The House approved by a vote of 389 to 34 a plan to impose criminal penalties and fines of up to $150 million for refiners and wholesalers for "gouging," with a fine of $2 million for retailers. It is pitiable that 389 members of the House were so eager to make a public spectacle of their economic illiteracy. It is revealing that they totally exempted congressional moonshine -- otherwise known as ethanol.
The measure "calls on the Federal Trade Commission to develop a definition of price gouging," noted The Associated Press. The House is threatening stern penalties for a crime it cannot even begin to define.
"Gouging" is a meaningless word. Charging more than others do for the same fuel is inconceivable at the wholesale level because fuel is traded on global markets and the going price is instantly visible online.
At the retail level, if one gas station tried to charge 10 cents more than others, consumers would buy their gas somewhere else. But what if that was the only gas station for a hundred miles, or the only station willing to stay open on Sunday night? In such cases, a higher price is an essential incentive to move fuel to where it is most acutely needed, to encourage station owners to provide fuel at non-peak hours, and to discourage wasteful use and stockpiling in areas faced with episodic scarcity from a transportation bottleneck or hurricane.
"Addicted to oil" is another meaningless phrase. Passenger cars and light trucks account for only 40 percent of all United States oil consumption. And commuting and shopping are not just frivolous "addictions." Nearly as much oil (32 percent) is used by all the addicts who operate buses, airplanes, railroads, trucks, farm machinery and ships. About 17 percent goes into petrochemicals used to make plastics, pharmaceuticals, polyester, paint and many other addictive products. And 4 percent goes to feeding the nation's addiction to paving over dirt roads.
All this sleazy silliness about "addiction" and "gouging" and "robber barons" is just a ruse to prevent us from noticing that Congress and the president worsened this international energy squeeze by (1) prolonged warfare in Iraq and threats of war with Iran and (2) a pork-laden "energy bill."
The energy bill had nothing to do with easing regulatory obstacles to the production of natural gas, crude oil or gasoline, or alleviating the federal government's socialist claims of ownership of energy lands. It was all about giving away more billions to the windmill lobby, the hybrid lobby and the politically generous ethanol lobby.