Such a policy, which prohibits private companies from increasing prices regardless of market conditions, would have catastrophic consequences including energy supply shortages and increased inflation, the economists argued in a series of interviews with The Daily Caller News Foundation. Democrats have
alleged in recent weeks that inflation is being driven by corporate price gouging and that
Big Oil is
using the Ukraine crisis as cover to raise prices and boost profits.
“I just can’t believe they’re dumb enough to do this,” Benjamin Zycher, an economist and senior fellow at the American Enterprise Institute, told TheDCNF in an interview.
“If prices are controlled at below-market clearing levels, then you get shortages because the quantity demanded is greater than the quantity supplied at the legal maximum price,” he continued. “And that’s why you get gasoline lines and allocation controls.”
The House Rules Committee
announced that it would review the Consumer Fuel Price Gouging Prevention Act — a bill that
enables the president to issue an emergency declaration banning energy prices issued in an “excessive or exploitative manner,”
according to its sponsors — on Monday before reporting it to the floor. House Speaker Nancy Pelosi, who told reporters last week that oil and gas companies were exploiting consumers,
promised that there would be a floor vote on the legislation this week.
