Snake oil salesmen

David McNew/Getty Images It’s the beginning of the so-called summer driving season in the United States, which means gasoline prices are going up. And that means it’s time for U.S. politicians to pander to popular ignorance about energy prices. Last week, the U.S. House of Representatives passed the “Federal Price Gouging Protection Act,” a bill ...

601587_070530_gasoline_05.jpg
601587_070530_gasoline_05.jpg

David McNew/Getty Images

David McNew/Getty Images

It’s the beginning of the so-called summer driving season in the United States, which means gasoline prices are going up. And that means it’s time for U.S. politicians to pander to popular ignorance about energy prices. Last week, the U.S. House of Representatives passed the “Federal Price Gouging Protection Act,” a bill that would make it illegal for gas companies to charge “unconscionably excessive” prices at the pump. A similar effort is underway in the Senate.

“Price gouging” is not a legal term in the United States, and the bill does not change this fact. What’s an “unconscionably excessive” price? Presumably, as with pornography, the courts will be able to identify this phantom menace when they see it. Maybe they’ll have better luck than the Federal Trade Commission. After Hurricane Katrina, the FTC investigated (pdf) allegations of price gouging and found none, concluding:

Based on well-established economic principles, the price increases were roughly in line with increases predicted by the standard supply and demand paradigm of a competitive market. 

But the most idiotic part of the bill is that the same groups pushing for action on “price gouging” also rightly believe that the United States needs to reduce its demand for oil on national security and environmental grounds. Yet as Robert Samuelson points out in a spot-on column in today’s Washington Post, only the pain of high gasoline prices will actually move significant numbers of Americans out of those Hummers and into Priuses and plug-in hybrids. The politicians surely know this, but knowing better has hardly stopped opportunistic lawmakers before. Why start now?

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