Obama goes back to Bush playbook and declares war on “price gouging” oil companies

"I’m concerned about higher gasoline prices. The government has the responsibility to make sure that we watch very carefully and investigate possible price-gouging, and we will do just that." — George W. Bush, 4/17/2006

Congress is vowing to take actions that it believes will reverse runaway crude and gasoline prices. Oil rose above $136 a barrel on Monday – more than double what it cost a year ago – and gas hovered around $4.07 a gallon.” – CNN, 6/24/2008

"We are going to make sure that nobody is taking advantage of American consumers for their own short-term gain." – Barack Obama, 4/20/2011

Whenever the price of gas spikes the call goes out from Washington to investigate price gouging. Unfortunately, this leads to one of the great intellectual challenges of capitalism: Defining price gouging. Problem is no one can separate “taking advantage of consumers for short-term gain” from what is usually called profit taking.

To quote Collateral Damage Sr.: "In a society that has a free market fetish, if not a religion, what is price gouging? Is nine percent profit gouging the price? Or 15 or 50 percent? At what price point does profit change into gouged profit?"

Well, here are a few samples from people who have tried to split that particular hair.

First, former Rep. Bart Stupak, (D-Mich), from 2006:

When we were doing the Energy Policy Act last fall, in the town of Midland, right by my district there, gas went up 90 cents in one day. Now, is that not gouging?

If you take a look at it, from September 2004 until September 2005, refineries have increased their prices 255 percent. Isn’t that gouging?

I mean, I think we all know what gouging is. What we need is a federal standard so we can hold the oil companies’ feet to the fire and make sure we know what factor goes into every gallon of gasoline, so at least the American public will have some transparency and get a fair shake on what goes into a price of a gallon of gasoline.”

Next up:

New York State law prohibits price gouging during a state of emergency. The law specifically provides that, in order to prevent any party from taking unfair advantage of consumers during an abnormal disruption of the market, the charging of "unconscionably excessive" prices is prohibited.”

I like that one the best because it is by the former Attorney General/Governor of New York, Eliot Spitzer. Did he wonder about price gouging as he paid all those ladies of negotiable morality?

And finally this one from the very accurately named blog, Neutral Source:

There is no objective definition. Economists–who specialize in price theory and the behavior of markets and can study these things ad nauseum–have no definition for it, either. In fact, economists have avoided the term as if it were a social disease. A review of all the microeconomics textbooks on Neutral Source’s bookshelf reveals that none have as much as an index entry.”

Price gouging, like porn, is in the eye of the beholder. One thing everyone agrees on about it is that it is always committed by someone else.

For businesses price gouging is "when my competitor gets away with charging more than I thought to charge."

For the general public, price gouging is when a company that I don’t work for or have investments in is charging me too much. Profits are when my company is making enough money to not lay me off.

Actually addressing this problem would involve fundamental changes in our system that are much needed but which no one is willing to actually contemplate. Instead we will get more of this Kabuki Theater. The next act will come when the oil companies declare their quarterly earnings. This will be followed by bi-partisan denunciation of  their “excessive profits” and a number of bills will be proposed which will go nowhere.  Then the oil companies will attempt some sort of PR move to show that they are really nice guys and that will be that.

 

WikiLeaks is at the cutting edge of irony

From Glenn Greenwald’s piece in Salon:

WikiLeaks suggested the “other source” was Daniel Domscheit-Berg, a former WikiLeaks associate who WikiLeaks claims took, without authorization, many WikiLeaks files when he left.

I am a fan of what WikiLeaks does but not so much of Julian Assange.

I’m sure he’s very upset about this.

Two personal anecdotes to mark the 150th anniversary of the start of the Civil War

1) About 25 years ago I’m sitting in my living room reading Shelby Foote’s The Civil War: A Narrative, when my roommate Gil walks in. He asks what I’m reading.

“A three volume history of the Civil War. It’s much better than the six volume one I read last year.”

“What, did the ending change?”

2) Earlier this year I’m playing the online version of a World War II strategy game called Memoir ‘44 with an Irish guy who lives in Germany where he spends many weekends re-enacting battles from the American Civil War.

Other:

• Gen. Sherman was judged crazy and relieved of command when he said the war would take years and cost hundreds of thousands of lives.
• Medal of Honor recipient Gen. Joshua Chamberlain died in 1914 at the age of 85 from wounds sustained at The Battle of Gettysburg.

Why I don’t go to major league baseball games

My wife will tell you that it’s not so much that I love baseball as much as it is part of my DNA. The soundtrack in my car from late March to late October because is whatever baseball game I can find on the radio. On May 20th, 21st and 22nd The Chicago Cubs – a team I have loved since growing up in Chicago – will play The Boston Red Sox – a team I have loved since I was 9 when we moved to Providence, RI, and I decided that it wasn’t cheating on your 1st team if the 2nd team was in a different league – will be playing each other at Fenway Park.

Here’s how much I am devoted to the two:

• I am still upset that Ernie Banks never got to play in the World Series.
• When someone asks how long I’ve lived in Boston I reply, “Since the spring after the ‘86 [World] Series.”

Until 2004, I reveled in loving the two most ill-fated teams in baseball. While that had its charms, I am quite content that only one of my beloveds is a constant reminder of the fickleness of probability.

