
Man who stockpiled hand sanitizer donates it all ahead of investigation - anigbrowl
https://thehill.com/blogs/blog-briefing-room/news/487711-tennessee-man-who-stockpiled-hand-sanitizer-donates-17700
======
H8crilA
Totally different scale, but this reminds me of Jesse Livermore, possibly the
best speculator of all times.

> _Following the end of World War I, Livermore secretly cornered the market in
> cotton. It was only interception by President Woodrow Wilson, prompted by a
> call from the United States Secretary of Agriculture, who asked him to the
> White House for a discussion that stopped his move. He agreed to sell back
> the cotton at break-even, thus preventing a troublesome rise in the price of
> cotton. When asked why he had cornered the cotton market, Livermore replied,
> "To see if I could, Mr. President."_

A true hacker of the markets.

[https://en.wikipedia.org/wiki/Jesse_Lauriston_Livermore](https://en.wikipedia.org/wiki/Jesse_Lauriston_Livermore)

~~~
toomuchtodo
In the same vein, Vince Kosuga cornering the onion market in 1955.

[https://www.npr.org/2015/10/22/450769853/the-great-onion-
cor...](https://www.npr.org/2015/10/22/450769853/the-great-onion-corner-and-
the-futures-market)

~~~
H8crilA
Yep, that's a great story too. It's so ridiculous that this is still in force:

> _The Onion Futures Act is a United States law banning the trading of futures
> contracts on onions as well as "motion picture box office receipts"._

> _In 1955, two onion traders, Sam Siegel and Vincent Kosuga, cornered the
> onion futures market on the Chicago Mercantile Exchange. The resulting
> regulatory actions led to the passing of the act on August 28, 1958. As of
> January 2020, it remains in effect._

[https://en.wikipedia.org/wiki/Onion_Futures_Act](https://en.wikipedia.org/wiki/Onion_Futures_Act)

> _The president of the Chicago Mercantile Exchange, E.B. Harris, lobbied hard
> against the bill. Harris described it as "Burning down the barn to find a
> suspected rat". The measure was passed, however, and President Dwight D.
> Eisenhower signed the bill in August 1958. Thus, onions were excluded from
> the definition of "commodity" in the Commodity Exchange Act._

~~~
smnrchrds
I am curious, why were onions specifically banned? I imagine they had some
reason to believe onions were uniquely susceptible to this kind of marker
manipulation in a way that potatoes, garlic, cucumber, etc. aren't. But I
cannot think of how onions are unique in this respect.

~~~
eru
Because the guy specifically tried to corner the onion market and the response
was a re-action, not a pro-active one.

~~~
smnrchrds
Weren't they afraid he or a copycat would corner potato market the next year,
green pepper the next, cotton the next, etc.?

~~~
H8crilA
I am fairly confident in the simple interpretation of a mob of angry farmers
demanding that something be done right now.

~~~
eru
And some calmer heads might have prevented the outrage spreading too much?

------
petilon
What about price gouging by drug manufacturers? When will the government
investigate that? Why is one type of price gouging accepted as capitalism and
another type not?

"In 2001, Acthar sold for about $40 a vial. Today: more than $40,000. An
increase of 100,000 percent." [https://www.cbsnews.com/news/the-problem-with-
prescription-d...](https://www.cbsnews.com/news/the-problem-with-prescription-
drug-prices/)

~~~
eru
> Why is one type of price gouging accepted as capitalism and another type
> not?

'Price gouging' is not an accepted part of capitalism. Those laws (and
customs..) that call out some prices as 'gouging' are bad economics and not
'proper capitalism' either way.

But you are right, that the drug prices are an even more egregious example.
And, of course, we get those weird prices because of heavy and incompetent
government interference in the drug markets. So we should probably look into
scaling back that interference, instead of adding even more.

(And I specifically mention incompetent interference. To give a counter-
example, for the most part I am quite happy with the economic policies of my
local government. But then, I live in Singapore, where our Prime Minister was
the top math graduate of his year in Cambridge, writes C++ sudoku solvers for
fun and is looking forward to learning Haskell when he retires.)

~~~
MagnumOpus
> we get those weird prices because of heavy and incompetent government
> interference in the drug markets. So we should probably look into scaling
> back that interference

No, we get it because of the wrong kind of interference (due to regulatory
capture and government corruption). I think in Singapore the government
interferes heavily too - at the very least posing as a bundling buyer for
hospitals to put drug purchases out for tender. Every developed country does
this.

