Gasoline "Price-Gouging":

The State of Florida has activated its price-gouging hotline in anticipation of Tropical Storm Fay. "Price gouging statute violators could be fined $1,000 per violation, up to $25,000 for multiple violations in one day."

Florida gas stations are starting to run out of gas in anticipation of Tropical Storm Fay:

Gas stations around Southwest Florida seem to be well-supplied this afternoon as residents prepared for tropical storm Fay.

The Florida Department of Environmental Protection surveyed 79 gasoline facilities in Lee, Collier and Charlotte counties. Only four reported being out of fuel.

Charlotte County seems to be the most fuel-strapped. It had 11 stations that reported being “low on fuel” and two that were out.

In Lee County, 24 stations reported having “plenty of fuel,” one was out and none of them reported being low. In Collier, 25 stations reported plenty, four were low and one was out.

Goza said two of the 7-Elevens in Cape Coral had run out of gas Sunday, but were now fully stocked.

At the Murphy USA station across Colonial Boulevard in Fort Myers, business was livelier. Cars and trucks lined up two to three deep at each pump. Diesel fuel was out, but all other tanks seemed fine.

It is almost as if the two stories are related in some way...

Anyone who witnesses the law of supply and demand being honored, I mean "suspects price gouging is asked to call 866-NO-SCAM."

Related Posts (on one page):

  1. In Defense of Price Gouging:
  2. Gasoline "Price-Gouging":
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In Defense of Price Gouging:

As Todd notes, the state of Florida is stepping up its misguided efforts to combat "price-gouging" in anticipation of Tropical Storm Fay. Unfortunately, this issue tends to come up anytime there is a hurricane or other natural disaster.

I was going to write a post about how harmful anti-price gouging laws are and why they actually end up exacerbating the shortages of scarce goods that they seek to alleviate. But economist Glen Whitman said all that needs to be said in this excellent 2003 post, written on the occasion of a previous Florida hurricane:

[H]igher prices induce suppliers to bring more of the scarce good – generators, batteries, flashlights, etc. – to market. Tyler [Cowen] responds by pointing out that, in the short run, the supply is fixed – but then he immediately offers the obvious counterpoint, which is that “in the long run the economy will stand readier with emergency flashlights.” Exactly so, and this seems to me a decisive argument. In order to stock generators and such, shop owners have to take up valuable shelf space that could have been used for other items. The added profit they can reap during times of crisis is the financial reward that compensates them for making sacrifices during ordinary periods. A policy that clamps down on “gouging” during a crisis makes it less likely that necessary items will be available during the next crisis. Also, . . . the higher prices attract suppliers in non-crisis regions to transport their goods to the region where they’re needed most.

I hope that lawmakers and voters will come to understand these realities, and repeal anti-price gouging laws before the next big natural disaster occurs. But I'm not optimistic about it.

Related Posts (on one page):

  1. In Defense of Price Gouging:
  2. Gasoline "Price-Gouging":
Comments