When I saw that the FTC found no clear price gouging in the aftermath of Hurricane Katrina, I’d planned to discuss the report. Not only because he beat me to it, but because he’s 100% correct, I’ll point you to Kip’s analysis at A Stitch in Haste. He says everything I could’ve hoped to say about the report’s specifics. Read it.
Instead, I want to mention this brief passage with ominous warnings for the future.
A House measure passed earlier this month would raise penalties for price gouging and order the FTC to define the term. But the commission’s report yesterday said that a federal law on gouging could “run counter to consumers’ best interest.” The commission said price gouging “is neither a well-defined term of art in economics, nor does any federal statute identify price gouging as a legal violation.”
[FTC Commissioner Jon] Leibowitz said the FTC report showed that “price gouging is a phenomenon that is hard to nail down.” But he compared it to obscenity: “difficult to define in theory but easily recognized.”
The FCC’s enforcement of “indecency” isn’t the most promising path we can pursue. Perhaps we could try something more sane, say “if you don’t like the price, don’t buy the product”. How’s that sound? I like it because it leaves the power in the hands of the consumer instead of some central planner ruling through threat of official reprisal, with both financial and criminal penalties.
We’re going to pursue the latter, stupid path, of course, because Congress has so little brain power and leadership. What the people want (mob rule) can’t be wrong. Can it? Never, so I suggest we set up the price control board now rather than waiting until the next crisis. We’ll have more time to adjust, at least. And we can learn to live without all the nice
essentials luxury items we’ve grown accustomed to having. Thanks.