Editors at Issues and Insights highlight a misguided response to rising gas prices.
Gasoline prices are spiking everywhere, particularly in California, with premium coming dangerously close to $9 a gallon last week in one Los Angeles neighborhood. So what’s an appointed bureaucrat to do? Find a crime, of course.
“Our team is vigilantly monitoring the retail, wholesale, and spot markets,” Tai Milder, first director of the Division of Petroleum Market Oversight (DPMO) for the California Energy Commission, announced last week, as gas prices were rising. “Any reports of unfair practices or market manipulation will be taken seriously, and we will not hesitate to refer any illegal conduct for further investigation and prosecution.”
A bulletin issued March 19 by the DPMO further warns, “Reports of price gouging will be taken seriously, and DPMO is already engaging with gasoline retailers whose high prices may not be justified by increases in their input costs.”
In roughly two years in office, Milder has not been able to find the real culprits behind the state’s punitively high gas prices. But he has been busy hunting down the “dark forces” behind them: refiners who don’t conduct their businesses the way he wants them to.
Price-gouging witch hunts play well with the media and among much of the public. Thirty-nine states and the District of Columbia “have statutes or regulations that define price gouging during a time of disaster or emergency,” according to the National Conference of State Legislators.
Google’s AI romp through the web gathered enough information to declare that “Price gouging laws are highly popular with the public and policymakers,” which confirms what most of us already knew.
What not enough of us know, though, is that higher prices are not inherently a crime against consumers but instead an important signal that markets need to operate efficiently.
