Thursday, August 30, 2007

Thoughts about Gouging

On occasion while flipping through the radio dials I'll take a couple of minutes to listen to Neil Boortz. He's only slightly less annoying than Sean Hannity and Rush Limbaugh (who I can never listen to) but that's not saying much. All the nationally syndicated Republican/Libertarian/anti-Democrat talk radio hosts are self-righteous prigs, but on occasion they do bring up a topic I'm interested in.

A couple days ago I was scanning the channels and Bortz was talking about price-gouging. Since this is the 2-year anniversary of Katrina, he was specifically having a conversation, or rather a monologue, about how motel and hotel owners raise prices of their rooms in the wake of an evacuation.

Now, Boortz is a fan of something called the "Fair Tax." He's written a book about a proposed revamp of the American Tax System, and takes all opportunities to promote it and the concept on the air. Anyway, he's a big proponent of capitalism and the duties of businesses to make as much money as they can, which supposedly benefits a capitalist society. Ok, fine. I can sort of live with that as long as everything is fair and equitable for everyone involved.

But his defense that day of businesses' right to price gouge in the face of a catastrophe had me seething. Tell me which side you fall on.

He provided an example - when Florida was hit by a hurricane some years back (don't recall which one but I believe it was a South Florida hit. Possible Hurricane Andrew) thousands of people fled in cars up the peninsula to safety. Hotels and motels along the way were filling up fast, but not before the owners started jacking up prices. Rooms that would normally cost $69/night suddenly could only be had for prices upwards of $300+/night. The benefit of this, according to Bortz, was so people wouldn't buy up multiple rooms - at rates they can afford - to house a few members of each family in each room. So a family of 4, plus grandma, would rent three rooms - 1 for mom and dad, 1 for brother and sister, and 1 for granny. And theoretically 80 families might be taking up 120 rooms.

First of all, while some people are shallow I don't think you're likely to see more than one or two families taking advantage of "low-ish" rates and spreading out the family. But I apparently have a little more faith in Americans than Boortz does, especially Americans during a crisis, and assume that most people are going to pull together and endure a little hardship while helping out their fellow citizens. I do think it's incumbent on the motel owner to perhaps put limitations on how he sells his rooms - it's certainly better than jacking up the prices - in the interest of the public good.

But Boortz is a big fan of owners raising prices and gouging guests up to 300-400% of the normal price for a room, to keep the occupancy dense. What he also fails to grasp is, in a crisis, where does he expect the people who can't afford $300/night motel rooms to sleep? Now I have a credit card, and in an emergency I can lay down a fairly big purchase if necessary. I could rent three rooms at $69/night on the spot, and deal with it later when the bill comes. Poorer people, just as deserving of shelter as myself and my family, may not have a credit card handy and may have even escaped with just the cash in their wallet. What are they supposed to do?

I guess Boortz figures they can just go sleep in the streets with the rest of the homeless and unwashed, as long as he gets his Presidential Suite to warm his tootsies.

He also has no problem with shopkeepers charging $20 for a bottle of water that normally costs $1 in a crisis. To, of course, keep the demand down and the supply available. So that one person doesn't buy up and horde 20 bottles of water when 19 other people could benefit from drinking them. I can see the logic in that, somewhat since these are physical objects you can save for later. But still, a man with a wife and two kids who have no credit cards and maybe $40 to their name could buy 2 bottles to share between the four of them according to that logic. Nice. Thanks, Neil for your compassion.

If I remember correctly during 9/11 a lot of shopkeepers in lower Manhattan opened up their stock to feed and water anyone who needed them - firefighters, rescue personnel, survivors, evacuees - anyone. I don't recall massive hording of those areas. They seemed to regulate themselves and, as long as supplies held out, everyone got what they needed and not much more.

I can't recall anything that has gotten me angrier in recent days than hearing him come out in support of hotel price gouging.

People can work together during a crisis, and no matter how much one reveres and worships capitalism (the way some people worship politics), simple cooperation will always win out.

UDPATE: In a related item, here's a post about horrible treatment of a customer by Delta Airlines, and how the local hotels jacked up their own prices to take advantage of stranded customers. The travelers had little to no available cash and were gouged out of their socks. And this is looked favorably on?

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