"price gouging"

willbrett · Post by **willbrett** » Tue Sep 16, 2008 12:22 am

The so called "gouging" makes for much better news, doesn't it?

I was an unfortunate 'victim' on Friday. I was down to 1/8th of a tank by lunch, so I reluctantly paid $4.39/gal for 87 octane. If I had stopped on Thursday at the same station, I'd have paid only $3.62/gal. My wallet really feels the difference when I'm filling up my 25 gallon tank! Unfortunately, the majority of stations in my area were already "sold out" of petrol by that time, of I wouldn't consider it gouging.

Todd S. Malicoate · Post by **Todd S. Malicoate** » Tue Sep 16, 2008 1:19 am

I'm really glad those government officials aren't around when we raise the price on wiper blades on days when it's going to rain for a while. Gouging? Some might call that good business sense.

And you should see what we do to the price of de-icer when we have an ice storm...I guess my boss should be thrown in jail for anticipating people might pay more than usual for something that's in high demand.

wgcl · Post by **wgcl** » Tue Sep 16, 2008 1:59 am

Yeah? Well while you call it "good business" here's a fact for you... this winter, people will freeze to death or starve. In the north, you have a chance to pre-buy home heating oil. Before all this "speculating" it was capped at $4.65. The average family can use between 1500-2000 gallons a winter depending on the home size. Factor in a $5,000 heating bill, say $75 a week in gasoline on a job that pays about $30,000 a year and you have two kids... It's a fact, people must choose to either pay to drive to work or pay their water bill. And since you've made a point where we can "choose" to just stay home or "choose" alternative ways to get around. Some places (I've been there) do not have buses (how about schools that cannot afford to run school buses?) or public transportation and your job requires you to commute long distances. DC for example is extremely expensive to own a home so many people have to commute. So if gasoline prices are say 3.50 in X town and 4.00 in DC, how is that not gouging? Isn't it interesting how gas stations jack up prices when they have full reserves? Meaning, how is this gasoline I'm paying 3.89 for today any different from the same station where it was 3.59 yesterday? Fuel stations don't profit from gasoline sales... so then who does? How about these oil companies that profits billions and billions each quarter and do nothing to reinforce infrastructure or build new refineries? When Katrina hit, gasoline hit $3 a gallon with outrage... and since then it's done nothing but rise. The main news stories now are how much barrels of oil are. De-icer sales before an ice storm reaaaallly aren't applicable in this situation... that's great for Pep Boys but you can't heat a home or get to work to heat that home with De-icer. I don't mean to trivialize the de-icer reference but gasoline is a necessity as much as you think you know the best way to get around it. It might work well for you and riding your bike or taking the subway, but think about those where that isn't an option. We don't really have a choice. I mean no disrespect to anyone who previously posted or want to cause any arguments... I'm just simply representing another side...

Summary: We've been gouged for years... it's only going to get worse...

Doug@GT · Post by **Doug@GT** » Tue Sep 16, 2008 8:00 am

wgcl wrote:how is this gasoline I'm paying 3.89 for today any different from the same station where it was 3.59 yesterday?

http://en.wikipedia.org/wiki/Supply_and_demand

Doug@GT · Post by **Doug@GT** » Tue Sep 16, 2008 8:02 am

Looks like this article bears repeating:

http://www.econlib.org/LIBRARY/Columns/ ... uging.html

Uncle Buck · Post by **Uncle Buck** » Tue Sep 16, 2008 11:48 am

If the prices are going up simply as a result of supply and demand, then that is the free market at work.

If the prices are going up as a result of collusion between all the sellers, then it is illegal and somebody should go to jail.

Unfortunately, collusion happens all the time - sellers (e.g. refineries) have just learned to do it without getting caught.

TubaRay · Post by **TubaRay** » Tue Sep 16, 2008 3:51 pm

If Sean is reading this thread, I'm guessing it won't last very long.

wgcl wrote: How about these oil companies that profits billions and billions each quarter and do nothing to reinforce infrastructure or build new refineries?

Name somewhere in the U.S. that would actually permit this. I'm sure there is somewhere, however we have mostly not allowed this to occur. This is part of our energy problem right now.

Read Bloke's post on this(above). He expresses a conservative view. Consider its merit. Bloke is guilty of having spent more time in thought process and less time getting in touch with his feelings. This comes in very handy when considering the problems of our country.

LoyalTubist · Post by **LoyalTubist** » Tue Sep 16, 2008 4:49 pm

I remember my economics class in college. That was a long time ago... long before people made a big deal about price gouging. I can remember the professor saying that in America everyone should be allowed to sell things for as high or low as he needs to make a living and help his business grow. The only time there should be any controls is if there is a long term shortage (and only after it's been declared a long term shortage) or during time of war. And with that he mentioned rationing went on during World War II, but not during the Korean or Vietnam Wars. With regards to that, far fewer resources are being used for our troops in the Middle East compared to the war here in Vietnam 40 years ago.

