'In the Money' Welcomes Kucinich's Price Gouging Theories
Would-be president Dennis Kucinich voiced “concern” over possible “$4 a gallon” summer gas prices and directed blame toward oil companies on CNN’s “In the Money.”
Hosts Ali Velshi and Christine Romans lobbed softball questions at the Democratic Ohio congressman on the April 21 edition of the show, but neither reporter offered substantial counterarguments to the lawmaker’s accusations and sweeping statements.
“One lawmaker is demanding answers from the CEOs of seven major oil companies,” Romans said.
“We want to know if there is any kind of manipulation of the law of supply and demand that’s resulting in very high fuel prices,” Kucinich said.
Kucinich ranted about oil companies’ profits, suggested possible price gouging and promoted a “windfall profits” tax. The Business & Media Institute has previously recorded his call for a "100-percent tax on excess profits." He railed against reliance on oil altogether and was asked a few easy questions by the “In the Money” team. Kucinich threw out accusations and blanket statements:
· “It seems the profits for these companies keep going up and the American consumer doesn’t have anyone intervening on his or her behalf.”
· “Are they contracting refinery capacity and driving up profits? I want to know about that.”
· “There’s no question that America has to transit away from reliance on oil. We all know that.”
Velshi admitted the media sound like a broken record on gas prices every year. “We seem to go through this cycle – It’s springtime, gas prices go up. We have the same discussions about refining capacity and all of these things.”
But Velshi did not make the connection to government regulations that mandate different blends for winter and summer and are switched in the spring – contracting supply.
The toughest question anyone asked Kucinich on “In the Money” was whether EPA regulations prevent new refineries from being built – but when the congressman dismissed it, Velshi let it slide. “One of the things we always hear is that they can’t build refineries because the EPA doesn’t let anybody build refineries,” Velshi said. “What’s your, what, what – is that true?”
“I’m not sure that that’s true,” Kucinich replied.
Velshi did not press him, but the Competitive Enterprise Institute cites the EPA’s New Source Review (NSR) program as doing exactly that. NSR “has made it very difficult to build new refineries or even upgrade existing ones.”
Kucinich’s support for a windfall profits tax also went unchallenged despite economic evidence of its damaging effects.
Economists Robert Shapiro and Nam Pham published a 2005 paper documenting the shortcomings of a windfall profits tax. Those who suffer under such a tax include retirees who might experience devaluation in pensions and retirement savings accounts. The estimated total cost to these individuals would be between $8.7 billion and $50 billion every year.