Tuesday, August 15, 2006

Hey, Look! More Market Intervention Shenanigans!

Gas station owner says state won't let him lower prices

MONROE, Wis. -- An ethanol-pump owner says he wants to lower his prices but the state won't let him.

Badger Ethanol in Monroe charges around $2.22 for a gallon of E-85, an alcohol-fuel mixture that is 85 percent ethanol and 15 percent gasoline, by volume.

Badger's owners wanted to cut the price to $2 but said they had to artificially hike prices after some competitors complained Badger wasn't meeting the state's minimum markup laws.

The markup law is "antiquated" and the governor and Legislature should eliminate it, said Gary Kramer, head of Badger State Ethanol.

Wisconsin Consumer Protection investigators launched a probe into Badger's fuel prices and found E-85 selling for just over $2 a gallon.

What's interesting is that "Wisconsin Consumer Protection" investigators launched the probe based on complaints not from consumers but from Badger's competitors. Only the state could "protect" consumers by forcing them to pay more for a product than what the market would otherwise charge.

Based on a complicated formula, the investigators said the price should have been $1 more. On Tuesday, Gov. Jim Doyle ordered state investigators to do nothing to stop the pricing.

"A complicated formula"? Sweet Lincoln's mullet, who do these guys think they are? We already have a law that governs prices fairly: it's called supply and demand. And it works just fine without the meddling of politicians.

The move came hours after Doyle's Republican opponents ripped the investigation into Badger Ethanol.

Let's review the lessons of this little episode:

The law helps:
*The state, whose power and influence is enhanced by the regulations
*Badger's wasteful and inefficient competitors, who are protected from competition by the state

The law harms:
*Badger, which is barred from profiting on its innovations and competitive advantage
*Consumers, who are legally compelled to pay higher prices for fuel

Keep in mind that this is all done under the auspices of protecting consumers. Consider also that, in a ruefully ironic twist, if Badger were to charge more for its fuel than the state deemed acceptable, it would face charges of gouging.

Don't you feel better knowing that our omniscient and compassionate overlords know precisely how much fuel should cost?

[h/t to fark.com]

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