Did you fill your tank?

[Traci]

Did anyone else see a panic over gasoline yesterday?

Lines were over a hundred long here.

There was also a lot of price-gouging - some places were charging $6.00 per gallon - up from about $1.60.

[The Mister]

<font size=2>My wife got gas on Monday, and I did over the weekend. The gas station nearest us (Citgo) went up from $1.39 to $1.55 and that was it. I suspect it's back down again. A cluster of gas stations down the road seemed to be unchanged, including another Citgo.

[Anonymous]

yes, got canned food too.

[Traci]

I didn't need it - so I just heard the stories second-hand.

But the price-gouging REALLY ticked me off! The NERVE of treating your neighbors that way in the wake of such a tragedy!

I hope people keep track of the merchants who did this and boycott them in the future.

[The Mister]

<font size=2>Much of it was just the gas station owners reacting to reports that they wouldn't get another shipment for a while. There was at least one report of a manager in OK lowering his prices back down and issuing an apology AND refunds to anyone affected by his actions.

[Griffin 1]

Traci, what exactly is "price-gouging"? If the lines were over 100 cars long, then that is a strong indication that demand has gone up. Since the supply remained the same, increasing the price is simply following the rules of freshman Economics. Did some stations actually raise their prices to $5.00 per gallon? Probably. Were people free to buy their gas elsewhere? Yes.

[Traci]

"""Did some stations actually raise their prices to $5.00 per gallon? """

Yes - they did

"""Were people free to buy their gas elsewhere? Yes. """

The point is that these merchants took advantage of the panic that began as the lines began forming.

If you think there is a threat of a shortage - fine - line up and fill your tank. But when it's gone - it's gone for all of us - and when the supply returns it returns for all of us. There was no reason to take advantage of people like that.

They just came on the local news and said that charges might be filed against those stations that did this. (Many did not)

[Dr T Non-Fan]

Yes, they should make it a personal policy not to buy anything at those stations. Not until the price is low enough (relative to other stations) that their conscience is cleared. (My clear conscience is about 5 cents lower than the comp.) And they should tell all their friends about it.

Short-term thinking is bad for business. The mighty, invisible hand has spoken.

[Griffin 1]

But what is "price-gouging"? How do you distinguish "price-gouging" from a "response to supply and demand forces"? Why should so-called "price-gouging" be something that is illegal when, as you and Non-Dr. T have said, now that the "crisis" has lifted, people can simply not buy gas there.

[Dr T Non-Fan]

I boycott lots of things, 99% on price, 1% on "principle." I don't go to certain supermarkets, because their prices are, on average, always higher, or their deli section has cheap meat that goes bad after a few days. I don't go to any gas station except AM/PM (Arco), since they're almost always the lowest cost.
My boycott of a theoretical gouging gas station would stop once the price was right for me. Trust me, I'd stop driving my car before buying gas at those prices. I can ride my bike to work if necessary. And I can make my kid ride his bike to school, too (with parental chaperoning). I can walk to a non-boycotted supermarket, and "rent" a grocery cart to carry a load of groceries home.

[Anonymous]

Price gouging is preying on irrational fears of a false supply shortage to gain profits at the customers expense.

The only reason customers' "demand" went up were due to irrational supply fears related to the terrorist situation. Some companies preyed upon those fears as irresponsible corporate citizens by increasing prices, even though the price of THEIR supply went up not a cent.

My local gas station did this, and after many angry customers pointed this out, lowered their price to below a dollar for a day to atone for their sins. If they hadn't, there would've been a boycott of their station until they had no customers whatsoever. I would've honored this boycott, going to one of the nearby stations that DIDN'T raise their prices.

Preying on panic is the last thing we need as a country right now, and those who do will certainly be punished if they don't make good.

[Anonymous]

Traci: "If you think there is a threat of a shortage - fine - line up and fill your tank. But when it's gone - it's gone for all of us - and when the supply returns it returns for all of us. There was no reason to take advantage of people like that."

So you support those people who were going to hoard the gasoline, so the rest of us couldn't get it. I have no problem seeing those selfish fools parted from their money. By the same token, the businessman, has to worry that short-term profit will not come back to hurt him in lost future business. The invisible hand works.

[Griffin 1]

"My local gas station did this, and after many angry customers pointed this out, lowered their price to below a dollar for a day to atone for their sins. If they hadn't, there would've been a boycott of their station until they had no customers whatsoever. I would've honored this boycott, going to one of the nearby stations that DIDN'T raise their prices."


Okay, so the station raised its prices to a level that not only would the market not bear, but to a level that angered the market. The next day, the station responded to the market. But what is this "price-gouging" concept that gets investigated by the government and deemed illegal?

[Traci]

"""So you support those people who were going to hoard the gasoline, so the rest of us couldn't get it. """

I support their right to stand in line and fill their tanks - at the correct market price.

I would not support someone filling additional storage tanks.

As someone else pointed out - the merchants' price did not go up. IF a shortage began and the price of oil went up - THEN you raise the price.

Until then - you do not take advantage of your neighbors.

[Griffin 1]

How are they taking advantage of people? Were the people forced to buy the gas? Isn't the "correct" market price determined by the buyers and the sellers? If people were willing to pay $5 per gallon (which they were), and the retailer was willing to sell at $5 per gallon (which they were), then the correct market price at that station yesterday in the afternoon was $5 per gallon (which it was).

[Traci]

I disagree with you Griffin - thankfully so does our DA's office.

<font size=-1>[ This Message was edited by: Traci on 2001-09-12 22:55 ]</font>

[Griffin 1]

"I disagree with you Griffin - thankfully does our DA's office."

I already knew that. That's why I've been asking you to tell me the difference between illegal "price-gouging" and prices set by supply & demand. You haven't even tried to do this.

[Traci]

I thought I did - I also think it's pretty obvious.

There was no gas shortage. There was a temporary panic and a few merchants capitalized on it (or attempted to).

This was not "supply and demand" because the supply side was NOT in fact affected - it was only perceived to be. And some merchants took advantage of this perception.

That's wrong, IMO

[CaptainCavy]

I filled up the morning of the attacks, around 10:00 EST, on my way to work. Gas prices were normal then. I didn't see any increases in the price afterwards.

We had a bad tropical storm in Texas earlier this year, and the legal measures put in place then to prevent gouging (which worked as far as I could tell) went back into effect yesterday.

Didn't see any lines at gas stations, but my wife said there were more people at the local grocery stores in the middle of the day than normal.

<font size=-1>[ This Message was edited by: CrazyCavy on 2001-09-12 23:36 ]</font>

[Anonymous]

Traci's comments are very telling. She presumes to know what the right price should be (rather than the market).

Then, she presumes to be able to tell people how much gas they should buy. Welcome to the planned economy of Traci-ville!

"Risk arbitrage" doesn't mean much to some people. Some people were willing to pay $5 per gallon to avoid the risk that MAYBE supplies would be reduced or eliminated through some terrorist act. Others, like me, were not so willing. So far, I have been proven correct.

However, supposing supplies WERE drastically reduced, and supply-demand ended up with an equilibrium price of $10 per gallon?? In that case, the poor fools paying $5 per gallon would have looked pretty smart in hindsight.

