Senator Tammy Duckworth and Congresswoman Jan Schakowsky, both from Illinois, joined with Massachusetts Senator Elizabeth Warren on Thursday to introduce the Price Gouging Prevention Act of 2022.
Don’t call me hyperbolic for saying the bill is based on a demagogic, grandstanding conspiracy theory. Just call me unoriginal, because those are the words describing the bill even in the left-leaning Washington Post by columnist Catherine Rampell. And former Clinton Treasury Secretary Larry Summers, a leading Democratic economist, slammed the bill, calling it “dangerous nonsense.”
The bill is idiotic on so many levels.
First, the purpose of the bill is transparent: to shift blame for our 40-year high inflation away from those who helped cause it, namely the Biden Administration and lawmakers like Duckworth, Schakowsky and Warren. No, they are not responsible for all of it. The war in Ukraine, the pandemic and supply chain problems are also behind inflation.
Unquestionably, however, two big drivers of today’s inflation are 1) the unspeakable gush of federal spending dishonestly spun as pandemic relief over the last two years and 2) the war on fossil fuels, which has driven up energy costs and thrown away the energy independence we had only two years ago.
On both those matters, blame falls squarely on the the Biden Administration and legislators — particularly legislators like Duckworth, Schakowsky and Warren — because they led the charge. Federal “pandemic relief” authorized by Congress has now totaled $6 trillion and is still growing. Cheered on by the same people, the Federal Reserve added another $4.2 trillion. That still wasn’t enough for the trio, who all supported the infamous Build Back Better Plan as originally proposed which would have cost another $3.5 trillion. And on energy matters, few in Congress are stauncher enemies of fossil fuels than those three.
That calls for a conspiracy theory for them to blame somebody else — a conspiracy theory that “has been infecting the Democratic Party, its progressive base, even the White House,” as that Washington Post column says. “Call it ‘Greedflation.'” Greedy corporations are jacking up prices, we are supposed to believe.
To stop that greed, the new bill would authorize the Federal Trade Commission to investigate and fine companies with “unconscionably excessive price increases.” What does that term mean? Anything the FTC might want, because it is not defined in the bill.
And corporations would be “presumed to be in violation” if they use “the effects or circumstances related to the exceptional market shock as a pretext to increase prices.” Again, that could mean almost anything. And isn’t it entirely appropriate to raise prices when there’s an exceptional market shock that raises the cost of production and inputs?
The bill is so absurdly vague that it should be seen as disguised price controls. It would give the FTC open-ended power to dictate prices.
Warren’s press release announcing the new bill contains some real doozies.
It quotes Schakowsky saying that “prices at the pump remain high despite the cost of oil coming down. That’s corporate greed.”
What? Oil today costs 110 bucks per barrel. While it went briefly up to $125 earlier in the year, the price today is up 50% since the beginning of this year, 84% over the last 12 months and 15% since mid-April.
Schakowsky is also quoted saying that “During World War II, war profiteers were held accountable. The same rule should apply here.” She’s referring to price controls during the war, which is a rather candid admission of what this is about.
And Schakowsky should brush up on how that worked out. Price controls were a nightmare to administer during and immediately after the war, ultimately infuriating Americans with the shortages the controls caused, resulting in a slaughter at the 1946 polls for the Democrats who supported controls.
Shortages are a primary consequence of price controls, and you’d think that shortages would be a concern in light of all that is happening today. From Larry Summers, again, the Democratic economist: “There is no material prospect that, in any enduring way, gouging legislation can have any substantial effect on inflationary pressure.” Summers told Bloomberg Television’s David Weinstein. “But it can cause and contrive all kinds of shortages” – as well as undermine moves by companies to boost supply as prices climb.”
You probably needn’t worry about the new bill, in its present form, because it’s almost certain that courts would void it because it’s so impossibly vague. At least Warren surely knows that, however, so maybe it will be amended to preserve its intent while fixing the defects.
More frightening is that the bill shows that the madness into which America has descended hasn’t bottomed out yet.