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Of course I can't prove my theory is correct - although it makes sense from first principles i.e. that if you cap prices you disincentive suppliers.

But - your amazement at two branches of government working at cross purposes - surely this has happened more times than either of us can count. I have absolutely no doubt that you could have one branch of government impelmenting price controls while another branch is investigating market disruptions.

In any case if my explanation isn't the correct one then how else to explain your father's observation?

In any case if my explanation isn't the correct one then how else to explain your father's observation?

While I concur that in today's politicized environment, the scenario you describe is more common than any of us wants to admit, at the time of the "oil embargo", the Federal Trade Commission, surprisingly enough, was a better run organization than it is today. Had they known beforehand that artificial price controls had been implemented by another government agency (such as the WH or Congress), they wouldn't have wasted the manpower to conduct an investigation.

That said, I defer to my dad's findings which supported the historical record of the oil industry; i.e. that the "oil embargo" was another in a fairly long line of phony schemes concocted by oil industry executives to dupe the public, raise prices (and increase profits), and shift the focus on OPEC, which was already an unpopular institution with the American public.

As I noted previously, if the "shortage" were due solely to price controls, selling ANY amount of gas at a loss is still selling the product at a loss; IOW, there is no benefit to limiting the available supply versus conducting business as usual and selling all of the available supply at a loss - particularly if the price controls are arbitrary and force the oil companies to sell at a loss. The oil companies had the option of shutting down and not selling any gas at all. Such an action would likely have caused one of several things to occur - the federal government would either have to nationalize the oil industry and sell the gas at any price it chose, or it would have forced the federal government to raid the Strategic Petroleum Reserve to meet the petroleum needs of the country, or it would have to relax the price controls to allow the oil companies to sell their gas with a reasonable margin of profit. Nothing in the Constitution allows the government to force any privately held business to sell its product at a loss. And, in those days, the Constitution was more highly regarded by the Congress than it is today.

Before I get flamed, I want to make it clear that I have no opposition to any private business making a profit - whether that profit is huge or tiny. Nor do I have an axe to grind with the oil industry. I do object to any industry, however, that perpetrates frauds on the American public for the sole purpose of increasing their "bottom line". If they can't honestly come out and say they are going to jack prices up because they can, I don't have a lot of respect for them. I may not LIKE the fact that they are doing that, but I will have more respect for them and exercise my free market rights to shop elsewhere for my gas (or whatever).