Thursday, November 29, 2012

Judas Christie Tries Out Soviet Union Economics

By Murray Sabrin

The Christie administration is on the warpath against so-called price gougers. Attorney General Chiesa has filed suit against gas stations and hotels and motels charging them with violating the state’s anti-gouging laws. As the Attorney General stated, “Safe, comfortable lodging is not a luxury when people have been displaced from their homes.” AG Chiesa obviously never took an introductory course in economics.

When a natural disaster occurs and the supply of goods and services is disrupted or costs rise to maintain services in motels and hotels, a rise in prices is not price gouging but reflects the new supply and demand relationship that exists in the marketplace. In other words, the drop in supply cannot fulfill all the demand at previous prices, hence prices rise to balance supply with demand.

For the state to mandate that prices should rise by X percent during an emergency is arbitrary and capricious. No law can dictate the “correct” or “fair” price for any good or service during “normal” times let alone during a natural disaster when there is a supply disruption. To think otherwise is to embrace the economics of the old Soviet Union.

Governor Christie got onto the anti-price gouging bandwagon spirit in the following statement, “The last thing people put out of their homes in a natural disaster should have to confront is price gouging from unscrupulous profiteers. It’s illegal, offensive and completely opposite the spirit of cooperation we saw from just about everywhere else in our state.” And the governor wants to attract businesses to the state. Lots of luck using the most left-wing rhetoric anyone can employ.

The governor and attorney general reflect the sentiment of the public at large that has been taught for generations that grandstanding politicians and their obsequious bureaucrats should— and must—override the laws of economics.

For all the kudos Governor Christie is getting for his performance as chief executive of the state during this difficult times, his true colors are showing when it comes to basic economic principles: to hell with supply and demand, might makes right.

The above originally appeared at


  1. We tried that in Florida and the result was most stations stayed closed to avoid getting tagged with gouging charges. Better to file an insurance claim and wait for your money then deal with the risk of getting hit with charges.

  2. Free-market economics is truth for all time, yet it's even harder to convert people in emergencies when they need free trade/prices the most.

    My brother works at a NJ hotel. The manager proudly told me they had not raised rates due to the unfortunate plight of the people. The hotel, like most, was booked solid for days. How many would have stayed for a shorter duration or not at all, if prices were allowed to reflect supply/demand? Helping people in times of emergency is commendable and necessary, but with a finite number of rooms/resources, individuals can't help everyone. The government is the only entity that pretends it can.