Senate Democrats have debuted their plan for addressing the high price of gasoline. Hold on to your hats:
Democrats unveiled a plan that sets up an Energy Independence and Security Trust Fund to be financed by a repeal of $17 billion in oil and gas industry tax incentives and a 25 percent windfall profits tax on the five biggest oil companies. The trust fund would finance renewable energy development, energy efficiency technology and consumer price protection, according to a summary of the plan... Democrats are proposing an anti-price-gouging plan that gives the president the authority to declare an energy shortage emergency and makes it a crime to set "unconscionably excessive" prices. They are also pitching again a plan to allow the United States to sue the Organization of Petroleum Exporting Countries for manipulating prices... [The plan] would prevent traders of U.S. crude oil from routing transactions through offshore markets to evade speculative limits and installs reporting requirements. It also requires the Commodity Futures Trading Commission "to set a substantial increase in the margin requirement for all oil futures trade, contracts or transactions," according to the summary.
The best that Democrats can come up with are tax increases on oil companies (which they promise won't get passed along to the consumer), a lawsuit against OPEC for price fixing (which must have the Saudis quaking in their boots), and a law against 'unconscionably excessive' gas prices. Wouldn't you have liked to be the proverbial fly on the wall when they drafted that last provision? To outlaw 'excessive' prices might have been too drastic -- so they narrow it down to unconscionably excessive prices. And since 'unconscionable' is in the eye of the beholder, the phrase is largely meaningless. The fact is that gasoline is a commodity governed by laws of supply and demand. Even Jay Leno is on to the fact that Democrats have been blocking new supply for decades, and now consumers are paying the price. If drivers start to make the connection between Democratic intransigence on new supply and the high price today, Democrats will be the ones paying for it at the polls. Update: Carter Wood reminds us of the negative effects of windfall profit taxes.