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

gasprices21Whenever 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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Oil spill is a crude and growing advertising trend

bullshitplug400x566 It’s an ill tide that … Spirit Airlines latched on to The BP Oil Spill as a way to divert attention from its own PR fiasco of charging for carry-on bags. So they launched a campaign with bikini-clad women in all glistening in sun screen with the tag of "Check Out The Oil On Our Beaches. While I’ve seen more risqué (and clever) things on the Benny Hill Show, someone somewhere objected to this. (And pardon me if I suspect Spirit of being behind this.)

Twitter users from all over the world have been tweeting about the advert while an indignant Facebook user has started the group ‘Tell Spirit Airlines their oil ads are offensive’.

Meanwhile, a chain of NYC gyms managed to come up with something slightly funnier. The NYSC is running ads which read, “Exercise sharpens the brain. Oil execs come in ASAP.” (For some reason CNN called the ad “tasteless.” A bazillion gallons of oil in the Gulf and you think this is tasteless?)

The marketing is seeping into new media with apps for both the Droid and iPhone that let you A) plug the spill or B) save a little yellow duck from turning brown. Elsewhere, everyone is trying to make political hay from the oil. In Minnesota, the Democratic opponent to Michelle Bachmann (R-Loon Lake) is flinging petrol-soaked mud because Bachmann also said the government was extorting money from BP to pay for the spill. In Maryland, Gov. Martin O’Malley claims his opponent is an oil company stooge because he once voted for tax breaks for the oil companies. Not to be outdone, the GOP has a video blasting President Obama for having the temerity to play golf during the oil spill. I really am not ready for a world in which the GOP disapproves of someone playing golf. That’s like the Democrats attacking brie. Have you no sense of decency, man?

What little quality advertising has been done about the oil spill has come at BP’s expense both thematically and fiscally. The beleaguered Gulf state tourism boards are desperate to get people to come visit. To that end, New Orleans launched a campaign with the tagline: “This isn’t the first time New Orleans has survived the British.” You know you’re desperate when your ads are built around a reference to the War of 1812. Next up, a Millard Fillmore quote. Probably the best thing about these ads is that BP is picking up the tab for them. Florida has already burned through the $25 million BP gave them for advertising and is now preparing to go back to the well for more.

But my personal favorite BP-related marketing effort comes from TerrorBull Games – the company which brought us War On Terror: The Boardgame. They are offering a free, downloadable game called Operation: Bullshit Plug (my but they do love colons over there).

This game is for two players. Each player takes a role – either ‘BP’ or ‘The Public’ and each player has two cards that represent two possible strategies. BP is trying to shore up its dwindling share price, while the public just want the leak plugged. Both players pick a strategy and play it face down, simultaneously. These are then revealed and the effects on the share price and the leak are worked out. This action is then repeated until the game ends. It’s very simple, takes just a few minutes to play, but is also quite devilish and deceiving.

Plus you get that cool/disgusting Ralph Steadman-esque picture.

Be afraid: Rep. starts congressional ‘Media Fairness Caucus’

From my blog at EmediaVitals:

Congressman Lamar Smith (R-Idiocy) believes the press is biased and doesn’t represent the values of most Americans. Reasonable people could disagree on this but it’s certainly not an unusual or insane point of view. What is insane is Smith’s solution. The Media Fairness Circus, er, Caucus: “will encourage fairness and balance in reporting, while calling attention to biased coverage in a fair and reasonable way. By bringing attention to media bias and promoting an open dialogue between members of the media and elected officials, we plan to remind the media of their profound obligation to provide the American people with the facts, and not tell them what to think.

Read the rest here at EmediaVitals.

penguin-sealIt is worth noting that this level of stupidity isn’t limited to the legislative branch. Today, President Obama signed a bill promoting free press around the world. The bill was named after slain journalist Daniel Pearl. Here’s the kicker: Press access to the signing was restricted.

The ceremony on Monday raised some eyebrows as well because the White House restricted media access as the president signed a free press bill. The event was open only to a pool of reporters and photographers who report back to their colleagues. It also came at a time when Mr. Obama’s administration is seeking to force a New York Times reporter, James Risen, to testify about his sources for a book in which he reported on a secret effort to undermine Iran’s nuclear program.

 

CRY HAVOC, AND LOOSE THE PENGUINS OF IRONY!!!

Idiots, Damn Idiots and Sarah Palin

“It’s unbelievable. Unbelievable. No administration in America’s history would, I think, ever have considered such a step that we just found out President Obama is supporting today. It’s kinda like getting out there on a playground, a bunch of kids, getting ready to fight, and one of the kids saying, ‘Go ahead, punch me in the face, and I’m not going to retaliate. Go ahead and do what you want to with me.'” — Sarah Palin on the Obama administration’s new nuclear strategy.

