What constitutes price gouging?

[Beano's Fourth Chin]

Dude borrowed money, bought 19 generators, rented a U-Haul and drove it 600 miles to Mississippi, where he offered to sell the generators for twice what he paid for them. Eager buyers surrounded his truck. "People were excited," he said.

So the government locked up him and his generators so that nobody was able to use them.

I know we've got some Katrina first-handers here. What are y'all's thoughts?

http://www.townhall.com/opinion/columns/JohnStossel/2006/05/24/198573.html

[Mjcpr]

Apparently, this wasn't price gouging either.

http://www.bigeddieradio.com/data/upfiles/news/Atlanta%20Gas%20Station.jpg

[Beano's Fourth Chin]

What do you mean, "either :rolleyes:"? The first example was ruled price gouging.

[yermom]

hopefully they were locking people up at gas stations too...

i'm thinking if i can't go to Wal-Mart or something and buy a generator for retail and i need one, i'd gladly pay 2x retail for it

[Mjcpr]

What do you mean, "either :rolleyes:"? The first example was ruled price gouging.
What are you talking about? I never click on your links.

[Beano's Fourth Chin]

I think hoarding is just as bad as gouging in this instance.

[Beano's Fourth Chin]

What are you talking about? I never click on your links.

Oh. I thought you did.

[Ike]

in my humble opinion, price gouging is impossible without either a)collusion between two or more organizations that are supposed to be competitors, or b) the existence of a monopoly. A businessman is supposed to set his prices at the maximum that the market can bear. Obviously, somebody else could have done the same thing, and sold more generators by undercutting dudes price. But they didnt. Wasn't his fault nobody did.

[SoonerInKCMO]

Gouging?! That isn't gouging. Dude had to pay interest on the money he borrowed to get the generators in the first place. Had to pay for a U-Haul. Had to pay for gas for a 1200 mile round-trip. I'd think a 100% markup is quite fair.

[Pricetag]

Guy shouldn't have gone to jail, but there's no way he's any kind of hero, coming to the aid of those in need. It was a pretty slimy thing to do, considering the circumstances.

[Beano's Fourth Chin]

I think it's also quite different on things such as generators or Ford Shelbys. 100% markup is also not much.

[yermom]

driving 600 miles in a rented UHaul is probably worth 100% markup

i'm not sure i'd call him a hero, but unless someone is independently wealthy, who is going to just come down there with a bunch of generators at little to no profit?

[1stTimeCaller]

I think you have to look at what the person is selling and the circumstances. He wasn't selling water or food that he bought locally and/or hoarded it in order to make an obscene profit.

These generators were not availiable to the people as he brought them from 600 miles away.

Why would the gubmint not make them availiable to be used by the people that wanted them?

[Ike]

I wouldn't call him a hero, but I wouldn't call him a dirtbag either. He provided goods that were scarce in that area from an area where they were more abundant. Dude deserved to make at least some cash off that, and it should have been limited only by what people were willing to pay for it.

[tbl]

Stossell had a special on this a couple of weeks ago on his "Myths, lies, and stupidity" show, where he made the point that price gouging is good. This guy was one of the examples.

[Ike]

Stossell had a special on this a couple of weeks ago on his "Myths, lies, and stupidity" show, where he made the point that price gouging is good. This guy was one of the examples.

well, price gouging isn't good. But in this case, this isn't price gouging. price gouging, as I would define it, is the act of collusion between competitors, or the use of monopoly power to set the price of a needed good at a higher price than it is worth. None of that happened here.

[yermom]

you know, like oil or diamonds

[toast]

Dude borrowed money, bought 19 generators, rented a U-Haul and drove it 600 miles to Mississippi, where he offered to sell the generators for twice what he paid for them. Eager buyers surrounded his truck. "People were excited," he said.

So the government locked up him and his generators so that nobody was able to use them.

I know we've got some Katrina first-handers here. What are y'all's thoughts?

http://www.townhall.com/opinion/columns/JohnStossel/2006/05/24/198573.html


The rest of the story is tha the gov't then sold the generators to the military for 20x the retail price.

:D

[slickdawg]

Double the retail price is a little steep, but considering your options -
you couldn't find a f'n generator within 100 miles of here.........

That why slickdawg had one way before Katrina. :D

[TUSooner]

Not guilty.
Next case.

[walkoffsooner]

Have you ever bought a beer at a concert or sporting event.Thats gouging.

[proud gonzo]

or a movie theater. $3 for a 12 oz. bottle of water.

[TUSooner]

I just read STossle's article (read my sig :( ) There is a limit to how much "gouging" is good. Suppose people needed drinkable water. Could you morally charge $100 for a half-litre bottle? On the other hand, strict government micro-maagement leads to stuff like the USSR. This generator guy was not necessarily a hero, but he was no criminal. He went to a lot of trouble and expense to get the generators down there and deserves his profit. And the holier that practical DA is a bozo.

[sooneron]

I would guess that charging 2x probably covered his expenses and time to pull it off. I wouldn't classify that as gouging. If he owned a store in the affected areas and he suddenly charged twice as much, that would be gouging.
Gas stations, oil companies et al will NEVER be accused of this. They have too many grandstanders in DC in their pockets.

[SoonerInKCMO]

Gas stations, oil companies et al will NEVER be accused of this. They have too many grandstanders in DC in their pockets.

Oh, they'll be accused; but the FTC will rule that they didn't do it - like they just did earlier this week.

[sooneron]

Oh, they'll be accused; but the FTC will rule that they didn't do it - like they just did earlier this week.
I stand corrected...