Just out of curiosity - were the long lines at the stations that raised their prices little if any, or were there long lines at the stations that were charging $5 per gallon?

[Griffin 1]

" I thought I did"

Not really. You mentioned "panic" a couple of times, and you said "the correct market price", but you didn't explain the difference between illegal "price-gouging" and prices set by supply & demand.


"I also think it's pretty obvious."

When I took a course in Quantum Mechanics, the professor used that line quite a bit. I think that sometimes a concept that is pretty obvious to one person is not so obvious to another. Maybe you could explain the difference for us slower folks.


"There was no gas shortage. This was not "supply and demand" because the supply side was NOT in fact affected - it was only perceived to be. And some merchants took advantage of this perception."

As it turned out, supply was not affected. But, in your first post, you do say that demand was affected ("Lines were over a hundred long here."). As I recall, an increase in demand, with supply unchanged, does result in an increase in price.

[Traci]

"""She presumes to know what the right price should be (rather than the market).

Then, she presumes to be able to tell people how much gas they should buy. """

There is no point in continuing this. This is typical.

I gave my opinions about a topic - you are free to disagree.

But I won't waste my time trying to explain it anymore, even though you don't seem to get it - I'm glad the DA's here do!

[Rockhound]

Traci writes: "As someone else pointed out - the merchants' price did not go up. "

What you mean to say is the merchant's "cost of goods" did not go up. And frankly, his costs have little if anything to do with what the price he should charge (except to the extent he can't stay in business too long if his costs exceed his price).

Too many in the actuarial profession, with our penchant for looking at costs, think that you set prices based on your costs. You don't. You set prices based on what the market is willing to pay for your product.

[Griffin 1]

"But I won't waste my time trying to explain it anymore, even though you don't seem to get it"

But that's the point - you haven't tried to explain it. Why should so-called "price-gouging" be illegal? Why not let market forces make the corrections? You have put all the responsibility on the seller. What about the consumer? Do we make "commodity-hoarding" illegal next?


"I'm glad the DA's here do!"

And that is the other point. Is "price-gouging" illegal simply because it helps politians get votes? Is this really how we want the DAs to spend their time?

[Griffin 1]

"What you mean to say is the merchant's "cost of goods" did not go up. "

And if, as some suspected on Tuesday, the supply of oil would become limited over the next few months, the merchant's cost of goods would certainly go up. Many merchants pay for tomorrows goods by using today's revenues.

[WWSituation]

My initial reaction to this was: "Leave it to the folks in the sticks to try and profit off of this disaster!" No need to flame my ignorance, as we all are a bit testy lately.

Cooler heads are now prevailing. I filled up yesterday for $1.59/gallon.

[Traci]

No offense taken WW

I was not looking for an economics debate - I was just expressing my anger for the people who tried to take advantage of their neighbors.

[E. Blackadder]

Would it have been better if the gas stations had simply shut down? A high price, even for gasoline, is how you get rid of long lines.

Think it through.

[Jowler Nojsen]

"I was not looking for an economics debate - I was just expressing my anger for the people who tried to take advantage of their neighbors."

But you have also said it is obvious why this practice is illegal, and you are glad the prosecutors are going after the gas stations. I have never understood why the government should get involved in cases like these. Either the market will bear the asked-for price, or it won't. If people are willing to pay $5.00 for a gallon of gas, then it would appear that $5.00 is the correct price. I think it is very obvious that the prosecutors should not be involved. On what basis do you believe otherwise?

[Patience]

In the NY metro-area there has been no change in prices. I boubt the Governor would allow it.

1) Demand has not increased, over any period the gas usage will remain the same. People are worried that it will become harder to gas later

2) Gas is a necessity in today's world. You can not choose to do without if prices go too high, like you could do with milk or apples.

3) It is not known that there will be a shortage, or prices should be raised, especially to that extreme level.

4) The extreme prices will not reduce usage, because people need the gas to go to work and shop. I doubt a lot of long vacation drives are currently planned.

5) If the shortage doesn't come, I assume these same merchants will reduce prices to virtually nothing, if not this is gauging. and taking advantage of people in a vulnerable situation

[Anonymous]

The only time the gov't should get involved is if they believe that there is collusion amongst the gas stations to raise the prices. If all the gas stations even tacitly agreed to do this, the govt should step in. I don't believe they are colluding, as most gas stations did not follow the lead and raise prices.

[WWSituation]

The other issue raised is did the oil companies coolude to have prices where they are now, independent of this event? And can it be proven?

[Anonymous]

NY rental costs are going to sky rocket due to the temporarily displaced thousands of employees and companies. Is this Price gouging or S&D??

[42]

My two cents:

It was morally reprehensible, but not illegal. The General Public's reaction to these stations in the near future will determine whether or not it was a good business decision to piss the GP off like that. I suspect that the GP will show it was a very bad decision.

[Anonymous]

I expect the loyalty to NYC issue will no longer be the tight string keeping corporate leaders from moving headquarters closer to their homes, outside the city.

There will also now be a followup consideration of London's proposal to make all markets electronic, imo.

[The Mister]

On 2001-09-13 10:34, Anonymous wrote:
NY rental costs are going to sky rocket...

<font size=2>Haven't they already? Like, for the last N years?

[G. Ringo]

Did the gas station owners know more about the supply than their customers? I'd define price-gouging as basing prices on asymmetric information.

[Anonymous]

GG: good definition. Maybe another definition of price gouging would be large-scale increases in margin due to irrational fears or expectations.

Would you consider this to be price-gouging:

Gas station pays $0.85 for a gallon, their standard expense and profit margin is $0.75, they usually charge $1.60.

OPEC announces they'll raise prices such that the station's cost will go up from $0.85 to $1.85, effective in 2 weeks. It will be effective in 2 weeks for all stations.

The station raises prices to $2.60 immediately.


I would, because the price has nothing to do with the cost or the current supply. I don't think anyone has a problem with someone making a realistic profit on a product, but unrealistic margins (making a fortune off the misery of others) are not acceptable.

I think the government agrees with this.

[Anonymous]

"There is no point in continuing this. This is typical."

Indeed. This is Traci's way of saying "You are right and I am wrong." Happens in every thread she participates in.

Moving on, here is a point to think about:

Suppose the gas station owner paid $1.50 a gallon and filled his station tanks Monday night - they are full. Tuesday comes, panic sets in, prices go up, the guy down the street fills his supply tanks up for $5.00 a gallon. On Friday, the first guy refills his supply tanks, now at $6.00 a gallon. The panic eases, and on Saturday the second station owner refills for $1.50 a gallon. Meanwhile, our friend at the first station is stuck with a very large supply of $6.00 gas.

It just isn't clear to me what Traci would do to help the guy stuck with the $6.00 gas.

Another point about supply and demand is this: People were PAYING $5.00 per gallon for gas. Intermittent spikes in at-the-pump gas prices in the past several years make it clear that the DEMAND for gas will support a fair amount of consumption at prices considerably higher than have prevailed. However, the supply has apparently and consistently been greater than the demand, resulting in prices in the $1.50 - $2.00 level.

