The Tom Woods Show, episode 987.

Prepare to set fire to the index card of allowable opinion.

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Hey, everybody, Tom Woods here. There is a lot of discussion, as usual, in a situation like this,

of so-called price gouging with Hurricane Harvey having caused so much damage

and suffering and deprivation. And people are very upset, many of them, that some people are

charging much higher prices for a lot of necessary items. And this seems unjust. It would be better for them to sell these items more

cheaply. Or would it? That's the question we're going to be looking at today, and joining me to

talk about this is David R. Henderson, who's a research fellow at Stanford University's Hoover

Institution. He's also a full professor of economics at the Naval Postgraduate School in

Monterey, California, where he's taught since 1984. Before that, he was a senior economist

for health policy and energy policy with President Reagan's Council of Economic Advisors.

David, welcome back to the show.

Thanks, Tom. I had a lot of requests for this topic, and I looked over the other 986 episodes and couldn't find anything on price gouging. I think I'd mentioned it in passing a couple of times, but this seems like as timely a moment as ever, given the disastrous flooding going on in Houston. These before and after pictures are really devastating,

very difficult to look at. And I mean, a lot of us know people in Houston, and it's,

it's very sad to see. So let's talk about, though, what happens in these situations when people

suddenly find themselves in quite desperate straits, and they need a great many supplies. But of course,

the emergency occurs so rapidly and out of the blue, there's no way physically to create all the

supplies everybody would need. And the result is very high prices that we refer to sometimes as

...