There is No Such Thing as Price “Gouging”

In the attached article, John Stossel explains that allowing the market to work, even during times of crisis, is the best way to help people.

Many politicians (and voters) rail against merchants raising prices when goods and services become dear in the wake of a natural disaster. They call it price “gouging.” But what such fluctuations in cost actually are, is the economy sorting out the best way to deliver the goods or services in question.

If gas prices are kept artificially low, as they are in New Jersey right now, shortages occur.  People overall are hurt.

Governor Christie should know better, and he probably does. But he’s a politician.

(From Fox News)

“What politicians call “gouging” is just the free market. When markets are allowed to work their magic, lines disappear. The high price is a big flag planted in the ground that says, “Hey, come over here and make money.”

Today, some car owners wait in line just to top off their tanks. If gas stations could raise prices, many of those drivers would wait, and drive less. Drivers who really need gas would be able to get it. At the same time, entrepreneurs would rush gasoline to gas stations that have the highest prices. The lines would quickly vanish, and prices would come back down.

Remember The 1970s “gas crisis?” The media claimed it was caused by a lack of gasoline. It wasn’t. It was caused by President Nixon’s price controls. Remember the lines in the Soviet Union? Most shortages are caused by politicians interfering with the market.”

Click here for the piece.