[Dr T Non-Fan]

Yo, T: try not to rationalize your emotions, or to call the lawyers when you're angry.
Good for you to admit that you were flying off the handle, and that your hysteria was probably just one of those woman things.

That's where you got into trouble here: using fancy words that were inappropriate to your venting.

More proper reaction: "I can't believe anyone would pay for gas at those prices, when other stations are still at near yesterday's prices. What idiots!"
Or: "So they wait in line to fill their tank today, knowing in a few days(/a week/slightly more) they'll have to buy again. As if this is a four-day crisis, and that's all the gas they'll need? What idiots! It's either a long-term problem, in which case you're out of gas a few days later than others, or it's a one-day deal, in which tomorrow there will be more gas. Honestly, the average intelligence of the American people! So glad I'm so much smarter."

[Griffin 1]

Since Traci refuses to explain her position, is there anyone here who believes that the government should be involved with this and who is willing to explain why?

(Traci - "It's obvious" is not an explaination.)

[Dr T Non-Fan]

"Oh no, Griffin (Sheriff), don't take logic (those guns) with you, you'll only make her (Mongo) angry."

"For shame Griffin (doc), debating (hunting) emotional people (rabbits) with logic (an elephant gun)."

It's obvious you don't know how to argue with T. She's always right. Ask her brave husband. You're always wrong. That's very obvious.

[Griffin 1]

You are correct. I have no idea how to argue with Traci. Or even how to get her to back up an opinion. If she posts another messages in this thread, I assume it will be along the lines of "Let's agree to disagree." I'm happy to agree to disagree. I would just like to know why she (and others) think it should be illegal for a retailer to (temporarily) overcharge for a product in what is a very competitive market. I don't think I'm asking for a lot here.

[Anonymous]

High prices and/or "price gouging" are observed in at least three situations:


Boom towns.
Disasters.
Delivering supplies to the front lines at war.


In (1) and (3), the high prices are related to the unique cost/risk/reward considerations. In the case of disasters, you have limited supplies on hand that a merchant will sell only at inflated prices. When these are necessities, such as bottled water, the "market rationing" of supply starts to look like predatory pricing or gouging.

Sun Tzu wrote in the Art of War that there was about a 10 to 1 factor in delivering supplies to the front line when fighting a war away from home.

Boom towns, such as gold and oil strikes, carry high costs because supply lines may be difficult, the markets are very uncertain (if you invest and the town goes bust, you lose) and often, there is a lot of cash going around.

In Dune, Frank Hilbert wrote that a pint of water (which was currency on the planet Dune) supplied in the desert was repaid 10 to 1 back in the safety of the home camp.

Of course, little of this applies to gas prices in the last few days. There was no disaster, only buyers and sellers speculating on the possibility of diminished supplies.

Keep in mind that there were reports of people buying up 50+ gallons of gas in addition to filling their tanks. This "hoarding" mentality is no different than the price-gouging mentality.

Price controls and rationing are the way of the centrally-planned economy, which has been shown to lead to failure.

Then we have the case of the service station in the middle of the desert, a recurring scenario in certain movies. Minor repair provided, then operator demands hundreds of dollars rather than the $50 or so that might be charged in the city. A complex issue, turning on whether there was advance notice of the high prices, whether there is in fact a "price" being offered in the market (as opposed to "how much do you have in your wallet or on your credit card?"), and whether coercion is involved. Also, there is the issue of arbitrage - how much would it cost to get towed to another shop 50 or 100 miles down the road for a lesser repair cost?

For those of you in consulting, you know that billing rates can be determined as: (annual revenue target / annual hours billed ). An auto repair shop in the middle of the desert doesn't get much non-emergency use; this is equivalent to low utilization or hours billed. The high rates in such circumstances can make a lot of sense, both in terms of utilization as well as arbitrage, i.e. they can charge an excess rate up to the cost of hiring a tow truck to the nearest competitor.

The transient increase in gas prices only approaches price gouging with respect to people traveling cross-country, where there may be fewer gas stations and thus fewer options. STILL, raising prices to $5.00 per gallon would have served to prevent or minimize those who would have speculated by hoarding, thus preserving a supply for those who would have been stranded without gas.

In short, I don't see ANY - NOT ANY - reason to bring the government in for this case.

I, too, would like to hear reasoned opposition to this viewpoint.

[roz]

I'm not American so I don't know the law, but the issue surely is the mental picture of gas station owners gleefully milking profits as a direct result of Tuesday's horror. Sure, you can take a libertarian stand that says they can charge whatever they like, but I think the vast majority of us find that utterly distasteful.

I'm with you Traci.

[Dr T Non-Fan]

I agree with the "Anonymous," posting at 17:34PM. (Hard to keep you'all apart.)
No need for government intervention, especially, when not all gas stations were doing it. It IS distasteful, but I don't want the government defining that term. That's asking for trouble.

But a nice mental note, and a list of neighbors, can do a lot of damage to the shortsighted gas station owner.

[Anonymous]

Help me
Help me before I choose to pay someone $5.00 per gallon of gasoline while someone else is only charging $1.50.

HELP ME!!!!!!

[Traci]

"""Help me before I choose to pay someone $5.00 per gallon of gasoline while someone else is only charging $1.50. """

Some people reported that the signs read $1.50 when the lines began forming. It was only when they got to the pump that they were told $5.00.

I don't know about other places, but around here I generally assume that the price of gas is about the same within a reasonable radius give or take a few pennies. So - after sitting in line for an hour or more - they might have chosen to go ahead and fill as opposed to shoopping around at that point.

Today they were ordered to give refunds and pay fines.

I don't have a hard and fast set of rules to define what's price-gouging and what's not - what should be illegal and what shouldn't.

But this was (to me) an "obvious" cross of the line. If not legally, then at least morally.

[Griffin 1]

What you have described is false advertising.

If the station had posted the true price they were charging, should they still be prosecuted?

[Anonymous]

Yes, they should be prosecuted.

Centrally planned prices: bad

Completely free markets: bad

Mostly free with some govt regulation: good

That regulation will include anti-gouging laws.

[Dr T Non-Fan]

Now we get the full story. They were being mislead by false advertising, as the lion/eagle states.

That's not gouging. There are fines and penalties for posting the wrong prices. Law states that stations must post the current price.

Please get the story straight next time, and you won't get berated so much.

Gouging is defined by whoever makes the most noise about it. Best lawyer wins.

[Griffin 1]

"That regulation will include anti-gouging laws."

Which brings us back to:

What exactly IS price-gouging? If we can't define the term, or are unwilling to, then how do we make it illegal?

[Traci]

"""Please get the story straight next time, and you won't get berated so much. """

That was just an add-on. SOME people reported it that way.

The way I think it played out was - people started lining up - the more cars - the higher the price went - people driving by saw the lines forming and the prices rising - figured they better stop. Then it just snowballed.

So - to me this was a clear case of the owners taking advantage of their neighbors.

[Dr T Non-Fan]

More like a clear case of irrational consumers. Mass hysteria?
What this nation was built upon: suckers.

True, it's not good business, long-term. Nothing to scream at the government for. But a nice sign atop a nice stick waved on a public sidewalk should work just fine for informing the public.