~~~
eru
Hence my addition of the important qualifier of 'incompetent'.

In any case, the medical system itself provides a lot of examples of
regulation driving prices in most cases.

Less regulated subsectors like Lasik eye surgery, or elective dental work, or
cosmetic surgery, generally improved in quality and dropped in price in the
last few decades.

(Another thing to investigate for me would be vet care. The technologies
involved are similar enough; but the legal environments are radically
different in most jurisdictions. If memory serves right, the evidence was
mixed.)

------
nate_meurer
Cute. Apparently he caused a bit of upset. He's is justifying himself with a
mix of contrition and claims of innocence.

> _Colvin apologized for purchasing all of the products Sunday, saying that he
> did not realize the spread of the coronavirus outbreak or the shortage of
> sanitary products across the country._

> _... I had no idea that these stores wouldn’t be able to get replenished._

Right.

I was wondering what law the Tennessee AG could possibly use to stop these
guys. The answer is in the AG's press release (sort of):

> _On Thursday, Tennessee Governor Bill Lee declared a state of emergency
> prompted by the spread of COVID-19, or coronavirus. The declaration triggers
> the state’s anti-price gouging law which prohibits vendors from charging too
> much during a crisis tied to a state of emergency._

> _Under the law, the Attorney General’s Office can put a stop to price
> gouging and seek refunds for consumers. The courts may also impose civil
> penalties against price gougers for every violation. The law applies to all
> levels of the supply chain from the manufacturer to the distributor to the
> retailer._

[https://www.tn.gov/attorneygeneral/news/2020/3/15/pr20-10.ht...](https://www.tn.gov/attorneygeneral/news/2020/3/15/pr20-10.html)

~~~
tantalor
I don't think a random guy hoarding bootleg hand sanitizer qualifies as a
"retailer" under the law.

If anything, normal penalties for operating without a business license should
apply.

~~~
surge
He's selling things retail, he's a retailer, the fact he doesn't have a
license for the retail business adds to the charges.

------
krick
Sure there are some important details missed in the story, but I really don't
like how fuzzy the line is. It's not like you usually buy the stuff from the
manufacturer, the whole world of trading is built on the ability to buy cheap
and to sell under the conditions where the price can be (always somewhat
artificially) made higher. It's what the resellers do, it's the "free market".
Yet when a man manages to predict that the demand (and hence the price) of
hand sanitizer will rise during the time of pandemic and to "stockpile" some
measly 17 700 bottles of it — he can be prosecuted for that. And I mean,
seriously, 17 700 bottles is peanuts, it's not like he was short selling US$10
billion worth of pounds sterling during the time of financial collapse (which
he majorly contributed to).

~~~
eru
> [...] the whole world of trading is built on the ability to buy cheap and to
> sell under the conditions where the price can be (always somewhat
> artificially) made higher.

Not sure what you mean by 'always somewhat artificially'? Eg retail trading of
the kind that Amazon or Walmart do doesn't strike me as particularly
artificial: of course, there's going to be a price difference between what the
factory gets and what customers pay?

Same for commodities trading. Or even stocks: if Warren Buffett puts in lots
of smarts to find undervalued companies and buys them, the rest of the world
catching up some time later seems perfectly sensible.

Of course, there might be _some_ instances where the price goes up 'somewhat
artificially' perhaps? But I am not sure what that would even mean? My
contention here is with the 'always'.

------
ipqk
> _“When we did this trip, I had no idea that these stores wouldn’t be able to
> get replenished.”_

> _“It was never my intention to keep necessary medical supplies out of the
> hands of people who needed them,” he continued. “That’s not who I am as a
> person "_

This doesn't follow a modicum of scrutiny. If he's buying to sell them at a
markup, it MUST be because it's not getting replenished. Otherwise, people
would just go to the store and buy it at retail price. It's a BS apology and
shouldn't be accepted by anyone.

