iPoW #2 - Click-it or Stick-it?

[Lulujayne]

Heh

Thanks for making me laugh Aeridus, though I know that's not what you meant to do.

BUDDHIST


Anyways, sorry for the tangent, I just have a pet hate about that LA/Richard Gere style zen-wankery.

[Toawa]

All I can say is, dude, that Germans lost their rights one at a time in the thirties. It doesn't happen all at once.

Oh, that was well underway before the 30's came around.

Theoretically foundational to any concept of freedom and liberty is, surprisingly not - as Toawa implies - the right of corporations to all your money (sorry... couldn't resist but rather the concept that you have a right to "own" yourself...

I have implied no such thing; they assuredly do not have a "right" to our money, any more than I have a "right" to your money or vice versa. They do have a right to freely exchange their goods and services for our money, and vice versa (so long as, in doing so, they are not violating or conspiring to violate others' rights; no hiring thieves, or thugs, or hit-men, for instance; practices that were sadly more common at the beginning of the 20th century, and I think is what pops into the head of many posters here as the "free market in action").

What is it, exactly, that gives government the right to say "You cannot do this thing you enjoy, which will hurt nobody else, and -may- not even hurt you, because we deem it to be too dangerous - not to anyone else, just to you."?

What is it, exactly, that gives government the right to say "If you don't be careful, we will punish you."?

...

What, exactly, is the legal argument that guarantees that government can't decide you can't do anything a particular group of politicians considers "too dangerous"?

Honor, I have to hand it to you... You're definitely not an easy one to pin down. You say this, above, and yet in other threads you apparently do not see the inherent danger with a "single-payer" health care system, even though it is the above writ large. To put it simply:

1. One of the basic truths of life is, the payer has the power. In the long run, the one with control over the purse-strings ultimately gets to decide what gets done and what doesn't.

2. In a single-payer system, the "single-payer" is the government. If your "single-payer" isn't the government, I'd love to know what it is, because in every plan I've seen, it is the government.

3. Thus, in the long run, because it controls the purse strings, it is the government that gets to make health care decisions.

Now consider the tendency for the government to make decisions based on the desire to "protect people from themselves," as you have attested to previously. How do they do it now? Fines, arrests, bribes (in the form of tax breaks), etc. You have suggested that you find the first two distasteful. Now imagine, if the government has control over health decisions, what's to stop them from declaring that no medical care shall be provisioned for those who engage in "risky behaviors"? Sure, it might not stop everyone; some people could still afford to pay for medicine privately (assuming we don't join the ranks of Canada, Cuba, and NK, and outlaw private health care), but it would be harder for them, because they'd be paying for health care twice (once for the "single-payer", which is subsequently denied to them, and again for private). But the provision of health care becomes another tool with which the government can control the people.

Now, I'll grant that our insurance situation is not good; however I still maintain that it's preferable to "single-payer." I believe it would be even better if we drop a lot of the barriers we've put up (making it illegal to purchase out-of-state health insurance, mandates, tax breaks to employers for supplying health insurance, but none for private individuals buying it on their own), and yes, there might be some companies that engage in the same kind of "engineering" that the government loves so very much with regard to risky behavior. But in a competitive environment (which we absolutely do not have at the moment), you could find another company that's more willing to tolerate "risky behavior" then your last one, and no person could stop you from doing so.

[Honor]

"single-payer" health care

Well... depends on the plan. While I'll certainly agree that the specter is there... But certainly looming no larger than the health insurance we have now.

They (our health insurance companies) already do everything we're afraid the government (acting as a health insurance company) would do. They decide which doctors you can see, they punish you for "risky behavior", they decide which procedures you can have... The only difference is they take a -huge- profit margin out of it...

And they have a legal responsibility to take as much profit from it as possible. I would think if there's any field of "commerce" where decent people could agree there should be little to no profit margin... Where as much of the "customer"s money as possible should go to the "product"... This - sick people who need medical attention - would be it.

Why exactly do we need an extra layer in there, who's legal responsibility is, with no exaggeration, to suck as much of that sick person's (or sick child's parent's) money out of the healing process and into their own pockets?


The thing is, if we simply take the profit incentive out of something that is ghoulish and evil to profit from in the first place, it doesn't have to be that way. If we adopt a system who's policy is, within very broad reason, "Go to the doctor. You're covered." we get better health coverage, "capitalist" medicine, and at a lower cost to the insured.

Do I think it'll work out that way? Well.... Let's just say I have very little faith in politicians to do the clearly 'right' thing in a straight-forward way.


By the way... I heard some idiot from the Ayn Rand Institute actually arguing that the FDA should be replaced by "private" testing firms, and it made me think of you... No insult intended. Just wondering what your take on that would be.

[Honor]

It's also interesting to me the way the data lines up between the version of these IPOW's I'm posting here, and the ones I'm posting in my LJ...

In this one, in particular, the European / Aussie influence is obvious.

The snap assumption would be that we Americans are -far- more crunchy about protecting even small, seemingly "unimportant" freedoms... Which is not surprising, since part of our "formative social doctrine" is quite specific in that even the smallest liberties, once lost, can almost never be easily regained, and that such a loss is extremely dangerous.

Would that more Americans had remembered that as Bush shredded our liberties by threatening them with a very small threat of terrorism.

[Toawa]

Well... depends on the plan. While I'll certainly agree that the specter is there... But certainly looming no larger than the health insurance we have now.

They (our health insurance companies) already do everything we're afraid the government (acting as a health insurance company) would do. They decide which doctors you can see, they punish you for "risky behavior", they decide which procedures you can have... The only difference is they take a -huge- profit margin out of it...

And in a properly functioning market, you could take your money elsewhere and find a new health insurance provider. Don't like their restrictions? Find a new one. Think they shortchange their claims? Find a new one. The problem is that the market is not functioning (and the government is largely the cause); I go into more detail below.

And they have a legal responsibility to take as much profit from it as possible. I would think if there's any field of "commerce" where decent people could agree there should be little to no profit margin... Where as much of the "customer"s money as possible should go to the "product"... This - sick people who need medical attention - would be it.

Why exactly do we need an extra layer in there, who's legal responsibility is, with no exaggeration, to suck as much of that sick person's (or sick child's parent's) money out of the healing process and into their own pockets?

We don't need an extra layer, and this is one of the reasons why the system is screwed up; people don't treat health insurance as insurance, they treat it as a prepayment plan. (Take the old example, if we expected car insurance to do for us, what we expect health insurance to do for us, it would cover gas and scheduled maintainance, and would be much, much more expensive than it is now.) Insurance is supposed to insure us from unexpected circumstances and expenses. You know if you're going to see the doctor every year; that's not an unexpected expense. You know if you're going to give birth; that's not an unexpected expense. You know that if two-thirds of your family has died of heart attacks, you're probably going to have heart problems as well; that's not an (entirely) unexpected expense.