Now's your chance to shine. Make some for the kids, too.

[Griffin 1]

"So - to me this was a clear case of the owners taking advantage of their neighbors."

No one is saying that this is not a clear case of the owners taking advantage of their neighbors. (Okay, I would argue that it is not at all clear, but that is not my current issue with you.)

What I have never understood, and you have never explained, is why this is an act that should be illegal. It seems that the market quickly corrected the prices it would not support.

[Traci]

"""But a nice sign atop a nice stick waved on a public sidewalk should work just fine for informing the public"""

No need - the names and addresses of the stations have been on the local news.

Why should this be illegal? I suppose for the same reason that it's illegal to use false advertising or to make false claims about a product. To me they were, in a way, lying to their customers.

[Anonymous]

I'm frustrated. I wanted to post something, but Non Dr T keeps making all the good points.

Just chalk me up as a vote in favor of "No way should we expect the government to protect all the irrational people from their own stupidity."

[Griffin 1]

"Why should this be illegal? I suppose for the same reason that it's illegal to use false advertising or to make false claims about a product. To me they were, in a way, lying to their customers."

Now you are describing a situation that is worse than outright government regulation, from the station owners' point of view. Will the station owners have to apply for permission to raise gasoline prices in the future? Will there be government agencies to evaluate each station's expenses to determine the proper gas price?

Why should the stations take all the risk here?

[Traci]

Of course not, Griffin - it will work the same way it works when ANY storeowner uses false advertising - or when ANY manufacturer makes false claims or sellers otherwise lie to consumers.

The consumers report abuses and the appropriate authorities take action.

[Griffin 1]

You have implied that raising prices is the same as false advertising. Consumers have been lied to. How does a station owner know when it is safe to raise his prices? If the lines are over 100 cars long, and the station owner doesn't know what it will cost to fill his tanks tomorrow, what is he to do?

As I think about this, it seems to me that the guilty party here is the consumer, not the station owner. How many stations actually charged $5.00 per gallon? What percentage of the stations in a particular area does this represent? The vast majority of stations raised their prices little, if any, Tuesday afternoon. Most people paid the same price for gasoline on Tuesday afternoon as they paid on Monday afternoon. Yet, the lines were very long. In my area, no station was charging more than $1.55 for regular unleaded; it was rare to find a line less than a half mile long. The highest price statewide reported to the AG was $1.80 per gallon.

What does this imply? Price gouging was rare, but gas hoarding was rampant. If we are to suspend the rules of Supply and Demand, we must conclude that this was not a clear case of the owners taking advantage of their neighbors. It is, in fact, a clear case of consumers taking advantage of their neighbors.

[Griffin 1]

"No need - the names and addresses of the stations have been on the local news."

So government action is needed because ... ?

[Anonymous]

It seems to me that the majority here is in favor of no government intervention. Glad to see it.

On Tuesday night, when I got home, my wife told me about the rising gas prices. It only took me a few moments to figure out what was pointed out above - either these were the new rates for gas or they weren't. We'd know shortly. But my wife's preference would have been to do a little hoarding. At any rate, she insisted on filling up. What did I care? Even if the local station was high-priced (they weren't), we would have only been out $20 or so (I filled up a couple days before). And it would have been our own fault. Completely consumer driven. Would I have gone back if they had raised prices? Most likely. They are good people, and I would have given them the benefit of doubt (i.e. they were trying to hedge their own future losses).

[Traci]

"""If the lines are over 100 cars long, and the station owner doesn't know what it will cost to fill his tanks tomorrow, what is he to do? """

IMO - he is to wait until tomorrow - fill his tanks and then pass on whatever price difference he paid *fairly* to his customers.

[No Buts]

Traci:
I have two vehicles. A truck with a 25 gallon tank that was almost empty on Tuesday, and a car with a 10 gallon tank that was half empty. Usually, I drive the car. When I saw the news Tuesday morning, it occured to me that gas prices might be affected. So, I decided to drive my truck that morning, and filled it up (paying $1.50 per gallon), because I would get the most gas that way.

Suppose gas prices were affected. Suppose gas prices Wednesday morning were legitimately (by your standards) $5.00 per gallon. If that was the case, would I be required to return some of my hoarded gas?


"IMO - he is to wait until tomorrow - fill his tanks and then pass on whatever price difference he paid *fairly* to his customers."

1) This assumes products are priced on a cost-plus basis. I know of no industry besides insurance that does this.

2) When the price of gasoline from the supplier drops, the stations must respond with lower prices in order to compete - they don't wait until the tanks of expensive gasoline are depleted to lower prices.

3) Some business use the revenue from current sales to buy new inventory. This is what I do in my retail business (it is not gasoline-related). A station owner may not be able to pay $5.00 per gallon for gas tomorrow if he does not charge $5.00 per gas today.

4) If the price of new gas has risen to $5.00 per gallon, then that is its value. Why should a station owner sell something for less than 1/3 of its true value?

5) It may be YHO that the station owner should wait until tomorrow, but why should it be the law?

[Jala]

Traci, it has occured to me that you have not really answered the original questions. What exactly is price gouging, and why should it be illegal. These questions are important, and should be answered. If we do not have a good definition of price gouging that can be explained, then the integrity of the anti-price-gouging law suffers. If we do not have a good reason for the existance of the law that can be explained, then the integrity of the legal system suffers.

As far as I can tell, price-gouging means to charge more for a product than you think should be charged, and the reason it is illegal is ambiguous but unimportant as long as it gets prosecuted.

<font size=-1>[ This Message was edited by: Jala on 2001-09-15 14:41 ]</font>

<font size=-1>[ This Message was edited by: Jala on 2001-09-15 14:43 ]</font>

[Traci]

I'm not saying that we need a whole new set of laws to cover price-gouging.

We already have laws that cover fair business practices - when a consumer believes he has been the victim of an unfair business practice - he can have the DA look at the situation and assess whether the business owner is likely guilty of bad faith and if grounds exist for a charge.

What exactly constitutes price-gouging would then be left to be precedented by actual cases.

I don't know that we could sit down and map out exactly what is and isn't price-gouging. It would likely vary by type of business and economic circumstances.

It looks like what happened here was - people complained to the DA - who went to the stations and found some legitimacy to the claims - the DA then offered that the stations could make refunds and pay fines in exchange for dropping a full investigation and lengthy, costly, bad PR court cases.

[Anonymous]

I have to go back to this again, quoting this time, because it shows Traci's thinking on this:


On 2001-09-12 22:17, Traci wrote:
"""So you support those people who were going to hoard the gasoline, so the rest of us couldn't get it. """

I support their right to stand in line and fill their tanks - at the correct market price.

I would not support someone filling additional storage tanks.

As someone else pointed out - the merchants' price did not go up. IF a shortage began and the price of oil went up - THEN you raise the price.

Until then - you do not take advantage of your neighbors.


She presumes that someone, other than the market itself, knows what the "correct" market price is. Further, she presumes that someone other than the consumer knows how much of a commodity to buy - since she would not "support" filling additional tanks. Also, she seems to think that the consumer and the merchant are not part of the market mechanism that determines market pricing, as evidenced by her "IF ... THEN ..." statement.

