The 10 Biggest Marketing Blunders of 2010

This year it was a race for 2nd place because the top honors were nailed down before the rest of contestants were even out of the starting gate.

1) BP & Tony Hayward

Under the astute guidance of now former-CEO Tony “I want my life back” Hayward, BP proved time and time again why it so wisely decided to can its positioning as the environmentally friendly oil company. Here’s just a few of Tony’s finer moments:

  1. Creates one of the quotes of the year by saying, “I want my life back.”
  2. In testimony before Congress he makes a point to remind us all that, “We care about the little people.”
  3. At the height of the spill he takes a weekend off to go watch yacht races at the Isle of Wright in England.
  4. In a slick video ad he takes pride in the fact that BP has “organized the largest environmental response in this country’s history.”
  5. His parting words on stepping down as CEO: “Safety, people and performance have been my watchwords. We’ve made significant progress.”

But Tony didn’t win this award all on his own. No he had help from literally thousands of BP execs like BP spokesman Randy Prescott: who said, “Louisiana isn’t the only place that has shrimp.” While space prevents from listing all the asinine things the company did, here are a few of the lowlights:

  1. Decided to pay out $10 billion in dividends to stockholders while failing to pay people hired to clean up its mess.
  2. Employed the engineer who wrote in an email about the decision not to install all the safety devices on the Deepwater Horizon, “Who cares, it’s done, end of story, will probably be fine.” The email was sent on April 16th – Four days before explosion that killed 11 people.
  3. “BP is going to [spin] off its Gulf of Mexico spill operation to a separate in-house business to be run by an American in a bid to isolate the “toxic” side of the company and dilute some of the anti-British feeling aimed at chief executive Tony Hayward, the company said today.” Because it’s all about protecting Tony, that’s why.
  4. Continuing to spend millions of dollars on ads promising to fix the damage its done and emphasizing how much effort it is putting into stopping the catastrophe it created.
  5. Put together an internal report on the disaster so vapid that the best defense BP’s safety honcho Mark Bly could offer was, “It wasn’t intended to be anything it isn’t.”
  6. Lying about the amount of oil being spilled in order to limit liability.
  7. Blocking the press access to the scene of the crime by banning flyovers and keeping reporters from beaches where the oil might be seen.

Of course these last two would not have been achievable without the aid and support of the US government. Reporters calling The Coast Guard about their inability to go look at the ocean were (and maybe still are) ROUTINELY referred to the BP press office. So BP gets to enforce the 1st Amendment. Ahh, the watch/lap dogs of government.

Dishonorable mention for its actions also go to: Rep. Joe Barton and The House Conservative Caucus for apologizing to BP. They called the President’s pallid pursuit of the company a “Chicago-Style Political Shakedown.”

2) Christine O’Donnell

In The Great Book Of Political Campaigns the first rule is “Never Have To Deny That You Are A Witch”. Coming up with the other best quote of the year (“I am not a witch.” Like you needed to be reminded) was but one in a cascade of highlights for Delaware’s GOP candidate for Senate. She also thought that an ad pointing out she had never been to Yale would be a good thing. Instead it merely highlighted the fact that she hadn’t actually graduated from college at all – despite her claims to the contrary. But, in the silver lining department, all the hoopla around her claims did get her to finally finish up the work on the degree she had begun working for 17 years earlier. Two weeks before election day she was awarded a BA in English from Fairleigh Dickson University. Despite having a degree in English it turned out that reading was not her strong suit shown when when she claimed that the separation of Church and State was not, in fact, a part of the constitution.

Not content to go quietly into the good night, O’Donnell returned to the public stage earlier this month, telling a gathering, “Tragedy comes in threes. Pearl Harbor, Elizabeth Edwards’s passing and Barack Obama’s announcement of extending the tax cuts, which is good, but also extending the unemployment benefits.” Tragedy may come in threes, but in this instance stupidity is singular.