You don't know you're going to fall and break your hip; you don't know you're going to get into a car accident; you don't know you're going to catch something from the guy you sat next to on the plane. Those are unexpected circumstances.

The thing is, if we simply take the profit incentive out of something that is ghoulish and evil to profit from in the first place, it doesn't have to be that way. If we adopt a system who's policy is, within very broad reason, "Go to the doctor. You're covered." we get better health coverage, "capitalist" medicine, and at a lower cost to the insured.

Hmm.. I refer you to this excellent column, by someone who lived through Hurricane Fran when it hit North Carolina in '96: They Clapped. Now, it does not address health care spending directly, but it does address this "profiting on pain and misery" aspect. To summarize: NC's anti-gouging laws are in place to prevent people from "profiting on the pain and misery" of people who had been hit by disasters such as hurricanes. The net result, was that indeed no one profited from said pain and misery, because no one brought any relief at all! The one entrepreneur who tried to bring relief, was arrested because he was "price-gouging", and his stock of ice was impounded and hauled away (it wasn't even distributed). The same thing would happen if we tried to take out the "profit-motive" in health care.

Profits serve a very important economic function; they're the flags and feedback loops that control our economy. If an industry has high profits, it's a giant neon sign saying, "We need more of this!" If profits have fallen below the rest of the economy, it's saying "We have too much! Better to do something else!" That is how it works in a free market. The problem is that health care is not a free market; there are too many barriers put up and the signals aren't getting through or aren't being effective. How is it not free?

• You can only buy health insurance in your state. You can't shop around. If there's only one or two companies in your state, tough luck. Less competition; no incentive for them to improve services.
• You want to buy an insurance policy that doesn't cover some event you'll never need? Are you a sterile woman who wants to buy coverage without provisions for childbirth? Can't do it; the law mandates that insurance policies cover childbirth. They aren't allowed to sell one that doesn't. More required coverages leads to higher costs.
• You want to buy insurance on your own? Hope you've got an extra 20% laying around, because you can't buy it with pre-tax dollars like your employer can, assuming you can find any companies that will sell to an individual. That's why so many people go through their employer; hence the insurance companies don't have to answer to you directly, only your employer, because they're the one with the purse strings. (Remember, the payer has the power.) Not satisfied? Tough; your only hope is to find another job (or pay extra).

Oh, and as for "Go to your doctor, you're covered", that leads to another serious problem: Over utilization. People would start going in for every little thing. For every one case now where someone with a headache doesn't go in because it's "probably nothing" and subsequently dies of a stroke or aneurysm or something, you have 20 people who go to the ER, "just to be safe," and subsequently tie up ER resources which could be going to someone who really does need help. (I'm not commenting on the absolute frequency of such cases, only that the vast majority of the time, something that is "probably nothing" proves to be just that: nothing.)

One other tidbit: The average claim payout-to-premium ratio is 80%. That represents 20% overhead. And before you try to claim that government run health care has a 3% overhead, know that said health care pushes a lot of the paperwork (the main source of overhead) onto the doctors, so the actual overhead costs are hidden. (The quoted overhead figure is 1-money out/money in, or possibly money in/money out-1; the point is there's no mention of how much of that money out goes to paperwork and compliance on the doctor's part, and how much goes to actual health care.)

Do I think it'll work out that way? Well.... Let's just say I have very little faith in politicians to do the clearly 'right' thing in a straight-forward way.


By the way... I heard some idiot from the Ayn Rand Institute actually arguing that the FDA should be replaced by "private" testing firms, and it made me think of you... No insult intended. Just wondering what your take on that would be.

Well, when it comes to the FDA, I say the same thing that I do about the FCC. When they were founded, their purpose was decent enough, and I really wouldn't have a problem with them if they stuck to their place. The problem is they haven't.

The FCC was founded to play "air-traffic controller" for the EM spectrum. They were not founded to be content monitors; it only became such when politicians realized that this newfangled "radio" could let anyone with a transmitter voice their thoughts on matters political, whereas the previous modes of communication (speech and press), were both covered specifically in the First Amendment (because there was no radio when it was written), and the vast majority of speakers could only reach a small group of people (and the ones that could reach a lot of people were generally under said politicians' sway anyway).

Likewise, the FDA was founded to be a repository of information about drugs, their effectiveness, their side effects, their ingredients, etc. to go along with labeling requirements listing the ingredients (since many medicines of the day had things like cocaine, alcohol, heroin, etc. in them). They were not founded to be the gatekeepers of new drugs and therapies, nor to decide what foods were good or bad for you (although that's also on USDA's lap).

So, would I like to see private accreditation companies as an alternative to FDA? Sure, as long as they're open about it, and are careful to fight against fraudulent claims of accreditation.

[Swordsman3003]

That's actually a pretty informative, well reasoned post.

I disagree about your insuance paradigm, though.

We insure ourselves on many, many things that we know will happen. It's just a matter of when. You know you're going to die, so you get life insurance to help your survivors. That kind of thing.

To tell you the truth, though, Toawa, I don't see any necessity for profit....in any insurance program. I'll make a really simplistic and mundane example:

We are a city of 100 citizens. We each own a bike. On average, 2 bikes are stolen per year. Bikes cost $100 dollars to replace.

Now, in order to have an insurance fund, we each pay $2.00 into the insurance fund....which adds up to two hundred bucks, enough to buy a new bike for each person whose bike is stolen that year. Add 20 cents to each policy for overhead or whatever.

Paying $2...and always having the garuntee you will own a bike...is a fantastic idea. Especially if owning a bike is necassary to the infrastructure of our city. Bikeless citizens become unproductive and burdensome or something.

Why is it not any different with health insurance? Becoming severely injured or ill is just a matter of time, and ill or injured citizens are useless to our society until they get better. Isn't it a good idea that we should all pay into a fund that garuntees everyone will have help?

[Honor]

Thanks for the over-simplified (and overly optimistic) first-year economics explanation of the theory of profit and competition... I feel -so- enlightened now.

I apologise for not having time just now to answer more fully, but I intend to come back and do so later.

I did want to address this, though...

Hmm.. I refer you to this excellent column, by someone who lived through Hurricane Fran when it hit North Carolina in '96: They Clapped. Now, it does not address health care spending directly, but it does address this "profiting on pain and misery" aspect. To summarize: NC's anti-gouging laws are in place to prevent people from "profiting on the pain and misery" of people who had been hit by disasters such as hurricanes. The net result, was that indeed no one profited from said pain and misery, because no one brought any relief at all! The one entrepreneur who tried to bring relief, was arrested because he was "price-gouging", and his stock of ice was impounded and hauled away (it wasn't even distributed). The same thing would happen if we tried to take out the "profit-motive" in health care.

First, you're side-stepping... I've never suggested (and, actually, specifically spoken against) taking the profit motive out of health care. Taking the profit motive out of health insurance is a wholly different matter.

