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Speaker 1: I want an argument. I want an argument. It's one

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Speaker 1: more thing I'm strong andy.

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Speaker 2: Before we get to that, which I know what that's about.

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Speaker 2: I'm going to retell a joke I heard yesterday, probably

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Speaker 2: in a poor way, but do you know the comedian

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Speaker 2: Ron White? Love him. Yeah, he's a very funny guy.

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Speaker 1: I can't picture him, but I know I've seen his stuff.

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Speaker 2: I just got fedted on some algorithm on YouTube or

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Speaker 2: something the other day and it gets sucked me and

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Speaker 2: I watched it. Anyway, he was talking about why are

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Speaker 2: sunglasses so expensive, which is a decent question. He's talking

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Speaker 2: about going into sunglass Hut and he said, I saw

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Speaker 2: a pair of sunglasses that I liked, didn't love, just liked,

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Speaker 2: and asked the guy how much they are now? He

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Speaker 2: said three hundred and nine dollars, which is yeah, fairly

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Speaker 2: common it sunglass hut.

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Speaker 1: Uh.

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Speaker 2: The joke part was that I thought, so it was

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Speaker 2: so funny? Was he said so? So? I I said

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Speaker 2: three hundred nine dollars. So I said to the guy,

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Speaker 2: you know, calmly and respectfully, how do you sleep at night?

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Speaker 2: You little prick? But anyway, it is a decent question

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Speaker 2: about Well, his main thing is why does a pair

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Speaker 2: of sunglasses cost more than the thirty two inch HD television.

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Speaker 1: Well, I see, you can't get a good bicycle for that,

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Speaker 1: but you can get a bicycle for that.

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Speaker 2: You can get a pretty good bicycle for that, Yeah,

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Speaker 2: because I have for my kids. Yeah, and you can

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Speaker 2: get a really good TV.

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Speaker 1: Anytime I've owned a pair of expensive sunglasses, I lose

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Speaker 1: them or I break them.

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Speaker 2: Mind you, I have a pair that I got at

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Speaker 2: a gas station like five years ago, still perfectly intact. Yeah,

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Speaker 2: that's a weird thing that just happens to everybody. Yeah,

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Speaker 2: my cheapest, crappiest pair I've had for I don't know

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Speaker 2: how many years that I spend eight dollars on. I

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Speaker 2: can't I can't lose them, I can't break them, apparently,

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Speaker 2: but the good ones are harder to hold on.

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Speaker 1: Yeah, there has got to be somewhere big Sunglasses holding

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Speaker 1: their meat alongside the Builderberg Group or something and price fixing.

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Speaker 2: It's got to be something like that. And then and

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Speaker 2: the guy said the rest of the story was because

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Speaker 2: he said, why I just bought a big I just

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Speaker 2: bought a thirty two inch HD television four K for

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Speaker 2: the same price, And the guy said at the sunglass, Well,

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Speaker 2: this filters out one hundred percent of the UV rays

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Speaker 2: and Ron White's line, I won't get all the words right,

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Speaker 2: but it's pretty good, he said. This takes in signals

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Speaker 2: from outer fucking space and turns them into sound in pictures.

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Speaker 1: Right right. And you know what's crazy is you got

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Speaker 1: your three hundred dollars sunglasses, then you got your fifteen

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Speaker 1: dollars convenience store sunglasses worth the eighty dollars sunglass.

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Speaker 2: Right in between. That's the good question, or now, or

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Speaker 2: even one hundred and twenty five because sunglasses, And whenever

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Speaker 2: I get expensive pair of sunglasses, I have one now

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Speaker 2: that I'm like, I treat like gold, and I don't.

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Speaker 2: I don't take them out of the house on special occasions.

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Speaker 2: I really like them, but they are hold hard to

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Speaker 2: hold onto, a not break. And that feeling of breaking

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Speaker 2: or losing a pair of your expensive sunglasses is just

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Speaker 2: so damaging to the psyche.

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Speaker 1: Yeah, oh yeah, Oddly enough, I have not lost nor

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Speaker 1: had sunglasses broken in many years since my eyes went funky.

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Speaker 1: I had lasac in for about a dozen years. I

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Speaker 1: could see like an eagle. It was great. But then

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Speaker 1: because it's the human body, and it's the body parts

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Speaker 1: that you get worn out. And now I'm back to

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Speaker 1: being half blind, and I've not lost or broken anything

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Speaker 1: because I need them to see, so they're always on

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Speaker 1: my face, which is part of it.

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Speaker 2: But I did better pre kid of keeping track of

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Speaker 2: sunglasses and treating them all.

