by Robert Maynard
Senator Bernie Sanders is on another witch hunt again and this time it is to uncover a supposed conspiracy by a few fuel distribution companies to keep gas prices high:
Vermont U.S. Senator Bernie Sanders says a lack of competition might be to blame for the Burlington area having had some of the highest gas prices in the country.
He held a Senate Energy Committee Field Hearing about the issue in Burlington Monday.
In the past month since Sanders called for a federal investigation, the difference between Burlington and national gas prices has narrowed. But the senator says that doesn’t explain what’s been going on for years in the region.
While the Oil Price Information Service Director did not have an answer to why this may be a problem, an industry representative offered a logical explanation that could account for at least part of the problem:
Oil Price Information Service Director of Data Ben Brockwell was asked to explain the price difference.
“I did not have a reasonable explanation as an ‘expert’ in the field,” says Brockwell.
Vermont Petroleum Associate’s Joe Choquette was there to defend the industry. He says, for one thing, Vermont is an expensive place to do business and that’s reflected in prices.
For his part, Bernie was not interested any explanation that may implicate the government, or point to any other conclusion that would not lend itself to a government mandated solution:
That didn’t satisfy Sanders who blames the prices on a few companies which he says control the market.
“Besides asking these companies to be more competitive, what can be done about it?” asked FOX 44/ABC 22.
“Well that’s an issue we are looking at,” says Sanders.
While Sanders didn’t come out and support Costco, the company which is fighting to bring a gas station to its store in Colchester, was invited to Monday’s hearing.
Costco has estimated it could sell gas 19-cents a gallon cheaper than nearby stations.
If the problem really is a lack of a competitive market due to fewer providers, why not come out and explicitly support Cosco? Furthermore, why so casually brush off the suggestion that at least part of the problem is the high cost of doing business in Vermont? Shouldn’t we even look at the possibility that this may be one of the factors driving up costs? A Vermont Department of Health analysis of health disparities by income in Vermont explicitly cites Vermont’s high cost of living as a factor driving a higher poverty rate:
Living in Vermont can be expensive compared to elsewhere in the U.S., and federal poverty guidelines may not take into account cost-of-living differences across the states.
In Vermont, a family of four would have to earn over $10,000 more than the same size family elsewhere in the U.S. to have equal purchasing power.
If the higher cost of living in Vermont has an affect on the poverty rate, why would it not be reasonable to expect that the higher cost of doing business may have an affect on the price of gas? In almost any business, prices for goods and services reflect the cost of doing business. That is basic economics 101. I find it hard to believe that Senator Sanders does not understand this, which leads me to wonder if he is simply using the problem as an excuse to huff and puff and call for yet more government intervention into the private market. It would not be the first time that such misdirection was used to promote such a purpose. In the early 1990s Vermont was one of eight states that initiated reforms, which resulted in yet more government interference in the private insurance industry market, that ruined the market. Undaunted by the mess that these would be reformers made of the private insurance industry by driving out numerous private insurers, single payer advocates came up with a 2009 study on the problems with Vermont’s insurance market. The study was entitled “Vermont Health-Plan Premiums Soar As Insurers Face Less Competition.” Even though the lack of competition that drove up premiums was caused by earlier government “reforms” that ended up driving insurance companies out of Vermont, those advocates used the situation as an excuse to push for a single payer health care payment system. In other words, propose a solution that involves an expansion of the role government to a problem that was at least partially created by expanding the role of government.
It looks like Bernie is now taking a page out of the same playbook. A good argument could be made that high taxes and excessive regulation are among the factors driving up both the high cost of living and the high cost of doing business in Vermont. Bernie Sanders and his progressive allies do not want to admit that some of the policies they pushed through here in Vermont may be contributing to the problems that they are ranting and raving about. It is far easier to continue their rants, point their fingers at real and imaginary culprits and demand an even further expansion of government into the private market.