Tag Archives: Hurricane Sandy

Ron Paul praises price gouging

Sure, I called it. But isn’t that special when Ron Paul backs me up on simple free market economics:

Had gas stations been allowed to raise their prices to reflect the increased demand for gasoline, only those most in need of gasoline would have purchased gas, while everyone would have economized on their existing supply. But because prices remained lower than they should have been, no one sought to conserve gas. Low prices signaled that gas was in abundant supply, while reality was exactly the opposite, and only those fortunate enough to be at the front of gas lines were able to purchase gas before it sold out. Not surprisingly, a thriving black market developed, with gas offered for up to $20 per gallon.

With price controls in effect, supply shortages were exacerbated. If prices had been allowed to increase to market levels, the profit opportunity would have brought in new supplies from outside the region. As supplies increased, prices gradually would have decreased as supply and demand returned to equilibrium. But with price controls in effect, what company would want to deal with the hassle of shipping gas to a disaster-stricken area with downed power lines and flooded highways when the same profit could be made elsewhere? So instead of gas shipments flooding into the disaster zones, what little gas supply is left is rapidly sold and consumed.

Governments fail to understand that prices are not just random numbers. Prices perform an important role in providing information, coordinating supply and demand, and enabling economic calculation. When government interferes with the price mechanism, economic calamity ensues. Price controls on gasoline led to the infamous gas lines of the 1970s, yet politicians today repeat those same failed mistakes. Instituting price caps at a below-market price will always lead to shortages. No act of any legislature can reverse the laws of supply and demand.

History shows us that the quickest path to economic recovery is to abolish all price controls. If governments really want to aid recovery, they would abolish their “price-gouging” legislation and allow the free market to function.

It’s a shame that RINO governor Chris Christie won’t listen to free market advocates, but he’ll be listening when citizens hit the voting booth next year and remember his handling of gas shortages by further exacerbating the situation with rationing. Even worse, they might remember him giving the green light to football fans to attend a Giants football game during said rationing and state of emergency. Or, they might remember that Christie was quick to send an army of 45 bureaucrats out to check gas station receipts.

Already polls are showing Governor Christie rather vulnerable against Democrat contenders (who most certainly would have also rationed gas, but go ahead and ask them yourselves). Hurricane Sandy and his mishandling of the aftermath have yet to be factored into these polls.

Gas rationing may have ended in New Jersey today, but the extended gas crisis’ actual costs to the New Jersey economy will no doubt haunt Christie well into next year’s re-election bid.

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Victoria’s Secret saves the National Guard

From Wired:

On Monday night, Hurricane Sandy hit the armory of the New York Army National Guard’s 69th Infantry Regiment, leaving the soldiers without power, hot water, or anything but the most rudimentary means of communicating with the outside world. So the next morning, the Regiment’s officers made an emergency plea — to the producers of the Victoria’s Secret fashion show.

As they had done for the last three years running, the lingerie company was holding its annual television event at the Regiment’s historic armory, located at 25th street and Lexington Avenue in Manhattan. For the show, the producers had hauled in eight massive 500 kilowatt generators. Of course, the producers said, we’d be happy to help. Hours later, the lights flashed back on.

“We were dead in the water until Victoria’s Secret showed up,” says Capt. Brendan Gendron, the Regiment’s operations officer.

But that wasn’t the only thing the lingerie company was better at than the National Guard:

The soldiers were still having communications problems, though. Many of the local cell towers were down, and so was the armory’s internet’s connection. Luckily, Shapiro had answer for that, too. For the show, he had leased a T1 line connected to a microwave dish on the roof. “We plopped two routers in their command center,” he says, “and now they’re sitting on our internet backbone.”

The troops also needed help distributing food. The Federal Emergency Management Agency had begun bringing tractor-trailers’ worth of emergency provisions to the armory. It was up to the troops to break up the pallets, load them in military trucks, and bring them to the seven distribution centers in Manhattan where the Salvation Army would hand out meals to Hurricane victims. One problem: the 69th didn’t have a fork lift. So again, they turned to the Victoria’s Secret crew.

You gotta love it when the private sector saves the government’s ass in a crisis.

But you really have to appreciate when it’s done by a bunch of people whose job typically consists of making sure scantily-clad girls look good walking down a runway in boa-feathered wings.