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Speaker 1: That's true, That is absolutely true. Yeah, yeah, yeah. You

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Speaker 1: have a living creature that you're one hundred percent responsible

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Speaker 1: for that can distract you from your sunglasses, no matter

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Speaker 1: how expensive. So it was mocking myself in the idea

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Speaker 1: that I want an argument. I want an argument because

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Speaker 1: I actually, if I had more time and energy, I

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Speaker 1: would make it my life's work to pick out maybe five,

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Speaker 1: maybe even three economic fallacies that people five. And we'll

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Speaker 1: talk about this more on the radio show in the

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Speaker 1: days to come. But like rent control, the government says

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Speaker 1: your rent can't go up more than three percent a year.

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Speaker 1: That sounds like a really good idea until somebody explains

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Speaker 1: to you why it's a terrible idea. And it's very

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Speaker 1: easy to understand why it's a terrible idea, but people

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Speaker 1: need to be helped to get there.

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Speaker 2: God, I was watching a zoom call yesterday with Republican

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Speaker 2: strategists and Democratic strategists, and they were discussing the whole

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Speaker 2: pricing and the host brought up the idea of well,

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Speaker 2: all the economists agree, even the left leaning economists say

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Speaker 2: price fixing doesn't work, and even the Republicans said, yeah,

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Speaker 2: but it polls really well, polls really well. You ask

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Speaker 2: somebody on the street, how would you like it if

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Speaker 2: the government says you can't charge more than X four x,

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Speaker 2: and almost everybody's gonna say, oh, that'd be fantastic. M yeah,

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Speaker 2: nice depressing.

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Speaker 1: And I've mentioned this so many times, but there's a

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Speaker 1: book called The Myth of the Rational Voter that goes

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Speaker 1: a little overboard on the argument a little bit, but

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Speaker 1: they point out that there are a number of things

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Speaker 1: like rent controls, price fixing, gouging, which we're about to

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Speaker 1: talk about, that poll anti gouging laws, I should say,

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Speaker 1: poll extremely well. But if you explain to people why

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Speaker 1: they're wrong, they get it really quickly. And it took

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Speaker 1: Tim Sanderfer to explain to me why have anti anti

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Speaker 1: gouging laws are such a terrible idea, And it was

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Speaker 1: immediately clear to me that he was right. And I've

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Speaker 1: I've been spreading the gospel ever since. And I was

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Speaker 1: chatting with a couple of friends of mine the other

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Speaker 1: night over a bourbon which which weirdly turned into three bourbons,

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Speaker 1: and just just intoxication.

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Speaker 2: Were how that happens. Huh yeah, oh.

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Speaker 1: Yeah, it was so odd because we all agreed that

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Speaker 1: well anyway, but we were talking about I can't remember

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Speaker 1: how it came out, but came up, but price gouging

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Speaker 1: came up, and I unleashed my screen about how it's

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Speaker 1: a good thing. And one friend of mine, who's quite

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Speaker 1: a bright guy, he's he successfully was a high up

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Speaker 1: guy in the money part of a business that ran

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Speaker 1: his own business for a while, but all this stuff

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Speaker 1: had never occurred to him exactly, and I convinced him

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Speaker 1: completely the gouging, price gouging is a good thing. And

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Speaker 1: read a great piece in the National Review about this,

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Speaker 1: and they go into how a bunch of states have

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Speaker 1: anti gouging laws, and California has all sorts of price

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Speaker 1: fixing in all sorts of you know, industries and rents

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Speaker 1: and you name it, and it just drives the price

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Speaker 1: and the supply of things in exactly the wrong direction.

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Speaker 1: But they went into a twenty eleven paper from the

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Speaker 1: Cato Institute from written by Michael Gibberson, who cited a

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Speaker 1: case from nineteen ninety six when four men selling ice

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Speaker 1: in the wake of Hurricane fran had been arrested in Raleigh,

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Speaker 1: North Carolina, for charging a price much higher than the

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Speaker 1: buck seventy five per bag standard before the storm, and

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Speaker 1: as another guy writing for a different publication explained, quote,

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Speaker 1: North Carolina's anti gouging law prohibited markups that were unreasonably

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Speaker 1: excessive under the circumstances. I mean, God, you don't need

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Speaker 1: to be like Montesquieu or James Adams to understand that.

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Speaker 2: Wait a minute, define every term there.

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Speaker 1: Yeah, unreasonably excessive under the circumstances, but that had been

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Speaker 1: widely interpreted to limit price increases to around five percent

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Speaker 1: or less. Wow. And the four gougers then they put

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Speaker 1: out in the National Review, We're going to go ahead

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Speaker 1: and use that term for simplicity's sake, so everybody knows

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Speaker 1: who we're talking about. We don't mean it. But the

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Speaker 1: four gougers lived in a part of the state where

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Speaker 1: the electricity was working. This is post hurricane the other

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Speaker 1: wake of hurricanes they had ice.

