As the storm hits and does her damage, residents in her path are going to find that they’re short critical supplies; water, ice, gasoline, propane to name a few. Part of the reason we’ll be short these key commodities is because people have bought more than they usually would have in advance of the storm. The second is because we’re just gonna use more of ’em.
Demand will impact supply.
And, just as the law of supply and demand would dictate, as those items begin to run out, the price will rise. In some cases doubling or even tripling. This does several things:
- It reduces the desire of people to hoard.
- It signals to suppliers that a need has been established and in the interest of profit, will work to fill that need.
- It activates politicians to fulfill the law of politics: Pass laws that try to break the law of economics.
See, people vote politicians in, so politicians react in irrational ways to this problem:
RALEIGH, NC (NCDOJ) — North Carolina’s strong price gouging law is now in effect because a state of emergency has been declared due to Hurricane Irene, Attorney General Roy Cooper notified businesses and consumers today.
“We’re warning price gougers that you can’t use a crisis as an excuse to make an unfair profit off of consumers,” said Cooper.
Price gouging—or charging too much in times of crisis—is against North Carolina law when a disaster, an emergency or an abnormal market disruption for critical goods and services is declared or proclaimed by the Governor. The law also applies to all levels of the supply chain from the manufacturer to the distributor to the retailer.
What people WANT is for suppliers to supply goods at the normal price even as the cost of doing so goes up. IF the law above were written to say :
The people of North Carolina have decided that during times of crisis, we do not want to encourage exceptional efforts to deliver necessary and critical goods. We don’t want to pay any price for this effort and would rather, instead, save our money and do without.
THAT is what this law is doing.
And if you don’t think so, or if you think that we should allow prices to reflect demand, then I suggest YOU buy a U-Haul truck of water or a refer truck full of ice and drive to the coast and deliver that water and ice yourself.