Wednesday, May 03, 2006
In the News - Congress is Retarded
Worried about the political heat from high gasoline prices, the House is preparing to vote on a bill that would impose criminal and civil penalties on any energy company caught price gouging.
The legislation, offered by Rep. Heather Wilson, R-N.M., calls for penalties of up to $150 million for refiners and other wholesalers and $2 million for retailers.
The reason they are worried about the political heat is that people get upset over price changes in cheap things. There's no political heat in house gouging with housing bubbles. But gas, a relatively cheap liquid is different, as it is the only variable cost in owning and driving an automobile. And consuming less means a change in behavior. So let's see, how does AP represent the argument that the market causes changing prices?
Rex W. Tillerson, chairman and CEO of Exxon Mobil Corp., defended the company's record profits and high gas prices in an interview on NBC's "Today" show Wednesday.
"Obviously, the truth is we do not get together and manipulate prices, that would be illegal," he said, adding that there have been several past investigations of price collusion in the oil industry and none of them have found any evidence of collusion.
"The profit we earn is what the market gives us ... the price is set on the open market."
Of course, the CEO of Exxon, despised because he's successful. But there was a gem that I found in this piece, no diamond, but a ruby at least. "Nationally there is no common definition of price gouging," Arizona Attorney General Terry Goddard told a Senate hearing in November. He said some states have laws that apply only to emergencies, while others allow up to 20 percent price increases.
No common definition. Because Price Gouging is held to the standard of "I know it when I see it." Because Price Gouging is a subjective, normative term. That's like mandating fairness; it cannot be done, except subjectively. Fairness from subjective standards, of course, always leads to unfairness.
The government, of course, takes no role in accepting that new regulation regarding the production and processing of gasoline (MTBE regulations) played a role, because only people that read the whole article know that, and these congressmen have to be re-elected, after all!
Labels: Politics
(1) ExxonMobil is not price gouging, they only add 6-to-9 cents to the actual cost of the gas.
(2) The CEO of ExxonMobil earned every penny of what he got. He did not take the money through marrying the heir of Heinz like John F Kerry (who by the way served his country in the Vietnam War).
(3) Represenative Heather Wilson from NM you mentioned knows better. She is facing a tough reelection and I have family in her constitutiency.
(4) The prices would be lower if the enviornmental wackos let us drill for our own oil (in ANWR, Florida, or wherever)
(5) Great article
-Fred
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