Stupak's Sure Cure ("Federal Price Gouging Prevention Act") Sucks
Last week, the U.S. House of Representatives passed H.R. 1252. The sternly titled "Federal Price Gouging Prevention Act" established penalties for people who hoik-up gas prices to take "unfair advantage" of U.S. consumers during an "energy emergency." The Right condemned the act as stealth nationalization of the American oil industry. The Left condemned the bill for not going far enough to rein in Big Oil. So, is H.R. 1252 a well-intentioned congressional misfire or part of a great political swindle? Yes.
Representative Bart Stupak is the sponsor of this affront to common sense and economic reality. In case politically-insensitive voters were motoring under the impression that price gouging has a relatively minor impact on current national gas prices– as compared to, say, the effects the laws of supply and demand– Stupak was ready to set them straight and sort it out.
"[Americans] want relief at the pump," Stupak proclaimed. "And that is what we are doing."
Stupak was also happy to add the requisite spin to his sham cause-and-effect conundrum. "Every member [of the House] has a choice: side with big oil or side with consumers who are being ripped off at the gas pump."
Stupak's act would punish individuals and/or corporations that charge "unconscionable" prices for gas and other petroleum distillates. Corporate violators would be subject to up to $3m in civil fines, and $150m in criminal fines.
Adding karmic payback to the deal, any fines collected would be used to "provide assistance under the Low Income Home Energy Assistance Program administered by the Secretary of Health and Human Services."
Despite Stupak's legislative zeal, the political Left isn't happy with H.R. 1252. For one thing the act only applies after a Presidential declaration of a renewable, thirty-day "energy emergency." "In other words," complains the Corporate Crime Reporter blog, "almost never."
The Director of the Public Citizen non-profit consumer advocacy organization is equally disgruntled. Tyson Slocum says H.R. 1252's "unfortunate language" proves that the oil industry "still holds sway over the Democratic Party." The Rhode Island native predicts more symbolic jabs. "Are you going to see the Democrats taking big swings at Big Oil? No."
At the other end of the political spectrum, former Nixon speech writer, economist, actor and game show host Ben Stein used his Yahoo! Finance column to pronounce the Federal Price Gouging Prevention Act de facto pricing control.
"This regulation could be triggered by actions that are basic to the free market," Stein railed, for exampling rising gas prices due to shortages caused by war or natural disasters. (As if.)
"In the most elemental terms," Stein opined, "the Stupak bill punishes oil companies when the free market is working as it should, allocating supply by means of the price system."
In Stein's estimation, drivers unable to find gasoline at times of crisis would suffer most from the bill's powers, not high-paid corporate big-wigs. Of course, the Executive branch was down with that.
"This bill could… bring back long gas lines reminiscent of the 1970s," the White House warned. "Gasoline price controls are an old– and failed– policy choice that will exacerbate shortages and increase fuel hoarding after natural disasters, denying fuel to people when they most need it."
Political posturing aside, the act has enough holes to accommodate several hundred thousand tankers of premium-priced petrol.
The bill proscribes selling gasoline or petroleum distillates at "unconscionably excessive" prices that "[indicate] the seller is taking unfair advantage of the circumstances related to an energy emergency to increase prices unreasonably." The act does not define "unfair advantage" or "unconscionably excessive."
The proposed law stipulates that federal investigators must prove that its violators did "grossly exceed" a 30-day average pre-emergency price, or "grossly exceed" prices of competing sellers.
Without a proper definition of "gross excess," the law would leave federal prosecutors and courts almost as powerless as they are now (which is not powerless at all, but that's another story).
Stupak's bill also instructs the feds to pause and ponder conditions attributable to local, regional, national or international market conditions, and "additional costs, not within the control of that person, that were paid, incurred, or reasonably anticipated by that person, or reflected additional risks taken by that person to produce, distribute, obtain, or sell such product under the circumstances."
Let's face it: any lawyer who couldn't beat Stupak's rap needs a new profession. That said, despite its inherent inanity, H.R. 1252 is a brilliant piece of legislation.
Democrats are sending President Bush a bill so fundamentally bone-headed that the Commander-in-Chief has no choice but to veto it. The Dems can then accuse the GOP of being Big Oil puppets during the upcoming national election cycle. Democratic candidates can also take credit for trying to protect you, the American people, from price gouging by the evil oil companies during times of crisis.
In truth, they've done nothing of the kind.
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