Is Gasoline as Important as Cable TV?
In 1992, the U.S. Congress overrode President George H.W. Bush's veto and passed the Cable Television Consumer Protection and Competition Act. This law, among other things, regulated the price for basic cable television service. The arguments made in favor of cable regulation apply even more clearly today to gasoline. So, is it now time to regulate the price of gasoline?
Basically, the 1992 Cable Act treated cable television as a utility, something everyone needs and which is prohibitively expensive for smaller competitors to produce and distribute, like water or electricity. Congress noted that a relatively small group of cable operators controlled the market for cable tv such they were able consistently to raise prices faster than the rate of inflation. According to Sen. Patrick Leahy (D-VT), "Before the 1992 Cable Act was passed, cable rates were rising three times faster than inflation rates. I do not think you can name a consumer in this country who did not feel that he or she was being gouged."
Hmm, sound familiar?
There are two big difference between cable tv and gasoline which makes price regulation even more applicable to gasoline. First, cable tv has lots of substitutes. Even if the market is defined narrowly as multichannel non-broadcast television programming, cable competes with satellite dish tv service, which has been gaining more subscribers than cable for some time. Plus, a more realistic view of the market in which cable competes would include broadcast television, which still gets the most viewers ("American Idol," the Super Bowl, etc.), as well as DVDs (on which one can rent movies, cable and broadcast television programs), and possibly even other forms of entertainment, like live sports events and, hopefully, blog reading on the Internet.
Second, it's not easy to argue that cable tv is a necessity (I can hear "Flavor of Love 3" fans going "what are you talking about?"), and it's even harder to argue that cable tv is more necessary than gasoline.
Gasoline has few or no competitors to power motor vehicles at this point. Hybrid cars still require gasoline. If drivers ditch their cars to take the bus, most buses run on gasoline. Electric commuter trains are not available to many people, especially those who do not live on the coasts or in large cities. Plus, how would you get to the train station? Bicycles? Horses? I don't think so.
So what we have with gasoline is a product that (a) nearly everyone needs; (b) has no current substitute to power motor vehicles; (c) is controlled by a small number of companies; and (d) has skyrocketed in price, way beyond the rate of inflation.
Maybe we should skip the price regulation and regulate gasoline as a drug.
(photo from atomsmasher.org)