I saw Charlie Crist, Florida Attorney General, on Good Morning America this morning. What he said just floored me.
He wants to meet with the major oil companies and discuss rising gas prices. His contention is there must be some collusion and price gouging going on to make the prices rise so high so fast. He wants to meet with them on March 18th, the day after he goes to the Spring meeting of the National Association of Attorneys General in Washington, D.C. This is no coincidence.
When Charles Gibson pointed out some basic facts of the economy such as reduced production, oil refineries shut down for maintenance, and the cost of getting the stuff from the mideast to here, Crist said that the oil companies always had some excuse, the consumer should not have to bear the cost.
My jaw hit the floor with that one.
Then Crist really stunk up the room.
When Gibson pointed out that nothing has ever come of these types of investigations, that no evidence of price gouging has been found by any previous AG investigation, and that this is just the seasonal spike in gas prices, Crist said that the rising gas prices will certainly be on the agenda at his meeting and perhaps if the AGs worked together as they have in the past against other industries, something more could come out of it.
I wanted to reach through the tv and bitch slap the man.
He didn’t outright say it, that wouldn’t be the political thing to do. After all, his star wouldn’t rise very far if he was actually honest and openly threatened the oil companies. I think he knows there is nothing there, but he smells an opportunity and wants to run with it.
Look, I know that economics can be a boring subject and the concept of supply and demand seems too abstract to be real, but it is. When demand outstrips supply, prices go up. Sometimes, as in this case with a commodity that everyone needs, prices go up a lot. No good can come from bitching about it and calling for investigations into price gouging, especially when higher prices might get people thinking about alternatives to gasoline, such as bio-diesel and hydrogen. The last thing we need right now is some overly ambitious lawyer with higher political aspirations making things worse.
Charlie Crist, I crown you King Idiot.
Update: Marginal Revolution has a nice post on rising gas prices.
I used to think the same way Crist does about rising gas prices…when I was 18. It took someone who understood the dynamics of the oil market all of 3 minutes to set me straight. Crist is old enough to know better, he has earned a good bitch slap.
He’s right. They are price gouging whether they have been caught or not. It’s a joke. If it was truly the cost of importing, transportation, etc… Every product containing oil would go up, but it doesn’t. Motor oil, transmission fluids, home heating oil(last I checked its pretty stable and relatively cheap.) Thats because they are just lining thier pocket with our money, the rich get richer and the poor get poorer. Good luck to AG Crist. It’s about time someone actually looked out for the pooooor working guy who needs gas to get to work.
Ron, you certainly make an interesting point regarding heating oil that bears further investigation. Nevertheless, given the enormous capital costs the oil companies incur coupled with the lack of refining capacity, I would suspect the profit margin would be smaller than you think it is.