There ought to be a required reading list for members of Congress. High up on that list should be Thomas Sowell's Basic Economics. Any freshman Congressman who fails a test on the contents should not be allowed to take his seat. All sitting Congressmen and Senators would be required to pass before beginning the next session.
I'd be happy to run in the special election to succeed Diana DeGette.
UPDATE: More on this subject here.
According to the AP from last Thursday, Republican members of Congress are interested in relieving the supply shortage of oil, natural gas, gasoline by - get this - relaxing environmental regulations so we can expand exploration, and build new refineries. (The last US refinery was built in 1976. There's a sad joke in there about energy independence, but let's not get sidetracked.)
Our distinguished, but economically illiterate representative from Colorado's first district had this to say:
Some Democrats, however, called Barton's bill a subsidy to an energy industry that is reaping huge profits from high oil and gasoline prices and criticized the proposals for not addressing price gouging at the pump. They also argued it would gut major clean-air requirements on refineries.
"It's ... not going to do anything to help consumers" and will "run roughshod" over environmental laws and local involvement in deciding where refineries are located, said U.S. Rep. Diana DeGette, D-Colo.
DeGette is supporting a push by congressional Democrats that would give the Federal Trade Commission enforcement authority over energy companies that engage in price gouging.
The legislation would allow the FTC to punish companies that sell gasoline or other petroleum products at prices that are "unconscionably excessive" or that indicate the seller is "taking unfair advantage of the circumstances to increase prices unreasonably."
Quick question for any Democrats: if relaxing a regulation is a subsidy, is imposing it in the first place a tax? Just asking.
Only someone driven not by reason but by blind ideology could argue that increasing supply won't help consumers. Only someone who needed the time spent in gas lines to catch up on her reading would propose price controls. DeGette's about 9 years older than I am: she lived through 1979 and still wants to control prices. Add to that the fact that a law containing language like "unconscionably excessive" and "unfair advantage" is so utterly meaningless that only a properly-greased bureaucrat could possibly know what it means.
The Post thinks that it's got a scoop on gas prices: the refiners are making money hand over fist during a shortage. Eventually the article quotes someone noting that maybe supply and demand have something to do with it, but that's an afterthought. (Finny, I don't remember the Post being worried for the financial health of refiners when I paid 79.9 for a gallon of gas in the fall of 1998.)
So we have an artificially-induced shortage leading to a fragile system operating near capacity all of the time, and people are surprised when action at the margins leads to shortages. Naturally, DeGette's answer is to prevent the refiners from making money, and to prevent them from expanding, which would increase supply. Keep that up year after year, and this problem is only going to feed the vicious circle:
With profit margins soaring and political pressure building to increase gasoline output, the nation's refiners face a dilemma as their fall maintenance season nears.
Going ahead with the maintenance schedule would mean shutting down refinery production, adding to the shortfalls caused by hurricanes Rita and Katrina, and keeping gasoline supplies tight and prices high. But postponing maintenance, needed to keep their refineries in top running condition, could increase the chance of accidents, potentially disrupting even more production.
I'm sure that next, DeGette will be asking about helicopter owners who are "price-gouging:"
A lack of sufficient workers, helicopters and equipment is hampering efforts to assess damage to offshore Gulf of Mexico oil and natural-gas facilities and restart production, which remains mostly shut down nearly a week after Hurricane Rita came ashore.
The Federal meddling is already creating long-term effects. The refiners, sensitive to gouging accusations, are holding prices down at their company-owned service stations. That's terrific if you happen to be one of those stations. But if you're an independent, you've got a problem:
In such a climate, he says, economy chains and big-box retailers have three choices: sell well above the average retail price, sell at a loss or shut off their pumps temporarily.
Jawboning price controls has the same effect as legislating them. Since even the Post understands that the guys with the margins here aren't the ones cleaning your winddhield, it's got to be clear that if independent stations start going under, that means less consumer-level competition in the future. No doubt Eliot Spitzer is already preparing a lawsuit alleging that the refiners are "selling" gasoline to themselves at a lower price than they charge their customer-competition.
The net result of all this is higher prices than necessary, and a government that's going to start asking us to wear sweaters again, as though we couldn't figure that out on our own. Having created the mess in the first place, they now want to make sure it goes on in perpetuity.
Seriously, a reading list.