Note: This article originally appeared on 6/19/01.
We can all agree that the Democrats have got it right this time on the subject of energy price controls. They want to pass a federal law that will put a limit on how much anyone can charge for electricity, natural gas and gasoline. The current term that they are using for this is “price cap.” They are going to need our help, and that is why I’m writing this article.
A couple of days ago, I watched Rep. Richard Gephardt on television, and he was making a strong argument in favor of having the government implement these newest price controls. He says that, otherwise, people will have to “pay too much” for energy. Worst of all, some of the people who produce and sell energy will make large profits unless the Congress steps in and puts a “cap” on prices they can charge.
Gephardt is the representative from the Third District in Missouri, and a former candidate for president. He wants to run again. He is also the Democratic leader of the House, so when he talks, we all had better listen.
Once the “price caps” are put into effect, several things are going to happen:
First, those who use energy will stop trying to conserve it, since they know that their cost cannot go up.
Second, people who produce energy will cancel any plans to build new electic generating plants, drill for oil, produce more natural gas or build new pipelines. They will realize that their potential for earning a profit is severely restricted or maybe even gone, and they will not want to risk their money with little hope of a return.
Finally, distributors – or middlemen – will either cut back or look for other ways to earn money. They will realize that, with price caps, they cannot expect a profit, either.
History tells us what happens next: shortages. There will be at least as much demand as before (probably more), but the supply will diminish instead of growing as it would if the energy business were still profitable. There simply will not be enough electricity, gasoline, or natural gas to meet our needs, and some system will have to be devised to decide how the scarce resources can now be allocated.
In other words – rationing.
This is where we can all really get behind Rep. Gephardt and support him and other Democrats in their efforts to help us get through this current energy mess. With rationing, there will be ration stamps that the government will parcel out to each of us, and you will be able to get only so much electricity, etc., depending on how many stamps you have. Once you use up your stamps, your lights will go out, your car will die, or your furnace will stop.
Since Gephardt has been instrumental in advocating and supporting this program, we should insist that he be recognized by putting his picture on the stamps. They can be called “Gephardt Stamps” or, maybe for short, they can be called “Gephardts.”
Some credit should also go to Dianne Feinstein, the Democratic senator from California. She has, in fact, already introduced a bill in the Senate to force the FERC to impose price caps on electricity. Maybe Gephardt would be willing to have his picture on the gasoline-rationing stamps, and Sen. Feinstein can have her picture on the electricity-rationing stamps. When your lights go out, you will say, “Darn! I’ve run out of Feinsteins.”
The only other person who might feel left out is the Senate majority leader, Tom Daschle. He’s also a Democrat and also big on energy price controls. Maybe he could have his picture put on the ration stamps for natural gas.
With proper recognition, we will all have at least three different books of ration stamps: our “Gephardts”; our “Feinsteins”; and our “Daschles.”
This will work out well because, as future elections come along, it will be easy to remember who we have to thank for getting our energy problems “solved.”
Howard Chapman is an attorney in Fort Wayne, Indiana.