UPDATED: More Chris Christie Cretinism*: Outlawing Price ‘Gouging’ (Befriending Obama)

Business,Economy,Free Markets,Private Property,Socialism

In the previous post, we mentioned an economic fallacy that gets floated during major disasters. It is that “Storms Create Jobs.” The idea of price gouging is another example of erroneous economic thinking that creeps into the discussion, especially during natural- and government-generated disasters.

Writes Salon’s Matthew Yglesias:


Even a progressive like Yglesias is able to grasp some of the natural laws of economics. A sharp rise in prices to coincidence with reduced supply and an increased demand for a good signals the need to conserve scare resources:


Still, some truths escape liberals (and most conservatives). Prices are the prerogative of private property.

In a free market, the institute of private property ensures that we have prices. “Prices are like a compass: pegged to supply and demand they ensure the correct allocation of resources. Without market prices, supply and demand cannot be brought into balance and, by extension, consumer needs cannot be satisfied. Conversely, in socialized systems there are no prices because there is no private property. Absent such knowledge, misuse, misallocation and mismanagement of capital are inevitable. Prices are the street signs of the economy.”

* Chris Christie has shown himself to be more of an opportunistic lowlife than expected..

UPDATE (Nov. 1): Obama’s New BFF (Best Friend Forever):


like tweet google+ recommend Print Friendlyprint