May 25, 2007
Gouge 'em
The lead WSJ Editorial today suggests that Congress look in the mirror if it wants to know who is causing "excessive" gasoline prices. The big anti-gouging law will only enrich a few lawyers.
What does "gouging" mean anyway? No one on Capitol Hill can answer that question. The House bill prohibits energy companies from charging a price that is "unconscionably excessive." There's a precise legal term. It further explains that it shall be a crime whenever "the seller is taking unfair advantage of unusual market conditions" or "the circumstances of an emergency to increase prices unreasonably."Still confused? Perhaps this will help. Gouging occurs, says the bill, whenever "the amount charged represents a gross disparity between the price" sold at the pump "and the average price at which it was offered for sale by the seller during the preceding 30 days." That could cover any price spike for any reason. Or gouging may occur when "the amount charged grossly exceeds the price at which the same or similar crude oil, gasoline, or natural gas was readily obtainable by other purchasers in the same geographic area." So if your oil supplier charges more than a competitor's does and you then raise prices, you could be a felon.
In other words, we are all criminals now. No one seriously believes this law will lower prices for consumers, but you can bet that brigades of lawyers will earn fat fees sorting out what exactly is meant by "unreasonably," "gross disparity" and "excessive."
Now that this law has passed, prices are sure to plummet.
UPDATE: link changed to free site -- thanks to johngalt.
The link was public this morning: http://www.opinionjournal.com/editorial/feature.html?id=110010132
Posted by: johngalt at May 28, 2007 12:04 PMThe line that caught my eye, and sent me looking for the story, was this one: "Now that this law has passed..." What? Did the Senate vote on it? Has the president signed it? No, it appears that only Pelosi and Soros' House of Representatives has passed it.
Once actual grownups begin debating this measure, sponsored by the aptly named "Bart Stupak" (D-MI) someone is sure to point out that it will cause gasoline shortages during price spikes. Faced with the government imposed alternatives of selling their product at a loss or comitting a felony, retailers will do neither. Instead they'll just turn off the pumps and wait for the government to cave.
Bart STUPak needs to read this cartoon and the 'Who is Gouging Whom?' excerpt that follows it.
Posted by: johngalt at May 28, 2007 12:15 PM | What do you think? [2]