aWpTiMuS

It’s only been one week and already the Dems are proving they don’t care about the little guy.

Sites being asked not to sell inaugural tickets

WASHINGTON (AP) — The senator overseeing Barack Obama’s swearing-in ceremony is writing to Internet sites like eBay asking them not to sell scalped inauguration tickets. Senator Dianne Feinstein of California is also writing a bill that would make it a federal crime to scalp tickets to the historic event January 20.

Feinstein, who chairs the Joint Congressional Committee on Inaugural Ceremonies, says she foresees overwhelming demand for the 240,000 available tickets and has heard reports of them being sold for as much as $40,000 online.

The tickets are supposed to be free to the public and distributed through congressional offices. The offices won’t get the tickets until shortly before the inauguration, to try to prevent scalping.

I don’t know about you, but I could use $40,000. I could use that a lot more than I could use one of his “stimulus” rebates. You see, this is an allocation of resources problem with a wonderfully simple free-market solution.

The inauguration has a physical limitation as to the number of people who can attend. To allocate this resource (space), tickets are issued. They are in this case being given by the issuer out for free. This isn’t necessarily a “fair” means of allocating this resource. If it is first-come first-serve then those who can get tickets are those who are first to find out. This is pure luck. If there is some criteria for eligibility to receive tickets, then it seems unfair to those who don’t meet the criteria.

So, this allocation of resources seems arbitrary and by most definitions, inefficient. There are probably those who by many measures want the tickets more than many who actually have them. The efficient outcome is that, as much as possible, everyone who wants tickets has an opportunity to get them. Scalping, on ebay especially, is perhaps the best means of obtaining this efficiency, and has many more rewards.

If I were one of the lucky who obtained a ticket, I could reallocate it to someone who wanted to go. Certainly, my situation is the lowest denominator: I don’t want to go. Sacrificing my ticket is of no concern to me. However, to whom I give the ticket is of importance. This problem can be seen by the “tentative” person. If someone is a “tentative” ticket holder — they may or may not attend — then they also may or may not wish to reallocate the ticket to someone who wants to go. So, my desire would not be to reallocate my ticket to a tentative recipient.

Since I have no intention of going, if I can’t sell my ticket, it would be only the joy I would receive from seeing someone else happy that would cause me to seek out someone who wants to go, otherwise I don’t bother. If I can sell my ticket, I will gladly accept almost any amount of money someone is willing to pay me for the ticket, and I will seek these people out. If there is a group of buyers, one who is willing to give me the most money (something I want) will get the ticket (something I don’t). If that person is a tentative recipient, they can either keep their ticket, knowing they may have wasted money, or can reallocate that to someone who wants it more than they do, and they can profit for doing so.

What about those who have no intention of going? Well, it is illogical for me, if I don’t want to go, to pay $40,000 for a ticket if I can’t sell it for more than $40,000. If I can, I am reallocating it to someone who wants it more than the person I bought it from. If I am wrong, I am either out $40,000, or I can sell it for less than $40,000 to minimize my losses, and allocate it to the person who wants it most. The person I bought it from won’t be a buyer, because he would have sold it to me for less than the $40,000 I paid for it if that were the case. Either way, in the end, the tickets are allocated to those who want to go to the event, and those who searched for those people benefited by performing that function.

Just imagine that you are worse off than you currently are. Let’s say you’ve lost your job, or you’re a single mother with three kids. $40,000 can go a long way. Of course, the worry is that people with means can get many tickets and monopolize the resource. That’s possible. When video game consoles are released, people will get on many reserve lists across cities to buy the systems the first day so they can sell them the next at 2 or 3 times the cost. But lets take this concern to it’s hypothetical conclusion: Warren Buffet gets all the free tickets at first. Yes, he can sell them and get richer, but there aren’t 240,000 people richer than Warren Buffet that can buy the tickets from him, so then the tickets get allocated downward (to those less affluent than he). The only time this doesn’t happen is if he wants a private viewing, in which case banning selling has no effect.

They don’t care about those less affluent than the rich, they just don’t want them to think they can get by without their help.