Wednesday, June 25, 2008


A Little Duke Submission, for your pleasure.....

"Yesterday, in their relentless drive to hide their culpability for high oil prices, Congress tried to pass a law punishing gasoline price gougers at the Federal level. There are many reasons this is a brainless idea. The fact that this sort of law is unconstitutional doesn’t matter because I’m not hopeful that our illustrious Supremes would see it that way. Another reason is that the phrase “price gouging” is so subjective and that would make it practically unenforceable. I have a better reason. One that Duke and I disagree on. I say there’s no such thing as price gouging. The only price gouging that ever takes place is because of government controls, not in spite of them.

First, let’s deal with how government causes actual price gouging. Government sanctioned monopolies always lead to higher prices. One needs only look at phone companies, cable companies and airlines. Look what happens as those services are deregulated. Prices drop significantly when real competition is introduced into the marketplace. Congress wants to add more regulation to the oil marketplace. Does anyone with at least the common sense of a houseplant think that could bring down the price of oil?

To explain why laws against price gouging are counterproductive, let’s look at an example we in Florida are very familiar with. A hurricane has just hit and prices start to rise on many things. We in Florida are saddled with one of these stupid gouging laws, so I’ll explain what would happen if the government let the marketplace help people. Since opponents want to call it price gouging, I’ll use their term and turn it on its ear.

Price gouging is a hedge against hording. It allows for the stretching of scarce resources in an emergency. Let’s look at bottled water. For simplicity’s sake, water costs $1.00 during normal times. After the storm, the few stores that are open have a limited supply of water and the municipal water supply will be down for weeks. You have two choices. Wait for FEMA and die of thirst or go out and buy some water to drink. It now costs $10.00 a bottle. This “price gouging” insures that there is water for you because the guy that walked in before you only bought what he had to have because it was so expensive. With those wonderful anti price gouging laws in effect, the guy before you bought all he could carry at $1.00 a bottle. Sorry, we “protected” him and screwed you. No water for you!

Price gouging allows for faster relief. Using the above water example lets look at how fast water will get into a stricken area. Again, we can wait for FEMA and hope. We can also rely on big chains to bring in water as fast as they can, but they are not geared up to supply their stores to the level that will be needed without a municipal water supply. John and his brother notice water is going for $10.00 a bottle and they think “I can buy it here in Georgia for a buck and sell it down there for $10.00. They load up the truck and head out. Multiply that by 1,000 people and very soon, there is enough water to stave off disaster. Keep water at a buck and those people stay home. No water for you!

There is no such thing as price gouging. That is a made up term to get the masses whipped up. It’s Congress’s attempt at slight of hand. “Forget about how we’re keeping gas from you, we’re going to hurt the very ones that are actually selling you gas.” I watch this three ring circus and can’t help thinking about a quote from one of my favorite books, Atlas Shrugged. While the hero Hank Reardon talks to the political leaders of the time about how their policies have been a disaster and why they won’t change those policies, he says to them “It’s impossible for you to not see the failure of your ideas, what are you waiting for?” What are the Democrats waiting for? This is not a temporary condition. I don’t care if the Democrats control the Presidency, Congress, and Judges. I don’t care if they get every stupid law on how to repeal the law of supply and demand enacted, oil prices will not go down with their policies in place.

WHAT ARE YOU WAITING FOR? Drill here, Drill now, save money!"

While Little Duke and I are a few points apart on Libertarian beliefs, strictly speaking, we are of-a-mind on this one. While My Son was too young to remember the fiasco of the 80s when we "controlled prices" and how the entire market tanked....I am NOT!

You will NEVER, NEVER, NEVER successfully regulate ANY form of free market. & FREE MARKET is what drives this country as the most-powerful engine on the face of the Earth. It is certainly NOT our government. One must only look at our congressional approval level, in the mid-teens, to know this.