In an opinion column published in the Washington Post, Joe Carr describes being arrested for the crime of offering to sell valid Washington Nationals baseball tickets for less than their face value. In Washington, selling event tickets for more (“scalping”) is illegal. But so is selling them for less (“soliciting”).
Category Archives: Antitrust/monopoly Power
Earlier this week, UK Prime Minister Gordon Brown and French President Nicolas Sarkozy proposed the establishment of a global regulatory regime to “stabilize” oil prices. We deconstructed the proposal to show that the Brown-Sarkozy proposal seemed to be aimed at keeping oil prices high, not necessarily stabilizing them:
The potential scope and scale of this proposed “government supervision” appear to be quite large. Brown and Sarkozy are seeking a global regulatory regime that would “reduce damaging speculation” and “serve the interests of orderly and adequate investment in future supplies.” The commentary provides no insight concerning what social benefits are obtained by “orderliness,” or how much speculation is “damaging.” Indeed, Brown and Sarkozy follow a well worn path by criticizing “speculators” for driving prices up (or, in this case, down). Every futures contract has both a willing buyer and a willing seller.
Futures markets serve an important public purpose–they provide price discovery–and, ironically for Brown and Sarkozy’s argument, they tend to reduce price volatility. Regulatory restrictions on speculation should be expected to increase uncertainty, and thus exacerbate volatility. But as an analysis of the Brown-Sarkozy commentary shows, price volatility is not the problem they are actually worried about. They are trying to figure out how to use regulation to keep prices high and make it seem as if this is a good thing for consumers.
Early reactions to the proposal suggest it has a long way to go to be persuasive.
The Los Angeles Times reported on April 14 that the ports of Los Angeles and Long Beach “are proposing an ‘unprecedented’ overhaul of dockside trucking that officials say would slash diesel pollution from trucks by 80% in five years while improving domestic security and working conditions for drivers.” Based on the Times report, the plan is light on environmental protection and rich with measures that protect large companies and unionized labor from competition.