Because of all this and knowing full-well that tickets were absurdly expensive, I went to see if maybe I could afford one in some far-distant bleacher seat with nearly totally obscured view of the field. The least expensive price for just such a seat: $99.

Out of curiosity, I went to see the cost least expensive ticket I could find for any game Red Sox at Fenway. So I looked at the cost for tickets to a Wednesday day game vs. The San Diego Padres, a team that will be lucky if it finishes above Baja this year. $46 for a seat in that weird little triangle in the center field bleachers.

Meanwhile, 45 minutes away in Pawtucket, RI, the best seats in the house for the Sox AAA farm team go for $11. For the AA team in Portland, ME: $9. For the single A Lowell Spinners $10. For the independent league Brockton Rox: $15 and that includes waiter service. If you want basically the same seats and are willing to get your own damn snacks: $9.50.

I’ll see you in Brockton. Bill Buckner, whom I have truly always admired, is managing and I’m pretty sure he’ll give me an autograph for no extra charge.

Transocean cites safety record in doling out bonuses despite 11 deaths and totally screwing up the Gulf

Never, ever, let it be said that mere facts will come between an executive and his or her bonus. Transocean which – along with BP – is responsible for 11 deaths while creating the worst environmental disaster in US history, used its safety record as the reason for giving out exec bonuses.

According to the company’s financial proxy:

"Notwithstanding the tragic loss of life in the Gulf of Mexico, we achieved an exemplary statistical safety record." Based on the total rate of incidents and their severity, "we recorded the best year in safety performance in our company’s history."

Transocean’s PR person (now there’s a job for you) said, "The statements of fact in the proxy speak for themselves” before adding the requisite comments about feeling bad for all the little people.

It is worth noting that the company’s execs did NOT get their bonuses the year before because of safety issues. It really isn’t reasonable to expect them to go two years without bonuses. That could lead to the departure of all the great talent that got the company to where it is today.

Let us not think that Transocean is alone. Our good friends in the banking industry have been doing the exact same thing even while they were destroying the economy.

The past few years have been very rewarding for bank employees. OK, maybe not the government rescues, stagnant loan books, layoffs and litigation. But none of these disasters hurt pay at banks.

A review of call reports filed with the Federal Deposit Insurance Corp., compiled by BankRegData.com, shows that average compensation in the last few years rose — and at the same rate as it did before the crisis. Employees of the largest banks realized the largest gains. The increases significantly outstripped inflation and can’t be attributed solely to shifts in pay schemes or recovering profitability. Banking in general shielded pay from its cost-cutting ax.

Ah, personal accountability in action.

As American Banker points out: “Over the last eight years, average compensation for a full-time bank employee has risen 35% to $83,050, twice the rate of inflation. In 2003, the banking industry’s 1.3 million full-time employees took home $78.3 billion. In 2010, its 2.1 million employees took home $168.1 billion.”

How much of that do you think went to the tellers and branch managers?

Oh and don’t forget: It’s all those millionaire public-sector employees’ fault.

Analtech wants public input on whether they should rename the company

What’s in a name?

We’ve talked with a few experts in the field of marketing, branding, etc. and here’s the general consensus:
   1. Analtech is a brand name known and trusted by the academic and science communities worldwide
   2. Under normal circumstances, such a branding after nearly 50 years would be considered a huge success
   3. Analtech faces certain challenges because of the "juvenile" humor that has developed in the past few decades and current web filters that may block the company name

What do you think?

We’re turning to you, our friends and customers, to see what you think.
Please click here for a simple, two question survey.

Uranustech?

For the record: Fluke has never even thought about it and they are doing just fine.

A moment of silence for one of the greats … Dianna Wynne Jones

Likely as not you never read one of Dianna Wynne Jones wonderful, archly funny and slightly dark fantasy novels which generally poked fun at the conventions of fantasy. (And one, Deep Secret, which also poked fun at SciFi & Fantasy conventions.)

If you have read her then likely as not you spent too much time in the library when you were younger, just as your correspondent did (does).

She was best known for writing Howl’s Moving Castle, which became the basis for the Hayao Miyazaki movie of the same name; and for her Chronicles of Chrestomanci which JK Rowling borrowed rather heavily from.

As Christopher Priest notes in his fine obituary for Jones:

Of the apparent coincidences, Jones said generously to this newspaper in 2003: "I think that she [Rowling] read my books as a young person and remembered lots of stuff; there are so many striking similarities."

She had a great skeptical eye which she earned. As a child she was evacuated out of London to the Lakes District where she encountered two well-know children’s book authors: Arthur Ransome, who thought she and her friends were making too much noise, and Beatrix Potter, who slapped her.

While I can recommend any number of her books, here are a select few which I particularly like:

• The Tough Guide To Fantasyland — lampoons all those tropes created by Tolkien and C.S. Lews (both of whom she studied under) in tour guide form.
• The Darklord of Derkholm – a fantasy world rebels after being turned into a theme park for people from earth wanting a fantasy world adventure.
• Archer’s Goon – A distinctly troll like debt collector invades a family home to collect the 2,000 words the father owes to a wizard.
• The Ogre Downstairs – is the new stepfather actually an ogre or just behaving like one?
• The Chrestomanci series

But, likely as not, you won’t read them. Your loss, not mine.