Living right now in New Jersey in the immediate aftermath of the epic superstorm Sandy that just passed through, I can tell you that there are some problems common to all residents here, no matter how much you, your family, or your home were, or were not, affected by Sandy. For example, no one is looking forward to having to wait three hours on line in order to get gas.
Recently, I encountered an article that argues, in effect, that price gauging during a disaster is not such a bad thing after all. The author of the piece, one Matthew Yglesias of Slate, concedes that it is one of the few issues that both Democrats and Republicans can come together on and condemn.
Yet, Mr. Yglesias insists that they are both wrong on this issue, and that, in fact, price-gauging is perhaps a good thing.
He talks about price controls, and says that they have the same results during an emergency as at all other times:
"They lead to shortages and overconsumption. Letting merchants raise prices if they think customers will be willing to pay more isn't a concession to greed. Rather, it creates much-needed incentives for people to think harder about what they really need and appropriately rewards vendors who manage their inventories well."
While he may have a point on the overconsumption aspect of it, I cannot agree that it is not a concession to greed. Why else would the vendor sell the same product at a much higher rate, if not to rake in profits. if we are talking about the availability of gasoline following a hurricane that creates floods or power outages, then many would be competitors might be taken out of the game altogether. A gas station that does not have electricity will not be able to pump their gas, and so will have to remain closed, even though the supply is, technically at least, still there. Yet, he seems to be suggesting that the rewards would go to those who know enough to stock up on supplies, not taking into consideration the sheer dumb luck sometimes involved with one gas station retaining power, while another loses power. He seems to be justifying that gas stations are entitled, in essence, to take advantage of bad times, even of tragedies, so that they may be rewarded for their good work. The rest of us who are at the mercy of these gas station vendors? Screwed.
Nice.
Matthew Yglesias argues that it is perfectly normal for gas stations to raise prices in order to take advantage of high demand when it is there, and on many levels, in theory, he is right. It makes complete economic sense.
He even turns the table around and suggests that this price-gauging creates an opportunity, as it were, for people to reflect on their situation and "what they really need".
The problem, however, seems to glaringly obvious that it almost makes you drop your jaw in wonder that this guy could so easily and conveniently sweep it under the rug. It is the eight hundred pound gorilla in the room that he is pretending is not there. Namely, that this is a disaster (he even uses that word specifically itself), and that by it's very definition, disaster implies hardship, pain, and suffering. Some people lost their lives, and some people are related to people who died during this storm. Some people were injured, and some people lost their homes, or had much of their property destroyed. Some lost their businesses, others cannot get to work, and are losing pay. These last few days have not been easy for anyone, and that is precisely what makes it unethical for a very tiny minority of people, namely those who profit from gas, to be given carte blanche to take advantage of such a tragic situation by adding to the suffering, so that they might make out like bandits.
What he argues makes economic sense in principle, but in reality, it is what is wrong with this country. Too much talk about economics, too much leniency on those who want to profit at all costs, no matter what the situation. Price-gauging does not merely affect the wealthy or those who hoard on supplies. It affects everyone. Times have been hard for many, many people already. We seem to just be crawling out of what has been called "The Great Recession", and now, we have one of the worst storms ever to hit New Jersey. Residents of this state do not need any extra headaches at this point, simply because, according to one Mr. Yglesias, it theoretically makes economic sense.
Economic theories can sound wonderful, much like political theories can. When taken to an extreme (usually, that turns out to be when principles are given more consideration than people), it can be extremely harmful. Communism, in theory, sounded wonderful to many people. But once it was instituted, it worked out disastrously. What we seem to be sliding into in this nation, at this time, is the opposite end of the spectrum: extreme capitalism. A no holds barred approach, where anything goes. Sell your gasoline for whatever you want to sell it for following a major disaster, and you can be proud of yourself for doing so because, according to Mr. Yglesias, you are upholding a proud and true economic theory. You are doing you're patriotic duty! The fact that you happen to be lining your own pockets in the process, and forcing people who are suffering to cough up more money so that you can profit that much more, is an example of good economics, not boundless and inexcusable selfishness.