Now... To the article. What you fail to mention is that the "good samaritans" with the ice were price gouging. Even the moron (or liar*) who wrote the article mentions the salient facts he's later mystified by...

These young men rented two small freezer trucks, paid $1.70 each for 500 bags of ice for each truck and set off...

...One truck apparently parked in Five Points, near downtown, and another parked a bit west, near wealthy St. Mary's Street, and opened for business. I have not been able to find a definitive claim about price, but it was more than $8.

This (price gouging law) had been widely interpreted to limit price increases to around 5% or less.

So... The argument is that, since people were in dire need, our "entrepreneurs' were wholly validated in thinking they deserved over $6000 for a days work.

The article would further like to have us think that these boys would have surely been imprisoned if they'd charged any more than $1.78 per bag... But that just ain't so.

First, we can easily calculate their costs into the selling price... They could have shown receipts for the truck rental, gasoline, and figured in a healthy profit for a couple hours work (the distance driven was about 50 miles, plus time to chainsaw trees in the road...) and come up with a reasonable, but highly profitable price, and been well within the law. $8+ per bag is not that price.

Then, we have the sneaky term "widely interpreted"... So, even under the circumstances, there was certainly room for adjustment. They likely could have charged $2, even $3 or $4 per bag... Maybe even $5 if they looked sufficiently warm and helpless when they told their customers that they had to rent the trucks and buy the gas.

If the other assumptions in the article are true (which I doubt, but haven't the time to research) the argument that, since none of the local "entrepreneurs" were willing to help a neighbor out if they couldn't gouge them for every penny they could scrounge out of their wrecked houses in the process is a better argument for government intervention than it is one against.

The people of NC might have been deprived of their god given right to give what little they had left in the world to "entrepreneurs" who were willing to help them survive another day at a rich profit, but they did receive food, water, shelter, clothing, and assistance in rebuilding from people who were willing to do it for free. All told, the US taxpayer ended up sending over $750 Million in aid and assistance, not because we could get rich doing it, at the expense and misery of others who were weakened by a situation of peril, but because it was the right thing to do.

Now, maybe you can sit there and say it was a horrifying infringement on your rights to have to give a couple bucks to help those poor folks out, but I'm pretty happy with it, myself.

It's the meme of the year... Do you want to live in a "me" society, or a "we" society?




And the preventative maintenance illustration you give for health insurance is flawed as well. People who can't afford gas and maintenance can just not have a car. Every year, some 18-20,000 Americans who can't "afford" (job doesn't provide it, and they earn too much for govt. programs) preventative health care effectively take the same option... They just no longer have bodies.


* Well, maybe not a "liar" exactly, but certainly willing to be disingenuous to advance his own greed... He very firmly implies that he would have been willing to give everything he owned for a bag of ice, and kiss the feet of the person who sold it to him, when he says:

Within a day after the storm, there were no generators, ice, or chain saws to be had, none. But that means that anyone who brought these commodities into the crippled city, and charged less than infinity, would be doing us a service.

I'd sure like to see him make good on that assertion.

[Toawa]

That's actually a pretty informative, well reasoned post.

Thank you; I think that's the first compliment I've gotten on my economic views from this board in a very long time.

I disagree about your insuance paradigm, though.

We insure ourselves on many, many things that we know will happen. It's just a matter of when. You know you're going to die, so you get life insurance to help your survivors. That kind of thing.

Not quite; the most common life insurance product is what is known as Term Life Insurance, which pays out if you die within the term (time) that it is in force. For most products, your death is certainly not guaranteed during the term of the policy. Moreover, as you get older, or find health problems, or ask for longer terms (since the monthly rate is generally fixed at the time you buy the policy) the rate you pay goes up, because the odds of them having to pay off goes up.

To tell you the truth, though, Toawa, I don't see any necessity for profit....in any insurance program. I'll make a really simplistic and mundane example:

We are a city of 100 citizens. We each own a bike. On average, 2 bikes are stolen per year. Bikes cost $100 dollars to replace.

Now, in order to have an insurance fund, we each pay $2.00 into the insurance fund....which adds up to two hundred bucks, enough to buy a new bike for each person whose bike is stolen that year. Add 20 cents to each policy for overhead or whatever.

Paying $2...and always having the garuntee you will own a bike...is a fantastic idea. Especially if owning a bike is necassary to the infrastructure of our city. Bikeless citizens become unproductive and burdensome or something.

Yes, that is the basis for insurance, but you left out some parts to the premium:

You need to charge a bit to pay someone to keep track of who's paid and who hasn't, to process claims, to make sure that the bike really was stolen and not just hidden... That's overhead.

As for profit, it is simply as I said; profit in insurance is a flag for too many or too few insurance companies in the market, compared to the rest of the economy. (As it happens, I've reached this chapter in The Wealth of Nations.) Given the current situation, I'd wager that there are too few (likely because of the barriers I mentioned in my previous post). Furthermore, profit is what allows for capital accumulation, which in turn allows for more productivity (or in the case of insurance, the ability to insure more people).

I'd also point out that there are not-for-profit health insurance companies (such as Kaiser Permanente).

Why is it not any different with health insurance? Becoming severely injured or ill is just a matter of time, and ill or injured citizens are useless to our society until they get better. Isn't it a good idea that we should all pay into a fund that garuntees everyone will have help?

Thanks for the over-simplified (and overly optimistic) first-year economics explanation of the theory of profit and competition... I feel -so- enlightened now.

You're not the only one on the board; and sometimes I think you do need a refresher in first-year economics.

First, you're side-stepping... I've never suggested (and, actually, specifically spoken against) taking the profit motive out of health care. Taking the profit motive out of health insurance is a wholly different matter.

See my reply to Swordsman. If you (try to) remove the profit motive from any industry, you distort its market to a point where it ceases to function.

Now... To the article. What you fail to mention is that the "good samaritans" with the ice were price gouging. Even the moron (or liar*) who wrote the article mentions the salient facts he's later mystified by...

He never tried to hide that many, including you apparently, would say that they were gouging; what he is saying is that price-gouging laws are bad laws.

These young men rented two small freezer trucks, paid $1.70 each for 500 bags of ice for each truck and set off...

...One truck apparently parked in Five Points, near downtown, and another parked a bit west, near wealthy St. Mary's Street, and opened for business. I have not been able to find a definitive claim about price, but it was more than $8.

This (price gouging law) had been widely interpreted to limit price increases to around 5% or less.

So... The argument is that, since people were in dire need, our "entrepreneurs' were wholly validated in thinking they deserved over $6000 for a days work.

You forgot to mention that in their trek to try and squeeze $6000 out of the peoples' "pain and misery", they left behind them roads cleared of downed trees, so that others could follow. And follow they would, especially if the entrepreneurs had been successful.

The article would further like to have us think that these boys would have surely been imprisoned if they'd charged any more than $1.78 per bag... But that just ain't so.

