Friday, March 20, 2020

Jeff Jacoby: When demand soars, prices should too

Price gougers are sellers who brazenly raise the price of goods in order to exploit desperate customers and profit from their misery.

Price gaugers — let's coin a phrase — are sellers who sensibly adjust the price of goods upward in response to a spike in demand, in order to minimize hoarding and accommodate as many customers as possible until fresh supplies become available.

Price gouging is immoral. Price gauging is indispensable. Yet in times of stress, officials routinely confuse them. Prudent price hikes are demonized as gouging, so merchants avoid trouble by leaving their prices unchanged. The results? Shortages, suffering, and even more stress.

If you've been to a supermarket lately, you've seen those results up close and ugly.

Last Friday I went to the store to pick up a few groceries, a weekly errand. Hand sanitizer and disinfecting wipes weren't on my list, which was just as well, since the supermarket's entire supply was gone. Laundry bleach was on my list, and I managed to snag the last bottle on the shelf. When I went to the dairy case for the gallon of milk I get each week, I found the aisle mobbed by customers. But it wasn't only pantry staples and disinfecting products that were being hoarded. It was pretzels, sports drinks, and fresh meat, too.

In light of the coronavirus pandemic, some of this consumer frenzy is understandable, especially the demand for hand sanitizer. Some of it is irrational panic buying: Nobody needs a year's supply of toilet paper. But whether or not customers have good reason for denuding the shelves at Stop & Shop, Wegman's, or CVS, sellers have an excellent reason to adjust their prices upward to account for the soaring demand: Failing to do so leaves shelves bare, and countless would-be customers are turned away empty-handed.

As soon as it became clear that the coronavirus emergency was driving consumers to load up on supplies, sellers should have been raising their prices. That would have deterred consumers from buying more than they really need, while increasing the incentive to bring more supplies to the marketplace.

But as soon as the crisis erupted, politicians immediately began signaling retailers not to raise their prices. Massachusetts Attorney General Maura Healey urged the public to report "instances of price gouging" to her office. So did attorneys general in Texas, Kansas, New Jersey, and elsewhere. The US Justice Department warned it would go after "bad actors" who "fix prices" for health products such as face masks and respirators. Senator Ed Markey sent a letter pressing Amazon CEO Jeff Bezos to root out "coronavirus-based price gouging" by third-party sellers. House committee chairs, the Washington Post reports, have proposed including "anti-price-gouging measures" in the next coronavirus relief bill.

Yet what the market needs, especially in an emergency, is not more price controls, but none at all. Anti-gouging laws are misguided and "should be scrapped entirely," Harvard economist Jeffrey Miron tells me. For three reasons: First, they ensure that scarce resources are allocated "based on the arbitrary luck of who gets there first." Second, such laws "eliminate any incentive for reducing use or increasing production" — keeping prices well below what the market will bear invites shoppers to buy as much as they can while doing nothing to encourage manufacturers to ramp up production. Third, they lead to illegal black markets, with unscrupulous dealers operating under the table, taxes going unpaid, and consumers left unprotected.

None of this is to defend greed, or to minimize compassion. We can all agree that the Tennessee man who amassed a stockpile of more than 17,000 bottles of hand sanitizer in order to sell them at a steep markup is no one's idea of a good citizen, a model businessman, or a kindly soul. But the vast majority of merchants are not trying to gouge anyone — least of all their customers, whose good will they crave. Having to face would-be buyers with empty shelves is a terrible way to do business. When governments pressure sellers to keep prices artificially low, the result is to push demand artificially high. That only adds to the misery of people already in dire straits.

Better by far to let businesses use their own judgment to gauge the right price for their products. That way, fewer buyers get left in the lurch — and more of us have what we need to get through this crisis.



With Coronavirus, Leftists Angry Trump Not 'Literally Hitler'

Those who are dependent on the nanny state are inclined to blame the nanny state.

The cognitive dissonance from the anti-Trump Left regarding the federal response to the coronavirus has been fascinating to watch. It’s a simultaneous display of rhetorical contradictions and civic ignorance.

On the one hand, “progressive” Democrats have screeched for three years that President Donald Trump is “literally Hitler,” a modern-day fascist tyrant consolidating complete federal power into his own hands.

Yet today, those same leftists excoriate President Trump for … not exerting dictatorial powers to deal decisively with the COVID-19 pandemic.

These are, of course, the same people who condemned President Trump in January for shutting down travel from China — a decision they called “racist” and “xenophobic.” Can you imagine the outrage from these critics had President Trump at that same time enforced a nationwide lockdown?

“It might seem hyperbolic to compare the U.S. government to a failed state that cannot project its authority or adequately ensure the safety of its population,” The Atlantic’s Derek Thompson opines. “But for much of the past month, the White House has shown an inability to do either.”

Thompson continues, “It is, above all, a test for the state. Only the national government can oversee the response to a national outbreak by coordinating research on the nature of the disease. Only the state can ensure the national regulation and accuracy of testing. … Throughout the world, the most effective responses to the historic threat of the coronavirus have come from state governments. … But in the United States, the pandemic has devolved into a kind of grotesque caricature of American federalism.”

Yet isn’t the cause of this global pandemic rooted in the fact that the Communist Chinese government, wielding the very kind of compulsive power Thompson advocates, completely bungled handling the virus upon its discovery, and then spent precious weeks downplaying and covering up the severity of the outbreak, while refusing to allow foreign experts to assist in controlling the spread of the virus?