3) TIE: Sharron Angle/Alex Sink/Libby Mitchell

  • Sharron Angle should have easily won the Nevada Senate seat. In a year when not being a Democrat was pretty much all you needed to win, she was running against Harry Reid – a man about as popular as Bernie Madoff. She managed to lose because of a campaign that rivaled Ms. O’Donnell’s for egregious stupidity. Of many great moments in her run for office my favorite was when she told the Rancho High School Hispanic Student Union, “You know, I don’t know that all of you are Latino. Some of you look a little more Asian to me. I don’t know that.” To make it clear just how hard it can be to tell who is Latino and who is Asian and who is white, Angle added, “I’ve been called the first Asian legislator in our Nevada State Assembly.”
  • Alex Sink, the Democratic nominee for governor of Florida, lost to Rick Scott — a man with no political experience who ran a company involved in the biggest medicare fraud case in American history.
  • Libby Mitchell, Democratic nominee for governor of Maine, came in third and lost to Republican Paul LePage – a creationist. While neither Sink nor Mitchell’s campaigns were as spectacular a flop as Angle’s, the results speak for themselves.

4) Summer’s Eve says, Want a raise? Wash your vagina.”

The literal and metaphorical douchebags at Fleet Labs ran a full page ad in Women’s Day that opened with the headline, “Confidence at Work: How to Ask for a Raise.” It then listed eight steps to getting more money out of the boss. Number 1? “Start with the usual routine and all things you do to feel your best, including showering with Summer’s Eve Feminine Wash or throwing a packet of Summer’s Eve Feminine Cleansing cloths into your bag for a quick freshness pick-me-up during the day.”

5) Montblanc regrets “honoring” Gandhi with $24K fountain pen

Either Montblanc’s execs have a brilliant sense of irony or they’re complete idiots. I’ll report, you decide. Whichever is the case, they have “unconditionally apologized” to an Indian court about it – at least until the court rules on whether the company can continue to sell the pen. The pen was marketed as a way of honoring 140th birthday of the brilliant spokesman for the poor.What, you may ask, justifies the $24,000 cost of this ink delivery system?

The gold and silver limited edition pen includes an engraving of Gandhi and comes with an eight-meter golden thread that can be wound around the pen, representing the spindle and cotton Gandhi used to weave simple cloth.

Montblanc made only 241 of the handmade pens, one for each mile Gandhi walked in his famous march against salt taxes in 1930. It should be noted that the company did think of the needs of the less affluent consumer when producing this pen. They are also offering ballpoint and rollerball versions for a mere $3000 per.

6) Drake University boasts about being a D+ school

clip_image001Let’s pretend you are an institution of higher learning. Let’s say the name of your institution starts with the letter D. Now you want something special for your marketing, something that talks about the special magic that occurs when a student comes to your university. So what do you call it? Anything BUT “D+.” Well, unless you’re Drake University. Much to the school’s surprise, some have taken the now-dead recruitment campaign amiss. Go figure. Maybe they needed a better slogan. How about, “Drake, the ultimate safety school.” I sure hope the faculty are smarter than the admissions office. The only thing dumber than the campaign is the school’s effort to explain it away.

In hindsight, introducing the concept and the testing that was conducted with the target audience may have minimized some of the concerns that have been expressed, and we are very sorry that many of you were caught by surprise as a result.

They used 42 words to say “Mistakes were made.”

“Our experience in the survey and in the field suggests that the kind of students whom we want to attract to Drake easily understand and appreciate the irony of the D+.”

Ahhh, irony the last excuse of the incompetent. Or, as Calvin Trillin once said, “I never did very well in math – I could never seem to persuade the teacher that I hadn’t meant my answers literally.”

7) Medal of Honor video game shoots itself in the foot

Simple marketing rule: Don’t include a feature in your product that directly contradicts the name of your product. Case in point: The Medal of Honor video game from EA games. In this first person shooter, players get to pretend they are soldiers. I assume it lets you pretend you are a US soldier since those are the only people who can actually win a Congressional Medal of Honor. The latest version of the game — coming out next month — includes a feature where you can play as a member of the Taliban … and thereby shoot US soldiers. Here’s the brand disconnect: Shooting US soldiers is definitely NOT going to let you get a Medal of Honor.

Surprisingly, many people and organizations were upset by this. A lot of those people are the families of soldiers who have been killed in the war. Who could have seen that coming? Also upset is the commander of the US Army and Air Force Exchange Service (that’s the group that runs the stores on military bases), who has decided that they won’t sell the game. That will hurt because, as Sgt. Big Brother CollateralDamage can attest, military folk LOVE games like this. It will also hurt because it will make Walmart and co. think twice about stocking the game. Congrats, guys, on a blunder that could have easily been avoided.

