Gov. Christie told merchants that price gouging during a state of emergency is illegal because "during emergencies, New Jerseyans should look out for each other -- not seek to take advantage of each other." Christie warned: "The state Division of Consumer Affairs will look closely at any and all complaints about alleged price gouging. Anyone found to have violated the law will face significant penalties." It's not just Christie who has threatened to prosecute sellers for raising prices. New York Attorney General Eric Schneiderman has launched an investigation into post-storm price increases after receiving consumer complaints about higher prices for everything from gasoline to hotel rooms.
Christie, Schneiderman and public officials elsewhere know better or have access to economists who inform them. But they're playing politics with people's suffering, emotionalism and economic ignorance. By the way, politicians would serve us better by focusing their energies on tax gouging.
Disasters produce ignorance in another way. Peter Morici is a professor at the University of Maryland and a former chief economist at the U.S. International Trade Commission. He argues that Hurricane Sandy may prove to be an economic boon, writing: "Disasters can give the ailing construction sector a boost, and unleash smart reinvestment that actually improves stricken areas and the lives of those that survive intact. Ultimately, Americans, as they always seem to do, will emerge stronger in the wake of disaster and rebuild better -- making a brighter future in the face of tragedy."
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Professor Morici is not alone in this vision. Nathan Gardels, editor of New Perspectives Quarterly, wrote an article titled "The Silver Lining of Japan's Quake," arguing the economic "benefits" of that disaster. Even Nobel laureates are not immune from this vision. After the 2001 terrorist attack, economist Paul Krugman wrote in his New York Times column titled "Reckonings; After the Horror" that as "ghastly as it may seem to say this, the terror attack -- like the original day of infamy, which brought an end to the Great Depression -- could even do some economic good." He explained that rebuilding the destruction would stimulate the economy through business investment and job creation.
We conservatives may never reach a consensus among ourselves as to the main factors that caused our election defeat, but surely we can agree that we must do a better job of selling our ideas. The billions of dollars that will be earned by people in the building industry and their suppliers will surely create jobs and income for those people. But rebuilding diverts resources from other possible uses. Natural or man-made disasters always destroy wealth. Were that not the case, mankind could achieve unimaginable wealth through wars, arson, riots and other calamities.
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