Why Price Gouging Can Be A Good Thing

In the wake of storms like Hurricane Michael, there are often stories of people who flock into the area carrying loads of supplies such as food, clothes, bleach, generators, fuel and batteries. Often these people are on missions of charity, but others are entrepreneurs who truck in provisions to make a quick buck. Although these profiteers are easy targets for scorn, they do serve a useful purpose for the storm-ravaged communities.

When Hurricane Harvey hit Houston last year, I lived in a small town on the outskirts of the city. While my house was spared serious storm and flood damage, many others in my community were not so lucky. Flooding was extensive and many homes were damaged or destroyed. Even for those who didn’t lose their homes, there were widespread power outages as well as shortages of gasoline and other supplies. When nearly every road is closed, it can be difficult or impossible for stores to get new stocks of food and fuel.

In the wake of the 2016 storm, my family and I volunteered at a FEMA shelter operated by several local churches. We received some supplies from FEMA and the Red Cross, but the majority of the relief items that we received were from individuals and groups around the country. In particular, churches provided truckload after truckload of food and clothes for our local storm victims.

The way the shelter operated was that we would take relief supplies in through the back door and give them away through the front. Donations were unloaded and sorted into categories. We would then use the items to make up donation boxes that were given away. At our shelter, we gave away most supplies to anyone who wanted them, no questions asked.

While this was altruistic and a service to the community, it also made abuse easy. Many locals brought donations to the shelter, but we also noticed some people who would show up every day to pick up food and other items. In some cases, we suspected that they were “shopping” rather than picking up what they needed to survive.

The problem was that when items are given away free, it creates an abnormally high demand. People who might not really need the food would be tempted to get some just because it was free for the taking.

This problem is illustrated by the need for bleach after the hurricane-related floods. In a hot, humid climate like Houston, mold grows quickly. If you have a house that is wet from floodwaters, you need bleach to kill mold in the wet areas before it spreads to other parts of the house. Bleach was in high demand after Harvey.

When shipments of bleach arrived at the shelter, they went quickly. We limited the distribution of bleach, as well as other hard to find items like tarps, to one per family, but there is the possibility that some of these items went to people who didn’t really need them. While charging storm victims for bleach would have seemed cruel, it would also have helped to ensure that the supplies went to the people who needed them most.

In the aftermath of Hurricane Michael, Duracell and other companies have joined relief organizations in shipping truckloads of supplies into affected regions, but with hundreds of thousands of people in storm-damaged areas, how can they make sure that the supplies get to the people who need them? When Duracell gives away batteries, they might well be handing them out to people who have a stockpile of batteries at home. Some might have generators or still have electric service at their home.

There is definitely a place for charity, but there is also a place for the entrepreneurs that people call price gougers. If storm victims can’t find bleach or batteries at a shelter or if the local stores are out of generators, they might be able to get these items from the entrepreneurs who drive in motivated by profits.

Supply and demand are elastic in the wake of a natural disaster. The demand for generators and batteries increases dramatically when the power goes out, especially when it may be out for weeks as one of my friends in Florida expects. If the price doesn’t go up, people will stock up on supplies on the chance that they may need them. In a post-hurricane situation, who knows when the supplies will be available again?

The flip side is that if the price is bid up, buyers who don’t really need the items won’t buy them. If a pack of batteries that generally costs $5 is selling for $20 after a storm, speculators will exit the market and only people that really need batteries will purchase them. There is also an incentive not to waste batteries if you just paid $20 for them.

Natural disasters introduce scarcity and the way that markets deal with scarcity is to adjust prices. Allowing prices to rise after storms seems cruel and selfish, but it helps to ensure that the people who really need supplies are the ones who get them. When prices are not allowed to adjust, shortages often result. Low prices are worthless if there are no products to buy.

God bless the people and the companies like Duracell that are helping hurricane victims, but we should also be thankful for the price gougers. They serve an important role in distributing relief items, but they had better have a thick skin.

Originally published on The Resurgent

Remember the Challenger

Churches offer help to tornado victims

Shattered house in Bartow County, Ga.

When super cell thunderstorms and tornadoes barreled across the south on April 27, it left a swath of damage across Alabama and Georgia that will take years to repair.  Local churches have stepped in to minister to the people affected by the storms and who lost homes, possessions and loved ones. 

A Disaster Relief team from Peachtree Community Church in Villa Rica traveled to Adairsville, Ga. on May 9 to assist local residents.  The group first traveled to NorthPointe Church in Adairsville which has become a central location for relief efforts in the area.  The church is home to a local food bank and has built upon that ministry to bring in more food to displaced residents.  The church is also accepting clothing donations and has essentially set up on clothing store in the church gym that is free to those in need.  Other household items and toys for children are also available.

NorthPointe had received shipments of food from the Atlanta Community Food Bank and the Peachtree volunteers were tasked with visiting the hardest hit areas of Bartow County to find residents in need of food boxes and hygiene kits.  Many of the homes visited by the Peachtree team were along Cedar Creek Road, Crowe Springs Road, and Spring Place Road in Bartow County near Cartersville. 