8) Sperm Logo Sneakers

I can’t top what Rebecca Cullers wrote over at AdFreak:

sperm sneakerDo you wake up in the morning wishing you could wear shoes with a picture of a sperm prominently displayed on them? Well, now, with Gravity Defyer sneakers, you can! The Web site refers to the sperm logo as the ‘Slick Seed of Life Logo,’ and says it’s there ‘because it’s cool!’ As you can see from the full-page advertisement … wearing these shoes is like pouring an energy drink on your feet. At least, I’m assuming the can (also covered in sperm pictures) that’s splashing liquid on the shoe is supposed to be an energy drink. In a press release, company officials explain how, despite a couple of retail partners who’ve pulled out due to the logo, they intend to keep it: “Our logo is deliberate. … There’s no shame, there’s pride,” they write. In my mind, there’s a big gap between not being embarrassed by sperm and wanting to have it all over my shoes.”

9) Video game lets players bomb illegal immigrants.

Spain’s conservative Popular Party launched the video game, Rescue, on its website as part of the party’s campaign for regional elections in Catalonia.

In the game, Alicia Sanchez-Camacho – the president of the PP branch in Catalonia – is depicted riding a white seagull called Pepe. She is dubbed Alicia Croft, in a reference to Lara Croft, the heroine of the popular video game Tomb Raider. Points are awarded to players when they direct the bird to bomb aircraft containing illegal immigrants or symbols of Catalan nationalism.

The game was taken down within hours and the party of course found someone else to blame for it. In this case, it was the developer who allegedly failed to follow directions. Instead of bombing the immigrants, the PP  claimed, the seagull should have targeted the organized crime groups that traffic them.

Hey, who hasn’t made that mistake?

10) Magazine industry spends millions preaching to the choir

On a list of industries with too much money the leader would clearly be banking followed probably by oil. What about magazine publishing? While it is certainly ahead of typewriters (repair & manufacture of), I don’t think it would crack the top 1000. Despite this, the industry has collectively decided it is time to waste some of this precious resource. Thus the just-announced multimillion-dollar ad campaign touting the “power of print.”

The campaign, funded by five leading publishers, seeks to convince people that “magazines remain an effective advertising medium in the age of the Internet because of the depth and lasting quality of print, compared with the ephemeral nature of much of the Web’s content.”

And how are they going to get this message across? “Nearly 1,400 pages of the ads will be sprinkled through magazines including People, Vogue and Ladies’ Home Journal this year.”

Let me get this right – you’re going to tell magazine readers that reading magazines is a good thing? Maybe it’s just me but I’m pretty sure they already know. Aren’t the people you want to reach the ones who aren’t trying to discern the difference between the ads and the articles in GQ?

SPECIAL BONUS: BEST UNINTENTIONAL MARKETING MISTAKE OF THE YEAR


Never a good sign when a candidate puts out an ad saying, “I’m not a witch.”

And that candidate is? Why Christine O’Donnell (R-You’re Joking), of course.

 

What’s especially impressive is that it gets WORSE after she assures us she’s not a rhymes with b … i ….

As Stewart or Colbert put it, “All this information is coming from an unreliable source: Christin O’Donnell.”

FWIW, I believe her. I can’t believe there’s a coven that would take her.

Would the last African-American to leave the GOP please turn out the lights?

Activists at a conservative political forum snapped up boxes of waffle mix depicting Democratic presidential candidate Barack Obama as a racial stereotype on its front and wearing Arab-like headdress on its top flap. Values Voter Summit organizers cut off sales of Obama Waffles boxes on Saturday, saying they had not realized the boxes displayed “offensive material.” The summit and the exhibit hall where the boxes were sold had been open since Thursday afternoon.

I actually like the idea of Obama Waffles as a satirical product (indeed, I quite like the image of John Kerry endorsing the waffles on the group’s web site). Had the group used a picture of the senator or at least a caricature that looked like him I would have said, “Good on you.” Using a drawing that makes him look like the child of Uncle Ben and Aunt Jemima was just stupid.

Y’know, there are a number of African-American conservatives out there, might be a good idea to recruit a couple.

It is safe to say that the GOP has written off the Black vote for this election — and probably for the foreseeable future. However, for the last eight years George Bush has been doing his best to reach out to the rapidly growing Latino population. Well, the waffles also managed to insult them, as well. On the back of the box, Obama is portrayed wearing a sombrero and serape. There is also a recipe for “Open Border Fiesta Waffles” that can serve “4 or more illegal aliens.” A recipe tip: “While waiting for these zesty treats to invade your home, why not learn a foreign language?”

In this case the foriegn language seems to be courtesy.

