Anyone legitimately worried about high gasoline prices would welcome a federal investigation finding no evidence of "price-gouging" after Hurricane Katrina last year.
Yet when the Federal Trade Commission reported findings like that on May 22, Democratic members of the Senate Commerce, Science, and Transportation Committee objected.
"This is business as usual from the FTC," Sen. Barbara Boxer (D-Calif.) complained. "This report is a lot of work that says nothing, and the oil companies are laughing all the way to the bank. This report proves that this administration is owned and operated by big oil."
Before a Commerce Committee hearing on the report, ranking minority-party member Daniel Inouye of Hawaii declared, "This report does not convince me that consumers were treated fairly."
At least Inouye, unlike Boxer, bothered to offer something other than personal outrage to explain his doubts about the FTC report, which said markets, not manipulation, caused post-Katrina price jumps.
The 180 days FTC spent on its investigation didn't represent enough time to uncover misbehavior, Inouye argued. The commission based much of its work on "previous work and evidence collected from other investigations in order to meet the deadline."
What's more, gasoline prices in Atlanta reached $6/gal after Katrina, and oil company profit margins increased—"an important piece of evidence," Inouye said, that the FTC report "declined to examine."
These are bogus concerns. Time spent on the investigation is irrelevant. The FTC watches for anticompetitive behavior all the time. It has conducted numerous investigations and found no systematically unfair pricing.
High prices—$6/gal or any level in Atlanta or anywhere else—are not evidence of "gouging." They're evidence of strained supply, which happens when a market suddenly loses a third of its manufacturing capacity. Nor do elevated profit margins reflect "gouging"; they are predictable and unsustainable results of a price surge.
No matter where it begins or how long it takes, an investigation can't find what doesn't exist. A competitive market won't allow "price-gouging." It's that simple.
Boxer, Inouye, and others who argue otherwise are either economically bone-headed or shamefully committed to a witch-hunt that puts politics ahead of public interest.
(Online June 2, 2006; author's e-mail: [email protected])