by Jon Sanders
Research Editor and Senior Fellow, Regulatory Studies, John Locke Foundation
Here’s a screenshot from WRAL today:
Look at these two headlines back-to-back from WTVD. An economist can see how they’re related:
Why are we seeing water shortages before Hurricane Florence even hits? Because North Carolina outlaws “price gouging”; i.e., raising prices during natural disasters.
Economist Art Carden illustrates Mike Munger’s example from Raleigh after Hurricane Fran, “They Clapped: Can Price-Gouging Laws Prohibit Scarcity?“:
If higher prices are signal flares saying, Bring supplies from where they’re plentiful to where they aren’t!, then anti–”price gouging” laws are signal flares saying, Stay away from there!