(More cheap shots from the Liberal Media:The Army Times takes McCain to task for changing his position on the Army’s Future Combat System — which the paper describes as “over-budget, behind-schedule.” Seems the Senator — back when he was a fiscal conservative — was against it, and against it for quite a long time. His position changed sometime this summer. )

Georgia GOP congressman describes the Obamas as “uppity”

So much for Republican minority outreach efforts.

[Georgia Republican Rep. Lynn] Westmoreland was discussing vice presidential nominee Sarah Palin’s speech with reporters outside the House chamber and was asked to compare her with Michelle Obama.”Just from what little I’ve seen of her and Mr. Obama, Sen. Obama, they’re a member of an elitist-class individual that thinks that they’re uppity,” Westmoreland said.

Asked to clarify that he used the word “uppity,” Westmoreland said, “Uppity, yeah.”

And suddenly the hockey mom/pit bull with lipstick is the sensitive one.  (BTW, I did think the lipstick line was great.)

Well, he must have figured they weren’t going to get any of the African-American vote anyway so let’s insult women, too.

The real question about Sarah Palin

I do not care about her kids. Anyone asking how she couldn’t be home with the new born and/or oldest daughter is a sexist idiot. I hope the experience with her eldest makes Gov. Palin give a long rethink on the topic of abstinence only education, but that is an issue that is for her and her heart and not germaine to what it is she will be asked to do.

I am fascinated by the fact that she is the only candidate who will get a raise if she wins. The governor of Alaska currently earns $83,280. The veep gets $208,100.

The chief reason I think she shouldn’t be a heartbeat away from becoming president has nothing to do with her gender. it is that she is a creationist. If she herself doesn’t believe in creationism she has said that it should be taught in schools. If you are going to teach creationism as science — as opposed to teaching the Bible as literature which I am all in favor of — then you must also teach the Cthulhu Mythos and Flying Spaghetti Monster as science.

Still there is one essential question that I am positive was overlooked in the vetting process: Has the governor or any one in her family ever played Dungeons & Dragons?

C’mon you intrepid journalists! This one has Pulitzer all over it!

The tea leaves continue to suggest that things are not going well for Sen. McCain. David Frum, NPR’s token conservative, said that the Palin pick came about because McCain had seen some troubling internal poll numbers that said he had to make a big risk if he wants to win.

Also Political Wire says

My prediction: This is not going to be close in the final count.

Tea leaves not looking promising for McCain

I hesitate to make a prediction but the race for president may not wind up being as close as it currently looks.

First the TV audience:

  1. Hillary Clinton’s speech (26.0 million viewers) had higher ratings than Michelle Obama’s speech (22.3 million viewers).
  2. Almost five times as many people (26 million) watched Day Two coverage in 2008 vs. Day Two in 2004 (5.9 million) when only the cable networks covered the convention

It will be interesting to see the numbers for tonight. But last night’s numbers don’t suck either:

  1. More than 24 million people watched the third night of the 2008 Democratic National Convention — a 7.5% decrease from 26 million viewers on day two of the convention.
  2. Wednesday night’s speeches, which featured Former President Bill Clinton’s endorsement of Senator Obama and Senator Joseph Biden’s acceptance of his party’s nomination for vice president, drew 12.2% of all African American viewers — down slightly from the prevous night when Hillary Clinton addressed the convention (12.7%), but up from day one (12%), when Michelle Obama spoke.
  3. Viewers age 55 and older continue to dominate the DNC’s TV audience, with 18.1% of all Americans in that age group — 12.5 million people — tuning in to Wednesday night’s convention coverage on ABC, CBS, NBC, CNN, FOX News Channel, MSNBC, BET, and TV One.

Perhaps most telling is this: The 24 million who watched last night was a third larger than the 18 million who watched day three of the 2004 Democratic snooze fest.

Then the live audience:

According to the Dayton Daily News, Sen. John McCain is still giving away tickets to his Friday rally where he will unveil his running mate. He’s having trouble filling a 10,000 seat arena.