And if what Mr. Trump’s critics claim is true — that his handling of the situation has been riddled with incompetence — then wouldn’t giving him dictatorial power to manage the situation only make the outcome far worse? Isn’t it a very good thing, if the criticisms of Trump are true, that individual governors, mayors, business owners, churches, and citizens have the capacity to act expeditiously in their own wisdom to minimize exposure to the virus and slow its spread?

It should be noted that the primary criticism of President Trump’s handling of the COVID-19 pandemic was the administration having declined to use testing kits that had been quickly approved for use in other countries. In retrospect, that may have saved American lives. More than a month ago BBC News published an article investigating major flaws in the test kits being used by other countries. The BBC reported that “people are having up to six negative results before finally being diagnosed.”

What is worse? Delaying the rollout of test kits by a few weeks in order to ensure accurate results? Or sending thousands of infected people back to congregate among their families, churches, schools, and businesses, infecting countless others, all while thinking they are virus-free?

New York Times reporter Erica Green complained that Trump has “become a bystander as school superintendents, sports commissioners, college presidents, governors and business owners across the country take it upon themselves to shut down much of American life…”

Ignorance of the finer points of pandemic virology can be forgiven in an American journalist. Ignorance of the most fundamental aspects of the American form of republican government cannot.

The Constitution was specifically crafted to deny the president such a level of omnipotence. Green’s rebuke exposes the contempt for federalism she and her leftist cohorts exude.

The fact is that no president possesses the constitutional power to do what these progressive critics are demanding. And thank heaven! Do we really want the same government that couldn’t even manage a working ObamaCare website to have complete control over the response to this virus?

With no sense of irony, Thompson simultaneously demands President Trump act with absolute power in this emergency, condemns him for alleged incompetence, praises the response of the private sector, and says that the private sector should not be depended on in such a crisis.

Over the last week, numerous governors and mayors have taken a range of steps to slow the spread of the virus, from requests for voluntary “social distancing” to mandated closure of schools and businesses. They have done so based on the specific risks and needs of their states and communities. These actions have come from the ground up, demanded by local constituencies.

This is the very essence of federalism. One-size-fits-all policy doesn’t work in a nation of 330 million people scattered across 50 states. Top-down edicts are often counterproductive.

Thank heaven our Founding Fathers understood that, and thank heaven for a president today who respects it.



Alliances Emerging Out of This Crisis?

We don’t yet know the end of the coronavirus story, but we are seeing one bright spot emerge, just as we did in the aftermath of Sept. 11.

There is, once again, a sense of unity among the American people. Decent citizens are metaphorically linking arms, even as we keep our physical distance, in an effort to defeat the spread of what threatens us.

Remember the image of the entire Congress standing shoulder to shoulder on the Capitol steps as they prayed to God after the terrorist attacks? It was one of the most beautiful moments of political unity in modern history.

Democrats and Republicans are again praying together. On Sunday, the nation observed a National Day of Prayer, declared by President Trump. He said: “As we unite in prayer, we are reminded that there is no burden too heavy for God to lift or for this country to bear with His help. Luke 1:37 promises that ‘For with God nothing shall be impossible,’ and those words are just as true today as they have ever been.”

Allied in prayer as “one nation under God” is a beautiful and powerful thing to behold.

Other kinds of alliances are emerging out of this crisis too. I was as proud as I’ve ever been of our president when he addressed the nation from the Rose Garden on Friday. Flanked by medical experts, who serve the public through their governmental roles, and highly successful private business leaders, the president rolled out a plan to protect all Americans. In so doing, he showed how people benefit when industries are unleashed from the shackles of draconian government regulations and the good that can come when government works with the private sector instead of against it.

Who would have thought it possible that in a span of just a few weeks, hard-working public servants and private companies could assemble, create, and execute a plan to save our nation? Who thought it was possible to bring direct competitors like Walmart and Target into a room and persuade them to lay down their business swords for the good of the country?




"GAG AND VOTE FOR IT ANYWAY": Senate Majority Leader Mitch McConnell says Senate will pass House coronavirus bill without changes (The Hill)

"WE'RE GOING BIG": President Trump wants checks sent to Americans within next two weeks (The Daily Wire)

WORSE THAN 2008? Treasury Secretary Steven Mnuchin warns virus could yield 20% jobless rate without action (Bloomberg)

TAX PAYMENTS POSTPONED: Treasury and IRS to delay tax payment deadline by 90 days (CNBC)

CANNOT RISK AN OUTBREAK: U.S. to send back all asylum seekers at southern border (National Review)

RULE OF LAW: Border chief won't hand over criminal illegal immigrants to sanctuary cities (Washington Examiner)

AVERAGE OF DAILY ARRESTS DROPS BY 240: Los Angeles releases more than 600 inmates, slashes arrests to "combat coronavirus" (The Daily Wire)

FOLLOWING SUIT: Philadelphia police stop some arrests to manage jail crowding during coronavirus pandemic (Washington Examiner)

POLICY: How coronavirus could change healthcare for the better (Washington Examiner)

POLICY: Governance in crisis: A guide to what the states can and can't do about coronavirus (Washington Examiner)

FOUR TIPS  for Dealing With Life Under Social Isolation — Ben Shapiro's four tips for dealing with life under quarantine.


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