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.

 

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Fully loaded car comes complete with pistol

Mark Mulder, owner of Max Motors in Butler, Missouri, reports that sales have soared since launching a promotion this week that promises buyers a free handgun or a $250 gas card with every purchase.

“This thing has taken off. Sales have quadrupled,” said Muller. The store sells both used and new vehicles including General Motors and Ford products. Every buyer so far “except one guy from Canada* and one old guy” has elected to take the gun, Muller said. Muller recommends his customers select a Kel-Tec .380 pistol. “It’s a nice little handgun that fits in your pocket.”

“We did it because of Barack Obama. He said all those people in the Midwest, you’ve got to have compassion for them because they’re clinging to their guns and their Bibles. I found that quite offensive. … We all go to church on Sunday and we all carry guns,” said Muller. “I’ve got a gun in my pocket right now. I have a rifle in my truck. We’ve got to shoot the coyotes out here, they’re attacking our cows, our chickens. We’re not clinging to nothing. We’re just damn glad to live in a free country where you can have a gun if you want. This is the way it ought to be.”

See, the Democrats are already helping the economy.

*Damn Canadians.

Heather points out the shoes to wear while driving your car from Max’s. They were designed by Karl Lagerfeld and will be put out by Chanel.

Via Shoeblogs

If you like to drink and drive — that is get loaded while driving fully loaded — here’s the drink for you:

More examples of weaponized alcohol containers can be found here.