~~~
myself248
I beg to disagree, and here's why: (Not saying the guy isn't scum, but I think
his statement is plausible...)

He didn't just start doing this last week. This so-called "retail arbitrage"
is a normal thing throughout online marketplaces, and has been for years.

Sometimes, someone (like me, as a consumer) won't feel like going to the
store, and will happily pay ten bucks for what's usually a three-dollar item,
because it's shipped to my door. FedEx is the real winner, but guys like this
are making a living enabling my laziness.

In other situations, a product will be weirdly short in one part of the
country, but available elsewhere. For instance, in a hurricane, a bunch of
unprepared people suddenly decide they want some product, but the local stores
are sold out. There's lots of that product _already sitting on shelves_
elsewhere in the country. Those retailers aren't going to pull it themselves
and shove it backwards up the distribution chain to be redistributed to storm
country -- that's just not how distribution works.

So, folks like this will go buy it, off the shelf, and offer it online. Where
again, someone decides it's a better option than going to the store. And the
guy doing the shipping is doing real work, I don't see anything wrong with him
putting food on his table with it.

In all these cases, the retail-arbitrage folks aren't depriving anyone of
anything. They're not clearing out the last of anything, and the stores they
shop usually do restock the next day, because their local distributor has
plenty of product.

This time was different, and that's obvious to everyone now.

But I do find it at least half-plausible that this guy might not have been
thinking of it as different. It looked, from his view, just like every other
opportunity where he's been making money the last several years, and which
hurt nobody.

~~~
smnrchrds
This is the answer. NPR Planet Money did an episode on this a while ago, long
before there were any real or perceived shortages of any goods. Even in good
times, this strategy tends to work:

> _Sam Cohen 's business works like this: He walks into a big retail store and
> buys a bunch of stuff. Then he sells it on Amazon for more. It's
> straightforward and surprisingly lucrative._

> _This is a multimillion-dollar business for Sam — and for lots of other
> people who do the same thing. It 's called retail arbitrage..._

[https://www.npr.org/sections/money/2017/07/26/539552579/epis...](https://www.npr.org/sections/money/2017/07/26/539552579/episode-629-buy-
low-sell-prime)

~~~
tartoran
Why not buy it directly from the supplier? Why pay tax and a mark-up when it
can be obtained for a similar price the department store got it for??

~~~
smnrchrds
I am not sure if manufacturers will be open to selling directly to someone who
is not buying a large enough quantities. But even if they are, they probably
won't sell them to retail arbitragers.

I cannot remember if it was from the same episode or another Planet Money
episode, but I remember them talking to manufacturers who were unhappy with
their products being sold online for prices much different than they intended
to.

The gist of it is that, if you are for example Coca Cola, you want people to
think of your products as an everyday item they can drink anytime, not a
luxury to be saved for special occasions. And if you are Apple, you won't want
your product to end up in the bargain bin. Pricing is part of a brand's
marketing strategy and identity. People who price products way out of the
range the manufacturer envisioned are detrimental to their brand image and
long-term market share.

~~~
mooreds
It wasn't until the 1970s (in the USA) that retailers could determine the
price of goods in their store. Before then manufacturers could dictate the
price of their goods (laws protected that). So retailers competed on other
dimensions (service, location) rather than price.

I learned this (and a lot more) from "Goliath":
[https://www.simonandschuster.com/books/Goliath/Matt-
Stoller/...](https://www.simonandschuster.com/books/Goliath/Matt-
Stoller/9781501183089)

------
Mountain_Skies
Glad this is getting widespread attention. Buying up all of the Monopoly:
Millennial Edition board games in the state to flip on eBay for profit is one
thing but buying up goods that you know will cause a panic is something else
altogether. Hopefully this dissuades others going forward.

~~~
amiga_500
How about buying up housing stock in popular inner city areas only to
"provide" housing for people?

Housing is an essential good. Profiting off an essential isn't so great
suddenly. Yes people need to rent, but many would buy if prices weren't pushed
up.

Are they or the hand sanitizer guy assisting the market in any way here? Or
are they parasitic?

People are going to be asking a lot about unfettered capitalism after this.

We are going to see many ugly examples in America before this is done.

