Posted on 08/25/2005 6:15:41 AM PDT by OESY
...Charged with the unenviable job of implementing the gas-cap program, Hawaii's Public Utilities Commission says local industry expects the caps to increase prices by an estimated 30 cents a gallon, with costs on Oahu rising from the current price of $2.68 a gallon to more than $3....
So why bring back price controls more than 30 years after Nixon tried them and failed miserably, causing shortages, rationing, inflation and an economic crisis? It's hard to find a reason, other than to retaliate against the big oil companies, namely Chevron, which many Democrats tried to punish unsuccessfully in court.
Made up primarily of liberal Democrats with no economics training, no business background, an open disdain for the free market, and a lust for price caps (except on state taxes), lawmakers say they have to "do something" about the high price of gasoline. Never mind that oil prices have skyrocketed everywhere thanks to increasing demand in the world market and rapid growth in China and India....
Gov. Cayetano worked years to earn Hawaii the distinction of being the most costly, the most business-unfriendly, and the most taxed state in the union.
...Strangely -- and to the dismay of many citizens of Hawaii -- Gov. Linda Lingle, elected in 2002 as the first Republican governor in 40 years, has refused to use her emergency powers to halt the gas caps.
Gov. Lingle says she's against the gas caps but is required by law to wait until a "crisis" occurs before revoking the cap -- she also notes that the Legislature could call a special session to make adjustments....
Living in Hawaii often feels like being part of a bad social experiment. If lawmakers truly wanted to reduce gasoline prices, they'd eliminate or drastically reduce state and county gas taxes....
(Excerpt) Read more at online.wsj.com ...
RIGHT! This is going to work real good! As we all know price controls ALWAYS work.
This will prove to be a mistake. Price controls always are.
When out of line, some enterprising stations will always reduce prices to compensate for the gougers. They get rich on the overpricer's ignorance.
The price cap on the wholesale (but not the retail) price of gas will not reduce the prices that customers actually pay, but will in fact lead to a cutoff in supply (what wholesaler is going to ship gas to Hawaii when they can sell it elsewhere at higher wholesale prices), which will actually drive retail prices higher AND lead to long lines, rationing, and shortages. IT sounds like the California Energy Commission that created California's electricity crisis decided to move to Hawaii.
It's a widely known fact that price controls always work as long as the ceiling price is above the equilibrium price. After that, the price drops to zero cents per gallon. Unfortunately, the suppliers don't have any to give away at that price.
My guess is that the state will come to a grinding halt.
Because the gov't can't conceive of eliminating the gas tax.
Unsurprisingly, there is some discussion going on to reform the situation in Louisiana. From the Lousiana Senate's web page http://senate.legis.state.la.us/SessionInfo/2005/RS/Highlights/LinkShell.asp?s=Commerce
2005 Regular Session Highlights
Commerce & Consumer Protection
by: Jeff Oblesbee
(225) 342-0597
Despite the focus of the 2005 Regular Session on addressing the state's fiscal matters, the legislature nevertheless addressed several important issues in the area of commerce and consumer protection.
UNFAIR SALES
The astronomical rise in gas prices across the country prompted the legislature to address provisions of the Louisiana Unfair Sales law which require retailers to mark up the sale of gasoline a minimum of 6% above their actual cost. Historically, this law was written to provide protections against a retailer selling items at below cost in order to drive out their competition. An exception in the law allowed manufacturers of a product, including gasoline, to sell their product at any cost.
The legislature chose to address this troublesome issue in two similar, yet somewhat different ways. House Bill 763 by Representative Townsend (Act 263) eliminated the mandatory 6% mark-up for gasoline, while providing that no one could sell gas at below their actual cost, unless they were doing so to meet the legal cost of a competitor. An alternative proposal was offered by House Bill 183 by Representative Daniel (Pending House Commerce) which would have removed the mandatory mark-up, as well as the provisions which required gas to be sold at the actual cost, as long as the intent was not to impair or injure competition. With the elimination of the mandatory 6% mark-up, it is anticipated that Louisiana citizens will see some reduction in the price they pay at the pump.
CONSUMER PROTECTION
Continuing to address the emerging threat of electronic identity theft, Senate Bill 205 by Senator Duplessis (Act 499) provides for the Database Security Breach Notification Law. Adding to Louisiana's already aggressive stance towards preventing identity theft, the Database Security Breach Notification Law would require any person that conducts business in the state that includes personal information must, following discovery of a breach in the security of the system containing such data, notify any resident whose personal information was, or is reasonably believed to have been, acquired by an unauthorized person.
