Shortages

Is price gouging just the economy's way of saying, "Bad Choice"?

SHORTAGE OF SUPPLY AND PRICE GOUGING

If you have cared enough to follow the news in Arizona, then you are aware of the recent shortage of gasoline. Please be aware that this is the precursor of the future. As major cities continue on the expansion into mega cities, the distribution of goods becomes more and more critical. Where society once was able to go out to the woodpile for heat and the barn for saddling Bessie for transportation, the times they are a changing.

Shortages have not been very apparent for the last, well really, since the day the country was founded. Not because we have utilized very resource with the greatest efficiency, but more because, there have always been resources available. Yes, you have to go a little farther and pay a little more, but they are out there. Where once oil was found in Texas (it was all in Texas, other states just sucked it away), there was never enough to last considering the rate at which it was burned. Now, thanks to the reserves half way around the WORLD, we have a steady supply. The United States burns more oil than ANY OTHER COUNTRY IN THE WORLD, and to prove our economic advantage, show no signs of slowing down.

So, when supplies run short, for any reason, what is the reaction? To start, there will be lines and lines will breed hording and hording will breed stealing and fights. The weeks starting August 15, 2003, recorded the fastest price increase that I have seen in a while. Everyone jumped on top of their 7 mile per gallon SUV and screamed; "PRICE GOUGING". I drove by in my 30 mile per gallon compact and worried about where I would get the five gallons needed to fill my tank next week.

Retailers ran the price up as fast as they could and the real issue at hand is whether or not there was price gouging or the natural result of the supply and demand economy that has made this country the most developed on Earth. Which way do you want it? The oppression of the creativity that developed a $700 computer or expansion of thinking into new and better ways to do everything. The oppression I speak of comes from not allowing someone to recognize that a situation exists and to take advantage of it (i.e. supply and demand), meanwhile, the creativity comes from recognizing that goods and services can be provided at a lower price if the consumer accepts a change. This is all just philosophical anyway.

From a purely operational perspective, a gas station is intended for one purpose, to provide a place for people to buy gasoline, and in doing so, maybe buy snacks and drinks and diapers. If there is no gasoline to sell then will people continue to frequent the gas station - Yes, if that is where they run out of gas. The point is that a gas station needs to stay open all the time, in order to sell the other stuff that allows the stations to stay in business. The most recent reports I have seen indicate that gas stations aren't all that profitable in the first place, and, even if all the gas is sold at record prices in a matter of hours, the rent is not based on the hours open, rent is charged no matter what. So, the way I see it, if a station wants to charge a lot in order to control the demand (and therefore keep gas in supply), what's the issue. I will look around for a station that charges the price I am willing to pay until I get DESPERATE, then I want gas NOW, at any price.

I think the retailers made the biggest mistake in not raising prices faster. If the prices were raised immediately and higher, then there would not have been any lines, stations would not have closed, the world would go on as before only with less money in the pocket. I did notice that as soon as the price jumped, the number of cars on the road dropped - this is a good thing.

Do I feel sorry for those SUV drivers that had to pay $50 to fill up the tank? No.

Do I feel sorry for the poor people that were stranded when their car ran out of gas? No

Do I feel sorry for me because I had to wait in line? Yes, being selfish, I think that is the biggest issue for me.

Everyone MUST accept the results of their choices and this is no different. If you must have that big car, then there is a cost to pay. But when the cost goes up, don't whine because your choice was wrong, make better choices.

Just a side note - how can you explain the woman that waited in line, filled up her tank and then began pumping gas into a Barbie water cooler? Shortages cause lines and lines cause hording. Shortages can be eliminated by increasing the price and getting people to buy less. Isn't supply and demand cool?