Caprice at the Pump

Summary


As the summer travel season quickly nears and consumers continue to watch as the cost of filling up gas tanks steadily increase, they may instinctively believe oil companies are getting rich at their expense. This is an understandable, but common misconception whenever prices seem to inflate beyond reason.

Unfortunately, some federal policymakers are all too eager to seize on this frustration and propose so-called solutions that place artificial ceilings on gas prices, often referred to as "price controls," or today's more popular political moniker, "price gouging." Phrases like these should raise red flags, because no matter how well-intentioned at best or politically motivated at worst, history and basic economics teach us price caps ultimately result in harsh unintended consequences, including shortages in the market and unnecessary economic hardships for consumers.

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Extract


Caprice at the Pump

Anyone who remembers the long lines, gas shortages and inflation from the 1970s when pump price were controlled knows this is not a legacy to fall back on.

Despite previous lessons learned and the overwhelming evidence...

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