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Kottke.org suspends posting

One of my longtime subscribed reads has sadly had to indefinitely suspended operations post-Sandy. Jason Kottke writes:

Publishing on kottke.org is suspended until further notice. The situation in New York and New Jersey is still dire** so posting stupid crap seems frivolous and posting about the Sandy aftermath seems exploitive. Information is not what people need right now; people need flashlights, candles, drinking water, safety, food, access to emergency medical care, a warm place to sleep, etc.

Anyway, we’ll be back in a few days hopefully.

** I say “still dire” because I think the perception among people not in the NY/NJ area is one of “oh, the storm has passed, the flooding is subsiding, and everything is getting back to normal”. But that’s not what I’m hearing. What I’m hearing is that there are large areas that have been without power for 4-5 days, people are running out of food and gas, food and gas deliveries are not happening, etc. Things are getting worse (or certainly have the potential to get worse), not better, especially for those without the resources to care about which cool restaurants are open or how much an iPhone car service is gouging its customers or which Midtown office they’re gonna work on their startup from.

My deepest sympathies go out to Kottke and other bloggers who are enduring the dire situation still ongoing in New York City and the surrounding boroughs. We anxiously await your firsthand reports of the struggle to keep civilization together in the wake of the worst disaster the Internet-centric generation has ever experienced.

Drop by his site and click some ads to show your love.

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While Tri-State goes Mad Max, Obama campaigns in Vegas

NYC Mayor Michael Bloomberg and New Jersey Governor Chris Christie should probably realize soon enough they’ve mistakenly hitched their wagons to the perpetual campaigner in chief, not the savior of Sandy-monium:

“when disaster strikes, we see America at its best.”

“All the petty differences that consume us in normal times somehow melt away,” the president told 4,500 Nevadans at a rally in Las Vegas. “There are no Democrats or Republicans during a storm, just fellow Americans, leaders of different parties working to fix what’s broken, neighbors helping neighbors cope with tragedy, communities rallying to rebuild, a spirit that says, In the end we’re all in this together, that we rise or fall as one nation.”

That end of course, comes after Obama’s latest campaign stop in Las Vegas, which has taken priority over the plight of Americans mired in a growing crisis of shortages across the flood-devastated East Coast.

Meanwhile, things are reaching thunder dome levels as a gasoline shortage has people going completely nuts, and an ancillary food crisis begins to bloom.

Remember when Bush was caught in similar circumstances after Katrina? Las Vegas will become Obama’s Coronado.

Libertarians and assorted “kooky survivalists” across the country — always wary of big government promises and now muttering “told you so” — are left to watch helplessly as the federal assistance once again arrives days late and several braincells short.

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Over 8 million were without power at peak of Sandy outage

According to the Department of Energy website, which has been acting as a clearinghouse of information regarding the electric grid in the Northeast, at the peak of Hurricane Sandy there were over 8 million “customers” (these can include entire buildings) at the peak of the outage.

Adding all the people who have been restored, the number is a mind-bending 8,460,344 8,317,507 total “customers” who lost power due to Sandy across twenty one states. CORRECTION: Those who had been restored were already counted in “peak outages,” we regret the error.

Since then, the government has done all it can to stay out of the way of electric repair crews, going so far as to suspend many regulations in order to allow companies to expedite repairs and give fuel to those so desperate for energy. The result has been telling, with 4,657,013 remaining “customers” left without power as of 9AM EDT on November 1st.

One of the more interesting stories is that quite a few NYC data centers have had to shut down due to the loss of power and their inability to get fuel for backup generators. Another is how many people are willing to stand around outside of Starbucks just to get their internet fix (from websites that are still up). Some people are even getting so desperate that they going back to using payphones (gasp, those still exist?).

Con Edison has stated that they expect repairs to last until at least through November 10th or 11th –however this may be an overly pessimistic view so folks will see them in a better light when the lights finally do come back on.