First, we can easily calculate their costs into the selling price... They could have shown receipts for the truck rental, gasoline, and figured in a healthy profit for a couple hours work (the distance driven was about 50 miles, plus time to chainsaw trees in the road...) and come up with a reasonable, but highly profitable price, and been well within the law. $8+ per bag is not that price.

Then, we have the sneaky term "widely interpreted"... So, even under the circumstances, there was certainly room for adjustment. They likely could have charged $2, even $3 or $4 per bag... Maybe even $5 if they looked sufficiently warm and helpless when they told their customers that they had to rent the trucks and buy the gas.

If the other assumptions in the article are true (which I doubt, but haven't the time to research) the argument that, since none of the local "entrepreneurs" were willing to help a neighbor out if they couldn't gouge them for every penny they could scrounge out of their wrecked houses in the process is a better argument for government intervention than it is one against.

Well, for starters, most of the local entrepreneurs didn't have anything to sell either, since hurricanes tend to have a wide berth. And no one was stopping anyone from driving in and trying to sell $1.78 ice... But oddly enough, no one was doing so. Why? Because they simply didn't see it being worth their time and effort. Sure, they might donate money to big, centralized relief efforts, but those big, centralized relief efforts take time to ramp up; I'd much prefer 500 entrepreneurs selling overpriced goods today, then wait for one big relief effort at some undefined point in the future. (Look at New Orleans.) And again, no one is holding a gun to the customer's heads; if they are willing to pay $8 for a bag of ice, it's because that bag of ice is worth more to them than $8. If they don't like it, they're perfecly within their rights to wait and see if the price will go down.

And it will go down. If they hadn't been arrested, they might (and probably would) have been followed by others.. Soon you'd have 10 trucks selling ice, or 20, or 30, and they wouldn't be able to charge $8, because the truck across the street is selling for $7, or $6, or $3. That's competition!

The people of NC might have been deprived of their god given right to give what little they had left in the world to "entrepreneurs" who were willing to help them survive another day at a rich profit, but they did receive food, water, shelter, clothing, and assistance in rebuilding from people who were willing to do it for free. All told, the US taxpayer ended up sending over $750 Million in aid and assistance, not because we could get rich doing it, at the expense and misery of others who were weakened by a situation of peril, but because it was the right thing to do.

Yes, they did.. Eventually. The question is, which is worth more to you, ice today at $8, or ice at $2, three days hence? If the answer is the latter, you are free to wait. If you have several hundred dollars worth of medicine which needs to be kept cold, $8 for a bag of ice is a bargain.

Now, maybe you can sit there and say it was a horrifying infringement on your rights to have to give a couple bucks to help those poor folks out, but I'm pretty happy with it, myself.

It's the meme of the year... Do you want to live in a "me" society, or a "we" society?

If it came down to a decision to live in my vision of a "me" society, or your vision of a "we" society, I'd take mine any day of the week. Yeah, sometimes it might suck to pay $8 for ice, but the point is, there will be ice to pay for.

And the preventative maintenance illustration you give for health insurance is flawed as well. People who can't afford gas and maintenance can just not have a car. Every year, some 18-20,000 Americans who can't "afford" (job doesn't provide it, and they earn too much for govt. programs) preventative health care effectively take the same option... They just no longer have bodies.

I'm sorry, EMTALA disagrees with you.

* Well, maybe not a "liar" exactly, but certainly willing to be disingenuous to advance his own greed... He very firmly implies that he would have been willing to give everything he owned for a bag of ice, and kiss the feet of the person who sold it to him, when he says:

Within a day after the storm, there were no generators, ice, or chain saws to be had, none. But that means that anyone who brought these commodities into the crippled city, and charged less than infinity, would be doing us a service.

I'd sure like to see him make good on that assertion.

What he said is perfectly correct, in a mathematical sense. If the quantity of goods available for delivery, right here, right now, is zero, then the supply-side price for those goods is infinite. Of course, the demand side probably wouldn't cough up $1 million for a bag of ice, but that price would still be less than the supply-side price when there is no ice to sell!

[Swordsman3003]

I too, see that price gouging laws are a mistake. I've lived in Florida my whole life, through.....dozens of hurricanes. Even on summer where my city was hit with three hurricanes inside of a month.

If it weren't for price gouging laws, there would be a lot more things like generators, gasoline, and ice.

[Honor]

That's actually a pretty informative, well reasoned post.

Thank you; I think that's the first compliment I've gotten on my economic views from this board in a very long time.

Point of order... He wasn't complimenting your economic views, he was complimenting the quality of your post expressing them.

To that extent, I agree... Your posts are usually informative and well reasoned... Unfortunately, IMHO, they also usually contain excellent examples of the wacked out combination of pie-in-the-sky idealism and abject greed that, fortunately, will keep Real Libertarians from winning any major election for as long as human beings retain any kind of realistic empathy and skepticism at all.

Not that the closest thing, "Reagan Republicans", didn't do plenty of damage all by themselves.

Thanks for the over-simplified (and overly optimistic) first-year economics explanation of the theory of profit and competition... I feel -so- enlightened now.

You're not the only one on the board; and sometimes I think you do need a refresher in first-year economics.

Quite right. I apologise for my snarkiness.

...Taking the profit motive out of health insurance is a wholly different matter.

See my reply to Swordsman. If you (try to) remove the profit motive from any industry, you distort its market to a point where it ceases to function.

Really...? Ceases to function? Such as fire protection...? Police protection...?

In truth, there are several examples of systems where taking the profit motive out of the industry made them work quite a bit better. Further, systems that would tend toward working better as a socially supported cooperative are fairly easy to identify... And both medicine -and- insurance fall squarely into that category... if properly funded and operated.

Medicine, for instance, is not an area where we should try to do it as inexpensively as possible. If we were willing, we could throw -plenty- of money at it, and still save money hand over fist over the current system... Which would leave plenty of room for professional competition, innovation, etc.

The proof of this can easily be seen in the above mentioned examples of police and fire protection. Even as they chronically complain of underfunding, innovations are made all the time, excellence - rather than mere adequacy - remain closely held and cherished goals of professionals in the field, and despite vocal complaint born of the acute nature of -any- shortfall, far from languishing on the vine and fading into intellectuality, these systems actually do very well for what they are given. Imagine what they could do if we regularly and uniformly funded them properly?

You forgot to mention that in their trek to try and squeeze $6000 out of the peoples' "pain and misery", they left behind them roads cleared of downed trees, so that others could follow.

Nope... I mentioned it later in the post, suggesting that that time and effort could have been fairly introduced into the selling price.

Well, for starters, most of the local entrepreneurs didn't have anything to sell either, since hurricanes tend to have a wide berth.

Sorry... I meant local enough to have an impact, like the ones fifty miles away where there -was- ice. I drive a truck. Anything less than a (western) state away is "local" to me.

