…That Congress is finally going to do something about gasoline price gouging. There’s really no commentary I could come up with that could improve on this article from the NYT. Consider it your entertainment for the day.
Source link: http://archive.mises.org/4990/well-thats-a-relief/
Well, that’s a relief…
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If only they would pass anti-gouging laws for taxes…
If only the states would move to disovle the Constitution…
From the article:
“The price of gasoline should serve as a wake-up call … that we’ve got an energy security problem and a national security problem and now is the time to deal with it in a forceful way,” Bush said after the meeting.
“Forceful.” Well, at least we’re recognizing it as such now.
Actually, and to my astonishment, Bush seems to be the only one cited in the article to exhibit even one iota of sense:
“Bush said last week he did not think oil companies were engaging in price gouging.” But then the very next sentence proceeds to throw that all into a fog: “He said Wednesday there is a ‘need to make sure our consumers are treated fairly — that there is fairness in the marketplace.’ ”
Uh, whatever.
But what I want to know — and that this article from the great “newspaper of record” fails to so much as whisper about — is what, concretely, constitutes “price gouging.” They’re talking criminal prosecution here, after all: So wouldn’t it be important to say where the line is drawn, to say just how high a price has to go to fall over into, uh, gouging territory?
This omission should make us nervous. (But then, what about the NYT’s interpretation of reality or about Congressional proposals shouldn’t?) I’d think either one of two things must be true about this proposal: Either it upfront legislates price controls (either directly or to be determined by a regulatory agency), or — and this gets even scarier — it legislates vague language about what “gouging” is, to await ex post facto prosecution and litigation.
Of course, this latter approach is the realm in which antitrust law normally operates: You try to operate in the so-called free market, and then federal prosecutors twist what you’ve done into an alleged violation of some ill-defined, capricious rules.
This is the inverse of the rule of law, but it’s happy hunting grounds for powermongers and influence peddlers.
But no matter how it’s cut, the basic idea is price controls. And price controls mean shortages. Funny how even Jimmy Carter eventually figured that out, but now these “right-wing” Republicans don’t know or care about the difference.
Well, it seems to me price gouging is to be defined as charging more for gas than nearby competitors, however, if all competitors charge the same price for gas they get charged with collusion.
It is literally impossible to underestimate the stupidity of politicians and the people who look to them for solutions.
Or maybe that should have read “it is literally impossible to overestimate the stupidity.:~)
It all seems so simple to me that if supply and demand were to work, the optimum units would be sold at the optimum price. It is a known fact that the US has a much lower price than the rest of the industrialized world, and we use quite a bit more, and cause more pollution. So if the price rises, demand falls, less is used, profit is maximized, as is stock value, the environment is better off (for those who buy into it), alternatives are found by those who don’t care to pay the new price, and competition in transportation is fostered.
So what’s the problem?
This is a prime example of the cross purposes of lefties, they want less gas used, but they don’t want business to make profits. They apparently think that they can use endless intervention by force and make it all work out, cheap energy beyond the layman’s reach, humbled businessmen, a green paradise, and they perched at the top as philosopher-king. Unfortunately experience shows such formulas lead to poverty for all but a select few. Somehow the philosopher-kings always manage to be within this select few.
Yancey Ward:
“[C]harging more,” you write. But how *much* more? I regularly see neighboring stations charge one cent, two cents, five cents per gallon more than one another. Just how great must the difference be from one another? Should the fact that some stations accept cash payment only be considered by government as a legitimate reason for some charging less than others?
If “gouging” is charging a lot more (however so defined) than competitors without compensating added value, wouldn’t that give the competitors the market advantage? How can the government assume it’s unfair to charge a price that hurts one’s own business?
And if it’s simply collusion they’re after, why not use antitrust sanctions instead?
Oh, excuse me: I’m trying to think rationally.
R.P McCosker,
Yes, trying to apply rational thought to this entire idea of price gouging will give one an enormous headache.
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