A Stitch in Haste

Illinois' activist attorney general is engaging in outright extortion over the so-called Hurricane Katrina "price gouging" faux scandal:

The Illinois attorney general is notifying several gas stations that they can donate $1,000 to the American Red Cross or risk being sued for price gouging in the wake of Hurricane Katrina.

The office of state Attorney General Lisa Madigan detailed the options in letters that began arriving at the 18 stations this week. Officials said gas prices at some Illinois stations rose as high as $3.63 a gallon after Katrina hit the Gulf Coast.

"When we're in an emergency situation, such as we were, retailers have the obligation not to increase their prices to the general public over what wholesalers are charging them," said Deborah Hagan, chief of the attorney general's consumer protection division.

You don't need to have taken a microeconomics class (although it would help) to understand that if a retailer is forbidden to earn a gross margin (i.e., is forced to sell his inventory at the wholesale price), then he is, by definition, being forced to lose money (specifically, his fixed costs).

And what the heck does the American Red Cross have to do with this? Assume (falsely) that there can even be such a thing as "price gouging." Why should those, in Illinois, who are "guilty" of such "gouging" be forced to subsidize people outside Illinois through Red Cross donations?

There's a word for an offer to buy your way out of being harassed:

Shakedown.

And there's a word for those who, like Attorney General Madigan, engage in such practices:

Mafioso. (Or is it Mafiosa when it's a woman?)

Maybe we should just stick with "thug."