All hail the price gougers. As Irma bears down on Florida, people are stocking up on bottled water. Let’s recall not but a week or so ago when, in the wake of Harvey, people were using social media to shame those who sold bottled water at a price they were not used to. Or, now, let’s look at social media and see people shaming people for prices going up pre-storm. This, of course, is perfectly natural.
I recall in the great D.C. blizzard of 2010 I felt compelled to buy a shovel, despite being unmarried and living in a condominium. Still, the panic of a storm does strange things to people and I drove all up and down U.S.-1 in Virginia searching for a shovel. I couldn’t find one because they were all sold out. Did I really need the shovel? No. Did I want one? Yes. If shovels were around and cheaply priced, would I have bought one? Yes. If they were $60? Probably not.
As the FTC’s David Meyer observes: “Society must decide whether the perceived fairness resulting from regulations to hold down prices is more important than allowing the market to provide incentives for resolving the shortage as quickly as possible, while making sure that scarce resources are available for those who value them the most.”
Big box retailers are usually wont to dramatically raise prices even when they should. Which is how this happens:
Now, we don’t know why this person is buying this much water. It could be for a shelter of some sorts. Impossible to discern from a photo their circumstances or reasons, but this picture circulating on Reddit does illustrate the very real human inclination to hoard things.
So, in the wake of Harvey and potentially (though hopefully not) Irma, let’s remember that so-called price gouging laws can often do more harm than good. In fact, Michael Salinger, former director of the FTC’s bureau of economics has a thorough post-Katrina report concluding, soberly, that price gouging laws can “…increase the risk of a breakdown of social order.”
Speaking of scarcity, how about some free breast milk? This is the most disgusting thing I’ve read (and I read a lot of disgusting things for you, dear reader) in probably a week. Of course, it takes place at the hedonistic Burning Man festival.
Miki Agrawal, co-founder of a womens’ underwear company, did this: “I pumped my breasts every three hours at @burningman and gave away most of my milk. Some people downed a whole four ounces hoping for a hangover cure. Some wanted it for their coffee to make lattes. So many were excited and curious to try it. I drank some too when I ran out of water, it tastes like sweet coconut milk!”
As a father-to-be I am learning a lot about feeding babies, and turns out there’s an entire black market for breast milk since not all mothers are able to produce enough milk. Agrawal, who was recently accused of sexual harrassment by employees, has taken disgusting to new heights. I don’t want to live on this planet anymore.
Press release lottery: The 2017 football season is upon us, fans! And what NFL fan doesn’t want to hear from Dear Leader Goodell? This means the NFL is the most recent winner of our running press release lottery. Goodell highlights some changes in officiating for the ’17 season: first, full-time game officials to “enhance consistency.” Those part timers couldn’t hack it! Also, “replay decisions, under our centralized replay model, will now be made from New York.” And… the referees will get their own Microsoft™ Surface™ tablets! Exciting, no? Speaking of exciting, make sure you check out the latest TMQ column from Gregg Easterbrook! And if you’re a TMQ loyalist, be sure to sign up for the TMQ news alert so you’ll be the first to get your hands on a freshly pixelated copy of the latest column! (Also, read this interesting report about Houston’s football vs. preparedness spending if you need any convincing that civic leaders value football more than public safety.)
Fidget spinners changed the toy economy. The Economist has a neat write up how the pointless (but fun!) fidget spinner took the market by surprise: “Big toy retailers, the usual arbiters of what sells, were initially caught flat-footed. Fidget spinners were a plaything that children themselves discovered and shared on social media, particularly on YouTube and Instagram. No person or firm had a patent on spinners, so with no patenting or licensing fees to pay, anyone was able to make one. They are produced in huge quantities in China, often by businesses that previously manufactured smartphone accessories. Others were made using 3D-printing. That has been a boon for small shops, which have been able to stock these unbranded goods from wherever they can find them.” Yes, toy stores have been planning that “hot toy” for years with focus groups and lots and lots of meetings. Just like in the movie Big.
But that this little ball bearing device (probably made over with the millions of extra ball bearings used for the rollerblade fad of the 1990s) took everyone by surprise reminds me of this Bloomberg story on the economics of Halloween costumes. Your kid is going as a Star Wars character from Rogue One for Halloween next month? The Halloween costume guys knew what the movie concept art looked like two years ago. A lot of planning goes into all of the supply chains, but when something like a fidget spinner comes along, patent-free, it’s a temporary license to print money. If you get in quickly.
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