And again, no one is holding a gun to the customer's heads; if they are willing to pay $8 for a bag of ice, it's because that bag of ice is worth more to them than $8. If they don't like it, they're perfecly within their rights to wait and see if the price will go down.

That's fallacious... The situation was holding a "gun" to their heads, or they wouldn't have paid the $8+, and the sheer scarcity of the product made waiting for the price to drop unrealistic.

With over 300,000 people in the city, there're bound to be enough people "rich" enough to begrudgingly pay the eight bucks, then a single working mother with two kids, who got there first and waited, goes without.

Which is the real central beauty of your "economic system" in the first place... The wealthy will always have enough, and the working poor can just "choose" to eat worms.

And it will go down. If they hadn't been arrested, they might (and probably would) have been followed by others.. Soon you'd have 10 trucks selling ice, or 20, or 30, and they wouldn't be able to charge $8, because the truck across the street is selling for $7, or $6, or $3. That's competition!

No, that's a pipe dream. Long before the burgeoning Ice Pirate trade reaches the level of market stability, the real merchants will be re-supplied, and the twisted little republican fucks who were quick enough to take advantage of people's fear and need will be long gone.

Yes, they did.. Eventually. The question is, which is worth more to you, ice today at $8, or ice at $2, three days hence? If the answer is the latter, you are free to wait. If you have several hundred dollars worth of medicine which needs to be kept cold, $8 for a bag of ice is a bargain.

Bullshit. It's not a "bargain", it's a very distasteful necessity. It's unfortunate circumstance allowing some petty piece of shit to rob you of $6 because you can't afford to wait for a decent human being to come along.

If it came down to a decision to live in my vision of a "me" society, or your vision of a "we" society, I'd take mine any day of the week. Yeah, sometimes it might suck to pay $8 for ice, but the point is, there will be ice to pay for.

Again. Fortunately, you're in a remarkably small minority, and -most- Americans still believe in helping someone in need.

And the preventative maintenance illustration you give for health insurance is flawed as well. People who can't afford gas and maintenance can just not have a car. Every year, some 18-20,000 Americans who can't "afford" (job doesn't provide it, and they earn too much for govt. programs) preventative health care effectively take the same option... They just no longer have bodies.

I'm sorry, EMTALA disagrees with you.

I'm sorry, no, it doesn't.

EMTALA guarantees emergency services... If you re-read what I wrote, you'll find I used a direct parallel to your illustration of preventative maintenance.

The 18-20,000 Americans I spoke of are just those adults who die every year "because they lack preventive services, a timely diagnosis, or appropriate care."

What he said is perfectly correct, in a mathematical sense. If the quantity of goods available for delivery, right here, right now, is zero, then the supply-side price for those goods is infinite. Of course, the demand side probably wouldn't cough up $1 million for a bag of ice, but that price would still be less than the supply-side price when there is no ice to sell!

Quite true... If there were no difference between textbook theory and the reality of people knocked on their economic asses by a real-world "set back", he'd be right on track.

The reality of applying that theory to people under economic duress, though, is invariably a substantial worsening of an already tenuous position.

If it weren't for price gouging laws, there would be a lot more things like generators, gasoline, and ice.

Incorrect, Sir... A lack of "price gouging" laws, like most economic regulations, only really benefit the wealthy in their absence... Those wealthy enough and lucky enough to take advantage of the situation to bring goods at a premium will make an obscene profit, and those wealthy enough to afford the goods provided will enjoy their benefit.

There would be a little more stuff like generators, gasoline, and ice, under limited circumstances, for a small period of time... The more wealthy victims would enjoy yet another temporary advantage, and the rest would continue to suffer... The potential for violent crime to address this inequity would be increased, and the application of meaningful aid and relief could even be slowed and/or decreased.

Toawa's sad story doesn't reflect the reality of it, but there are also stories of decent merchants and other people who've undertaken the same kind of activity to bring much needed supplies, and either charged a fair price, or simply given them away.

Again... If we accept the proposition that entrepreneurs aren't going to be wiling to help unless they can make a killing - almost literally - then it's not a good argument for deregulation so much as it's an argument for better prepared and better funded emergency services.

Further, there is already room for the greed of this specific breed of entrepreneurs in this model as well... The government already pays a premium to private sources that provide needed goods and services in the "challenging environment" of a disaster or emergency. This allows for the "speedy" reaction of private industry while somewhat regulating the amount of blood and flesh they're allowed to extract for their kindness. I have a couple of friends who make a -very- good living in just this way... So long as there are emergencies enough to keep them busy.

[Toawa]

Really...? Ceases to function? Such as fire protection...? Police protection...?

Yes. Really. Police and fire protection aren't markets; they are government run monopolies, which tend not to get too out of hand because most of them are controlled on a local level.

(Well, there are some private firefighting firms...)

And again, no one is holding a gun to the customer's heads; if they are willing to pay $8 for a bag of ice, it's because that bag of ice is worth more to them than $8. If they don't like it, they're perfecly within their rights to wait and see if the price will go down.

That's fallacious... The situation was holding a "gun" to their heads, or they wouldn't have paid the $8+, and the sheer scarcity of the product made waiting for the price to drop unrealistic.

With over 300,000 people in the city, there're bound to be enough people "rich" enough to begrudgingly pay the eight bucks, then a single working mother with two kids, who got there first and waited, goes without.

That reminds me, I did leave out an important point. The increase in price not only acts as a flag to people outside, saying "Bring more ice here!", but it also serves a second, equally important function: It reduces demand, by making people ask themselves, do I really need $8-a-bag ice? And that effect on the demand side is no less important than the effect on the supply side.

Why is this important? You said it yourself, the city has 300k people. And a great many of them are going to want ice, for a multitude of reasons. Furthermore, it is physically impossible to ship that much ice into the city instantaneously. As a result, ice cannot be distributed to all comers at the same time; some people will get it before others. So how do you decide who gets the ice first? How do you differentiate between the people who need ice to keep their medicines cold, or treat heatstroke, from those who just want it to keep their beer cold? I suppose you could ask, but there's nothing to stop people from lying. You could ask on pain of perjury, but not only would that be hard to enforce, it's also rather insane.

This is why the price is so important; in general, people who need ice for medical reasons will value it much more highly than people with warm beer; as a result, they will pay more. Since they pay more, they get the ice sooner, depriving the beer-drinker a cold beer, perhaps, but not being denied by the same due to the luck of whomever arrived at the distribution point first. I'm not saying the situation doesn't suck. It does suck; it sucks royally. But it's better to get the ice to the people who really need it, first, and the fastest way to judge who really needs it, is who is willing to pay more for it.

Which is the real central beauty of your "economic system" in the first place... The wealthy will always have enough, and the working poor can just "choose" to eat worms.

