Let us Praise the Hawaiian Price Gougers

This is another lesson in Economics 101. And one that the government should meddle in. I discussed this very topic last year in a video podcast. You may view it here. It’s in segment 2 which begins at about minute 19:25. Or you read my article regarding the same here.

from IBD:

‘Price Gouging’ In Hawaii Should Be Thanked, Not Cursed

Hawaii has taken a hit from Hurricane Lane, with an estimated 40 inches of rain and flooding in several areas. It’s an old story: Already, claims of price gouging for everything from propane to airline tickets have emerged. Should Hawaiians curse the gougers? No, they should thank them.

That might seem strange, but it’s true.

First off, let’s concede there are no doubt businesses that are technically breaking Hawaii’s anti-emergency gouging laws, which forbid stores from raising prices on food, water, ice, gasoline, cooking fuel, batteries and generators, chemicals or building materials during a declared disaster or emergency. read more

Economics of Bacon and Natural Disasters

by: the Common Constitutionalist

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You may have noticed that the price of bacon is off the charts. I know I have. It appears to have basically doubled in the last months. Why?

It’s simple – supply and demand. Over the last few year demand for everything bacon has skyrocketed. It seems bacon is in everything. There is Maple Bacon ice cream for dogs. There are bacon cream Oreos, bacon flavored gumballs, bacon mayonnaise, bacon toothpaste and Amazon sells Lester’s bacon soda. I love bacon, but ick!

In February, Business Insider explained the effect the demand for bacon has had on the industry.

The country’s supply of frozen pork belly — the meat used to make bacon — fell from 53.4 million pounds in December 2015 to 17.8 million pounds in December 2016. That’s the lowest level the nation’s pork reserve has been at since 1957, according to US Department of Agriculture data. “Today’s pig farmers are setting historic records by producing more pigs than ever,” Rich Deaton, the president of the Ohio Pork Council, said in a statement highlighting the data. “Yet our reserves are still depleting.”

What we’re witnessing are naturally occurring market forces at work – basic economics – supply and demand, and why the cost of bacon has increased so much. As demand outstrips supply, prices naturally increase. If it didn’t, soon there would be no supply left. The free market, left to its own devices, devoid of government meddling, will then re-balance itself, allowing supply to catch up with demand. Bacon will then return to more reasonable prices.

Put it this way. You go to store to purchase something. For this scenario, it doesn’t matter what it is. Luckily, you happen upon a store offering the product at 50% off. Why? read more

Juxtaposition of Two Christmases

by: the Common Constitutionalist

Christmas is one the happiest times of the year. Actually, I guess the song says “It’s the most wonderful time of the year.” It’s a time for giving. It’s a time for family, charity and kindness toward others. And yes, it’s also a time for us to all gather around the tree Christmas morning and exchange gifts.

But what happens if the gifts aren’t there to exchange? What happens if it’s not up to Santa? What happens if, for instance, a delivery company doesn’t get them there on time?

Well, that’s exactly what’s happened to possibly tens of thousands of Americans this holiday season as package delivery giant FedEx admitted they were not able to absolutely, positively get there. FedEx guarantees on time delivery, but for many customers, it could not make good on that guarantee. Many of the delays were due to severe weather across the Southeast, but FedEx is also blaming a flood of last minute shoppers.

Okay, so thousands of packages didn’t get to be opened on Christmas day. Considering FedEx estimated deliveries between black Friday and December 25th to be about 317 million, that’s really not bad. And as I said – this is the season of love and giving and understanding – right? read more