Like many Americans, I never heard of California Lt. Gov. Cruz Bustamante until recently. But because the California recall election has dominated national political coverage for the last month, I have been getting a crash course on Mr. Bustamante—the leading Democrat to replace Gov. Gray Davis should the recall be successful on Oct. 7. Unfortunately, Mr. Bustamante’s latest pronouncement does not indicate any knowledge of economics whatsoever. This suggests that California’s economic woes are unlikely to improve under his leadership.
Last week, Mr. Bustamante proposed amending the California state constitution to allow the Public Utilities Commission to regulate gasoline prices. “Californians are being gouged,” he charged. His proposal would require oil companies to justify price increases and regulate their profits in the state.
The price control plan has universally been condemned on economic and legal grounds. “It’s a terrible idea,” says energy expert Philip Verleger. He warned that it will lead to gas lines as oil companies export gasoline production from California refineries to other states and reduce imports of gasoline from Canada, the Caribbean and others places that now serve the California market.
The state would have no power, even if the constitutional amendment were adopted, to compel oil companies to keep supplies in the state or bring gasoline in from elsewhere. Any effort to do so would be a violation of the commerce clause of the U.S. Constitution and surely be thwarted.
Says law professor Anthony Sabino, “Gasoline and the business of selling gasoline is part of interstate commerce that belongs to Congress to regulate, if at all.” He added that Mr. Bustamante “is either very ignorant of the law or he’s getting incredibly bad advice from his advisers or it’s a publicity stunt.”
The last is a definite possibility. Susan Estrich, a Democratic consultant, believes that Mr. Bustamante is trying to shore-up the party’s left-wing base going into the recall election. “Bustamante is running as some would say a ‘60s or ‘70s Democrat,” she says. This would be a foolish strategy in a normal election, where the winner needs 51 percent of the vote. But in the recall election, where a third of the vote might win, the strategy makes some sense.
Bruce Bartlett is a former senior fellow with the National Center for Policy Analysis of Dallas, Texas. Bartlett is a prolific author, having published over 900 articles in national publications, and prominent magazines and published four books, including Reaganomics: Supply-Side Economics in Action.
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