I was hoping this would happen.
In congressional hearings yesterday, several senators, who have either forgotten anything they ever learned in Economics 101 or never learned it in the first place, were flabbergasted to learn that there has been no price gouging in the arena of gas prices. Today, the Wall Street Journal slapped those senators in an editorial titled "The Gas-Gouging Myth" (subscription required). Questioning those senators’ self-described brilliance, the Journal editorial begins:
We’re beginning to wonder how many times Congress is going to call for an investigataion into gasoline "pirce gouging" — and how many times the Federal Trade Commission is going to report none exists — before that august body begins to grasp the basids of supply and demand.
Noting the Senate hearing yesterday during which FTC Chairman Deborah Platt Majoras was hammered by our elected intellectuals, the Journal reports:
Ms. Majoras noted her staff had investigated every possible form of chicanery — whether refiners were running their plants below full capacity to restrict supply, making less gasoline or diverting fuel outside the U.S. Whether pipeline operators had purposely chose to not expand capacity, if oil companies had reduced inventory, or if firms used published bulk spot prices to manipulate the market. The answer was no, no, no, no, no and . . . no.
They didn’t like that answer and have threatened anti-gouging legislation.
Their brilliance is staggering, and scary. Notes the Journal:
Congress may be one loopy piece of legislation away from recreating 1970s gas lines.
(For a great piece on price-gouging, check out Alex Epstein’s "The Myth of ‘Price Gouging.’")