~~~
kristopolous
I've been looking for people to make the connection of how this is a great
example of the emotional behavioral reality of actually exercising classical
economic models and how people aren't just completely atomized rational agents
devoid of collective cultural expectation, but you're the first to make the
connection.

It's a clear narrative for people who are looking for it who are deeply
suspicious of how real world humans interact in alignment with the hypothesis
of the traditional mathematical models, but to those who don't share the
suspicion, you'd have to spell it out.

I've had to, it's been painful. People have been penalized for thinking in
sociological terms about economic culture all throughout school, because such
considerations lead to dramatically conflicting answers.

For instance, the more extreme example is private property markets require
buy-in from the participants. If a group decides the rules are simply unfair,
the game is called off. As a producer of physical assets I've always been
keenly aware of theft and sabotage possibilities and prices are kept fair to
keep people from doing such things.

~~~
TomMckenny
There also seem to be differences in underlying assumptions: whether humans
exist to serve markets or whether markets exist only because they happen
benefit humanity. And a similar question for property itself.

~~~
eru
Nice strawman you got there. You'll have a hard time finding anyone who thinks
that humans are meant to 'serve the market'. Especially any economist.

The market isn't a separate entity, it's made of humans interacting.

~~~
TomMckenny
True, I put the point bluntly.

If the market produces bad outcomes for years on end, which it in some narrow
cases it does, do we 1) keep with it regardless or 2) do something else.

I think you will find there are quite a few people who will choose #1

~~~
eru
The wisdom of this course of action depends on whether that something else
produces better outcomes.

------
freeopinion
This article is very low on information. The man is accused of price gouging,
and was threatened by the Tennessee AG, but the article says he purchased all
his stock before a state of emergency was declared and hasn't sold any since
the state of emergency was declared.

He's an Amazon seller, but it doesn't say at what price he was selling.
Selling hand sanitizer during a crisis doesn't seem like gouging unless the
price was exorbitant.

It may have been exorbitant as his account was suspended. But the article
doesn't mention the actual asking price.

~~~
guerrilla
There's a previous story which got quite famous which you're missing that went
into great detail on this:
[https://www.nytimes.com/2020/03/14/technology/coronavirus-
pu...](https://www.nytimes.com/2020/03/14/technology/coronavirus-purell-wipes-
amazon-sellers.html)

------
djsumdog
The original article in the Post ended hysterically with him not wanting to be
known for this.

It's a pretty shitty thing to do and I'm glad the state's Attorney General
started investigating him. I was not aware they were price gouging laws in
some states for medical supplies during an emergency.

~~~
ceejayoz
> “But I’m not looking to be in a situation where I make the front page of the
> news for being that guy who hoarded 20,000 bottles of sanitizer that I’m
> selling for 20 times what they cost me.”

Oops.

I'd love a follow-up. "What, exactly, did you think talking to a reporter
would result in?

------
pg_bot
One man's gouging is another man's market at work. Would your opinion of this
man change if he had stockpiled hand sanitizer a year ago?

~~~
abiogenesis
It's not the same thing as stockpiling a year ago wouldn't have caused a
shortage.

~~~
pg_bot
So why is the crime the same for both people? Also, if he didn't plan on
selling the sanitizer then we wouldn't have any (legal) problem with his
actions. You can buy all you want with no consequence.

~~~
MperorM
Well the (in my opinion flawed) idea is to remove the incentive for buying
that much in the first place.

Say what you want, but someone receiving this enormous an amount of social
shaming on top of a painful economic loss, sure is going to disincentivise
people from pulling similar stunts in the future.

------
ISL
I have been considering the following business thought-experiment:

Price Gougers: a company whose goal is explicit in its name. What you need
will always be in stock, but it will always be expensive. It is the kind of
company that could ensure that, in situations like this, there might be more
N95 masks and hand sanitizer in global inventory.

Could such a company get enough social buy-in to survive in the face of anti-
price-gouging laws that appear with every crisis?

If a person/company had stockpiled N95s a year ago, with intent to sell them
at a markup in the event of a pandemic, could that entity ever hope to be
repaid for its beneficial risk-taking?

(I'll also point out that I'm considering donating most of our few household
N95s to our nearby medical center, and am angling to get our research
laboratory to do the same. This thought-experiment arises from the fact that
investors won't deploy capital to do this kind of thing at scale unless they
expect to see a return.)

