New crisis, old reactions.
The market has failed, we are told, to handle the coronavirus pandemic . . . even though it has just begun.
We hear demands for vast public takings (California Gov. Gavin Newsom commandeering hotels to add quarantine stations and hospital beds), huge transfer programs (including gargantuan Federal Reserve quantitative easing), and even war socialism (an old staple courtesy of John Dewey in 1918 — oops, John Cassidy, 2020, in The New Yorker).
But most galling?
Complaints of medical supply shortages while cracking down on “price gouging.”
The most astounding case is of the man who scoured the countryside to hoard a truckload of hand sanitizer to sell later at higher prices — moving goods from a period of low, normal value to a time of higher value — only to discover that he was not allowed to sell them, by Amazon and eBay, not government.* The big Internet trading platforms object to normal entrepreneurial action, buying low and selling high, in times of crisis.
But how scandalous is it? In buying up a supply he sent a signal quicker to producers to ramp up production. And he took goods away — very temporarily — from early panicky buyers (who seized the same opportunity in a near-future scarcity but to hoard for personal use) to offer to truly needy people who would value the product enough to buy at higher prices.
Foolish enough to prohibit crisis pricing — or, here, kum-bah-yah prohibitions in solidarity. But then to castigate markets for being inefficient!
Banning “price gouging” and blaming the market is like taunting your victim on the ground as you kick him.
You’re the bully, not a noble savior.
And all that hand sanitizer goes unused.
This is Common Sense. I’m Paul Jacob.
* There are numerous anti-gouging laws around the country, too. The online market companies are merely mimicking very old political tropes.