Reps. Bart Stupak, D-MI (right), Peter Welch, D-VT (left), and Christopher Carney, D-PA try to make us feel warm and fuzzy inside; photo courtesy of AP
I read with some bemusement the text of H. R. 1252, also known by the name "The Federal Price Gouging Prevention Act", which purports to offer American consumers some protection from the corporate greed of multinational oil conglomerates. It has been a long time since I have seen a piece of legislation so ill-conceived and dripping with false sincerity that will accomplish nothing, save perhaps the creation of long lines at the gas pump due to the effects of the implicit price controls inherent in the bill.
Moreover, the very concept of "price gouging" itself is quite murky, and the anecdotal examples provided usually involve local merchants seeking to capitalize on a short-term crisis, like the convenience store owners who start charging $20 a bag for ice during a power outtage.
In addition, the bill is riddled with vague terms like "unconscionably excessive" pricing and sellers who take "unfair advantage of the circumstances related to an energy emergency to increase prices unreasonably." Imagine trying to sort through this confusing, overly relative terminology in a court setting.
Ostensibly the Federal Trade Commission FTC is the body responsible for policing price gounging of petroleum distillate, but the bill adds another twist: enforcement at the retail level by state Attorneys General. So now we would face the prospect of 50 ambitious, demagogic AGs chasing down alleged perpetrators of the "crime" of price gouging in addition to the federal bureaucrats.
Now, don't get me wrong: I readily concede that multinational oil conglomerates are enjoying record profits during this period of insufficient production capacities and global instability (read: Middle East on the verge of widespread war, or "Bush's Iraq War made things much worse"). But this shallow law will only exacerbate our energy woes should the Senate lack the common sense to kill this bill.
Want to lower gas prices? You can: a) reduce global demand for petroleum products; b) increase global production capacity for petroleum products; or c) reduce the global instability that makes investors jittery and drives up the price of oil.
None of which involve ridiculous laws that ignore basic economic forces like supply and demand.