Let's apply what we just learned. What are some examples of humane sellers? To do that, we need to identify who charges low prices. Well, The New York Times charges only one dollar per issue -- and you can read these very words for free! How about NPR? They don't even have ads! And court-appointed lawyers will defend you for free -- the very pinnacle of generosity...and quality. How about Wal-Mart? Not so fast. We are mortgaging our lives to the Chinese for the illusion of low prices there. And who are the greediest? Homeowners. Houses are among the most expensive things you can buy. Why? Greedy sellers.
The technical term for very high prices is "gouging". Oil companies are good examples of gougers; they always gouge. Economic theory states that gas prices should be about 50% lower than whatever they are; hence, we have an unconscionable gouge factor (except in Europe, where prices are triple what they are here -- but that is due to their superior moral system, and not gouging). In general, we can determine gouging by the following formula:
Gouge Factor = Price / Worth
Hence, if a product is worth only ten dollars to you, but you're being charged twenty dollars, that is a gouge factor of 20/10= 2. So, we can mathematically state that greedy sellers have gouge factors >1, progressive sellers have gouge factors <1, and the most humane sellers have gouge factors of zero.
Let's apply what we just learned. Say you've had a heart attack, and your doctor prescribes medication to prevent a fatal recurrence. What's that medicine worth to you per year? $500? And now, let's say that the pharmaceutical company charges you $1500, or about $5 per pill. That's a gouge factor of three...enough to warrant prison sentences under an enlightened judicial system! And the gouge will require you to make some very unpleasant tradeoffs; perhaps you will need to halve your cigarette purchases or cut down on pay-per-view. Is that what we, as a society, as a nation, should be doing to the most vulnerable among us?
High prices also send "signals". Say there’s a shortage of gas, and gas prices increase. How will people behave? Will they cut back on gas purchases and thereby alleviate the shortage? If you said “yes”, then we’ll need to talk in detention! You see, that is propaganda designed by oil companies and other monied interests. Here are the facts: When gas prices increase, the children suffer first. The children are deprived of transportation, food, and the other joys of childhood. Is it right for oil executives to raise prices while children suffer? The only signal here is the oil men are child abusers.
Are high prices a signal to oil companies that they should expand production to make more money -- and thereby alleviate shortages as an unintended benefit? No it isn’t. Just remember what we discussed about the crimes of profit-making.
Are high prices a signal to other firms that they should move their resources to selling oil, and then compete by charging lower prices? You say, “ridiculous”? And I say, “now you can see through propaganda!”
How can these child-abusers be stopped?
- - Price controls are always effective. Remember: The Soviet Union, one of the most powerful nations ever, perfected price controls. And gas price controls under President James Earl Carter were so effective that people were lining up by the hundreds at gas stations to stare in awe at the low prices.
- Taxes are also an effective remedy – perhaps better than price controls, because the government gets the money.
- Education matters. Children must be taught at an early age that money-mongers are evil. And they must learn that when they grow up, they will deserve to have anything they desire at a price that they think is fair. What they want should be theirs for the asking. In fact, isn’t that how you raise your children now? No? Well, that’s why we have public schools to educate them...
Had a snooty kulak say to me the other day, "competition drives down prices. If I control my production costs, I can offer the same product at a lower price than my competitor." Babbled something about "market forces".
Last I heard he was in a re-education camp. But John Kerry assures me that he'll be ok.
Today glorious state-sponsored and entirely truthful news sought to mention you.
They spoke your name and that of aliens and the economy in same sentence. It's meaning is to inspiring for humble person such as myself. Can you explain?