~~~
myself248
I sort of love this idea. It'd be the perfect test of some free-market ideals.

Similarly, sometimes the government buys product above the lowest market
price, because it's produced domestically and it's strategic to prop up the
production in case of an event like this. They failed in this case, sadly.

~~~
ISL
Perhaps pre-designated "price-gouging" companies could be allowed to price-
gouge (and might be forbidden to buy up remaining traditional supply once an
impending disaster is apparent?), but the person on the street could not?

It just seems like there should be some middle ground between, "Price-gouging
should be banned!", and "My kingdom for an N95 mask!".

~~~
eru
What's the point? Just allow people to pay the prices they want to pay and
sell at.

Why add more special licences to exclude the person on the street?

------
koolba
This guy is an idiot for drawing attention to himself.

~~~
bilbo0s
Not necessarily for drawing attention to himself.

But you never try a stunt like that with anything the government might
reasonably claim to be medical equipment or supplies. You just don't do it.

The best outcome you can hope for in a situation like this is the government
comes and confiscates all your supply for redistribution.

The worst outcome? Ask Shkreli.

You're just begging for them to come down on you when you do stuff like this.
When you're wanting to price gouge, do it with something the government will
never need. Like Monopoly board games.

~~~
eru
And, if memory serves right, they officially got Shkreli for something
completely unrelated to his medical 'price gouging'.

The same might happen to you, even if you carefully try to stay within the
laws: they'll find something else to pin on you.

------
pluc
> Colvin apologized for purchasing all of the products Sunday, saying that he
> did not realize the spread of the coronavirus outbreak or the shortage of
> sanitary products across the country.

Heh. Isn't that specifically the reason he did it?

------
tuna-piano
Like any crime or bad ethical activity, let's think about who was hurt and who
benefited by his action of buying sanitizer from an area with it and selling
it to an area without it.

1\. Consumers of sanitizer in his area were harmed (and those people were
willing to spend at least $2 per bottle)

2\. Consumers of sanitizer in other areas who purchased online benefited (and
those people were willing to spend $20+ per bottle)

3\. He also benefited financially

Why is it a bad thing to take away the option to purchase sanitizer from
someone in his area (presumably from people who don't want it as much - as
they had the option to purchase but hadn't yet) and sell it to people who want
it (and don't have the option to purchase it)?

I don't understand why the people in his area deserve the sanitizer more than
people in another area - or certainly why that should be a crime.

He wasn't dumping the sanitizer into a fire- he was providing the sanitizer to
people who really wanted it!

~~~
salawat
The goal of the supply chain right now is to get supplies staged in
geographical regions so that anyone can have access cheaply.

These acts of arbitrage aren't solving market inefficiencies. They're cutting
holes in the preventative fabric so to speak. While clearly there are
different levels of risk tolerance within the audience of HN and amongst
people at large, this was clearly something that struck very few as behavior
to be encouraged in any form.

------
chairmanwow1
People speak like this is a vital drug that cures people. What is wrong with
hand soap and warm water?

~~~
DoreenMichele
You can't stick it in your pocket, purse or car for use in situations where a
sink isn't available.

------
wruza
May I ask what exactly that sanitizer is and how is it different from soap
and/or alcohol, which is abundant in any house? Everyone here comments about
it as if it was a bottled water or an irreplaceable first aid medicine.

~~~
eru
Apropos: bottled water is also easy to make and replace. Just take a bottle
and a water tap. You can refill empty bottles, too.

~~~
objectivetruth
No, people stockpile bottled water in emergencies with the assumption that it
will NOT be easy to replace, i.e., the tap might stop releasing water.

I've seen way too many comments like "Why would you need bottled water in a
pandemic?" with the assumption that municipal water systems won't fail.

My (US) small town's municipal water system fails a couple of times a year in
the best of circumstances, usually just resulting in a "boil order" for a few
hours until repairs are made.

But imagine half of our six water filtration workers are home sick or
caretaking family, or the trucks that bring the spare parts are sitting idle
at a depot four states away. Now our town needs 4000 gallons a day just for
human survival.