(BTW, all 75K seats seem filled for tonight’s speech at Mile High Stadium by Mr. Obama)

All of which may be caused by the McCain campaign’s astounding ability to say exactly the wrong thing. First there was former advisor Phill Gramm’s “American’s are whiners” reaction to the current economic troubles. This of course was still eclipsed by the candidate himself saying he didn’t know how many houses he had. While nothing will ever top that one there’s today’s wonderful bon bête on how to deal with the health insurance issue:

“The next president of the United States should sign an executive order requiring the Census Bureau to cease and desist from describing any American – even illegal aliens – as uninsured. Instead, the bureau should categorize people according to the likely source of payment should they need care. So, there you have it. Voila! Problem solved.” — John Goodman (not the actor), president of the National Center for Policy Analysis, a right-leaning Dallas-based think tank, and the person who helped draft. Sen. John McCain’s health care policy.

Best line in the story: “Goodman said anyone with access to an emergency room effectively has insurance, albeit the government acts as the payer of last resort.” I believe Goodman was quoting a classic solution to problems of the poor originally conceived of a by a Mr. Dickens. Too bad he hadn’t read Mr. Swift.

Suddenly the malaprops of Dan Quayle and even the our current Inarticulator-In-Chief don’t seem so bad.

All that said, the good senator from Arizona is hardly out of it by any account. Should he pick either Texas Sen. Kay Bailey Hutchison or Christine Todd Whitman (former governor of New Jersey and ex-chief of the EPA) as VP he could really make it close. That would get him a lot of Hillary defectors. While the senator has been mentioned as a possible veep it is as the longest of shots, the governor has not even got that close.

BTW, you could save some time and read this stuff at the place I get it: Taegan Goddard’s Political Wire. I  recommend it highly.

Larry Craig scientifically proven to be a liberal

A study published in Nature Neuroscience showed that

Conservatives tend to crave order and structure in their lives, and are more consistent in the way they make decisions. Liberals, by contrast, show a higher tolerance for ambiguity and complexity, and adapt more easily to unexpected circumstances.

Consider this in the light of Mr. Craig’s behavior: First, there’s the Hamlet-like debate over resigning (if Hamlet were really, really, really creapy). Then his lawyer William Martin said on the Today show (today!) that Craig didn’t “knowingly and intelligently enter a guilty plea” and so would be changing his mind on that one, too.

Perhaps the soon-to-be-former senator is bisexual, because other than his plea & the resignation, he has yet to change his mind about any other facts in the case:

“He admits to going into the bathroom, he admits to moving his foot, he admits to reaching his hand down,” Martin said. “That’s not a crime.”

Martin said Craig will argue that he was under too much stress to knowingly plead guilty.

And you KNOW Mad Annie Coulter is going to have a field day with this. This is the person who wrote:

Assuming the worst about Craig, the Senate has not held a vote on outlawing homosexual impulses. It voted on gay marriage. Craig not only opposes gay marriage, he’s in a heterosexual marriage with kids. Talk about walking the walk! Did Craig propose marriage to the undercover cop? If not, I’m not seeing the “hypocrisy.”

God love her. Someone has to.Personally I think the Democrats should offer to pay Craig’s legal fees. He’s the best thing to happen to them since whatever that last GOP sex scandal was.

(Aside from the issue of the study’s implications for the Man Behind Door #2, I have to say I had my doubts about the science of this study. I’m always uneasy when I hear of science “proving” a social contruct. It reminds me too much of the bogus studies that have been done to “prove” this or that racial group or people with a particular sexual preference are always X — with X being a value that is not considered positive by the ruling class at the time. But from what I’ve read this was a legit double-blind study. I wonder what it would show about people who describe themselves as libertarians?)

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Republicans prove they’re smarter than Dems: The leading GOP presidential candidate is None Of The Above

I don’t care if he’s dead. I’m voting for Pat Paulsen. Or Pogo. Or Willie Nelson. Or Chris Rock. Yeah, I’m voting for Chris Rock.

Democrat makes brilliant grab for the gun-nut vote

The junior senator from Virginia has turned a potential felony into a brilliant marketing move. Yesterday one of Democratic Sen. Jim Webb’s aides got busted  for taking a loaded weapon belonging to the lawmaker into a Senate office building. Today Sen. Webb explained he felt the need to carry a gun to protect himself.

I believe it’s important, it’s important for me personally and for a lot of people in a situation that I am in, to be able to defend myself and my family,” said the veteran and former Reagan cabinet member.

Now that’s taking away a Republican issue.

If nothing else it pretty much guarantees that Webb will carry Texas should he ever be masochistic enough to run for president. As of today Texas seems to have removed whatever remaining limits the state had on being able to shoot your fellow human being.