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Speaker 2: Yeah, exactly.

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Speaker 1: They had power and they had ice. They loaded up

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Speaker 1: two trucks with ice and drove to Raleigh, where clearly

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Speaker 1: the electricity was not on. Something they would not have

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Speaker 1: done for a five percent markup. What they reportedly wanted

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Speaker 1: and got until the police intervened was twelve bucks a bag.

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Speaker 1: And as Monger this journalist points out, had there been

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Speaker 1: no anti gouging law, there would have been much more competition.

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Speaker 1: The twelve dollars ice price would have melted away.

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Speaker 2: Well, they would have brought another truckload as soon as

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Speaker 2: they could, or other people would have heard, and they'd

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Speaker 2: have brought their truckloads. And then guess what would happen.

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Speaker 2: Guess what would happen If you started bringing more and

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Speaker 2: more truckloads at twelve dollars.

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Speaker 1: A bag, the price would go down, and that ice

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Speaker 1: would have been like a buck fifty bag. Never mind

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Speaker 1: the bucks seventy five it was before the hurricane. Because

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Speaker 1: there would have been such an over supply of ice,

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Speaker 1: people would be like, well, I don't need ice, will

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Speaker 1: give you a buck and a half for it.

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Speaker 2: Plus and there's not a pity and plus and this

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Speaker 2: can't be left out. People would have ice. People who

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Speaker 2: really wanted ice would have ice.

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Speaker 1: Yeah, right, exactly, And well you might point out, well

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Speaker 1: or rich people would have ice. Doesn't matter on the

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Speaker 1: supply side, doesn't matter who was buying it and for

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Speaker 1: what reason. Maybe they're building ice sculptures of a little

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Speaker 1: boy peeing Champagne. It's immaterial the supply during a hurricane,

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Speaker 1: hurri it's after the hurricane.

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Speaker 2: It's time to drink up, Michael. That really seems decaded,

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Speaker 2: doesn't it. I mean, in the middle of a hurricane,

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Speaker 2: and you got the big ice sculpture of a little

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Speaker 2: boy being champagne.

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Speaker 1: Right, Well, that's my lifestyle, right, entitled to live the lifestyle.

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Speaker 2: It's use well, but all products work this way though.

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Speaker 2: The rich people, the people who can afford it, would

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Speaker 2: buy it first, but then there would be more coming.

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Speaker 2: The price would go down. That works that way for everything.

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Speaker 1: In fact, you could make the argument that because and

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Speaker 1: don't forget this end of the supply question, if you say,

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Speaker 1: all right, no gouging, you got to keep it at

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Speaker 1: a buck seventy five to a buck ninety five, it

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Speaker 1: would be a lottery of poor people or average people,

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Speaker 1: I should say, and a few would win that lottery.

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Speaker 1: And then there'd be no more effing ice. There would

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Speaker 1: be no more ice. Or the rich people who think

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Speaker 1: I got all sort some money, I'll pay twelve bucks

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Speaker 1: a bag. Those rich people have triggered an avalanche of

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Speaker 1: ice to come to not a few randomly selected poor

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Speaker 1: people who happened to show up when the ice showed

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Speaker 1: up at a dollar seventy five, but it would furnish

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Speaker 1: the needs of everyone who wanted ice until that price

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Speaker 1: was back down to the pre hurricane line.

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Speaker 2: You know, the emotional flaw in this argument, not the

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Speaker 2: economic flaw, because there is no economic flaw, but the

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Speaker 2: emotional flaw in the argument is there's a lot of

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Speaker 2: people whose human nature leads them to I'd rather nobody

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Speaker 2: has ice, then some people have ice. That is correct,

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Speaker 2: which is an unfortunate part of human nature.

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Speaker 1: It's like a flaw in the programming.

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Speaker 2: Yeah it is.

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Speaker 1: So I'm going to read this part just because I

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Speaker 1: think it spells it out so beautifully and can help

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Speaker 1: solidify the concept in everybody's heads, because I think this

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Speaker 1: is important. In short, anti gouging laws will mean that

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Speaker 1: fewer individuals outside of the affected areas will risk their

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Speaker 1: time and money bringing ice electric generators or other goods

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Speaker 1: into storm ravaged areas if they risk arrest, then fines

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Speaker 1: for charging quote unquote unconscionable prices. As the other guy

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Speaker 1: points out, the effect of anti gouging laws on the

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Speaker 1: supply of one good can hit the supply of another.

