Wednesday, June 25, 2008

Long Live Price Gouging! (Art Carden)

I hope that got your attention! Art Carden writes on why price control laws are disastrous:

In the wake of the recent flooding in Iowa, the state's attorney general has announced that Iowa's rules against price gouging are now in effect. These rules prohibit businesses from "substantially raising the prices for needed goods or services without justification" in the wake of a natural disaster.

According to a June 23 press release from the Iowa attorney general's office, the rule covers not only the time during which the disaster is declared but also a "'subsequent recovery period' up to six months." Missouri's attorney general is also encouraging Missourians to report "price gouging on necessary supplies like water, ice, storage units, and generators."

Enforcing these restrictions will have predictable effects: shortages of needed supplies, long lines, delayed repairs, and, perhaps, increased incivility. Like other forms of price control, price-gouging statutes will hurt precisely the people they are intended to help.

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