Wednesday, March 16, 2011

FT Reporter Throws Hayek Under a Bus

FT reporter Izabella Kaminska, due to a thyroid problem last year, has a supply of potassium iodide.

Joe Weisenthal tells her: Don't get greedy! Sell half [on ebay]and lock in profits. Let the other half ride. That's my advice.

Kaminska tweets back: I wouldn't want to profit from other people's misery. Will only sell at over-priced level to people in unaffected areas.

In this last tweet, Kaminska has thrown Hayek's concept of prices as signals under a bus. Of course prices for potassium iodine are highest where people need it. That's, duh, a price signal. It's not profiting from "other people's misery" to sell to high demanders, it's possibly, in this case, saving lives. To only sell to "unaffected areas", say Miami Beach, is nuts and continues to show the lack of  understanding of basic economics even amongst financial journalists.

Bottom line: Kaminska has overruled price signals because in her model of the world profit is a dirty word, especially when it may really help people!


  1. She didn't just throw him under a bus, she backed up and took another run at him.

    How much dumber does it get?

    I've had people get on the verge of being violently angry with me for stating that price gouging in times of crisis should not be criminal and in fact serve a useful economic function.

  2. ...if she's THAT concerned, why not sell at whatever price she deems acceptable?

    All she is doing (on an absurdly small scale of course) is not increasing the supply of a good with an outrageously high demand

  3. Izabella, you wrote that you "Will only sell at over-priced level to people in unaffected areas."

    That's not just nuts. Of course, there's little reason to believe that in unaffected areas anyone but operators of charities would buy at your inflated offering price.

    Perhaps your customer will be the operator of just such a charity and either sell below cost, or give away, the needed commodity to those in "misery". In fact, I'll bet you that you'd prefer to sell to just such a person even if another person bid the same price and was NOT operating a charity.

    At any rate, congratulations Izabella Kaminska. You've just revealed your true self, as the infected rats of your ilk inevitably do when posturing about how much they care about others.

    You remind me of a lawyer in Chicago who a year ago proclaimed to me in private with a straight face that "Democrats are caring". That person, too, is a feminist. Big surprise. And she, too, is neck deep in finance and the investment banking rackets. In fact, she used to work at Michelle O's law firm. Yes, I know; it's just shocking.

    Unfortunately, the evil didn't stop there. (Think: posturing as an environmentalist.)

  4. Wow, a financial journalist who doesn't understand economics.

    Stop the presses.

  5. I disagree.

    The price signal serves its purpose if the price buyers are will to pay is effectively communicated to sellers. If the sellers willingly provide the good at a lower price, I don't see how that screws anything up.

    In a situation like the iodine example, to the degree the seller can discriminate among "worthy" and "unworthy" people, she is providing the good to people and leaving them with more resources for additional goods. Eventually, supplies run low and a higher price will result. In the meantime, she is running her business at a monetary loss (presumably because she gets compensating psychic profit). I don't see how that throws Hayek under a buss nor do I see how it hurts the price signalling mechanism.

    It's a whole different matter when the gov't mandates a price ceiling.

    Of course, none of this should be taken as a sign she knows anything about economics :)