Residents reported that the storm that hit around 9:30 p.m. on April 27 caused most of the damage.  Lasting only a few minutes, estimates ranged from five seconds to a minute and a half, the tornado snapped trees and wrecked buildings, but did not take any lives in Bartow County.  One survivor said, “They tell you a tornado sounds like a freight train.  What they don’t tell is that it sounds like a freight train about two feet above your head.”  Another described it as sounding like a “band of demons.”

As is characteristic of tornadoes, there were areas of severe damage interspersed between areas of almost total normalcy.  Some areas were so devastated that they looked like a set of Gone with the Wind after the Union Army had slashed and burned its way through the plantations of antebellum Georgia, complete with flattened houses and shattered trees.  The cyclonic winds were evident in the way that trees were often toppled in the same direction like a gigantic crop circle.  In some cases, trees remained standing but leaned in what had been the downwind direction.  Other trees stood upright but were devoid of limbs.

The houses in the area had varying degrees of damage.  Many sported blue tarps where shingles were missing or trees had been dropped through the roof.  Others were missing porches.  One disabled veteran pointed out where his detached garage had been picked up and dropped against the side of his house.

All too often the houses were damaged beyond repair.  Some had already been bulldozed or demolished by heavy equipment.  In others, little remained standing to demolish.  In one home, a pastor’s family had survived the night in an interior room, one of the few rooms left standing in the house.  The roof had been picked up and deposited in the in-ground swimming pool.  A family friend explained that the family had held on to each other even as their shoes were pulled from their feet by the winds. 

A Peachtree team member pointed out where a friend lived on the next street.  The friend’s child had hid in the bath tub clutching a Bible.  The mother and father joined her there.  A tree fell across the tub just missing them, followed by the roof collapsing on top of them.  All survived but there is only bulldozed red Georgia clay where their house once stood.

The author loading his truck with food boxes. (Candace Raines)

A few miles away, a family is living in a camper trailer in front of their house.  They point to the one-story house and say that until the night of the storms it was a two-story house.  The nine members of the family, including two small children, hid in an interior closet on the first floor of the turn-of-the-century farmhouse as the storms approached.  When they came out, they looked up a staircase next to the closet and realized that the top of their house was gone, along with the front porch.  The patriarch of the family joked that he was going to move lounge chairs to the second floor and use it as a sun deck. 

Just down the street stands a stone chimney on a hill.  It is all that remains of the house that stood there until two weeks ago.  The family, which now lives in an RV, rode out the storm in the basement under the chimney while the house collapsed above them.  They were trapped in the basement a short time until rescuers arrived.

Another man describes how lucky he was that “we only lost half of our house.”  His son, an EMT/firefighter who lived several miles away was so worried about his parents that, when the roads were blocked two miles from the house, ran through the woods in the middle of the night as a second line of storms hit to check on them.  The father, speaking with obvious pride, says that his son pulled four people from the wreckage of their homes that night. 

No lives were lost in Bartow County that night.  A common thread among the survivors is thankfulness.  They are grateful for their lives and for the assistance that their fellow Georgians have offered.  One man tells us that since a media event staged by national groups like the Red Cross, Salvation Army, and United Way in the early days after the disaster, those groups have been noticeably absent.  He says that most of the assistance has come from local churches and ministries. 

This may be a result of the fact that the United Way and Salvation Army are set up with the Federal Emergency Management Agency at the Clarence Brown Conference Center in Cartersville.  The Salvation Army is providing meals and clothing and the United Way is providing funds in cooperation with FEMA.  Many residents are probably not aware of this assistance since several told us that, although they have electricity, they have not had cable or phone service since the storms.  People in need of assistance from this shelter should call the conference center at 770-606-5763 or visit in person at the intersection of I-75 and Ga. Hwy. 20 West.  This is at exit 290 on I-75.  The street address is 5450 State Route 20 in Cartersville.  Those in need can also contact the Bartow County chapter of United Way at 770-386-1677.

Likewise the Red Cross has also been involved in the area.  The Northwest Georgia Red Cross says that they have been very involved in the past weeks, but are now scaling back their efforts since many of their clients say their needs have been met.  The Red Cross did not set up a shelter in this case, but did provide over 3,000 meals through mobile feeding, health services, and is now beginning to focus on case work in cooperation with FEMA. 

While in Bartow County, the Peachtree team members delivered boxes of food that were sent to NorthPointe church by the Atlanta Community Food Bank.  They also helped to clear debris when needed by homeowners and often just lent a sympathetic ear to the tornado victims.  The inspiration for the journey and work was the love of God and compassion for their fellow Georgians.

The following day, other members of Peachtree met at the church in Villa Rica to sort items that had been donated for the relief work.  A second trip is scheduled for Wednesday, May 11, to Spalding County to assist in the tornado-damaged areas around Griffin.  A multi-day trip to Tuscaloosa, Ala. is being planned for sometime around the end of May. 