Price gouging is a retailer's way of survival. When it becomes illegal, you've lost the free market economy.

Doug@GT · Post by **Doug@GT** » Tue Sep 16, 2008 5:53 pm

Let's keep in mid that "price-gouging" is a political, not economic, term, and is devoid of any real meaning. The closest economic approximation would be "pricing above cost," but that would make everybody who works for more than ~$2 and hour a price gouger.

The political meaning is more along the lines of "pricing above what's fair." But when politics is involved, "fair" takes on an absence of any meaning, and so the reality is that price gouging means "pricing at an amount that gets people mad enough to give a politician more power."

TubaRay · Post by **TubaRay** » Tue Sep 16, 2008 6:20 pm

Doug@GT wrote: The political meaning is more along the lines of "pricing above what's fair." But when politics is involved, "fair" takes on an absence of any meaning, and so the reality is that price gouging means "pricing at an amount that gets people mad enough to give a politician more power."

I believe you have hit the nail right on the head. Amen! & Amen!

Doug@GT · Post by **Doug@GT** » Wed Sep 17, 2008 9:17 am

tubashaman wrote:
Gas is inelastic, meaning the demand doesn't change

...

the walmart I get gas on my card with is cheaper than ALOT of places around. ...the wait is sometimes 30 minutes. Every pump is filled, and even at night it gets crowded, while the gas stations across the street are empty.

Seems like the demand changes a lot.

The problem is you incorrectly defined elasticity. Elasticity is the change in demand or supply relative to price. Your experience with Wal-Mart demostrates that gas is, in fact, very demand elastic.

Donn · Post by **Donn** » Wed Sep 17, 2008 12:57 pm

LoyalTubist wrote:I remember my economics class in college. That was a long time ago... long before people made a big deal about price gouging. I can remember the professor saying that in America everyone should be allowed to sell things for as high or low as he needs to make a living and help his business grow. The only time there should be any controls is if there is a long term shortage (and only after it's been declared a long term shortage) or during time of war.

Outside of the numerous members of the Flat Earth Society, there's some awareness that in the long term, we're looking at shortages of fossil fuels. Price controls (or subsidies, as we've been doing up to now) are not helpful, though - they only make the problem worse.

Price gouging is a retailer's way of survival. When it becomes illegal, you've lost the free market economy.

If there is such a thing as a retailer any more, in the sense that the word evokes, I don't think many people worry about what gouging they may occasionally manage to do. We're talking about the big guys - oil and pharmaceuticals ("say ... you'd probably die without this medicine, wouldn't you?") come to mind. The NC example from the reference above is a conveniently absurd example, but does at least carry a message. Those people clapping, at that ice truck, are the people who were cheering at the guillotines in France a couple centuries ago. They may have cut off the only heads that were good for anything, but they know when the system isn't working for them.

We don't have a free market economy in any absolute sense, nor does anyone else have one or want one. It's a useful principle when it's useful, or it's a simple ideology if you like to be a slave to ideology, your choice.

ArnoldGottlieb · Post by **ArnoldGottlieb** » Wed Sep 17, 2008 5:18 pm

TubaRay wrote:If Sean is reading this thread, I'm guessing it won't last very long.
wgcl wrote: How about these oil companies that profits billions and billions each quarter and do nothing to reinforce infrastructure or build new refineries?
Name somewhere in the U.S. that would actually permit this. I'm sure there is somewhere, however we have mostly not allowed this to occur. This is part of our energy problem right now.

Read Bloke's post on this(above). He expresses a conservative view. Consider its merit. Bloke is guilty of having spent more time in thought process and less time getting in touch with his feelings. This comes in very handy when considering the problems of our country.

It sure does. Now if the conservative party would stop considering the "feelings" of Jesus maybe we could get some of those problems solved.
Peace
ASG

TubaRay · Post by **TubaRay** » Wed Sep 17, 2008 6:15 pm

ArnoldGottlieb wrote:Now if the conservative party would stop considering the "feelings" of Jesus maybe we could get some of those problems solved.
ASG

Doug@GT · Post by **Doug@GT** » Wed Sep 17, 2008 10:20 pm

tubashaman wrote:
When I started college, I could fill my body up at a fast food joint for $4.50. Now to fill up, its about $7. I eat the same things, I always order the same things. The 2 years I was employed at a McDonalds, I started at one where the Big Mac meal after tax was about $4.10, eventually when I quit over a year ago at the same one Istarted at (on a visit) was nearly $5, and I am sure it is higher now.

http://www.economist.com/markets/bigmac/index.cfm

Doug@GT · Post by **Doug@GT** » Fri Sep 19, 2008 8:50 am

bloke wrote:Judging on what I see when I'm in any sort of congregation of American people (and when looking in the mirror), the aggregate demand for food could quite easily be cut in half with no one starving to death...and with most benefiting greatly.

