Gas prices warrant FTC investigation
Governor Lingle supports the Federal Trade Commission investigation of possible gasoline-price gouging.
TWO hurricanes are blamed for the increase in gasoline prices, but the astonishing size of the price hikes defies explanation. The oil companies don't even try to explain. Governor Lingle has rightly joined the chorus of public officials in supporting an investigation
of possible gas-price gouging.
Hawaii's new price cap on gasoline is of limited use when mainland prices, on which it is based, soar out of control. The cap was enacted because of the state's oil oligopoly of two refiners, but the mainland price increases raise questions about competition nationwide, with 10 refiners controlling 83 percent of the market.
Eight Democratic governors asked two weeks ago for an investigation by the Federal Trade Commission, which already had begun the probe. "To price-gouge consumers under normal circumstances is dishonest enough, but to make money off of the severe misfortune of others is downright immoral," the governors said in a letter to the commission.
Lingle has asked Attorney General Mark Bennett to join other state attorneys general in supporting the FTC investigation of possible unlawful conduct. The Senate has approved a $1 million amendment to an appropriations bill to pay for the investigation.
In a letter to the FTC, the governors cited a study by Don Nichols, a University of Wisconsin economist, concluding that for gas prices to reach $3 a gallon, crude oil prices would have to reach $95 a barrel, about $30 more than they have remained in recent weeks.
The industry explains that prices are determined by supply; a dozen Gulf Coast refineries that account for 18 percent of the nation's refining capacity remain shut because of the hurricanes. Meanwhile, the higher prices have caused a 3 percent reduction in demand from a year ago.
Montana Gov. Brian Schweitzer, one of the signatories of the FTC letter, points out that his state's gas prices rose by 40 cents a gallon, even though it gets all of its crude oil from Alberta, Wyoming and in state. Likewise, Hawaii gets its crude from Asia and Alaska, indicating that the domino effect of skyrocketing mainland prices would occur with or without the state's price cap.
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Limit military role as first responders
President Bush is suggesting that the military be allowed to respond to natural disasters without a request from governors.
CONGRESS responded to the federal military presence in the South following the Civil War by prohibiting the military from ever again engaging in law enforcement. Blunders in response to Hurricane Katrina have prompted President Bush to suggest amending that law, but that would be dangerous and unwarranted.
The late entry of troops to the Gulf Coast area is blamed partly on confusion in colloquy between Louisiana Gov. Kathleen Blanco and federal officials. Some officials have said she did not explicitly ask for federal help, a request made necessary by the Posse Comitatus Act of 1878 for federal troops to be deployed.
If there was confusion, the officials should have explained the situation to Blanco. Their failure to do so is one of the lessons to be learned from Katrina.
The Pentagon itself is wary of being saddled with power, a diversion from its combat role, and expanded training, equipment and force levels. Paul McHale, the assistant defense secretary for homeland security, said last month that "what we ought not do is convert DOD into a department of first responders."
Posse Comitatus, translated as "power of the county," already may give the president the authority to deploy troops in response to a natural disaster. "There are all kinds of exceptions to Posse Comitatus that allow the federal government to do what they should have before Katrina," according to William C. Banks, a Syracuse University law professor who is an expert on the subject.
Federal troops would be unnecessary if the National Guard troops in Iraq were instead fulfilling their role under the authority of their governors.