Gouge to the Eye
Hurricane Katrina has hurt everyone at the gas pump. While there's been a lot of talk about price gouging, there is no federal law to prevent it. That could change because of a New Mexico lawmaker.
Gas stations claim these high prices are a direct result of Hurricane Katrina, but many people, including Congresswoman Heather Wilson, aren't so sure.
Today Rep. Wilson announced she is drafting an anti-gouging bill that will protect consumers when a disaster like Katrina hits.
Wilson says all of the details have not been worked out but essentially it would prevent gas companies from rising prices unless the prices they pay are higher.
Wilson says part of the bill could require companies to set their prices based on the gasoline in their tank that day, not the gasoline they will buy at a higher price tomorrow. Right now gas stations set prices of futures meaning what they anticipate the price to be the next day, or next week.
“There is always that tendency in the wake of a disaster or emergency when people need something badly, they willing to pay for it,” says Rep. Wilson. “(Some people say) it’s my chance to cash in, no that's not how we operate in America.”
Wilson says the bill she is drafting will only apply to gasoline prices, not natural gas prices.
I do not understand where Congressional Republicans have gone wrong. Now, legislation promoting price controls just days after the alleged win over pork? Looks like some are going to need a wake-up call from the Club for Growth or the Free Enterprise Fund in order to rediscover their principles.
Back in the real world, the fact of the matter is that prices for regular unleaded, at least in Pasadena, have returned to pre-Katrina levels. The fact of the matter is that whenever there is a market distortion created such as the one created here, the market will eventually correct itself. As usual, the market did so without interference from the government, which will make it interesting to see if those trying to capitalize on the rise in gas costs will continue to push for anti-gouging laws and price controls in the coming months. Attorney General Joe Curran is already trying to do so in Maryland, and I have a feeling that election year politics will tempt many more in the Free State to adopt this tact.