Bryan Caplan  

Bush's Hate Speech

Nasty, Brutish Looting... Education and Income...
The gougers are the most beastly, the coarsest, the most savage exploiters... These bloodsuckers have waxed rich during the hurricane on the people's want, they have amassed thousands and hundreds of thousands... These spiders have grown fat at the expense of disaster victims, impoverished by the hurricane... Merciless war against these gougers!

No, this isn't from Bush's "zero tolerance" on "gouging" speech. The words are too big.

It's actually V.I. Lenin, with the following substitutions: "gouger" instead of "kulak," "hurricane" instead of "war," "disaster victims" instead of "peasants," and "families" instead of "workers."

Steve Landsburg once called George Bush I "the most economically illiterate of modern presidents." I'm very tempted to quip "Like father, like son," though in truth I suspect that anyone who could get elected would have given a similar speech.

Note to politicians of the world: For the last time, if you want supplies to flow to disaster areas, let prices rise !

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The author at Outside The Beltway in a related article titled Bush: Zero Tolerance for Looters writes:
    President Bush today declared that there should be “zero tolerance” for looters and price gougers. Bush warns against price gouging on gasoline prices (Reuters) President Bush warned against price-gouging of gasoline on Thursday in re... [Tracked on September 1, 2005 2:45 PM]
The author at ishkabible in a related article titled Price gouging? writes:
    If you cap the price (as some people are making noises about), rationing will take the form of queuing: people will have to wait in long lines for gasoline. This sounds just fine to some activists and academics, apparently ones... [Tracked on September 5, 2005 10:18 PM]
COMMENTS (8 to date)
spencer writes:

Of course raising prices will attract supplies to a region with no electricity and the roads flooded.

Markets work, but they can not perform miracles.

I believe in markets and work in them every day --
but your faith is childish.

I really find it hard to believe that Exxon, Wal-Mart, Home Depot, CVS, and the various retail grocery store chains are waiting for higher prices before they resume deliveries to the region.

That is what your comments imply -- do you really believe that about the managements of major US corporations?

Dave Schuler writes:

I agree with your conclusion but the way you get there is beneath you: you are smarter than that. I could turn Mahatma Gandhi into Genghis Khan with word substitution. Don't be stupid and petty.

Bob Knaus writes:

The price of nuance must be at record levels, judging by Bryan's sparing use of it lately ;-)

I was in Homestead for Hurricane Andrew in 1992, the eye went right over me. In the devastation zone, "markets" work differently for a while.

The hurricane went over Monday morning. On Wednesday evening, my dad arrived from Georgia with a panel truck full of donated generators, tar paper, food, and such. As we unloaded a generator for my place, he asked me if I needed some money. I said "Not really, there's nothing to buy." It was true, free water, food, ice, and clothes were already arriving by the truckload.

The big retailers of hardware, groceries, building materials, etc. did not raise their prices post-hurricane, even though they probably incurred a lot of extra expenses in quickly clearing out their stores and getting new supplies in. My guess is that they didn't want to tarnish their reputation with consumers, that any short-term losses they might have sustained were more than made up in customer appreciation for having been there and having fair prices.

Small contractors were a different story. They could and did charge whatever the market would bear for painting, roofing, construction, clean-up, and all the other hard work that needed to be done after the storm. This of course attracted hordes of out-of-state workers, which presented some logistical issues but ulimately speeded the reconstruction process.

I predict this is more or less what will unfold after Katrina as well.

John P. writes:

Bob -- Thanks for sharing your experience. Very interesting, and I agree with your analysis.

N. writes:

I agree with this in principle, but offer the following for discussion: if no attempt at creating a price ceiling is made, doesn't it seem more likely that those who cannot afford what they see as a necessity will resort to force, and thus circumvent the market entirely?

I'm suggesting that creating a ceiling, though less efficient (and thus guaranteed to prolong recovery) might prevent, in essence, riots.

Am I off base, or does this line of thinking have any merit?

Robert Schwartz writes:

N.: It is entirely true that markets may breakdown in great extremes as Mr. Knaus testified. However, when last I heard, the price of gasoline was irrelevant in New Orleans where the streets are impassible and the cars are under water, but in Atlanta, where there was neither storm nor flood, it had reached $6.00/gal.

Atlanta's problem is that it was supplied by the pipelines from the gulf coast. The alternative is that a lot of tanker trucks will need to be filled and driven to Atlanta at great cost and some risk.

$6.00/gal will induce a large number of truckers to haul tankers of gas to Atlanta, and it will deter Atlanteans from wasting it. So supply and demand will be brought back into balance until such time as the gulf coast pipelines are humming again.

Price controls were tried in the 1970s, they caused rationing, gas lines and outright theft. When Reagan repealed them in the 1980s the price of gasoline went down for the next 10 years. I personally do not think that we need to go through that experience again.

Brad Hutchings writes:

You might as well suggest that N.O. be relocated above sea level somewhere and called New New Orleans or Really New Orleans or Newer than it's ever been Orleans or It'll be old again in 100 years Orleans or whatever Dennis Hastart was thinking when he decided to be thoughtful during a disaster.

Logic does not rule in disasters. While this is an instructive time every year for us to teach people how the price system could satisfy more people's need to get 20 miles away from the epicenter of a disaster than any conceivable government plan, we have to find ways to reinforce the lesson year-round, so it's not forgotten in the next hurricane, earthquake, etc.

john dickie writes:

'All men are created equal', how many times have we heard this phrase pertaining to the United states and its constitution? Your government has long used this as a mantra to instil national pride and promote patriotism. Based on the response of your president and the federal government last week amid the carnage of New Orleans 'all men are created equal' is not only not accurate it appears to be a lie. john dickie toronto

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