A law signed today by Gov. Rick Perry allows for the reasonable use of lethal force if an intruder is:

  1. Committing certain violent crimes, such as murder or sexual assault, or is attempting to commit such crimes
  2. Unlawfully trying to enter a protected place
  3. Unlawfully trying to remove a person from a protected place.

OK, I can sort of see #’s 1 & 3. But No. 2 suggests I can shoot anyone who comes to my house and bugs me. “Look out honey! It’s the Jehovah’s Witnesses!”

Master Sgt. Big Brother Collateral Damage (USArmy) is our official ambassador to Gun-Nut Nation and even he gets nervous whenever they broaden the “right to shoot” laws. He’s already spent enough time in a country filled with untrained amateurs who felt no compuntction about firing their weapons. It was called Iraq.

“Other state’s are trying to abolish the death penalty… mine’s putting in an express lane.” — Ron White, one of my favorite comedians, on his home state of Texas.

(Graphic via Star Spangled Ice Cream.)

Fox reports Romney to announce prez run. Or at least how he would have run if he did. Retraction imminent.

Everyone everywhere else in the US knows that Romney won’t even carry the state he’s governor of, right?

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Generic Democrats lead the Brand X Republicans

Another reason why I love polls…

Democrats Expand Lead in Generic Ballots: The latest Diageo/Hotline poll Democrats have increased their lead in the generic congressional ballot and now lead by 18 points, 52% to 34%, up from 13 points last month. In a generic Senate ballot, Democrats lead 55% to 32%.

Let me be the first to jump on the Generic bandwagon! GENERIC IN ’08!  His/her running-mate will be Non-Specific. So GENERIC & NON-SPECIFIC IN ’08! Wait, isn’t generic Democrat redundant? And I do feel as though we already have a generic senate…

More bad news for the GOP: Even Charlie Brown is starting to look good by comparison

Rep. John Doolittle (R-CA) is facing a stiff challenge from Charlie Brown (D) in California’s 4th district, according to a new SurveyUSA poll. Doolittle currently leads Brown by 10 points, 51% to 41%.

C’mon dude, everyone knows how to win this one,  just yank the football away at the last minute.

Where were you during the war on price gouging?

Hurrah! Washington has heard the call to battle and is taking up arms to protect us all from price gouging.

“Anyone who is trying to take advantage of this situation while American families are forced into making tough choices over whether to fill up their cars or severely cut back their budgets should be investigated and prosecuted,” House Speaker Dennis Hastert, (R-Ill), and Senate Majority Leader Bill Frist, (R-Tenn), wrote in a letter to President Bush. Of course they only mean taking advantage monetarily, not politically.

What better way to protect us than with a mountain of useless paper? This explains why many, many different bills are winding their way through Congress to deal with this threat. The one just approved by the House would impose criminal penalties and fines of up to $150 million for energy companies unable to distinguish the difference between making money and making too much money.

This offensive against excessive profit continues the trend of declaring war on chimerical concepts that began with our efforts to curb “terror.” Don’t you miss the good old days when we only attacked nouns? The wars against cancer and poverty weren‘t any more successful than the current bunch but at least you knew what the hell we were trying to eradicate.

Just as no one can define terror, no one has any idea what price gouging is either. This fact is made plain in the GOP-sponsored House bill, which leaves it to the Federal Trade Commission “to develop a definition of price gouging.” You have to love a law that is so specific about the penalty and so vague about the crime.

It is imprecise because it has to be. Otherwise it would be totally laughable. Witness the efforts of Sen. Maria Cantwell (D-Wash.) who has proposed a bill that would levy fines of up to $3 million on oil companies, refiners, distributors, or retailers found to be “taking unfair advantage of the circumstances to increase prices unreasonably” or imposing “excessively unconscionable price increases.” This suggests that oil companies and their ilk would have a legal defense as long as they could prove a price increase was either excessive or unconscionable but not both.

The Cantwell bill does offer some guidance on the issue, saying that gouging depends on whether the price charged amounts to “a gross disparity” from the usual price of oil and gasoline. However, it does not give any specific dollar or percentage increase to define what “a gross disparity” would be. Once again the dirty work is left to someone else, in this case that would be the judiciary. (I found out about Sen. Cantwell’s bill while reading a story on MSNBC with the misleading headline: What is price ‘gouging,’ and can it be stopped? It was misleading in that it answered neither question.)

Price gouging, on capitol hill at least, is not unlike the old definition of obscenity – I know it when I see it. Consider this quote by Rep. Bart Stupak (D-Mich):

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.

