Price Gouging Sans Tragedy?

By Ian

Just :46 seconds into this report on the Michael Jackson jury selection process, and the reporter (Carrie Kahn) dredges up the evil spector of "price gouging."

The worries over price gouging usually arise in the wake of some natural (as though others were "unnatural"?) tragedy, such as the hurricanes in Florida. In this case, however, the epithet is being applied to people who are "lucky" enough to have their businesses close to the courthouse where the Jackson trial is taking place. Rooftop locations for viewing, local eateries, hotels, and other places have raised prices -- or in the case of spectator seating, had to create them to answer a demand that was not there before -- as the swarms of journalists and onlookers have flowed into town.

Aside from the trouble I have in viewing any sort of price changes in the face of changing demand as "gouging", I'm even more confused by the use of the term in this instance. Clearly the reporter is attempting to make a case that the circus surrounding the Jackson case is somehow tragic in nature and scope, as it comes with the things that normally attend a great tragedy or shock. And, to go further, we see that the trial atmosphere brings out the worst in some local merchants who have been so crass as to charge for the use of their space, raise prices on a hamburger, or take advantage of similarities in naming. Clearly we should see this as a great failing all around.

Obvisouly the reporter feels she is above it, and should be excluded from this, though she herself makes her living on the spectacle, gains notoriety and thus financial and reputational reward in proportion to amount of coverage and the continued public fascination with what is, no matter the outcome of the trial, a horrendously flawed and troubled man. If she didn't, would not the labels she hurls at businesspeople indicate that she herself would be horrified by her own participation?

My issues: First, does Carrie Kahn's pay increase with this sort of trial, given the nature of the work as opposed to other stories? Does she, or any journalist such as this, get an increase in pay or expenses due to the 24-hour scope of the work, the locality pay, or other varying factors? If she does, why is this not "price gouging", since the reporters are charging more in the face of greater demand?

And second, why can't we see these trials as boons to local economies? Reporters flock in, with all their attendant camera and sound people, various commentators and professional spectators are on constant watch, and all of them need places to sleep, eat, and get a drink after a grueling day of picking through the gory details. Local restaurants and hotels and bars most likely didn't stock up heavily in hopes of a future rush; their prodcuts are now relatively more scarce. A price increase seems not only natural, but beneficial. The resources move to the people more willing to pay, and the seller gets an appropriate price. If they went too high, no one would buy the burger/beer/hotel room/plastic lounge chair on a roof; then they come down.

Rather than engage in the hand-wringing and teeth-gnashing of concern about why we're all so obsessed with these sorts of events, I'm choosing to appreciate the spur in commerce this means for those folks in Santa Maria, California. (Hmmm, do I smell a research topic? Judicial Spectaculars: The economic benefits of sensational trials.)

-- January 31, 2005 12:00 PM |

Comments

Kevin Brancato wrote:

Aren't the costs of such trials are usually borne by out-of-the-way courthouses, funded by local taxes?

If so, by raising prices, even with a constant tax rate, a business owner will help allieviate the local tax burden by placing it on others--like media personalities--who come from out of town.

If you help bring the costs into town, you'd better bring the benefits too... it seems they don't want to do that...

As jury selection begins today in Michael Jackson's trial on child-molestation charges, some journalists worry that they have already stumbled into uncomfortable new territory. Their concern: an arrangement that could require television stations and newspapers to pay a total of as much as $800,000 to Santa Barbara County to defray the costs of the trial.
Though some journalists agreed to the payments, others said they far exceed what other jurisdictions have charged and smack of "pay-to-play journalism." More ominous, they said, is that the payments continue a pattern in which local officials overseeing high-publicity cases chip away at the long-established principle of free access to public courtrooms.

-- January 31, 2005 12:26 PM ∞

Ian wrote:

I'm constantly amused by the lack of basic understanding that goes on among the press corps in this country. The more I hear about them, and the more I heard from a friend with a Master's in Journalism, the more I distrust that any of them really understand what they're talking about. That they often get elevated to the position of "expert" on anything just astounds me. Why should they be considered an expert if they've spent a lifetime misunderstanding a subject?

I would guess that these reporters feel it's an imposition on the public's "right to know" to charge them such fees, despite the hassle and headaches they cause that far exceed the capabilities of some towns to deal with well (that is, they bear all the cost for traffic jams, property use/misuse, etc, none of which was anticipated). Of course, if you suggest that the public has a right to know the sources of journalist's information, you get an earful about the "integrity" of the process and how revealing sources would make some people not come forward. I'm not sure how much of a price that is to pay to be able to vet the sources and processes these people use. If the information they report on is leaked, why should we assume the "leak" isn't incredibly politically motivated. Indeed, I always assume that the leaks are MORE motivated than the average person, as they are willing to leak info in the face of stiff penalties. Doing so is rarely out of altruistic motives.

But I digress.

-- January 31, 2005 1:05 PM ∞

Kevin Brancato wrote:

I,

This dismal understanding is underscored by the refusal to call what the local government is doing -- raising the price of courthouse access and government office space -- by the name of "price gouging", while almost offhandedly using the phrase to describe the raising of the price of private office space...

Also, I believe that if we had capital punishment, impounding of automobiles, seizure of bank accounts, and demolition of family homes for convicted leakers, I dare say the quantity of leaks supplied would still be positive, and entirely untrustworthy.

-- January 31, 2005 1:48 PM ∞

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