If you would like to donate or assist in tornado relief efforts, you can contact Peachtree Community Church at 770-459-1717 or you can visit the Peachtree Disaster Relief page on Facebook.  In the Bartow County area, people needing or offering help can also contact NorthPointe Church at 770-387-8135. 

As FEMA and insurance companies step in, NorthPointe will be turning over much of the relief work to local charities.  One of these is Lighthouse Ministries of Cartersville.  They can be reached at 404-368-5850 or by email at ministryoflight2011@gmail.com.

Slide show of pictures from the relief trip to Bartow County:

http://www.examiner.com/conservative-in-atlanta/bartow-county-tornado-damage-may-9-2011-picture

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Georgia reactor is similar to failing Japan nuclear plant

Georgia is not typically associated with earthquakes, but fault lines do run through Georgia.  The Great Valley fault extends from Chatsworth to Cartersville and the Brevard fault runs from Atlanta to Stephens County and then to Brevard, N.C.  These faults, as well as the New Madrid fault in Arkansas and Missouri, have produced earthquakes and tremors in Georgia on multiple occasions.

The earliest recorded Georgia earthquake was in 1811 and shook bricks from chimneys.  Savannah and Tybee Island were shaken by the 1886 quake centered near Charleston, S.C.  This earthquake was estimated at approximately 7.6 on the Richter scale.  There have been a number of earthquakes in Georgia that are rated at V or VI on the Mercalli Scale.  This is considered strong and would be approximately equivalent to a 6 on the Richter scale.  The U.S.G.S reports the most recent Georgia earthquake was a 2.2 that was centered near Milledgeville on August 10, 2010.  (See the U.S.G.S. Seismic Hazard Map of Georgia here.)

Georgia also is home to two nuclear power plants.  The Edwin Hatch plant in Baxley has two units, which have been operating since 1974 and 1978 respectively.  The Alvin Vogtle plant in Waynesboro also has two units.  These came online in 1987 and 1989.  A new reactor is currently being built at Plant Vogtle.  Other states bordering Georgia also have additional plants such as the Savannah River Site which is located in South Carolina near Augusta.

Hatch’s Unit 1 is only three years younger than Fukushima Daiichi plant in Japan that is center of the current crisis and has the same GE Mark 1 boiling water reactor.  Nevertheless, experts point out that the problem in Japan is not with the design of the reactor itself, but with the fact that the earthquake and tsunami cut off electrical power to the plant.  Diesel backup generators then came online, but stopped working several hours later.  At that point, the pumps that provided water to cool the fuel rods ceased to function.  The Wall St. Journal reports that the Japanese engineers failed to cool the rods with sea water until it was already too late.

The Nuclear Regulatory Commission’s assessment was that the tsunami was primarily responsible for the loss of power in the Japanese plants.  The damage caused by tsunamis is limited to coastal areas about 1,000 feet from the water.  Georgia’s nuclear plants are far enough inland that they would not be threatened by a tsunami.  The NRC further states that U.S. nuclear plants are designed to withstand the largest magnitude expected in their area plus a safety margin.  The Japanese plants withstood an earthquake magnitude of 9.1.  Georgia earthquakes have historically been limited to about six on the Richter scale.

The Union of Concerned Scientists claims that many U.S. plants, like the one in Baxley, have the same vulnerability to loss of main and backup power.  The group says that the Japanese plant had batteries that supplied the plant with electricity for eight hours, but engineers could not restore power in that time.  According to the U.C.S., many U.S. nuclear plants have battery power that only lasts four hours.

The instability of the world’s oil supply and its increasing price, along with concerns over global climate change, make nuclear power an important part of America’s future energy plans.  While Georgia is not in imminent danger of an earthquake or tsunami, there is the possibility of power loss from other sources.  As the U.C.S points out, fires, which can be caused by earthquakes, can pose a significant risk of damage to a reactor’s primary and secondary power systems.

In the U.S., fire protection standards were updated after a 1975 fire at Brown’s Ferry near Decatur, Ala.  which threatened the plants ability to control one of its reactors.  Changes to the standard in 2010 allow individual plants to evaluate their own fire risks.  Some claim that this standard is too weak and point out that many U.S. nuclear reactors are in violation of fire codes.

The Nuclear Regulatory Commission stated in response that older plants were built before 1981 when fire protection standards were updated.  Exemptions were issued to these existing plants in cases where safety gains from modifications would have been negligible.  Further, the NRC says that the voluntary fire risk analysis program will enhance safety by focusing attention on “design and operational issues according to their importance.”

In spite of its potential as clean energy, nuclear power has long had strong opposition in the United States.  No nuclear power plant has been built in the U.S. since 1979, the same year that the Three Mile Island incident occurred.  As a result, the U.S. does not rank in the top ten nations according to the percentage of electrical power provided by nuclear energy, but ranks first in the number of reactors shut down.  According to the Energy Information Administration, the U.S. gets just under 20% of its power from nuclear energy.  More than 76% of France’s energy is nuclear.

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