So-called “price gouging” is a gimmick used by politicians and the media to rally supporters and viewers. It’s almost never about predatory business practices, and it’s always the people who end up paying the cost of price control laws.
Governments can’t alter the laws of economics any easier than they can the laws of physics. Yet, they seemingly never cease trying, either under some private or public pressure to skew economic outcomes.
Particularly in vogue these days is outrage over “price gouging.” In this way, the political and media response to COVID-19 is the same as it always is during hurricanes or other natural disasters.
Now, there’s no telling how extreme anti-price gouging policies will get, considering the economic lockdown continues unabated even as a record shattering 6.6 million jobless claims are filed as a result.
[…]Low prices may normally be preferable for consumers, but high prices help keep masks, hand sanitizer, food, and other high demand products on shelves longer.
Instead of the first guy in line buying up 300 rolls of toilet paper at the normal price, a “gouged” price would leave enough for the last shopper, or even eliminate the tight-windowed long line altogether.
Additionally, “gouged” prices rarely last, as they encourage more production, because there is greater potential profit. As more producers rush to meet the high demand, competition drives prices down once again.
[…]Although basic economic laws and principles can be understood without a Ph.D. or even a high school diploma, they are often eschewed by the elites in politics, academia and media. Unfortunately, too many Americans follow these so-called leaders.
What should always be kept in mind is that the size and scope of this COVID-19 pandemic is largely unknown.
Some precautions are undoubtedly in order, but government intervention is at least on the verge of overreach and overreaction.
— Gavin Wax, April 7 Newsmax column