The Economics of a Storm
There are two very predictable behaviors in this day and age: 
(1) Whenever there is a gun tragedy, there is an outcry to further limit gun rights and gun ownership, as if limiting legally owned guns will somehow lessen the number of violent crimes, which are by and far committed by illegal weapons or people who possess them illegally.
and
(2) The topic of this little work: Whenever there is a major storm, the likes of Hurricane Katrina, the tornadoes that devastated much of the southeast in 2011, and now, most recently, SuperStorm Sandy, there is always talk of price gauging. We hear it at all levels – from the President, from state governors, and city mayors, just to name some of the most visible. 
But let’s examine what happens with a storm and what “price gauging” really is. The undeniable facts are that after a major catastrophe like any of these storms, there is an increase in demand for certain items (usually starting with generators, gas, food, and water, but depending on the event, the list could go on to include plywood, sandbags, flashlights, etc.)
But the specific items are not the real issue. The real issue is that after a storm (or even just before) the demand for these things will rise. With a rise in demand, only two things can occur right away – a rise in prices or shortages of those items. Is there a third option? Nope, not in the short term! In the longer term supplies can be increased to match the increase in demand, but that will not (because it cannot) happen in the short term.
To say it simply: A rise in demand always triggers a rise in prices or shortages. 
So let’s go back to our current storm and this talk of price gauging. The governor (or other misinformed leader) declares that raising prices in the midst of (or while recovering from) a storm is profiteering improperly from the storm and such profiteers will be soundly punished. Businesses are told, “No, you may not raise those prices one bit.” So, with no increase in prices, what has to happen? Yes, shortages. They happen every time.  Not just some of the time, every time. They are as predictable as the cries of price gauging. 
So, instead of being able to pay more for the gas you need for your car or your generator, you just won’t be able to get any. Instead of paying more for the food or water you need, the stores will simply run out. 
But think for a bit what the alternative would be like if we encouraged gas stations and grocery stores to raise their prices as needed during and after a storm, and applauded them for that instead of vilifying them, what would the situation be like? If you were the 100th person in the store, or the 1000th person, you might actually be able to buy a few cans of tuna or some bottled water; there might be batteries still on the shelf, and gasoline at the pump. Yes, you would have to pay more, but you would be able to purchase what you absolutely needed (and if it’s a true need you would be thrilled to be paying double rather than not being able to purchase it all all!)
So, why do we act like keeping the prices artificially low at this time is somehow virtuous? In time, supplies can go up to take care of these increased demands. But let’s consider how quickly supplies will go up if prices are kept artificially low, versus if they are allowed to rise to the true market level?
If prices can go up, the people in the next town or county or state over are more likely to bring more of (fill in the blank with whatever it is you need and can’t buy after the storm) and sell it at a higher price in your area than they can sell it back home. But if the government has put a price ceiling on what those items can be sold for, there is no (I repeat, no) incentive for someone to work harder to bring it to a hard-hit area rather than just staying where they  are and selling it easily for that same price.
Yes, they may do it out of the goodness of their heart, but then we’re talking about charity, not business.
So, rather than just sitting back and hoping that the government will bring in the needed supplies, or some relief agency will show up with something that is desperately needed, we should also unleash the power of the market to assist! Let those prices go up, don’t demonize those who may profit by filling a need, and watch how quickly the demand and the supply will equalize again after the storm!
In conclusion, I’m not trivializing the difficulties of those who have just gone through a difficult storm. But I would like to encourage people to reconsider whether those people are helped or harmed by artificially lower prices on the things they need to purchase. 
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About the Author
Catherine Jaime did her undergraduate work at the Sloan School of Management at the Massachusetts Institute of Technology.  She has taken additional economics training through the Foundation for Teaching Economics and the Foundation for Economic Education.  Catherine has taught in grades K-twelve with a concentration in high school economics and government.  She has authored a number of history books, and several booklets dealing with government and/or economics.  She firmly believes in the importance of the U.S. Constitution and the free market, and it shows in her writings.
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Discover other titles by Catherine Jaime at Smashwords.com:
Leonardo the Florentine (historical fiction)
A Brief History of New York City
Understanding the U.S. Constitution
Important Constitutional Documents
The Philadelphia Convention: A Play for Many Readers
Failure in Philadelphia (historic fiction)
The Philadelphia Convention: In Their Own Words
A Brief Financial History of the United States
Understanding the Electoral College
The Declaration of Independence: A Play for Many Readers
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Connect with Catherine Online:
Smashwords:  https://www.smashwords.com/profile/view/CatherineJaime
www.CatherineJaime.com 
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