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Speaker 1: A truck bringing in food really should get some of

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Speaker 1: the available gas. But if a price gouging limit on

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Speaker 1: gas means that truck can't get gas, then it can't

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Speaker 1: bring in food either, And price gouging limit on limits

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Speaker 1: on foods means the trucks can't afford the gas.

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Speaker 2: Also would have effects on the future. So when a

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Speaker 2: hurricane is headed toward New Orleans, anybody who's like on

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Speaker 2: the edge of where the hurricane would hit is going

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Speaker 2: to think, Okay, hurricanes supposed to go this weekend, Let's

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Speaker 2: make sure we got all the plywood ready to go

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Speaker 2: in the trucks, and we'll show up the next day

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Speaker 2: and we'll get to charge twice as much as usually charge.

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Speaker 2: And so you'd have a flood of material go in

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Speaker 2: and the price would level out at whatever price is

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Speaker 2: still profitable for people to show up with ice or

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Speaker 2: chainsaws or plywood or whatever. It is, but no more.

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Speaker 1: Up until the point that it's not profitable anymore. And

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Speaker 1: at that point nobody needs any more plywood. It's a

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Speaker 1: beautiful system. Wait, there's a little more. Anti gouging laws

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Speaker 1: limit the price rises that discourage the hoarding that makes

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Speaker 1: shortages worse. The more expensive of good, the more expensive

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Speaker 1: it is to hoard. Cochrane argues that higher prices also

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Speaker 1: send a signal that would be hoarders that there is

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Speaker 1: no need to hoard, say, toilet paper as quote, there

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Speaker 1: always will be some in the store later. Not everyone

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Speaker 1: would get that message, but if enough did, it would

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Speaker 1: help reduce the risk that emptying shell trigger a panic.

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Speaker 1: Hoarding is infectious, and anti gouging laws could also discourage

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Speaker 1: stores from holding larger inventories of products that might come

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Speaker 1: in handy in the event of an emergency. For instance,

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Speaker 1: inventory is a great source of supply. If you run

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Speaker 1: a home depot in Florida, how many four x eight

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Speaker 1: sheets supply would do you keep around? Well, if you're

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Speaker 1: allowed to sell them for one hundred bucks each when

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Speaker 1: the next hurricane is coming a lot, you're going to

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Speaker 1: keep a lot around if you must charge only the

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Speaker 1: regular price until the shelves empty out, then not so

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Speaker 1: much inventory is expensive. Sure, price gouging is wonderful for

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Speaker 1: all the reasons that letting supply and supply equals demand

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Speaker 1: is wonderful. When there is a limited supply, then a

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Speaker 1: sharply higher price directs those who supply to those who

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Speaker 1: really need it. It's day two after the hurricane. Who

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Speaker 1: really needs gas? That's pretty good, and it's somewhat counterintuitive,

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Speaker 1: and again I think it would do you know, the

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Speaker 1: United States as a republic so much good if more

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Speaker 1: people understood the way economies and businesses really worked, because

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Speaker 1: there is so much of government policy that's pitched to

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Speaker 1: us that's not only not a great idea, it's a

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Speaker 1: crappy idea, and it's really expensive to implement. Just the

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Speaker 1: function of government is really really expensive. So the less

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Speaker 1: they do, the better we're off.

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Speaker 2: I'm picturing a cherub whatever a cherub is, naked, little

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Speaker 2: cherub I made ice, peeing out the champagne.

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Speaker 1: Yeah, you know, uh, that's a distinction.

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Speaker 2: Rich people like cherubs for some reason.

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Speaker 1: Especially those that piss champagne. Because you know, now that

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Speaker 1: you pointed out I was picturing a cherub in my

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Speaker 1: decadentn ice sculpture idea. If it was just like an

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Speaker 1: average kid stopping come the way home from school to

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Speaker 1: grab it here and the bushes peeing out champagne, Yeah,

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Speaker 1: that that would be off putting. It's almost got to

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Speaker 1: be a cherub.

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Speaker 2: Is this a is this crystal coming out of this

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Speaker 2: little fat kids penis?

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Speaker 1: Or what?

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Speaker 2: Is this? Tastes pretty good?

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Speaker 1: Why this is smooth? You know?

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Speaker 2: If this wasn't bad enough. During Hurricane Ike, Joe bought

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Speaker 2: all the plywood in the area and built what past

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Speaker 2: presidents and stuck him in his yard just because he could,

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Speaker 2: just because he could. His lifestyle, lifestyle, Well, I guess

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Speaker 2: that's it.