Posted on: Thursday, April 25, 2002
ISLAND VOICES
It's called legislative price-fixing
By Mike Miyashiro
Assistant manager, Diamond Head Petroleum
As a solution to high gasoline prices, members in the Legislature have proposed a new law to limit how much profit an oil company can make. The proposed law includes penalties if the company makes too much money, and allows the state to confiscate profits that exceed its predetermined limit.
Look up "socialism" in Webster's Dictionary and decide for yourself if this is not a textbook definition come to life in Hawai'i — a political theory whereby government controls and administers the means of production and distribution of goods.
There are three reasons to explain the cost of gas in Hawai'i:
• Collusion and price-fixing exist among our gasoline manufacturers. Price-fixing is an evil act that threatens the very fabric of a society dependent on the rule of law. This type of illegality should be punished to the fullest extent whenever it is discovered. But the truth of the matter is that no evidence of such a practice exists among Hawai'i's gasoline manufacturers.
• Gasoline prices are not high. After all, how does one define a price as being "high"? If the cost goes up 50 cents per gallon, the average Honda owner who purchases a tankful every week will experience a monthly increase of $18. This is hardly a crisis that justifies the creation of a "profit police" division in our state government.
Others would say that "high" is defined by the disparity in prices between Hawai'i and the Mainland. But what commodity in Hawai'i does not have a disparity in price when compared to the Mainland? To use this basis for economic measurement is irresponsible at best.
• The market allows it. There is no evil in making as much profit as possible so long as price-fixing, collusion and bodily harm are not involved. Is it not hypocritical to cry outrage against oil company profits while simultaneously enjoying exorbitant personal gains from Hawai'i's real estate?
Do I wish that gasoline prices were lower? Yes, but also my rent, groceries and other monthly expenses that place an even bigger drain on my checkbook. The answer to lower gasoline prices lies in the factors that will bring other prices in Hawai'i down as well.
Or perhaps we should simply impose price-fixing on taxes.
In our efforts to balance the imperfections in our free-market system, let us not be distracted. For an even greater threat exists to our economy, democracy and American freedom.
It is called legislative price-fixing.