If you believe the NYTimes that policy says,

“For the first time, the United States is explicitly committing not to use nuclear weapons against nonnuclear states that are in compliance with the Nuclear Nonproliferation Treaty, even if they attacked the United States with biological or chemical weapons or launched a crippling cyberattack.”

In other words we’re limiting ourselves to only using conventional weapons to bomb them back into the stone age. In case you weren’t aware of this – we have conventional weapons with as much explosive power as the bombs dropped on Hiroshima and Nagasaki. BTW, there’s an intentional loophole in this policy that still lets the US do whatever it wants.The policy explicitly excludes North Korea, Iran and other “outlier” nations which have violated or renounced the main treaty to halt nuclear proliferation.

The Prez had the comeback of the day: “I really have no response. Because last I checked, Sarah Palin’s not much of an expert on nuclear issues.”

Congress waffles in face of national Eggo shortage

eggohide1Speaker of the House Nancy Pelosi  is calling for swift action in response to a national Eggo frozen waffle shortage. In a speech today at the International House of Pancakes, Pelosi (DNot Amused) said the nation could not wait while the nation’s children were forced to pick something else for breakfast.

“This poses a threat to the entire educational system,” she said. “The time lost to choosing another breakfast food will cause massive delays of school start times which could snowball through the entire school day.”

The issue of how to handle the shortage, expected to last until at least next summer, has further polarized an already divided, split, segmented and bisected Capital Hill.

Senate Minority Leader Mitch McConnell, (R-Cranky), accused the Obama administration of having a socialist Eggo agenda that posed a threat to national security and the economy. “Eggo! Al Qaeda! Dow Jones! Eggo! Al Qaeda! Dow Jones! Eggo! Al Qaeda! Dow Jones!” he said, until Senate Minority Whip Jon Kyl (R-To The Right Of You No Matter What) whacked the back of his head.

Earlier in the day, McConnell addressed the issue on a Fox News special, French Toast Sticks: Threat or Menace? At that time McConnell blamed the liberal media before offering to wipe some syrup off the chin of host Glenn Beck.

Pelosi said she would consider a bailout for the waffle industry and a public option for either butter or margarine. In a move widely seen as an attempt to placate moderate Democrats she promised there would be no government mandate for syrup.

Pelosi shattered any possibility of bipartisanship when she decried Republican attempts to link the crisis to Rep. Barney Frank’s waistline. Frank (D-“Those” People) defended himself by saying he owed his chubbiness to Dunkin’ Donuts. “The Massachusetts’ state constitution requires every resident to start the day with an extra huge coffee, regulah, and the donut of his or her choice.” Frank, who has an aide bring him his daily serving,  acknowledged that he may have a donut problem. “I don’t care if it’s sprinkles or coconut or icing,” he said. “But it BETTER HAVE SOMETHING!”

In an unprecedented move, the Obama administration offered a straight-forward opinion on the issue. When asked about the shortage First Lady Michelle Obama sighed, rolled her eyes and made us all feel silly for bringing up the issue in the first place. Later, she was crowned queen of Europe. Her husband is reported to have done something, too.

The shortage is a result of problems at Kellog’s Atlanta and Rossville, Tenn., plants. Eggo production won’t return to normal until it until the middle of 2010, said company spokeswoman Kris Charles. Already customers are noticing near-empty Eggo shelves on the freezer aisle at many grocery stores. This has scared many shoppers until they noticed the store brand frozen waffles.

No surprise: Goldman Sachs – aka the Treasury Dept. – reports record earnings

The financial firm’s investment in the Obama campaign is certainly reaping impressive dividends. The company “generated nearly $750 million in revenue from equity underwriting, helping battered financial-services firms sell stock to meet new government capital requirements. The quarterly performance from equity underwriting was a company record, and surpassed even the heady days of the Internet bubble and the previous benchmark for such fees set in 2000.” The only difficulty the company faces is how to cover up the bonuses it will pay out as a result of all this.

For those keeping score at home here is the tip of the iceberg of Goldman alumnae now working for change in Washington:

  • Mary Schapiro, Chair, Securities and Exchange Commission
  • Gary Gensler, chair, Commodity Futures Trading Commission.
  • Lawrence Summers, Director of the White House’s National Economic Council
  • Mark Patterson, chief of staff to Treasury Secretary Tim Geithner’s
  • Neel Kashkari, Treasury Dept. assistant secretary for international affairs

And, no I don’t think it would have been any different had someone else been elected.

Obama tries to revive hopeless “Hope for Homeowners” plan

Last fall the Administration unveiled its "Hope for Homeowners" program in the hopes it would allow some 400,000 troubled homeowners to swap risky loans for traditional 30-year fixed-rate mortgages with lower rates.

Instead only a handful of borrowers have been able to qualify, and as of earlier this spring only one loan had completed the program. It was launched by the government last fall but has so far has been a failure, proving unattractive to banks required to absorb large losses.”

Having failed to come up with a program that makes sense, Treasury will now give $2,500 bribes to “to entice [banks] to participate.”