During this pandemic, many have complained about price gouging, where retailers raised prices on needed items in short supply. This often triggered government-mandated price controls.
But when prices are held constant by government decree, needed items quickly vanish from shelves, causing shortages. Thus, most people don’t benefit from lower prices anyway.
Raising prices on scarce items during an emergency serves two purposes. First, it discourages those arriving first at a store from buying all the toilet paper or batteries so that others can’t get any, thus deterring hoarding and promoting conservation. Second, raising prices during a crisis provides incentive for creative merchants to make the extra effort to bring in more supplies from distant places to where scarce items are needed.
Furthermore, researchers from Utah State University’s Center for Growth and Opportunity, using cellphone mobility data, found that shortages from price controls encouraged consumers to search more stores for items, thus increasing an average individual’s social contacts by at least 3.3. This led to 57 to 184 additional daily confirmed covid-19 cases and an additional 12 to 17 daily covid-19 deaths per state where anti- price gouging laws were in effect.
Once again, progressives’ virtue- signaling causes more harm than the problem that they claim to solve.
Dave Majernik
Plum