FTC Chieftesse: Don't do it!

Congress Seen Passing Price-Gouging Law

WASHINGTON Nov 16, 2006 (AP)— The head of the Federal Trade Commission predicted Thursday that Congress would pass a gasoline price-gouging law despite her warnings that the country doesn't need one and it might cause fuel shortages.

FTC Chairwoman Deborah Platt Majoras said she has warned Congress publicly and privately about the dangers of such a law.

"We looked vary carefully but didn't see any new legislation needed to protect consumers," Majoras said at an antitrust conference Thursday. "Will new legislation be passed? I think we will see a price-gouging statute pass, perhaps at the end of this (incoming) Congress."

With gas prices rising to over $3 per gallon this spring, the House passed a bill permitting large fines and jail time for price gougers. The Senate has not acted on it and Sen. Max Baucus, D-Mont., the incoming Finance Committee chairman, said Thursday, "There's a lot more that has a higher priority."

Majoras said she understood the public's frustration and concern but said an upcoming FTC report on the price spikes found that consumer demand was up at the time.

"There is a distinction between a market determination you don't like and a market failure," she said.

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We, of course, concur with Ms. Majoras vis-a-vis the silliness of such laws, which fly in the face of the inescapable, immutable laws of Price, Supply and Demand.

Did these people sleep through the '70's?

Actually, if they were waiting in line for gas, they probably did!

Americans will be better served if the temporary majority eschews the silliness of Paul Krugman in favor of the wisdom of Milton Friedman.

Markets work.

Bureaucracies do not.