The “Reasonable Profits Board”
Via Marginal Revolution, Congressman Kucinich has introduced a bill to limit oil company profits, the “Gas Price Spike Act.”
Here are the important definitions (you can find them in the bill itself here):
The term ‘windfall profit’ means, with respect to any sale, so much of the profit on such sale as exceeds a reasonable profit.
The term ‘reasonable profit’ means the amount determined by the Reasonable Profits Board to be a reasonable profit on the sale.
Specific enough for regulators, I suppose, but let’s hope the Congressman considers taking some time to look at actual data on oil company profits and the determinants of gasoline prices. He might start with the U.S. Energy Information Administration. He might also want to consider the consequences of government price controls.