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Post-Sandy price gouging laws and gas shortages

Yesterday, Matthew Iglesias at Slate warned us that many people living in states suffering from the freak storm Hurricane Sandy will find themselves in dire shortages as the free market gets tangled with price gouging laws:

Even in these polarized times, there are some things politicians of both parties can agree. Price gouging, for example, is wrong. New York Attorney General Eric Scheiderman, a Democrat, wants you to know it. But this isn’t just for soft-hearted liberals. New Jersey’s notoriously tough conservative governor, Chris Christie, also put out a weekend press release warning that “price gouging during a state of emergency is illegal” and that complaints would be investigated by the attorney general. Specifically, Garden State merchants are barred from raising prices more than 10 percent over their normal level during emergency conditions (New York’s anti-gouging law sets a less precise definition, barring “unconscionably extreme” increases).

The bipartisan indignation is heartening, but there’s one problem. These laws are hideously misguided. Stopping price hikes during disasters may sound like a way to help people, but all it does is exacerbate shortages and complicate preparedness.

The basic imperative to allocate goods efficiently doesn’t vanish in a storm or other crisis. If anything, it becomes more important. And price controls in an emergency have the same results as they do any other time: They lead to shortages and overconsumption. Letting merchants raise prices if they think customers will be willing to pay more isn’t a concession to greed. Rather, it creates much-needed incentives for people to think harder about what they really need and appropriately rewards vendors who manage their inventories well.

Today, gasoline is in short demand as retailers who were able to stay open are prohibited from adjusting prices in the face of inflated demand:

Drivers and homeowners scrambled to secure fuel for their cars and generators in the U.S. Northeast on Wednesday as storm-hit gasoline stations started to run dry.

More than half of all gasoline service stations in the New York City area and New Jersey were shut because of depleted fuel supplies and power outages, frustrating attempts to restore normal life, industry officials said.

Reports of long lines, dark stations and empty tanks circulated across the region. Some station owners were unable to pump fuel due to a lack of power, while others quickly ran their tanks dry because of increased demand and logistical problems in delivering fresh supplies.

Being able to adjust prices to reflect market conditions isn’t price gouging, it’s good economic sense.

As economist Art Carden eloquently wrote in 2011, “[I]n post-disaster situations rising prices perform vital economic triage by showing which uses of resources are now high-value and which uses of resources are now low-value.”

“A disaster means a big shock both to what people want and to the resources available to fulfill those wants. Freely-moving prices make sure resources are allocated to their highest-valued uses, and rising prices send people a very important signal: resources have gotten scarcer and need to be conserved. If houses are destroyed by a tornado, rising lumber prices tell someone in an unaffected area to think twice about building a new deck because the lumber is probably more valuable rebuilding houses. Rising gas prices tell people to think twice about burning scarce gas for a Sunday drive in the country. And so on.”

In other words, temporarily higher prices would encourage those not directly involved in cleanup to stay home and out of the way until the economy stabilizes.

But with price gouging laws, your desire to drive around looking at a storm’s destruction is just as valid as the crews who are working to clean it up, and makes the overall economic situation that much more painful, for a longer period.

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“Superstorm” Hurricane Sandy photos

The Boston Globe has a heart-wrenching series of photos of showing the vast amounts of flooding and fires in the aftermath of Hurricane Sandy. As the Northeast begins to pick up the pieces and rebuild, some are estimating the dollar value of the freak storm could run more than $30 billion.

NASA has also released a video time-lapse of the storm from Caribbean inception to landfall, showing a massive spiral that stretched all the way to the mid-Atlantic.

While you’re at it, check out an International Space Station flyover video.

UPDATE: The New York Times has a time-lapse video from their office window. The blackout hits at Monday at 8:40PM.

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After Hurricane Sandy, all eyes on FEMA

Yesterday, the devastating Hurricane Sandy made landfall along a swath of the Northeastern seaboard of the United States, sending surging tides across coastal areas of Delaware, Pennsylvania, New Jersey, New York, Connecticut, Rhode Island and Massachusetts. At a stunningly low 943 millibars, it broke the previous record low barometric pressure set in 1938 by the Long Island Express Hurricane (946 millibars).

Already fires are beginning to erupt in the wake of the storm, with 80 homes destroyed in a Queens, New York neighborhood.

But while millions are reeling from widespread electrical blackouts and loss of utilities in the stricken areas, the Federal Emergency Management Agency — head by Craig Fugate — has said it remains in response mode, while merely hinting at the political fallout that may ride along with a disaster so close to election day:

“We are anticipating that, based on the storm, there could be impacts that would linger into next week and have impacts on the federal election,” Fugate said on a conference call with reporters.