To finish the thought experiment, note that there are over 150,000 water
distribution systems in the United States.

~~~
eru
True.

Though to put this particular crisis into perspective: neither water nor
electricity nor online deliveries ever failed even in hard hit Wuhan.

------
m00x
To the commenters here: It's price _gouging_ and not price gauging. The
article made a spelling error.

------
marsrover
The little guy that scalps hand sanitizer on eBay needs to be investigated
while the corporation that scalps cancer drugs is praised.

~~~
salawat
The little guy scalping on amazon doesn't have a cabal of lawyers to keep the
prosecutor at bay. Frankly, I'd prefer hitting pharma companies hard as well,
but you have to make sure the case is bulletproof, or an ineffectual token
settlement is the likely result.

------
kaikai
They say “his address was posted online” like it wasn’t displayed on his own
website. Pointing that out hardly counts as doxxing.

------
gbronner
Wonder what value he can attribute to it. Possible that the tax write off
exceeds his cost

------
sneak
Hand sanitizer is not essential, and nobody was forced to buy from him or pay
his prices.

I think it’s a real shame that Amazon and eBay shut him down and halted the
distribution of his stock to where it was most needed, simply on PR grounds.

I don’t think he did a single thing wrong, but the mob sure does seem white-
hot angry at him.

~~~
robjan
Hand sanitiser is not essential, however it's an important tool which helps
reduce the chance of infection in the general population. If someone is
carrying a sanitiser they will most likely use it and that benefits everyone.

------
KKKKkkkk1
Let's say you're desperate for sanitizer because you're caring for an elderly
relative. And let's say that sanitizer is available on Amazon for $100/bottle.
Would you buy or rather go without?

~~~
DoreenMichele
I'd prefer to live in a world where we don't have to face such moral dilemmas.

A lot of people caring for babies are financially stressed as is. Simply
having children in the US helps push a lot of people into poverty. We do a lot
of things very badly in this country and one of those is we do not have
family-friendly policies.

For some people, a hundred dollars is quite a lot of money. It can mean not
eating and similar hardships.

------
seemslegit
I hope he kept one bottle for his own use.

------
throwGuardian
All it took to curb his inner price gouging criminal and bring out the
philanthropist was a teeny weeny criminal investigation. What a model citizen!

------
forkexec
Mens rea

They should still throw the book at him for trying to profiteer off the misery
of others.

------
Trias11
Akin dropping bags of cocaine in ocean when customs ship approaches the drug
trafficer's boat.

Won't help!

~~~
seemslegit
Out of pure curiosity, why won't it ?

~~~
guerrilla
because they'll prosecute him anyway since he was price gouging?

~~~
seemslegit
I thought the OP was saying that the cocaine example won't help the trafickers

~~~
NikkiA
Yeah, and it doesn't, except now they have two crimes, trafficking and
destruction of evidence.

~~~
seemslegit
Well if they do drop them before the custom ship arrives, what's the evidence
for the destruction of evidence, and the trafficking for that matter ?

~~~
hectorlorenzo
Some really weird behaving fishes.

------
Medicalidiot
I'm shocked at how this forum has changed its mind on COVID-19 in the past
week. This makes me happy that y'all are taking this more seriously.

~~~
H8crilA
And also, that the bottom in stocks may be near.

------
aaron695
Stop the lynching, it's boring and pretty evil. That is what Reddit is for.

Why not ask the real question, sanitizer is vial, it's soap and a tap you can
carry around in your pocket.

It's just alcohol and a jell AND a plastic bottle.

How can we as a society not be able to produce this, People will even pay for
it, they will even pay extra for it.

We have failed. Stop blaming individuals. Nothing about C19 was unpredictable.

~~~
mynameishere
Isopropyl is one of the simplest chemicals in the universe and a big bottle is
1.88 at Walmart. They will never, ever run out of this stuff, even if people
start hosing off their cars with it.

The whole thing is a joke. This guy was exploiting idiots and the irredeemably
lazy. Big deal.

But what a fool for him to talk to the media. Maybe he thought he'd get
sympathy for losing money because Amazon shut him down...?