(Finally, let's not get ahead of ourselves.. It's ice, for $8. We're not talking about $1000-a-bottle water. It's eight frickin' dollars a bag. The smallest common bag of ice is 7 lbs.; so we're not talking about $8 a cube. No one is going to be bankrupted by paying $8 for ice.)

And it will go down. If they hadn't been arrested, they might (and probably would) have been followed by others.. Soon you'd have 10 trucks selling ice, or 20, or 30, and they wouldn't be able to charge $8, because the truck across the street is selling for $7, or $6, or $3. That's competition!

No, that's a pipe dream. Long before the burgeoning Ice Pirate trade reaches the level of market stability, the real merchants will be re-supplied, and the twisted little republican fucks who were quick enough to take advantage of people's fear and need will be long gone.

Really? And how long is that going to take? It might take a day, it might take a week. In the case of a certain southern coastal city, it's been 2+ years. And it doesn't take long for the ice market to stabilize, once the inroads have been made. And in the meantime, there will be ice to be had.

Bullshit. It's not a "bargain", it's a very distasteful necessity. It's unfortunate circumstance allowing some petty piece of shit to rob you of $6 because you can't afford to wait for a decent human being to come along.

You must have a very unusual value function; I'd say paying $8 today to save $200 in three is most definitely a bargain.

If it weren't for price gouging laws, there would be a lot more things like generators, gasoline, and ice.

Incorrect, Sir... A lack of "price gouging" laws, like most economic regulations, only really benefit the wealthy in their absence... Those wealthy enough and lucky enough to take advantage of the situation to bring goods at a premium will make an obscene profit, and those wealthy enough to afford the goods provided will enjoy their benefit.

There would be a little more stuff like generators, gasoline, and ice, under limited circumstances, for a small period of time... The more wealthy victims would enjoy yet another temporary advantage, and the rest would continue to suffer... The potential for violent crime to address this inequity would be increased, and the application of meaningful aid and relief could even be slowed and/or decreased.

Toawa's sad story doesn't reflect the reality of it, but there are also stories of decent merchants and other people who've undertaken the same kind of activity to bring much needed supplies, and either charged a fair price, or simply given them away.

Tell me, how many hurricanes have you lived through? Swordsman's been through dozens, as he's said; I think he'd be in a better position to judge. Myself? No, I've not been through any either... But last December, we had a massive ice storm that knocked out power for many hundreds of thousands (possibly over a million) in the area. We didn't have power for 3 days, and it was frickin' cold outside.

You know what? By the afternoon of that first day, you couldn't go two blocks without seeing someone selling generators. I wish now that I'd stopped by and asked how much they were selling for; ah well... Unfortunately, I wouldn't be surprised if we had the same thing this year, as our electrical grid leaves some to be desired. (A situation which I also blame on government price regulation, BTW.)

And again, as I've described, simply giving stuff away, or selling cheaply, might actually be doing more of a disservice to those who truly need those goods, because they might not be one of the first X in line when the ice truck cometh. If the price is higher, the line is smaller.

[Swordsman3003]

From the way I understand my basics of economics:Any time you have a price ceiling that is lower than the natural price, you have a shortage.


So what if charging 5 dollars per bag would have been legal? Maybe those guys didn't think that kind of profit would be worth the effort and risk, maybe they would. If I needed ice, and I have in the past, an $8 bag is better than a chance at a $5 bag. I know that $8 a bag garuntees that I have ice, because that's the price that those guys drove in to charge.

[Honor]

Really...? Ceases to function? Such as fire protection...? Police protection...?

Yes. Really. Police and fire protection aren't markets; they are government run monopolies, which tend not to get too out of hand because most of them are controlled on a local level.

They're government run monopolies now. Because they work better for the benefit of society that way.

It reduces demand, by making people ask themselves, do I really need $8-a-bag ice? And that effect on the demand side is no less important than the effect on the supply side.

Let's remember we're talking about an isolated theoretical involving a artificial coercive demand. Even in the case of a normal market, to a lesser degree, but especially in the case of a coercive market, it's really just a matter of who can throw the money away... The 'rich' person can still afford ice for his drinks while the 'poor' person might have to choose between food and ice to preserve it.

(Finally, let's not get ahead of ourselves.. It's ice, for $8. We're not talking about $1000-a-bottle water. It's eight frickin' dollars a bag. The smallest common bag of ice is 7 lbs.; so we're not talking about $8 a cube. No one is going to be bankrupted by paying $8 for ice.)

Oh, please... It's an illustrative example. It's your illustrative example. The discussion is obviously not literally about $8 bags of ice, and you know it.

Really? And how long is that going to take? It might take a day, it might take a week. In the case of a certain southern coastal city, it's been 2+ years.

Um... Not a very valid example. The situation is NOLA is more about the advancement of the rich in an all-too-laissaiz faire economic environment.

The Whiter, less Democratic, More Republican, Less Urban Missippippi coast hasn't had the same problems rebuilding, has it?

The evidence I've been exposed to leads me to a pretty firm suspicion that NOLA was set up, intentionally, to become a corporate-owned adult disneyland... Just as soon as we can get all those poor black folk out of there.

The levies, for example, weren't simply failing... They were weakened by a red-favoring corporate welfare project that was dragging ass, for some inexplicable reason, in the lead-up to storm season...

Bullshit. It's not a "bargain", it's a very distasteful necessity. It's unfortunate circumstance allowing some petty piece of shit to rob you of $6 because you can't afford to wait for a decent human being to come along.

You must have a very unusual value function; I'd say paying $8 today to save $200 in three is most definitely a bargain.

And for the primary bullshit point I wanted to respond to...

So, by that logic, if someone pointed a gun at you and said "your money or your life!" your money is a 'bargain', right? Laissaiz faire economics in it's purest form.

If it weren't for price gouging laws, there would be a lot more things like generators, gasoline, and ice.

Incorrect, Sir... A lack of "price gouging" laws, like most economic regulations, only really benefit the wealthy in their absence... Those wealthy enough and lucky enough to take advantage of the situation to bring goods at a premium will make an obscene profit, and those wealthy enough to afford the goods provided will enjoy their benefit.

There would be a little more stuff like generators, gasoline, and ice, under limited circumstances, for a small period of time... The more wealthy victims would enjoy yet another temporary advantage, and the rest would continue to suffer....

Tell me, how many hurricanes have you lived through? Swordsman's been through dozens, as he's said; I think he'd be in a better position to judge.

Wait a second... Are you actually trying to suggest that living through an event makes a person better prepared to hypothesize the effects of a theoretical remedy?

Bitch, please. (I still feel this small need to make sure nobody thinks I'm seriously trying to be offensive when I say that... I just like the phrase.)

The only way surviving more "disasters" than me would help him there is if he could say he'd seen countless 'merchants' standing on street corners during each one, saying "Ya know... I'd like to sell you the stuff you need at a ridiculous profit, but, you know... Gouging laws."

