NM Governor To Draft Anti-Price Gouging Law
Gov. Bill Richardson and New Mexico Attorney General Patricia Madrid said Friday they will work to draft legislation to investigate and punish companies that engage in gas price gouging after natural disasters.
Richardson said in a news release about the proposal that most people will accept temporary gasoline price hikes in the aftermath of a natural disaster like Hurricane Katrina. But, he added, “it’s getting more and more difficult to justify 20-cent, 30-cent, and in some cases, 40-cent increases practically over night.
I’m all for anti-price gouging, which should be illegal, but trying to prevent the free market forces from working is quite another thing.
The way the free market works, is if there is high demand for a product, then the seller can charge more because people are willing to pay more. Sometimes it works to our advantage, sometimes it does not. If we try to artificially keep gas prices down, we will become fat, lazy and complacent with our cheap gas. Then one day it will be gone.
The other thing a free market does is when something gets high in price, it gives alternatives a chance to compete. Hydrogen, fuel cells, vegetable oil-powered diesel hybrids all have a better chance at competing in this sort of market. Alternatives are always good, and competition keeps prices down overall.
I’m no economist, but I believe this to be basically how things work. I’m willing to take some pain now knowing that it’s not the end of the world. It will require some adjustments but in the end we will be better for it.
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The first step of this is, in a deterministic way, explain the difference between price gouging and “preventing the free market forces from working”. And to justify the new law, do it in such a manner that it does not break an current laws.