Then, in response to my post, we get:
"""She presumes to know what the right price should be (rather than the market).

Then, she presumes to be able to tell people how much gas they should buy. """

There is no point in continuing this. This is typical.

I gave my opinions about a topic - you are free to disagree.

But I won't waste my time trying to explain it anymore, even though you don't seem to get it - I'm glad the DA's here do!

Indeed, this is typical. While I agree that we can disagree about the relative merits of a market economy vs a centrally-planned economy, I really don't see how you can avoid the conclusion that Traci's position was logically consistent with a centrally-planned economy.

I strongly suspect that Traci has seen this as well, and so took her standard cop-out.

Now, we see Traci attempt to draw some distinction that there was false advertising, without addressing the point she originally raised.

Elsewhere, we have seen Traci refer to people as "moron" . Is it polite to refer to people as morons? When pressed on the politeness issue, she essentially ducks it by claiming that the alleged moron was making an irrelevant point.

When pressed on the relevance issue, she ducks it, this time because she claims to be emotionally drained from the events of this week, and doesn't feel like discussing it.

Rather, I would suggest that she had an untenable position there, as well. When backed into that corner, the distinction she drew was that she was not up to discussing it at this time.

Well, I suggest this is yet another cop-out, because clearly she has the energy to pursue this line. Backed into this corner, I can only assume she will draw the distinction that she doesn't respect me, or something else.

Traci, I can only wonder why you think anyone would care whether you "respect" anyone else in this forum? You insult others and then you run every time the weaknesses of your positions are laid clear. Our respect for you extends from your efforts as an administrator of this forum; please respect our efforts as participants in this forum!

Do not insult us! (i.e. call people "morons")
If you raise a point, then PARTICIPATE! However, your hit and hide tactics have grown tiresome.

By the way, you moral/ethical appeal in this gas pricing thread is easily your strongest point. Stick with it. It is inherently emotional, and thus hard to refute. The false advertising angle only suggests that you did not state your topic clearly in the first place.

Sorry about the rant, folks, but someone needs to clearly point out the tactics being employed here.

[Anonymous]

- the DA then offered that the stations could make refunds and pay fines in exchange for dropping a full investigation and lengthy, costly, bad PR court cases.
Also known as government extortion!

[Traci]

I added the part about false advertising when it was reported on the news - but it really doesn't make a difference here. The issue that the stations were fined over (and that I was upset about) was the excessive and unfair price increase.

As I said - the prices went up as the lines formed - so I don't think it was really false advertising - it was price-gouging.

I love it when "agree to disagree" is called a cop-out. When it really only means that I'm bored with trying to explain something to someone who continually restates my positions for me - someone who isn't really interested in having a discussion - but someone who would rather just play a game. I get bored quickly with such games and have no problem walking away.

If I raise a point - I will defend my position - I might even change it if someone offers me a good reason to. But when people start playing games - I get bored - and I will leave. Inevitably to the anonymous whines of "cop-out!"

If the discussion happens to get back on track - I might jump back in - as I did here.

I called someone a "moron" who seemed to me to be (anonymously of course) saying that my views on the loss of innocent life on Tuesday were invalid due to my position on abortion. I still think he's a moron. (But we can agree to disagree on that :wink:

I have defended my positions on abortion ad nauseum in many discussions. I could write the entire thread - both sides - all by myself. I didn't bring up the subject and I don't OWE you a discussion about anything.

[Anonymous]

As I said - the prices went up as the lines formed - so I don't think it was really false advertising - it was price-gouging.
Actually, Traci, a careful reading of your posts will show that this is the first time you have made this statement. Your original point was that the high prices were intrinsically price-gouging, and thus wrong. Your next position was that one price was posted and another charged. Now, you are suggesting that it is price-gouging to change prices after a line forms, which is a related but different assertion.

A further careful reading of your posts will show that you did not get back in after the discussion "got back on track." Rather, you drew a distinction after your contention of price gouging was thoroughly discredited.

Next, a careful reading of my posts will show that I have not "restated" your positions. I have pointed to your positions, and then I have suggested that your position is logically consistent with certain other positions that many would take to be unacceptable. In this thread, your notion of what is an "excessive and unfair price increase" or limiting consumer purchases (rationing) are consistent with the actions taken in a centrally planned economy. You have not disputed this point, yet you come back to price controls in your most recent post.

As to "playing a game" I would suggest that is all anyone here is doing. We are not arguing a live case before the Supreme Court, nor are we Congressmen debating proposed legislature. Hopefully, this game is a little more intellectually rewarding than mud-wrestling. As in other intellectual games, such as chess, when one has a lost position, it is polite to topple one's king and concede - rather than scatter the pieces and claim that you are now bored.

If you think someone has MIS-stated your position, point it out and clarify/correct. On the other hand, when your position is RE-stated and an inference drawn from it, it seems to me that your options are either:
[list=A] Suggest that the inference does not follow logically from your position. (i.e. You could try to argue that price controls and rationing are not key elements of a centrally planned economy)
Suggest that inference is not undesirable (i.e. you could argue that a centrally planned economy is a good thing)
Or you could draw a distinction. (Which you apparently have done now by suggesting false advertising, or again that prices were changed while the line was forming.)

In summary, I have addressed your points in response to my critique of your debating technique, pointed out that your fundamental contention of price-gouging is as yet unsupported (as you have not addressed the points in various posts on this matter), and have noted that you have not attempted to refute the position that you are in favor of policy elements that lead to a centrally planned economy.

Further, I think we all agree that false advertising is wrong.

That only leaves the question of raising prices while a line is forming or formed. Next post!

[Traci]

I did not scatter the pieces. If I had to restate or clarify my position everytime someone misrepresented it for the purpose of arguing - well - I don't have that kind of time! I am a favorite target for some in this forum - so I'm never quite sure if someone really doesn't understand what I'm trying to say - or they are just trying to be difficult. After one or two tries, I assume the latter and move on.

Allow me to try to get back to where I started:

My understanding of what happened here is that people began lining up for gas, some station owners saw this as an opportunity to raise prices, as the prices went up, the lines got longer, and it snowballed up to some people being charged as much as $5.00 per gallon. Since the prices were going up quickly - some people got in line at one price only to find it had tripled by the time it was their turn.

I do not see this as an issue of false advertising - (a careful read will show that *I* did not label it as such) - I saw it then and see it now as a "bad faith business practice".

I put it in the same *category* as false advertising or misrepresenting a product - and I support the DA's office taking action against those station owners.

That's where I stand. I don't think I'm contradicting anything from a prior post in this thread - I'm just trying to pull it all together. If you think I AM contradicting myself from a prior post - then let's just say I was not clear enough before - and let THIS post be a summary of my position.

Now - what's your beef?

[Anonymous]

Well, Traci, I guess we are all a little frustrated. Your posts leading up to "There is no point continuing this. This is typical" gave no indication that your beef was with the changing of prices while people were in line. This distinction did not appear, clearly or otherwise, until nearly the end of the second page of this thread.