Well, that certainly clears things up. So if the folks in DC don’t know what price gouging is, does anyone else?

New York Attorney General Eliot Spitzer writes (in a column which makes repeated references to 9/11 – surprise, surprise) that

“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.

New York’s law, like that of most other states, says that price gouging can only occur during a time designated as an emergency by the government. So it IS price gouging if a hurricane hits my state and you jack up the price of duct tape by 1000%, but it is not price gouging if you charge me $2 to conduct an electronic bank transaction that costs you $.002 as a part of normal business. Apparently no one has yet thought to make highway robbery illegal.

That is not just my opinion either. This is from Arizona Attorney General Terry Goddard’s testimony to the Senate:

Traditional price gouging laws are not in effect during periods of “business as usual”. Rather, they only go into effect when the normal competitive checks and balances of the free market are disrupted by a disaster or other emergency. When a population is trapped and desperate for essential supplies, like food, water, shelter and gasoline, victims do not have the opportunity to shop around or wait to purchase essential products until the prices go down. Demand is steady regardless of the price, so unscrupulous businesses can and sometimes do take advantage of consumers.

Need a rule of thumb? Then just remember unscrupulous business practices during an emergency = BAD. But unscrupulous business practices under other circumstances = Good.

(Special note should be made of Louisiana’s price gouging statute:

During a declared state of emergency, a merchant is prohibited from selling goods or services at values which exceed the prices normally charged for comparable goods and services in the same market area at or immediately before the time of the state of the emergency. Businesses may raise prices on items for which they incur additional costs, however, these price increases should not be excessive. Price gouging is a misdemeanor and can result in a $500 fine or six months in jail.

Well, if the threat of a $500 fine doesn’t keep Exxon in line what will?)

There are other definitions as well:

The sages at Princeton say it is “pricing above the market when no alternative retailer is available.” Which could be read to mean that any time you have a monopoly, you are a price gouger. So much for an Ivy League education.

My favorite definition is from a site called 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 is defined by a buyer, generally after the fact, who is deeply unhappy that the price he willingly paid was much higher than the price he would have preferred to have paid. As the gap between actual and preferred prices rises, the buyer’s sense of unfairness and anger towards the seller intensifies.

Equally good is one from a website called Truck and Barter, (which has the wonderful tag line “Where Sympathy and Hedonism Collide”):

Price gouging is the raising of prices 1) far above one’s costs and far above competitors prices, 2) far above what many people think is just, 3) during a human crisis. I disagree with those that state that PG is a non-concept. It is an intentionally vague and deceptive, morally abstruse, and economically harmful concept, but for those very reasons, it must be taken seriously.

Or you could go with the words of some lunatic named Neil Boortz: “What is price gouging anyway? Just a buzzword used by the anti-capitalist, government-educated among us.”

Yep, Bill Frist, George Bush and Denny Hastert – anti-capitalists. I’ll have some of what Mr. Boortz is drinking please.

Anti-capitalists Hastert and Frist have asked fellow Commie President Bush “to direct the Justice Department and Federal Trade Commission to investigate the rising oil prices.” Across the aisle, the Dems are also using the FTC as a whipping boy.

Quoth Rep. Stupak again: “See, when the president calls for an investigation by the FTC into the price of oil to see if there’s gouging going on, it doesn’t do us any good, because the FTC, the Federal Trade Commission, has never brought a case for price gouging on petroleum products ever.”

One slight problem: One FTC official, though, told CNN that the trade commission can only look into anti-competitive practices and has no legal authority to investigate price gouging.

The GOP has also floated the idea of hitting the energy companies with a windfall profits tax which has got to be the funniest thing I’ve ever seen. Aren’t windfall profits the Republican’s raison d’etre? Next thing you know George Bush will be calling for abetter mileage on cars. Oh, wait …

One of these “price gouging” bills will inevitably pass through Congress’ digestive tract and get placed in a steaming pile on the president’s desk where it will promptly get signed. Why not? Our elected officials will be able to say they have done something without actually running the risk of doing anything. This law will never be enforced. If someone tries to it will be laughed out of court.

To really address this issue would require a long and critical look at how we choose to define capitalism or what the late Mr. Galbraith called the “free markets where nothing is free.” But that hasn’t happened since 1931.

There is one simple solution to the problem, but no one in this hemisphere has tried it. It’s called a Bolivian. But remember, simple does not mean good.