The Trillion-Dollar Farm Bill: When Energy Gouging Is OK

People hate energy price gouging.

Or at least they claim to hate it.

Back in 2008 when Hurricane Ike was doing damage, President Bush took to TV to threaten anyone who might consider price gouging. The result was completely predictable—gas stations ran out of fuel to sell to drivers in Nashville and Atlanta. By threatening the price system, Bush paralyzed the normal (and peaceful) process by which the victims of disrupted supply lines motivate gasoline providers to improvise quickly to get gasoline to their area. Prices stayed low and the gasoline ran out.

Price gouging in an emergency is what redirects human labor to end the emergency.

But somehow, when price gouging gets condemned, it is only private companies that are blamed. When the government gouges, it never gets called out and condemned with the same vociferousness.

Take the massive Farm Bill, for example. According to the Washington Times:

Congress‘ mammoth farm bill restores the imposition of an extra fee on home heating oil, hitting consumers in cold-weather states just as utility costs are spiking.

The fee — two-tenths of a cent on every gallon sold — was tacked on to the end of the 959-page bill, which is winding its way through Capitol Hill. The fee would last for nearly 20 years and would siphon the money to develop equipment that is cheaper, more efficient and safer, and to encourage consumers to update their equipment.

It’s just one of dozens of provisions tucked into the farm bill, which cleared the House on a bipartisan 251-166 vote last week and faces a key filibuster test in the Senate on Monday. It is expected to survive and face final passage Tuesday before heading to President Obama’s desk.

Taxpayer groups say the bill could increase spending over the previous version and that it’s crammed with favors for individual lawmakers, such as rules legalizing industrial hemp.

The heating oil fee was backed by Northeast lawmakers who said it would fund important research to benefit consumers.

“The National Oilheat Research Alliance (NORA) has long benefitted low- and middle-class families and small businesses throughout the Northeast and other cold weather states,” Rep. Leonard Lance, New Jersey Republican, said in a statement. “The program improves energy efficiency and lowers heating bills at no cost to the U.S. taxpayer.”

The bill prohibits oil companies from passing the fee on to consumers, but taxpayer advocates said that’s a sham and that the money has to come from consumers.

Of course it is a sham! Corporations that sell oil do so in order to make money. If their costs go up they have to make sure that their prices cover the cost.

Heating oil in cold states is not a luxury. It is a matter of staying alive. Congress is taxing people for staying alive.