At the same time, I think we all took it as clear that you felt the prices were intrinsically unfair - and I could point to several posts that would support that interpretation of your position. Note that I am not saying that is your position, but it sure seemed that way to me and I guess most or all of the others (on both sides of the issue.) (With respect to your position up to 9/14 18:06 post.)

So, I guess my beef is that you have wasted everybody's time by not being clear about your point at the outset.

Just for the record, then, do you think a gas station owner could raise his prices to $6.00 per gallon, even if his cost basis had not changed? (Assume that he closes everyday at noon eastern for half an hour, changes his price, and then re-opens as part of his normal business practice; thus obviating any question of false advertising or "waiting in line" price gouging.) Most everyone else participating in this thread has taken a position on this point.

[Traci]

"""my beef is that you have wasted everybody's time by not being clear about your point at the outset. """

Oh? Really? Well - now *I'm* confused. I thought you said you had made a careful read of my posts!

What follows is from my VERY FIRST 3 posts in this thread:

"Did anyone else see a panic over gasoline yesterday? Lines were over a hundred long here. There was also a lot of price-gouging - some places were charging $6.00 per gallon - up from about $1.60.

...the price-gouging REALLY ticked me off! The NERVE of treating your neighbors that way in the wake of such a tragedy!

The point is that these merchants took advantage of the panic that began as the lines began forming. "

You say I was not clear about my point. Yet I started a clear sentence with "The point is ..."

When someone starts a sentence that way - um - it usually means she is about to state her point!

A few posts later I was met with accusations that I was trying to dictate exactly how to set prices and dictate exactly how much people should be allowed to buy.

This was a typical restatement of my point - it happens all the time. Since I felt I had already been clear about what my point was - again, go back to that sentence that begins, "The point is ..." - I elected not to continue, as I assumed this person was not serious about understanding me.

And you think *I* wasted *your* time???

ROFL

[Anonymous]

Yes, I do, and I am curious if anyone still reading this thread understood the topic the way I did.

While I concede that your third post does mention "as the lines were forming", I think it is clear that everyone took your original post to refer to the $6.00 per gallon price, not the timing of the price change while people were waiting in line.

Also, your exchanges with Griffin on 9/12 between 21:39 and 23:06 board time seem to indicate that the issue is the price itself, not how it was raised.

Also, the following statement is telling: "As someone else pointed out - the merchants' price did not go up." If the merchant has an obligation to make the sale at the posted price to people waiting in line, that obligation is unaffected by the merchant's price. The distinction you make in this quote is irrelevant to what you now claim is your point.

Also, I am a little confused as to why you soft-peddle the distinction with "That was just an add-on. SOME people reported it that way."

Never mind, though: The thread is dead. Once you went down the false advertising/unfair business practice pathway, which seems to apply only to people in line at the time a price change is made, interest dropped off.

Meanwhile, though, you haven't responded on the question as to whether the $6.00 per gallon price is inherently price-gouging. Of course, if you think so, then the distinctions you have made about "as the lines formed" are irrelevant. On the other hand, if you think the $6.00 price is legally acceptable, I think we would all like to see you make that point.

Not that you OWE me or anyone else your opinions.

[Anonymous]

I'm a new anonymous.

Traci is funny. On 9/13 at 8:56 she said that she won't waste her time trying to explain her position.

For most of the next two days, various posters weigh in to poke holes in Traci's illogical position - essentially an emotional response to profiteering in the wake of the tragedy.

Then she proceeds to blow most of Friday night and all day Saturday explaining her position with 9 more posts that said nothing new.

Traci's funny.

PS. If you ran out to buy gas at the station that didn't raise his prices out of respect for the victims - and then the rumored shortage had happened and prices had gone to $6 per gallon everywhere, then you took advantage of your neighbor merchant to try to save a measly $50 for one insignificant tank of gas. Who took advantage of who?

[Dr T Non-Fan]

T says: "The point is that these merchants took advantage of the panic that began as the lines began forming."
Again, do you take issue with the natural order of economics? (One major assumption of economic theory is that producers and consumers are rational. To assume they're not would be to place power in a higher order (implying that only the government is rational).

These merchants had something that other people wanted. They sell it at whatever price they want to. Whatever people will pay. No worse than beanie babies or rock concerts.
Similarities are: buying irrationality is not a good thing.

We all agree: false advertising is illegal. If that's what was happening, then fine. And fine them. But gasoline prices were deregulated in the early 80's (?) so lines wouldn't form. When lines form, the price can be jacked so some people will get out of line. Very simple economics. Possibly first page.

Can't be any worse than a certain book that was priced infinitely higher than its worth. Now, THAT's gouging. (And below the belt.)

In summary, if it's more than T would pay, it's gouging. If that's not obvious to you, than I can't see any reason to discuss it further.

(PS: Sorry, Anon, posting at 2001-09-14 23:24. But she makes it so easy.)

[Dr T Non-Fan]

to new anon: Yes she is.

However, to the anon or two: She didn't waste our time. We wasted our own time. We were going to waste our own time anyway, but I think it was a very productive use of our normally allotted waste of time. We got to laugh, cry. It was better than "Cats." I'd post again and again and again.

[Traci]

"""9 more posts that said nothing new"""

Thank you for noticing!

[E. Blackadder]

Traci, if a paniced client were to demand completion of a job that would require you to work lots of overtime on short notice, would you:

A: Tell him to take a hike

B: Do the work and charge him an arm and a leg -- so you could afford a babysitter and a later vacation

C: Do the work at your normal price and be frazzled for your other clients

D: Do the work with less care than you usually do?

[Griffin 1]

Traci: As far as I can tell, price gouging means to respond to an increased demand by raising prices. That's how I think you and others were using it to describe Tuesday's events at the gas stations, and that's how I think certain politicians use it every summer when gasoline prices rise. That's fine if you wnt to call it that; everything needs a name.

I am still unclear why it should be illegal to price gouge. You may say it is unethical and immoral, that is your right. But many unethical and immoral things are perfectly legal.

Note: I am not talking about events such as changing the price at the pump but not on the sign, or changing the price on the sign and expecting it to apply to people already in line. These events may be called false advertising, and fall outside the realm of price gouging.


New Anon: "Who took advantage of who?"

It should be "Who took advantage of whom?"

[Traci]

"""I am still unclear why it should be illegal to price gouge"""

Not all cases should be illegal. I never said that raising the price of something in response to increased demand should ALWAYS be illegal.

Again - quoting from my third post:
"The point is that these merchants took advantage of the panic that began as the lines began forming. "

EB - I would do none of the above.

[Griffin 1]

"Again - quoting from my third post:
"The point is that these merchants took advantage of the panic that began as the lines began forming. " "

Price gouging laws were written in response to summertime price increases.

Besides, why do you assume the merchants were taking advantage and the public was panicing? If I owned a station and watched my tanks being emptied at $1.50 per gallon, and thinking I may have to pay $5.00 to refill them, I can assure you that my attitude would be more that of panic than glee.


"EB - I would do none of the above."

EB's list seemed rather complete to me. How would you handle his situation?

[Dr T Non-Fan]

I agree again with the winged lion.
You, T, have determined that it was panic, and that the merchants were taking advantage of the situation. You have determined that this is wrong behavior, and should be punished by government authorites.
Your "point" was all your opinion. That's not a point. Your "point" is that it's wrong to do such a thing, but it's possible that you have made up the facts first.