I imagine that means most of their pants are elastic, too.

SplatterTone · Post by **SplatterTone** » Sat Sep 20, 2008 4:06 pm

bloke wrote:Therefore, I (even after my life is done) will "consume" NO box/hole/stone/skin-painting/preaching/flowers/kleenex.

But you are depriving a Dixieland band of a gig and, no doubt, somebody of an excuse to celebrate and get drunk. To assist the family in paying, start a raffle now on that helicon.

MartyNeilan · Post by **MartyNeilan** » Sat Sep 20, 2008 5:39 pm

tubashaman wrote: the walmart I get gas on my card with is cheaper than ALOT of places around. ...the wait is sometimes 30 minutes. Every pump is filled, and even at night it gets crowded, while the gas stations across the street are empty.

There is a reason for that. Wally (Murphy) gas puts the absolute least amount of detergents in their gas allowed by law. The one by me encourages you to buy a $2.00 bottle of fuel injector cleaner with each fillup - there goes your savings. If you keep using Wally gas, figure on eventually replacing your fuel injectors, or if you are lucky just paying for a very expensive cleaning process. Good luck completely cleaning your valves, too, without tearing down the engine head.

tubashaman wrote: Gas is inelastic, meaning the demand doesn't change

Oh, really? Try telling that to all the panicked goofballs where I live.
http://www.cnn.com/2008/US/09/19/nashvi ... index.html
In addition to the fistfights, people have also started shooting over gas today. One of my wife's co-worker's cars got hit just a couple of hours ago.
In many parts of town, you can't buy gas no matter how much money you want to spend - every gas station is out due to the panic. The parts of town that do have gas, figure on a two hour wait, and bring your bulletproof vest.
I have about a quarter tank and should have enough to drive to work Monday, teach Monday night, and drive to work Tuesday. I don't plan on going anywhere else and am not even going to think about getting gas until Wednesday. A barge loaded with gas left a Memphis refinery and may be arriving tonight to ease the situation, but there will always be the idiots in front of you who have to completely fill up their SUV, RV, boat, and 5 big jerrycans (in the local news, not making this up) who will suck it dry in no time.

SplatterTone · Post by **SplatterTone** » Sat Sep 20, 2008 5:53 pm

MartyNeilan wrote:In addition to the fistfights, people have also started shooting over gas today.

Nashville was warned about allowing all that country and banjo music. But did they listen? Noooooo.
The next thing you know, they will be allowing boys and men to walk around with their low-slung pants even though they have been warned that God gave the moral authority for that only to plumbers.

Todd S. Malicoate · Post by **Todd S. Malicoate** » Sun Sep 21, 2008 12:19 pm

tubashaman wrote:Price gouging just doesn't occur with shortages or federal holidays. They also occur with college holidays. For fall break in town, (as I know other people who had different fall breaks i.e. baylor) the week of fall break and the week after prices gouge up almost 20 cents everywhere on the north side of town. Yes, the south side is normally a little more expensive, but during fall break week I either fill up with gas the week before and do alot of walking, or when im at the SW corner of town (ACU is in the NE) I fill up.

And if I end up going somewhere (like baylor last year for Dr. Pierce's and Baadsvik's recital) I fill up there or somewhere that is cheaper than NE abilene. If I notice it this year its being reported

So, I take it you would favor regulating businesses so that they can't raise prices as demand increases? I'm really concerned that people think this is "gouging"...or hadn't you noticed, for example, that pool supplies are higher priced in the middle of the summer than they are now (those dirty gougers!).

FWIW, Stillwater is a big college town, and is usually 5-10 cents higher than the Oklahoma City and Tulsa metropolitan areas. I suspect everyone thinks their town is higher than other places, and finds reasons to complain about it.

I'm waiting for a political candidate to promise "across the board" even pricing for gasoline at every station in the United States.

TubeNet

"price gouging"

Re: "price gouging"

Re: "price gouging"

Re: "price gouging"

Re: "price gouging"

Re: "price gouging"

Re: "price gouging"

Re: "price gouging"

Re: "price gouging"

Re: "price gouging"

Re: "price gouging"

Re: "price gouging"

Re: "price gouging"

Re: "price gouging"

Re: "price gouging"

Re: "price gouging"

Re: "price gouging"

Re: "price gouging"

Re: "price gouging"

Re: "price gouging"

Re: "price gouging"