Welcome Back Alice

down the rabbit hole

The supply-side solution to panic buying

In a letter published in the Detroit Free Press, five faculty members of the Hillsdale College Economics Department presented a plan to prevent panic buying during the coronavirus emergency.

They tell us that traditionally, “the Attorney General threatens businesses that ‘price gouge’ when demand is high.” But the five economists claim “this policy misapplies our moral intuitions and actually harms the public.”

Okay, I’ve tightened my seatbelt, now please tells us how the Attorney General is guilty of dropping the moral outrage ball by going after price gougers.

The Hillsdale faculty members argue that by not punishing price-gouging, and leaving markets free to rise or fall, prices will be driven up. This will discourage buyers from stripping shelves of needed products. In turn, the inflated prices will give companies the incentive to make more of the products in high demand.

I know you want to hit something, but keep reading, it gets better. So to speak.

True, the faculty members tell us, those “less able to afford higher prices” (i.e., minimum-wage earners, the unemployed, those living in cardboard boxes under expressway bridges) will suffer the most, but they will have the satisfaction of knowing their suffering is serving “the common good.”

See what I mean about getting better?

says thirty percent of Americans have no paid sick leave, and seventy percent of them are low-income workers. Thirty million have no health insurance, and eligibility for Medicaid and food stamps is now linked to having work, or looking for it. We can assume all or most of these people would be among those “less able to afford higher prices.”

Does this mean nothing can be done for the millions who are unable to buy toilet paper and soap…

Related posts:

Its quite common that the first time you work with a feature in a cloud interface, it can appear so foreign until you’ve done it a few times. If it’s a task that you may not do often or only once, it…

Over the past five years, the Shared Spaces market has the surprisingly rapid pace of development. The traditional model “one company, one office” was completely overturned. Today, the shared offices…