In a perfect world, perhaps we would indeed reflect on our priorities a little more, and do what we have to do to get through. In a perfect world, we might have better public transportation to help alleviate the situation. Unfortunately, we do not. While I agree that America has an addiction to oil that it must break, and that it is at times like these that we should seriously think about just what our priorities should be, I certainly cannot agree with Matthew Yglesias in holding up greedy gas stations who jack up the prices in order to fatten their wallets, while the rest of us are suffering. Rewarding such behavior would lead to further such practices, and that sounds too much like a vulture culture. We do not live in a theoretical world of economic principles, but in a real world where there are tragedies, and there is suffering. America's suffering does not compare to that of much of the rest of the world. At least not yet. But there is something quite alarming about someone who seems to be justifying outright profiting off of the pain felt by others.
Of course, maybe these arguments sound convincing to those who are far away from the disasters. To those who are much closer, and who are directly affected by them, perhaps they are somewhat less convincing.
But who knows? Maybe Mr. Yglesias put forth his theories to victims after Hurricane Katrina? Maybe he can go to New Jersey right now and ask those people who lost their homes? Or even those people, like my parents, who still have no power and no water in their homes, and have not been able to reach their jobs (you know, the place where you earn money so that you can pay all of those who people and businesses who practice price-gauging following such disasters)? Maybe he can go to some of the gas stations across the state, where lines go on sometimes for a mile (Yes, I personally have seen such a line first hand), who have been waiting to get gas, which is an essential for most people to live their lives here on a day to day basis, and ask them if price-gauging is such a great idea, as he apparently believes?
Personally, I don't subscribe to any economic or political theories, and try not to follow any too blindly. When we do that, we lose sight of the human costs all too often lost and buried underneath theories and principles and beliefs. Communism did not work because it did not take into consideration real people in real situations. Capitalism, the way some extremists want to implement it, can go exactly the same way that Communism in Eastern Europe did, and for the same reasons. Romney spoke about the possibility of privatizing emergency assistance, as if corporations, who are driven strictly by profits, are the ones who people should automatically turn to in their hour of need. He, and many of his admirers, will tell you that we are spending money that we do not have, and that such a policy will not work. What they do not tell you, a conversation that they do not engage in, is their tendency to favor corporations and the very rich, giving them tax breaks and other incentives, and that much of the reason that we do not have the money for programs that once were strong is because the money that was their before "trickle down" once again came into power is no longer there. The Democrats are almost as guilty as Republicans in this practice, and it is a sign that this country has already gone too far with these theories, without taking into consideration the human costs. The truth of the matter is that Hurricane Sandy made worse what had already long been a bad economic situation in New Jersey, and that has everything to do with ideology that seems to make sense theoretically, but seems blind to the damage it does to real people in real life. Sticking doggedly to theories won't help us out of this mess, and neither will advocating price-gauging because, in theory, it might not seem such a bad idea. In the real world, it comes at a terrible cost for real people, even if, in theory, it seems workable, or even ideal.
Perhaps he truly believes, according to his dream theories, that there is no greed in such dire times to concede to. In the light of day, in this, the real world, we know better, don't we?
Maybe, if Mr Yglesias could get his head out of the economic principles book and look around, he might see that real world. But since we cannot wait for those, like Mr. Yglesias, to wake up from their theoretical beliefs, then let me urge you to take action on your own if you see some examples of outrageous price-gouging, since it is illegal. Governor Christie set up a hotline, and so you can report such incidents at 862-209-0130, or at 973-220-3474.
Here is the link to the specific article that I am writing about and responding to in this blog:
http://www.heraldnet.com/article/20121031/BIZ/710319831
Here is another article on price-gauging in New Jersey, focusing on the measures that are being taken to fight against it:
http://www.wfmz.com/news/news-regional-newjersey/New-Jersey-cracks-down-on-Sandy-related-price-gouging/-/132518/17199398/-/1g6kcfz/-/index.html
No comments:
Post a Comment