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Quotation of the Day…

… is from an e-mail sent to me yesterday by Gary Hoover, a resident of Austin, Texas; I share this e-mail with Gary’s kind permission:

Watching TV, most of the [price] gougers seem to be individuals who went to the effort to buy water bottles in huge bulk and hand-deliver them to thirsty areas.  They took financial and perhaps physical risk to do so.  Beyond what the traditional retail system is prepared to do.  At the same time, Anheuser-Busch is donating 350,000 bottles of water in Houston.  That is tough competition and underscores the gouger’s risk.

DBx: Yes.

Far too many politicians, professors, preachers, and pundits miss these on-the-ground realities.  All they see are unsually higher prices and leap from this fact to the conclusion that consumers – especially poor consumers – are thereby unfairly harmed.  Pundit Michael Hiltzik is especially uninformed about this reality.  And he’s also especially annoying when he alleges that it is economists such as Greg Mankiw and Mark Perry who are unduly attached to simplistic explanations.  Yet, in fact, it is people such as Hiltzik who peddle uninformed, simple-minded explanations about complex phenomena.

Hiltzik mistakes the straightforwardness of a supply-and-demand explanation for simple-mindedness.  Like so many who know about economics only some terms, and who have only a superficial knowledge of economists’ manner of theorizing, Hiltzik misses the complexities that economists fully understand are packed into demand curves and supply curves.  Indeed, the great usefulness of supply-and-demand analysis is the fact that it takes account of this complexity in a way that allows us to grasp reality much more surely and clearly than is possible with any competing analysis.


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