And, yes... I've survived such events, and seen the direct benefit of such laws... Although, I doubt anywhere near as many. Ironically, in one such instance, I was in a position to call a friend and basically pay them to bring me what I needed... But that's really neither here nor there.

[Swordsman3003]

I don't think that price gouging laws hurt the merchants already in town, they hurt the merchants who might have come to town if they had been allowed to charge any price they chose.

And there have been merchants who complained that they were unmotivated to drive a long distance through risky territory to sell their goods.

[Honor]

From the way I understand my basics of economics:Any time you have a price ceiling that is lower than the natural price, you have a shortage.


So what if charging 5 dollars per bag would have been legal? Maybe those guys didn't think that kind of profit would be worth the effort and risk, maybe they would. If I needed ice, and I have in the past, an $8 bag is better than a chance at a $5 bag. I know that $8 a bag garuntees that I have ice, because that's the price that those guys drove in to charge.

I've never actually personally seen an anti-gouging law that held anything at a lower than natural price.

These laws prevent someone who had the ice on hand anyway from selling it for an exorbitant price to take advantage of people in crisis (gouging at the point of sale)... or from importing it into a distressed area at an unreasonable profit, due to scarcity and need (gouging at the wholesaler).

I've never seen one that prevents merchants from applying the costs of bringing materials into a market to the fair market price... Only from charging a ridiculous profit above and beyond that, and only in situations where to do so would take undue advantage of an emergency situation, thus invalidating the equilibrium of need argument Toawa made above.

In the case in question, for instance, Chapter 75, sections 37 and 38 of the North Carolina General Statutes clearly makes full provision for such an emergency, making specific mention of the laws intent to not "not defeating the ability of the market in goods and services from bringing supply back in balance with demand and not defeating the function of price in allocating scarce resources."

Hey... When I said I didn't believe the fuck, I only said I wasn't doing the research right then... I knew his "had been widely interpreted" weasel words were a red flag...

The entire "$8 ice crisis" article appears to be nothing more or less than a collection of selectively presented half truths intended to promote a given point of view. Anyone who wanted to haul stuff in could easily apply all applicable costs directly to the selling price, and make a healthy profit.

The "failing" is only in that it naturally takes a few days to mobililse the machinery of supply to replace lost stock on a macro scale, and the small-scale rip-off artists aren't willing to make the added effort for a fair-to-hefty profit. Only a "too good to be true" (or ethical) profit will motivate them.

More reputable (and capable) merchants could (and sometimes do) bring in more reasonable quantities of supply at more reasonable prices, but not all that often, since, generally, it only takes a few days to begin to mobililse the machinery of supply to replace lost stock on a macro scale.

[Toawa]

Wait a second... Are you actually trying to suggest that living through an event makes a person better prepared to hypothesize the effects of a theoretical remedy?

No, I'm not. You can believe that the sky is blue without ever having seen it, and be correct. But if you believe that the sky is green without ever having seen it, a quick look upward will disabuse you of that notion.

I've never actually personally seen an anti-gouging law that held anything at a lower than natural price.

That's their entire point! In this example, in NC at the time, the natural price of ice was over $8; because people were buying it!

I've never seen one that prevents merchants from applying the costs of bringing materials into a market to the fair market price... Only from charging a ridiculous profit above and beyond that, and only in situations where to do so would take undue advantage of an emergency situation, thus invalidating the equilibrium of need argument Toawa made above.

I don't know how old you are, but past posts have led me to believe that you've lived through the gas shortages of the 70's; those shortages were the direct result of the application of price-control laws (of which price gouging laws are a subset). If the price is artificially held below the market clearing price, the supply will not meet the demand; there will be shortages. Raising the price both signals for more supply to come, and reduces demand.

In the case in question, for instance, Chapter 75, sections 37 and 38 of the North Carolina General Statutes clearly makes full provision for such an emergency, making specific mention of the laws intent to not "not defeating the ability of the market in goods and services from bringing supply back in balance with demand and not defeating the function of price in allocating scarce resources."

Hey... When I said I didn't believe the fuck, I only said I wasn't doing the research right then... I knew his "had been widely interpreted" weasel words were a red flag...

Then why were these out-of-towners, who were actively bringing supply back in balance with demand arrested?

The "failing" is only in that it naturally takes a few days to mobililse the machinery of supply to replace lost stock on a macro scale, and the small-scale rip-off artists aren't willing to make the added effort for a fair-to-hefty profit. Only a "too good to be true" (or ethical) profit will motivate them.

More reputable (and capable) merchants could (and sometimes do) bring in more reasonable quantities of supply at more reasonable prices, but not all that often, since, generally, it only takes a few days to begin to mobililse the machinery of supply to replace lost stock on a macro scale.

And so what do you say to those people who, because you've stopped those entrepreneurs from operating on the micro scale, cannot get what they need now? What you're saying now is, "Sorry, we have to protect you from that mean person over there who's trying to sell you the stuff you need because we think he's charging you too much."

[Fnyunj]

I don't think that price gouging laws hurt the merchants already in town, they hurt the merchants who might have come to town if they had been allowed to charge any price they chose.

And there have been merchants who complained that they were unmotivated to drive a long distance through risky territory to sell their goods.

Yeah - but how do you prevent hoarding when a single entity (or collusion of a few entities) controls one segment of the supply chain? You can use government power to intrude on the privacy of the producers (4th Amendment) - but then the Free Market Fundamentalists start hollering, and anyway, the officials in charge of enforcing anything would undoubtedly get bribed - in any system. Further - when you're talking about an international economy (like Oil, not Ice) - there's no global authority that can take on this function (to police collusion in the supply chain). (This is why your Free Market Fundamentalists typically oppose internationalism, and fear anything that imfringes on "national sovereignity" because, strong internationalism implies an authority to police international economies - anarchy is preferred).

So - gouging happens, people complain, and government investigates, money goes into investigators' pockets, and they conclude: "no gouging going on here".

So when workers collude to get a higher wage (ie. Unionize). . . - OMG! COMMIES!

[Honor]

Wait a second... Are you actually trying to suggest that living through an event makes a person better prepared to hypothesize the effects of a theoretical remedy?

No, I'm not. You can believe that the sky is blue without ever having seen it, and be correct. But if you believe that the sky is green without ever having seen it, a quick look upward will disabuse you of that notion.

To quote the snarky Caveman in the commercials... "Yeah. I have a comment... Uh... What?"

I've never actually personally seen an anti-gouging law that held anything at a lower than natural price.

That's their entire point! In this example, in NC at the time, the natural price of ice was over $8; because people were buying it!

No... That might have been the "natural" price had the marketplace not been artificially coercive. But, in deference to those who still have their heads firmly placed into a highly inappropriate portion of Smith's anatomy, I'll use the term "Factor Price"... Which was and is "natural price" until the rise of and except in the presence of rabid Smithians who carry his concepts to ridiculous extremes.

