My state’s Attorney General, Lisa Madigan, has a long time family history of politics. She’s a crony and reckless with taxpayer dollars, and her voice shouldn’t be considered a powerful or true voice — but it is.

In Illinois major media news today, Lisa Madigan is blackmailing 18 gas stations, forcing them to give money to another group of people or get sued. She is using her political clout to gain media attention and make it seem as though she is pro-consumer.

Price gouging is a fallacy, a myth. It does not exist in a free market. As I have said in previous posts, price gouging saves consumers and doesn’t hurt them.

If a gas station finds its supply of gas cut off for any reason (usually a natural disaster or war), they have no ability to tell their employees, landlords and utility companies that they can’t pay their overhead. Bills must be paid, on time. When a gas station feels that they may be limited or cut off entirely from their product, the must instantly change the price of the product they do have in stock in order to raise the profit so that they can weather the supply shortage.

The reason price gouging is fair is that it almost always comes from a natural disaster: this affects the supply of all companies selling the product. If one gas station out of 10 in your town wanted to triple gas prices, the other gas stations would gain customers. No one is going to pay $5 per gallon if other stations are selling it for $2.50 per gallon.

The first complaint you’ll hear from anti-freedom advocates is that gas stations can collude to raise the price. This can be true, but competitive freedom will allow another company to open up and rake in the market. Collusion only can exist when it is very very hard to enter the market. The number one deterrent to entering the gas station business is most cities have terrible regulations and zoning rules regarding who can open a gas station. In a few towns where I have had businesses, the gas station owners are generally cronies of the politicians — if you’re not a friend or family, good luck in getting a business license.

Today’s Noon Anarchocapitalist News will cover price gouging reports from all over the world, and I’ll try to back up why the prices went up. If you feel someone is gouging you “illegaly” just go shop elsewhere. There is no need for government to blackmail companies into lowering prices — all you’ll get in the end is no gas station to buy from.

The U.S. Senate approved over US$3.1 billion for heat for the poor. Basically, they’re taxing those who can pay (the taxpayers) to give to those who have even more money (the gas companies). The gas companies are a heavily regulated cartel, charging more for gas distribution than in a competitive market. They’re allowed to be a monopoly by the State, and as such, they are given the right to charge as much as they like. Once in a while, we hear about how they’re not profitable, but their stock prices sure don’t show that to be true.

The poor need heat — it isn’t a right, but it is a need. The Federal government has no mandate in the Constitution to help the needy get heat. On top of that, the Federal government has no mandate in the Constitution to regulate heating costs, and the states that do regulate the costs (all 51) are guilty of collusion and backdoor deals. The Congressman in these cold states (where I live, too) are guilty of trying to get votes at the expense of citizens who don’t live in cold states.

How do you solve the heating problem in a free market? Let competition offer better pricing — much better pricing as is evident in many other unregulated markets. Forcing companies to charge a certain fee when the commodity of gas goes up and down in price is crazy. As the price of gas rises, people HAVE to start cutting back. Some of my poor friends (yes, on subsidies) keep their houses at 72 degrees and walk around in T-shirts during our 5 degree winters. When I grew up, we wore sweaters and hats when it was cold, in order to save money. We were middle income, with no subsidies.

Subsidies cloud the true prices of so many markets: transporation, farming, electricity, water and even housing. When our government sends public dollars to a private company, these dollars compete with YOUR dollars you sent voluntarily. By increasing the money aimed at a particular service or product, you also increase the demand and decrease the supply: this causes prices to go up. We’ve seen this happening in colleges, as publicly sponsored tuitions ran up the price of college. We’ve seen this happening in the stock market, as publicly mandated pensions chase stock prices up. We’ve seen this happening in the prescription drug market, as public aid and social security guarantees run up the prices of drugs for those paying full price.

The solution: end all subsidies. The money that middle class and upper class taxpayers spend on taxes would still end up in the economy: offering more opportunities for the poor to get out of their situations. For the truly poor, the ones who have mental or physical illnesses, I have no problem with local government and local charities helping them. My own church spends thousands every month helping the truly poor. But if these poor fool us, trick us or take advantage of us, we’re the first ones to pull out. Government? They just keep them coming back.