Cap demagoguery gusher
Published 5:00 am Monday, May 8, 2006
- Cap demagoguery gusher
There’s a big difference between Gov. Ted Kulongoski helping Oregonians deal with gas at $3 a gallon with facts and throwing gasoline on conspiracy theories. And lately Kulongoski has been throwing some gasoline.
Last week he and the state’s attorney general created a Web site for Oregonians to report unlawful conspiracies in gasoline pricing. Kulongoski also issued this statement: “I support corporate profitability, but not on the backs of working Oregonians – and not at the obscene levels we’re seeing today.”
We called up Lonn Hoklin, Kulongoski’s press secretary, and asked at what level profits become “obscene.” Hoklin said there is no “fixed threshold.” “Obscenity is often in the eye of the beholder.” And the profits oil companies reported in the first quarter of 2006 married with the recent increases in gas prices “crosses the threshold.”
Take a look at the first chart below. Actually, average profits for the oil industry have been less for the past several years than banks, pharmaceutical companies, real estate, software, insurance, health care, and hotels and restaurants.
Kulongoski should set up Web sites to report unlawful pricing conspiracies for a lot more industries!
Hoklin also said gas prices are going up faster than prices in other sectors.
Wrong again. Take a look at the second chart below. Gasoline prices have increased less than almost every other commodity from the early 1980s to this year.
The difference is people notice gas prices. There’s little most people can do in the short-run to use less gas. And it’s not like there’s a giant neon sign outside of St. Charles blinking with daily updates on the rising cost of health care.
Hoklin kept talking. He said there has been “no serious exploration in the last decade” and no “new sources brought online.”
Yes, that’s wrong too. One example: Last week the Minerals Management Service – that’s part of the Department of the Interior – released a report on drilling in the Gulf of Mexico. Chris Oynes, a regional director of the service, summed it up by saying, “Exploration and development within the deep-water Gulf of Mexico continue to expand.”
Of course, oil companies aren’t any more angelic than any other industry. For instance, Exxon made unsubstantiated advertising claims in the 1990s that high-octane gasoline has the ability to clean engines and reduce auto maintenance costs. It doesn’t. Unless your engine is knocking or your car’s owner manual calls for it, there’s no reason to pay for it. The Federal Trade Commission put a stop to those claims. However, the FTC has never found credible evidence of a gas price conspiracy.
We don’t like high gas prices either. But if the governor is going to use his office to help Oregonians through this price spike, we think he and his staff should not be gushing demagoguery.