But any potential tinkering with Election Day would bring a bevy of legal issues.

“Our chief counsel’s been working on making sure that we have the proper guidance,” he added. “We’re going through the regulatory policy and making sure all that’s in place and we can support it.”

Fugate did not address whether the election could be delayed — a question that federal officials said last week is up for states to decide.

President Barack Obama has responded by cancelling several campaign trips to key swing states. Included in the cancellations was a flight to Orlando, Florida where the president decided against being seen campaigning — Air Force One ended up landing, Obama ate some pizza with campaign volunteers and then returned to Washington (dubbed the most expensive pizza delivery in history).

Mitt Romney for his part has also remained low-key, cancelling several campaign appearances and adopting a wait-and-see approach to gauge whether FEMA will be able to manage a disaster without too much embarrassment.

So far the only major hiccup has been in insisting on sending people without power to the internet:

When President Barack Obama urged Americans under siege from Hurricane Sandy to stay inside and keep watch on ready.gov for the latest, he left out something pretty important — where to turn if the electricity goes out.

Despite the heightened expectation of widespread power and cable television failures, everyone from the president to local newscasters seem to expect the public to rely entirely on the Internet and their TVs for vital news and instructions.

[...] “With these types of storms, you get a lot of this is going to be carried out through the traditional TV and radio media,” Fugate told reporters on a conference call. “But we’re using a lot more social media, we’re using everything from Facebook to Twitter. I think there’s a higher degree of awareness that people have of the storm is coming and what the impacts are going to be.”

Fugate also talked up battery-operated or hand-cranked radios during interviews on morning news shows.

A call to FEMA’s news desk, however, found even they didn’t have any non-Internet information readily available beyond suggestions that people call 911 in an emergency. When asked where folks should turn for information if they have no power, a FEMA worker said, “Well, those people who have a laptop with a little battery life on it can try that way. Otherwise, you’re right.”

Back in 2006 we pointed out FEMA’s fraud and waste in the aftermath of the Hurricane Katrina’s disaster in New Orleans (or at least cited the Government Accounting Office):

The GAO, the investigative arm of Congress, found at least $1 billion in disaster relief payments by the Federal Emergency Management Agency were improper and potentially fraudulent because the recipients provided incomplete or incorrect information when they registered for assistance. (GAO report)

Oddly enough, our least favorite former FEMA chief Michael “heck of a job” Brown was quick to weigh in with political advice:

“Right now,” Brown maintains, “both campaigns need to let the first responders and governors do what they need to do. Basically say, ‘If we can help in any way, let us know.'”

Since Hurricane Sandy has dominated headlines in recent days, 2011 comments from Romney saying that FEMA should be shut down and power should be given to the states have resurfaced. His campaign has clarified that Romney believes states should have more authority, but he does not think FEMA should be abolished.

Brown agrees. “It’s more of a statement of fact…. This has always been my theory. The stronger you make the federal government, the weaker you make local governments…. State and local responders need to be as robust as they possibly can…. What FEMA should be doing right now is coordinating, [telling governors and mayors], ‘What do you need? How can we help?'”

He adds, “Everything that really needs to be done is a state and local issue…. The feds are more about helping financially.”

But some refugees wary of FEMA’s checkered history may have some hope when dealing with the federal aid-givers. If you’re not comfortable with the idea of marching into a designated “FEMA camp” that has been rightly or wrongly maligned, you can actually bring your guns and ammo with you.

From a 2005 article on the Boston Globe:

Gun rights groups had sought the change, saying the original policy violated Second Amendment protections for gun ownership. Kinerny said FEMA made the change after consulting with lawyers.

FEMA said it has been general policy for several years to prohibit guns at such parks anywhere in the country. But two gun rights groups — the National Rifle Association and Second Amendment Foundation — said they found out about it only this month as a 600-trailer encampment opened near Baton Rouge.

Wayne LaPierre, the NRA’s executive vice president, praised the change. ”It is wrong to force citizens to give up their constitutional rights in order for them to get a needed federal benefit,” he said in a news release.

We here at Hammer of Truth wish the victims of Hurricane Sandy a speedy recovery, and we certainly hope FEMA won’t get in the way of their recovery and rebuilding this time.

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