Following the devastation caused by numerous hurricanes and tropical storms which battered the United States last year, Senate Bill 162 by Senator Heitmeier (Act 149) will add to Louisiana's existing prohibition against price gouging by extending the prohibition during any period when a named tropical storm or hurricane is threatening the Gulf of Mexico.
TELECOMMUNICATIONS/UTILITIES
Senate Bill 126 by Senator Broome (Act 406) adds to the provisions of the Local Government Fair Competition Act which was passed during the 2004 Regular Session and which established procedures for a local government who chooses to offer certain "covered" telecommunication services. Under the proposed law, the local government would be required to call a local election for the purpose of authorizing the issuing of bonds which would assist in providing the covered services. In the event a local government choose to offer the covered telecommunication services, certain provisions of existing contracts with private companies who also offered the covered telecommunication services would be suspended. The provisions of the proposed law would not effect any local government which has already begun the process of offering the covered telecommunication services.
House Bill 381 by Representative Johns (Pending Senate Jud A) would have provided an exemption from the provisions regulating monopolies for electric or gas utility companies which are subject to the jurisdiction of the Louisiana Public Service Commission, the City Council of the city of New Orleans, the Federal Energy Regulatory Commission, or any other public utility regulatory body with rate making or other general regulatory authority. Under the current law, the gas or utility company is subject to the jurisdiction of the district court for violation of the state's anti-monopoly law, and if found guilty would liable for treble damages and attorney fees.
In an effort to assist Louisiana's military personnel who are called to active duty, House Bill 7 by Representative Gary Smith (Act 349) will enable those activity duty military personnel to either suspend or terminate their existing cell phone contracts without a penalty. Further providing relief to Louisiana's active duty military personnel, Senate Bill 151 by Senator Nick Gautreaux (Act 296) establishes the Service Members Civil Relief and Consumer Rights Act which would provide numerous financial protections for active duty military personnel, including relief from motor vehicle leases, rental agreements, financial credit agreements, and other similar contracts.
BANKING
Several "touch-up" pieces of legislation were presented to the legislature during the 2005 Regular Session in the area of banking.
Senate Bill 107 by Senator Duplessis (Act 291) will allow Louisiana banks to utilize a nationally recognized system which will provide additional FDIC coverage for public funds on deposit with state banks. House Bill 446 by Representative Trahan (Act 235) will require an applicant for a residential mortgage lender license to pass a written examination before obtaining a license. Any person with either a banking degree and one years banking experience, or with two years of banking experience would be exempt from the examination requirement.
House Bill 696 by Representative Pinac (Act 99) will provide additional protection to consumers who transact business with lenders who offer deferred presentment and small loans (i.e. "payday loans") by prohibiting lenders from taking either a direct or indirect interest in property in connection with the loan. Finally, Senate Bill 255 by Senator Michot (Act 500) provides a comprehensive revision regarding the sale and distribution of motor vehicles in Louisiana. Although the proposes legislation does not make any substantive changes to the existing law, it does attempt to reorganize and clarify the existing statutes for the benefit of the consumers.
Any attempt to reduce gas prices, by any means, is a mistake. A reduction in price will lead to an increase in consumption. Increase in consumption will further strain a system that is already at the limit.
The underlying illness has to be fixed, not the symptoms.
So right off the bat they're saying gas prices are going to rise?
If I were an oil company or distributor, why would I want to sell oil to Hawaii if I were making less or even losing money? I wouldn't. Therefore, I suspect the next thing for Hawaii is long gas lines....ain't liberalism great.
Who's John Galt???
Socialism 101: Price fixing leads to shortages.
obviously, the democratic dominated hawaii didn't read up on this.
They should of at least read the story of what Hillary's price fixing scheme did to the US vaccine industry.
I agree with Gov. Lingle's approach 100%. Wait till the public comes screaming to her about the lines at the pumps, and then take action.
The only way to get the sheeple to reject a bad idea is to rub their noses in its failure.
It seems that, just a few years ago, the enviro doofazoids, led by the likes of Al Gore, were touting the idea of gas at $4 and $5 per gallon as the cure for all the ills wrought on the environment by man. Now that their dream is threatening fulfillment, all we hear is economic doom. Does anyone else sense this disconnect?
Hawaii has obviously learned nothing from the saga of Greyout Davis. Hopefully other states will not make the same mistake.
The oil will go to China.
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