Regardless of that, who's at fault in a "panic"? What caused the "panic"? Is it wrong to fan the flames of a "panic"?

I like my definition better: It's gouging if T thinks it is.

And please describe how you'd handle the situation that EB posed. Please assme that you're in a position to make the decision, not just a lackey for someone else. (My guess: A. It's the most T thing to do.)

[Traci]

""Price gouging laws were written in response to summertime price increases. ""

So what?

"""If I owned a station and watched my tanks being emptied at $1.50 per gallon, and thinking I may have to pay $5.00 to refill them..."""

I do not believe that there was any reason for the station owners to think that the price would jump to $5.00.

So now you ask me what WOULD have been a fair increase? And how do I come to that price?

Is anyone else bored yet?

And I answer - I don't know - but $6.00 was too high. And I'm glad they were fined.

Are we done yet?

As to EB's example - pardon me if I sense some sort of trap.

The real answer would depend on circumstances. Have I started the project? Have I done work for them before? Are they known to panic and make demands regularly?

In most cases, I imagine I would explain the situation (hopefully quell their fears) - tell them I would do my best - and if they still felt they would be better served elsewhere - hand over my files. I would not take the opportunity to bilk them out of dishonest fees.

[mikey]

Some states have pretty clear laws that do not allow for people to take advantage of an emergency or disaster to profit. In places like Illinois and Missouri, these laws were clearly broken. Deal with it.

That is why most stations kept prices stable and allowed their tanks to be emtpied. They knew, as did the others that raised prices, that there was no imminent shortage. They probably also were aware that it was illegal.

[Traci]

And DTFN - I'm nobody's lackey - thank you very much.

Also - I forgot to ask - Is the client's panic reasonable? Do they have a legitimate concern to be panicking over? I was assuming "no".

[Grits N Gravy]

If the privately run hospitals in lower Manhattan quadrupled their fees on Tuesday, would this be supply and demand at work, or the ever-elusive price-gouging?

[Griffin 1]

"Price gouging laws were written in response to summertime price increases. "

"So what?"

So these were laws written to respond not to the rare emergency, but to demand-driven price increases. Any price hikes on Tuesday were demand-driven. Why should that be illegal? (If the laws were designed solely for "panic" situations, then there would be a government agency appointed to declare a situation as a panic situation. Station owners should not have to take their chances that the AG retrocatively says this was a situation that does not qualify for a price increase.)


"If I owned a station and watched my tanks being emptied at $1.50 per gallon, and thinking I may have to pay $5.00 to refill them..."

"I do not believe that there was any reason for the station owners to think that the price would jump to $5.00."

The lines were 100 cars long, and the radio stations were reporting that there were reports of stations charging $5.00 per gallon. Oil prices had already jumped $3 per barrel. Airports were all closed, creating a greater need to drive. Talking heads on TV were speculating wildly about how the bombings would affect the economy. Nope, they had no reason at all to think gasoline prices would rise.

[Dr T Non-Fan]

I win! "Take a hike" was the correct answer!

Last time I checked, gasoline was not a critical item in order to survive. One can go forever without it, given a few lifestyle changes. Do people actually live without cars or other fossil-fule transport? People do.
Point: gas and health care are a bit different. Please keep analogies relevant.

[Jowler Nojsen]

The car dealership up the street from me raised its prices on fuel-efficient cars Tuesday. Were they price gouging?

[E. Blackadder]

It's nice to know that you would merely deprive people of actuarial analysis instead of cruelly harming them by (gasp) price-gouging.

Personally, I prefer the approach used by the gas stations. "If you really, REALLY need the gas, it'll be available. Otherwise, don't start the hoarding frenzy." Why should the senior citizens and unemployed get first crack at the gas while the rest of us are stuck at work.

[Anonymous]

I still fail to see why the owner of a gas station has an obligation to charge any less than the market is willing to pay. If we suddenly started selling a lot of hydrogen cars, and the price of gas fell, would we be required to support the gas station owner who could no longer charge the same amount of money? Because in a way, that would be the consumer price gauging the gas station owner.

[Anonymous]

At last he have it simply stated:
... $6.00 was too high. And I'm glad they were fined. Are we done yet?
Traci, pardon me for restating, but you now seem to have taken the position that $6.00 was too high, legally. From this position, I infer the following, since I believe they are logically consistent with that position:

1. You presume to know what the correct price is; or at least what it is not. Either way, this brings government into the business of regulating prices. Along with your anti-hoarding sentiment (although you didn't propose fines for hoarders ...) my prior comments about the elements of a centrally planned economy still hold.

2. The later distinctions you drew about "as the lines formed" were simply smoke. If the price is untenable, it doesn't matter whether it is changed as the lines formed or not.

3. I concede that changing prices "as the lines formed" may constitute an unfair business practice, in a limited sense. I think there may be a contract law argument that says the person IN LINE has accepted the posted offer of the posted price at the time they get into line. However, a lot of "messy" issues come into play, including the question of whether the line can extend beyond the premises of the station, what about the guy who sees the sign from the freeway but the price changes by the time he pulls off and gets to the station, and finally whether the store owner has the right to close, empty the line, change prices, and re-open. I don't want to discuss any of these particularly, though.

At this point, yes, we are done: We know where you stand on an issue! You favor government intervention in market pricing - "I'm glad they were fined" - and all that comes with it. (Just as we favor market pricing and all that comes with it. Ya gotta take the good with the bad.)

Now, for cleanup, Slacker describes the typical case of price-gouging - raising the price of a good or service during an emergency or disaster for those goods or services that serve to prevent further loss. (Again, assuming the hospital costs didn't go up four-fold due to the situation.) Of course, Slacker's example is a little weak - because of the EMTALA regulations, the hospitals would not legally be able to turn away any emergency patients while they had capacity, regardless of their ability to pay. (An actuarial point in the middle of this!)

Finally, I didn't take DTNF's "lackey" comment to be a cheapshot - he laid out a hypothetical case, and wanted to be clear that you had the ability to decide.

As to EB's scenario, and your response about "dishonest" fees, I don't think it is clear whether the price is being negotiated up front or after the fact. Charging no more than usual, and not giving unusual service is not different from agreeing up front to give unusual service for a higher fee. If the client wants to renegotiate a deadline in the middle of an engagement, THAT becomes an interesting business decision which turns on a myriad of factors.

[Take 2]

Price gouging is like yelling "Fire!" in a crowded auditorium -- or yelling "Incoming!" while raising admission prices for a shelter.
Admittedly, it may be difficult to determine where to draw the line. It has often been drawn in court, e.g., for contractors whose high prices immediately followed a hurricane.
If, as reported, a supplier told a station owner on 9/11 that replacement gasoline would cost $5 or $6 a gallon, the supplier should be prosecuted.

[Anonymous]

The silence is deafening.

On average, my tank is a little more than half-full. Or is it half-empty?

