Sometimes You Just Have to Ignore the Economists

"Kamala Harris’s proposed price-gouging ban might irritate academics, but it makes sense to everyone else.

Here, regular people seem to understand a few things that economists don’t. During an emergency, such as a natural disaster, short-term demand cannot be met by short-term supply, setting the stage for sellers to exploit their position by raising prices on goods already in their inventory. The idealized law of supply and demand predicts that new investors would rush in, but the real world doesn’t work like that. A short-term price spike won’t always trigger the long-term investments needed to increase supply, because everyone knows that the situation is, by definition, abnormal; they can’t count on a continued revenue boom. During a rare blizzard, sellers might jack up the prices of snowblowers. But investors aren’t going to set up a new snowblower-manufacturing hub based on a blizzard, because by the time they had any inventory to sell, the snow would long be melted. So after the disruption, all goes back to normal—except with a big wealth transfer from the public to the company that raised prices."

Zephyr Teachout at The Atlantic

Exactly! With the economists it's always what is it about the laws of supply and demand and free markets you people do not understand? The natural supply and demand price mechanism is always economizing and expanding markets and maximizing economic growth but only if "free" and unfettered by government rules and regulations, like price-gouging bans, price controls, rent controls, and the like. It's a pipe dream and religion at this point. 

JK Galbraith had a hand in fashioning the successful and popular price controls implemented during WW2. He remarked of the experience afterwards that the first obstacle they had to overcome was trying to apply price controls to perfect competitive market models because it failed time and time again. There appeared to be nearly no such thing as a market with perfect competition in the real economy. But when they fashioned price controls to the specific power dynamics of particularly important markets they had way more success, effectively curbing price gouging and excessive profiteering while not only not impeding but in fact boosting production.  

By the way, Teachout wrote a book called Corruption in America: From Benjamin Franklin's Snuff Box to Citizens United (2014). From taking a snuff box as a gift from a foreign country costing you your office to judges taking millions in gifts and everyone knows it and they are untouchable, above the law. Stunning historical trajectory. Great anti-corruption history.