Sunday, July 10, 2016

Bad Policy From Kentucky Gov. Matt Bevin (He has to know better)

Kentucky Gov. Matt Bevin, whose brother is an EPJ reader, activated the state’s prohibitions on price gouging to "protect"consumers during strong weather system that continues to affect a significant portion of the state.

The price gouging emergency order went effective on Friday as of 5 p.m. EST, July 7, 2016. The order will remain in place for at least 30 days.

“In coordination with state authorities, I have put in effect prohibitions on price gouging in order to ensure Kentuckians pay appropriate prices on essential services and supplies during this continuing, severe storm and flooding,” said Gov. Bevin. “We urge Kentuckians to continue to take the necessary precautions needed to stay safe and to report any price gouging activity.”

Sad.

This is just a politician posing as an important actor when he is just gumming up the market.Price gouging laws just create shortages and distort price signals, which makes them all the worse during an an emergency situation.,

As Tom Woods put it: "Prohibiting such activity across the board only handicaps the market in its effort to make current stocks of goods last during the crucial days following a disaster."

-RW

8 comments:

  1. I had hope for Bevin, too.

    If he really knows better, what motive would he have?

    What, Robert, if you had to guess, was his thinking before this decision that led to it?

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    1. Bevin is either mis-educated or uneducated as to the vital importance of voluntarily set prices. One or the other.

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  2. The number 1 rule in politics is: If there is something stupid to be done that will garner more political power, you can be sure a politician will do it. And that's because it's not about right or wrong... good or bad... it's about acquiring, maintaining and increasing political power: period.

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    1. I vote that this policy is do-gooder-ism rather than evil by intent. Not that stupidity can't be plenty evil (it can).

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  3. "Appropriate prices" WTF???

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    1. Quite. Will he start painting pictures of Hugo Chávez on the side of government buildings next? Accusing the Chinese government of nefarious activity? Oh brother!

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  4. Russ Roberts of Stanford and George Mason Universities had a great EconTalk podcast on the unintended consequences of anti-gouging legislation that I hope would find its way to Bevin.

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  5. Speaking MMTers, Mike Norman does not know that there are laws against “gouging” in a crisis and that they cause shortages.

    http://tinyurl.com/zg4hcd3

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