I've never seen one that prevents merchants from applying the costs of bringing materials into a market to the fair market price... Only from charging a ridiculous profit above and beyond that, and only in situations where to do so would take undue advantage of an emergency situation, thus invalidating the equilibrium of need argument Toawa made above.

I don't know how old you are, but past posts have led me to believe that you've lived through the gas shortages of the 70's; those shortages were the direct result of the application of price-control laws (of which price gouging laws are a subset).

Bullshit. Those shortages were the result of one religious sect, which controlled a commodity, applying economic punishments to people who disagreed with them ideologically, and the government applying a much-needed restraint that the individual in the marketplace might not have had the intestinal fortitude to apply.

If they hadn't done so, OPEC would have owned even more of our asses than it does now.

And price gouging laws are -not- a subset of price control laws... Price gouging laws are emergency measures that merely bear a superficial resemblance to price controls.

In the case in question, for instance, Chapter 75, sections 37 and 38 of the North Carolina General Statutes clearly makes full provision for such an emergency, making specific mention of the laws intent to not "not defeating the ability of the market in goods and services from bringing supply back in balance with demand and not defeating the function of price in allocating scarce resources."

Hey... When I said I didn't believe the fuck, I only said I wasn't doing the research right then... I knew his "had been widely interpreted" weasel words were a red flag...

Then why were these out-of-towners, who were actively bringing supply back in balance with demand arrested?

Munger is the only reference to this occurrence I can find, which doesn't mean it never happened, but it certainly has all the earmarks of a fictional morality tale. In another version of the story, he ups the price to $12 a bag.

In short, if they were ever arrested, they were arrested because they chose not to restrain themselves to the natural - sorry, factor price of the goods they were selling.

The point you're all too happy to ignore is that the only reason the price was $12 a bag, and the only reason for restricting it from being so, is because the consumer was in an onerous and unnatural disadvantage.

If they'd invented ice, they could have tried to sell it for $10,000 a bag, until someone produced it cheaper. No infraction. Hell, if there hadn't been a hurricane, they could have tried to sell it for $10,000 a bag all day long.

In such a circumstance the concept of "choice" becomes an illusion. The very idea that, if I can only catch you at a sufficiently dire disadvantage, I should be able to take everything you have is... Unconscionable... As is the pretense that commerce is harmed if people are restricted to merely making a "massive" profit on the misfortune of others.

The "failing" is only in that it naturally takes a few days to mobililse the machinery of supply to replace lost stock on a macro scale, and the small-scale rip-off artists aren't willing to make the added effort for a fair-to-hefty profit. Only a "too good to be true" (or ethical) profit will motivate them.

More reputable (and capable) merchants could (and sometimes do) bring in more reasonable quantities of supply at more reasonable prices, but not all that often, since, generally, it only takes a few days to begin to mobililse the machinery of supply to replace lost stock on a macro scale.

And so what do you say to those people who, because you've stopped those entrepreneurs from operating on the micro scale, cannot get what they need now?

"We" haven't stopped those entrepreneurs from operating at the micro scale... Only their own greed has done that. If they could be happily motivated by 'merely' making, say, 100 or 200% profit, everything would be peachy.

The 'problem' exists solely because the 'entrepreneurs' in question are saying "well, if I can't cut your heart out and eat it, then fuck ya. I'll just stay home."

Again... Your position doesn't argue for "freer markets" nearly so eloquently and urgently as it argues for better funded emergency services.

What you're saying now is, "Sorry, we have to protect you from that mean person over there who's trying to sell you the stuff you need because we think he's charging you too much."

No... What "we" are saying is "In your current position, you might not see the harm that would surely come from a policy under which anyone sufficiently disadvantaged becomes fair game for unscrupulous people, but we can. In the long run, your having to go without a bag of ice for a couple days just doesn't measure up to the risk of entire regions being economically destroyed and reduced to lifelong debt because of a temporary disaster."

The shortsightedness of immediacy makes it seem ok to pay $12 bucks for a bag of ice, "just this once", but it won't feel so good when you've had to "sell" your home, your savings, and all your possessions for the price of a move to an unfurnished efficiency apartment and enough food - charged against future wages at 1000 X normal prices - to survive long enough to see the city rebuilt.

Don't even try to say I'm exaggerating... Protections exist because we've seen just that happen to countless others, over the course of history... People lose everything, and then die, or become the de facto possessions of those who were fortunate enough to be in a position of wealth and safety sufficient to offer "relief".



Edit: Fucked up the quote structure... Had to fix it.

[ManaUser]

You know, Toawa, I see you're point about the ice. Maybe if they'd known they couldn't get away with charging $8 they wouldn't have even bothered. And sure, expensive ice is better than none. But what about even more abusive cases? Suppose there was already one store in town (with a generator, or whatever) selling ice for $2 a bag,then someone came in, bought it all and turned around and started selling it for $8? And what if it was food instead of ice?

[Honor]

You know, Toawa, I see you're point about the ice. Maybe if they'd known they couldn't get away with charging $8 they wouldn't have even bothered. And sure, expensive ice is better than none. But what about even more abusive cases? Suppose there was already one store in town (with a generator, or whatever) selling ice for $2 a bag,then someone came in, bought it all and turned around and started selling it for $8? And what if it was food instead of ice?

I'm fairly sure / deeply suspicious that this is exactly why Munger chose ice for his story...

It's a fairly innocent example that will cause the majority of people, who don't typically think things past the edges of the story they're being told, to accept a spurious economic theory, pass along the idea, and (with any luck) hound local politicians into making some bad decisions "at the public's demand".

It's a lot easier to get Joe Sixpack to scream in anguish "Oh my god! Them ebil gubmints! How dares they interfere in my freedums dis way!!??!!" when it's a small dollar value for a seemingly trivial item.

If he'd crafted his story around some misanthropic merchant selling gasoline at $21 a gallon, or $42 to buy the stuff to make one child some macaroni and cheese, or $245,000 for a new Chevy, because yours got squished and you want to drive to safety... Or maybe $225 for a can of baby formula and a bag of Huggies... Well, I'd wager the reaction wouldn't have been nearly as sympathetic to the "entrepreneurs"... Or nearly as short sighted. And yet, this is exactly the same profit margin as Mungers higher estimate on the ice.


Intentionally or not, the $12 ice example is ignoring a very important factor in the relevant economic equation... When the consumer hasn't got the option of going somewhere else, then the "supply and demand" pricing model is inherently broken.

Which doesn't even touch on the crystal clear fact that it's simply not ethical, decent, or humane to take advantage of people in this kind of situation...

Again... You could happily make obscene profits of 200% and be well within the law. So, I have to wonder, from whence comes Munger's & Toawa's motivation to cannonize asocial fucks who can't be bothered to make an effort for less than 700% as the valiant and abused would-be-heroes of the situation?