Washington, DC – The price of gas has risen in recent weeks, and with the summer driving season quickly approaching, it’s likely to rise further. This situation creates an opportunity for politicians to push bad legislation under the guise of helping ease the financial burden on consumers. But consumers should be warned that government intervention in the marketplace will create more problems than it solves.
“No one likes to pay higher prices when they go to fill their gas tanks,” said Michelle D. Bernard, president and CEO of the Independent Women’s Forum. “But consumers need to recognize that changes in prices play an important role in energy markets, encouraging people to conserve when supplies are short. Government price controls will stifle this important process and create the potential for gasoline shortages.”
The American Council for Capital Formation just released a study examining how proposed legislation to end so-called “price gouging” would have affected the economy and the availability of fuel during devastating hurricanes–including Hurricane Katrina–in the fall of 2005. The researchers estimate that these price controls would have resulted in economic costs totaling $1.9 billion dollars.
“Price controls discourage suppliers from taking the steps necessary to get the product to market during a crisis,” explained Carrie Lukas, IWF’s vice president for policy and economics. “In an instance like Hurricane Katrina, that would have meant even less fuel getting into the areas most in need, and would have encouraged consumers to hoard the limited resources that were available. This may sound like well-intentioned policy, but it could have horrible effects for our economy and for consumers in a crisis.”
To schedule an interview, please call Kate Pomeroy at 202-631-6704 or [email protected]
The Independent Women’s Forum is a non-partisan, 501(c)(3) non-profit organization. Founded in 1992, IWF’s mission is to rebuild civil society by advancing economic liberty, personal responsibility, and political freedom. IWF fosters greater respect for limited government, equality under the law, property rights, free markets, strong families, and a powerful and effective national defense and foreign policy. IWF is home to the next wave of the nation’s most influential scholars–women who are committed to promoting and defending economic opportunity and political freedom.