I wanted to comment on something different. As he begins:
In May, the House of Representatives passed a bill that could lead to
fines as high as $3 million per day for gasoline price gouging, which
it defined as charging a price that "grossly exceeds the average
price"¦offered for sale by that person during the 30 days prior" or
"grossly exceeds the price at which the same or similar gasoline"¦was
readily obtainable in the same area from other competing sellers."
Lets take these two cases in reverse order. If I am charging a prices that "grossly exceeds the price at which the same or similar gasoline"¦was
readily obtainable in the same area from other competing sellers," then what for God's sakes is the harm? People will just go to one of the "readily obtainable" other sources. My business will take a beating, but that's my problem.
The first case is an open invitation for gas lines. It does not say "grossly exceeds the average
price"¦offered for sale by that person during the 30 days prior unless there is some kind of supply discontinuity or change in wholesale prices." It sets up a clear if-then: If you raise your prices by some amount we later rule to be too much, we can fine you $3 million per day. In the confusion of a supply disruption, gas stations will be afraid to raise their prices despite the new supply-demand reality. They will be afraid of this kind of arbitrary enforcement. Therefore, the first 100 random people who show up to top off their tanks or fill their generators to keep their TV running will get the available supply, rather than letting price allocate the gas to the people who value it the most.
I lived through gas lines of the 1970's. In fact, as the low-driver-on-the-totem-pole, it was my job in the family to cruise around town looking for an open station and then sitting in whatever line I found. I don't think younger people remember, but in major cities (not in the countryside) in the 1970s, there were weeks when there simply was no gas to be found. Since that experience, I have pleaded to allow gas gouging in supply emergencies.