 4h

It's very cultish, which is why the members can't grok it.

48 sats \ 2 replies \ @SimpleStacker OP 4h

The problem is I don't think this person is part of the cult. I think they're just a normie. It's scary that normies are so brainwashed by the cult.

I have normie friends whose personal behaviors and attitudes are entirely conservative, but also repeat these left wing talking points about climate, race, Trump, etc.

I think they just all get their news from CNN and the New York Times.

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0 sats \ 0 replies \ @Bell_curve 3h

The focus should be on shooting looters and arsonists

30 sats \ 0 replies \ @denlillaapan 4h

Rationing is unavoidable. Price is just the most obvious, non-arbitrary ("fair"?!) way of doing that.

Any other superior way of figuring out and implementing Who Gets What and When, I'm all ears

43 sats \ 1 reply \ @Jon_Hodl 5h

"Price gouging" is just basic supply and demand to curb demand until supply increases and market equilibrium is achieved.

It's a term that's only used by economically illiterate sheep.

The real problem with wealth disparity is central banking and the Cantillon effect but all of us bitcoiners know this and housing has only gotten cheaper over the past X years.

0 sats \ 0 replies \ @Bell_curve 3h

Surge pricing

These market conditions are transient

104 sats \ 0 replies \ @0xIlmari 7h

Price controls and caps will disincentivize more producers of a product from entering the market and may push out existing ones due to unprofitability. Which leads to supply shocks.

Price controls = commies

30 sats \ 0 replies \ @WhatIsBitcoin 5h

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