Or maybe I should say: Please Price Gouge Me! Either way, I've been pretty frustrated with the recent accusations of criminal increases in gas prices. My new home state of North Carolina has recently implemented price gouging laws to "protect” consumers from predatory pricing. Here are my criticisms of their criticisms:
"The prices are ridiculous. No one can afford them. The lines are out in the street.”
No one can afford it yet there are lines out the door? Sounds to me like a sale not a rip off.
"That's not what they paid for it. It just seems to me they shouldn't raise the price until they have to pay for it"
So maybe you and the thousands of other people rushing out to top off their tanks shouldn’t react until then either.
"The BP ran out of gas late Friday afternoon, which helped quiet the frenzy – until a tanker arrived to replenish the pumps.”
This is the consequence of gas stations not raising their prices high enough and fast enough. Would you rather pay $5 for gas today or have no gas tomorrow?
"I encourage gas stations to avoid panic price increases and consumers to avoid panic fill-ups."
There is no reason to encourage anyone to do anything. Let the strain on supply be shown in high prices and let people decide for themselves.
But let’s suppose for a moment businesses really are taking advantage of misinformation and panic. Do we really want to live in a country where the government can tell business owners what prices they can charge? And especially in an industry as competitive as gas stations (can you think of any other product that shows its prices on hundred foot high signs?) Like most issues of the free market, this is not only an issue of resource allocation, but an issue of liberty. These businesses are financed, operated, and owned by private citizens. It is their prerogative to charge what they see fit.
Sadly this is not harmless political pandering. There have been seven subpoenas served in North Carolina to stations accused of overpricing. They could pay up to a $5,000 fine. The Governor Mike Easley has declared “we're going to be on top of this. We're not going to let price-gouging happen in North Carolina.” Sir, I would prefer you turn your attention to your own government, whose threats have deterred stations from raising prices, ensuring that I am supply gouged.
Update: Maybe there should be some laws against price gouging on cigars.