[Dr T Non-Fan]

Bill O'Really weighed in recently. Heard tapes of it this morning on the radio. The gas stations were "gouging," defined as charging more for goods than others are charging."
Again, the invisible hand will beeeotch-slap these merchants in due time. Other problems are far more important. Like, looking for rapists, terrorists, murderers, and rapists.

Other incidents of gouging were some NYC hotels doubling their rates. Well, there's always the Entertainment book.

[Anonymous]

How could anyone accuse a NY hotel of price gouging? I mean, when you start with a gouging price, how is it price gouging to double that price??

Did they raise the price of canned Coke, etc. from $3 per can to $6 per can?? :smile:

Still, my response is simply not stay there; not to call in the government to whine on my behalf.

[Dr T Non-Fan]

I agree.

I don't know whether Bill O'Really is a pro-free-market guy or what. Probably just pro-ratings. It's Fox, after all.

[Hierophant]

Well, I guess we can chalk up another thread to the free market.

I heard that the average price of gas is now down a few cents per gallon nationally compared to pre- 9/11. The market works.

As I look back, a day or two after the attack, I paid about 25 cents per gallon above pre-9/11 prices to fill up. I also had to pay up for the next higher grade of gas, since the lower grade had been sold out.

So, as I think about it, if the prices had not been raised by the dealer, the hoarders might have bought even more, and I would not have been able to get the gas I needed when I showed up.

[Matoro]

Now that gas prices are dropping, does Traci continue to buy gas from the station still charging higher prices that are based on what it cost to fill the storage tanks last week, or does she buy gas at the station charging lower prices that are based on supply and demand?

[Patience]

but the prices last week raised artificially. There was no drop in production or huge increase in demand, aside from people trying to get to the pumps before the stations raised prices again.

actually in my area prices never moved, and have just started falling.

So basically the stations in her area got an incredible mark-up for no other reason than greed and promoting fear. If that isn't gauging what is?

[Matoro]

On 2001-10-01 09:24, Patience wrote:
but the prices last week raised artificially. There was no drop in production or huge increase in demand, aside from people trying to get to the pumps before the stations raised prices again.

actually in my area prices never moved, and have just started falling.

So basically the stations in her area got an incredible mark-up for no other reason than greed and promoting fear. If that isn't gauging what is?


Three comments:
1) Lines a half mile long do constitute a huge increase in demand.

2) In at least one post, Traci said that the price at the pump should be based on what it cost to fill the storage tanks, not to refill the storage tanks. I wonder if this philosophy still holds now that prices are falling.

3) Defining "gouging" was the point of most of this thread. "Greed" is a subjective term and can be used to describe why most people go into business. Should most businesses be deemed illegal? I also find it incredible to think that a station owner raised prices to "promote fear".

[Patience]

1) if prices stayed stable I don't believe the lines would have been that long. Something triggered the fear of shortage and high prices beyond the attack. Otherwise it would have been the same across the nation.

2) What is the price fall attributed to? The current price or the anticipated price? or the fact that there wa no need to raise prices in the first place.

3) Maybe I should have said excessive greed. I believe many raised prices to take advantage of a bad situation. & those actions caused fear among the consumer who felt they had to hoard gas.

I don't feel they promoted fear on purpose. But if prices stayed stable I believe there wouldn't have been the same long lines and the station owners would have had their normal profits.

but by raising prices they conveyed there was something to fear and made excessive profits that had nothing to do with the supply of gas, but capitalized on a catastrophe.

[Dr T Non-Fan]

We can only hope that the heartland (full of scarecrows) wises up and realizes that the topping off of a half a tank only gets them to next week. A few extra days without gas is not the end of the world, if the end of the world is already nigh.

[Matoro]

Patience:

1) If demand had not increased, stations would not have raised prices.

2) What is the price fall attributed to? Who knows? Who cares? Traci advocated a cost-plus system to price gas at the pump. Does she follow that philosophy when suppliers' prices are falling?

3) Greed or excessive greed, the point is the same. Hoarding gas should be viewed the same as gouging prices.

[Anonymous]

I've seen it described two different ways here...

Did the prices go up because the long lines formed or did the long lines form because the prices went up?

Either way, I am inclined to believe that some owners raised prices out of what they considered to be a legitimate concern, while others saw an opportunity and jumped on it. I'm not terribly impressed with either group. But hey, glass houses and whatnot.

I also cannot understand the mentality of those who would voluntarily wait in a half mile long line for a few gallons of gasoline. What was to be gained by those few extra gallons? Saving a few extra dollars? Two days of satisfaction from knowing you're driving around on $1.50 gas while your simple-minded neighbor is driving around on $5 gas? And if you waited in that same line just to pay $5 a gallon, then you deserve to get swindled.

[MountainHawk]

"""She presumes to know what the right price should be (rather than the market).

Then, she presumes to be able to tell people how much gas they should buy. """

There is no point in continuing this. This is typical.

I gave my opinions about a topic - you are free to disagree.

But I won't waste my time trying to explain it anymore, even though you don't seem to get it - I'm glad the DA's here do!


Hey Traci ... did anyone actually get convicted from this? I bet not.

[E. Blackadder]

but the prices last week raised artificially.
This is in the October (2001) top 10 of statements from someone who could benefit from acquiring further knowledge. Prices do not exist in nature.

[2pac Shakur]

New Study Finds Oil Company Profiteering Behind Gasoline Price Spikes; Bush Called Upon To Prevent Profiteering
California's Sales Tax on Gasoline Makes Government Complicit With Oil Companies
Santa Monica, CA --- A study released by the Foundation for Taxpayer and Consumer Rights California (FTCR) today found oil company profiteering and the government's failure to respond to it are the cause of recent gasoline price spikes in California. Click here to read the report.

The study by petroleum industry analyst Tim Hamilton showed, for example, that from January 17th to April 18th 2005 gasoline prices jumped 65 cents per gallon and refiner profits rose by 61 cents per gallon. The extra four cents went to the state in increased sales tax collection. The study concluded that California's percentage sales tax provides an economic incentive for government officials to promote high prices at the pump because they result in greater tax collection -- an estimated $1 billion more in California during 2005 due to the price gouging. The consumer group recommends a "windfall profits rebate" be instituted.

http://www.consumerwatchdog.org/energy/pr/?postId=5084&pageTitle=New+Study+F%20inds+Oil+Company+Profiteer ing+Behind+Gasoline+Price+Spikes%3B+Bush+Called+Up %20on+To+Prevent+Profiteering

This kind of stuff happens a lot with Bush and the rest of the "energy experts" in the White House.

[fallout]

http://www.consumerwatchdog.org/energy/pr/?postId=5084&pageTitle=New+Study+F%20inds+Oil+Company+Profiteer ing+Behind+Gasoline+Price+Spikes%3B+Bush+Called+Up %20on+To+Prevent+Profiteering

This kind of stuff happens a lot with Bush and the rest of the "energy experts" in the White House.


You mean california's method of taxing gas was implemented by bush?

Is there anyhting wrong in the world that W didn;t cause to be that way?

[2pac Shakur]

You mean california's method of taxing gas was implemented by bush?

Is there anyhting wrong in the world that W didn;t cause to be that way?


No.
Enron was price gouging CA, but FERC did nothing.
This is because Bush appointed a Brownie to head FERC.