CNNs Serwer Dismisses Study Finding No Price Gouging

CNNs Serwer Dismisses Study Finding No Price Gouging
ABC and NBC briefly reported the story without commentary.

By Ken Shepherd
Business & Media Institute
May 23, 2006

     A federal investigation released to the public on May 22 found no systemic price gouging in gasoline prices following Hurricane Katrina. Of the three broadcast news networks, CBS ignored the issue in its May 22 evening newscast.

     The following morning, CNNs Andy Serwer reported the news with derision for the Federal Trade Commission (FTC) findings. The government found only a smattering of price gouging when it comes to gasoline after Hurricane Katrina, which may have some people wondering exactly whats going on here, Serwer began his 7:30 a.m. Minding Your Business briefing.

     While Nightly News guest anchor Campbell Brown delivered a straightforward read on the FTC report, and World News Tonight anchor Elizabeth Vargas said the report found only 15 isolated cases of unusual pricing, the CNN business contributor weaved commentary into his reporting on the May 23 American Morning.

Nine months it took them to produce a 200-page report, Serwer marveled, adding that it just sort boggles the mind really that it would take this long to come up with sort of a half-yes, half-no conclusion.

     Far from a half-yes, half-no conclusion, the FTC report reported five major findings.

    No evidence to suggest that refiners manipulated prices through any means including diverting gasoline supplies to other countries or deliberately running refineries at an artificially low capacity No evidence to suggest that refinery expansion decisions over the past 20 years resulted from either unilateral or coordinated attempts to manipulate prices. No evidence to suggest that petroleum pipeline companies manipulated business plans to game gas prices No evidence to suggest that oil companies reduced inventory to increase or manipulate prices No situations that might allow one firm - or a small collusive group - to manipulate gasoline futures prices by using storage assets to restrict gasoline movements into New York Harbor, the key delivery point for gasoline futures contracts.

     In other words, Serwer was wrong. The FTC found no conspiracy anywhere in the petroleum industry - from oil derrick to gas pump - to artificially game gasoline prices.

     The Business & Media Institute (BMI) recently documented how network news outlets have reported on congressional calls for price gouging investigations. BMI also documented the call by some in the media for higher gas prices, if need be to be reached by higher gas taxes.

Correction: We originally reported that ABC, like CBS, ignored the Federal Trade Commission report. In fact the report was given a 30-second mention by ABCs Elizabeth Vargas on the May 22 broadcast of World News Tonight. Vargas noted that of only 15 cases the FTC of unusual price hikes following Katrina, all but one were due to market pricing confusion.