The President of the United States was clearly frustrated. Skyrocketing gasoline prices were unacceptable. He called them "unrealistic," though he never explained what a realistic price would be.
One solution? He would punish "price gougers." But there was a question he didn't—arguably couldn't—answer: What constitutes price gouging?
Curiously, the Republican president was echoing a Democratic talking point. Democrats fought (perceived) price gouging for decades. They had long called for outlawing "grossly excessive prices," but left the details of what that meant to the Federal Trade Commission (FTC)—which never produced a clear standard.
Congress, meanwhile, blamed Big Oil and service station owners for overcharging consumers. Some lawmakers insisted that the price spikes resulted from illegal price-fixing conspiracies. The FTC had investigated such claims over the years and found nothing. In one case, Democrats were so outraged by the lack of evidence of a conspiracy that they demanded an investigation of the FTC itself.
Arguably, it was the president's own policies—more than any other factor—that had helped turn conflict in the Middle East into an energy crisis at home. Yet rather than reverse course, Congress wanted to double down.
It had been a tough year to be president...
As President Richard M. Nixon would have attested.
The year? 1973.
Of course, today's rhetoric sounds familiar: President Donald J. Trump is repeating some of the same price-gouging complaints Nixon voiced more than fifty years ago.
Trump is angry about high gasoline prices—and he is hardly alone. American motorists are feeling the pain. But history suggests that turning frustration into policy is a perilous path. Gas prices have indeed risen more than a dollar per gallon since January 2026, largely due to oil-market disruptions from the Iran conflict. But what does Trump intend to do about it? Is he merely venting on Truth Social, or does he plan to compel the market into delivering what he deems "realistic" prices?
Nixon tried that approach. In 1971 to fight inflation, he imposed broad wage and price controls. Although most were lifted by 1973, gas controls remained in place for the rest of the decade. As I detail in my book, U.S. Energy Policy and the Pursuit of Failure, these government interventions did not solve the problem of high gas prices—rather they created two major energy crises that were, in reality, policy crises. The Democratic Congress not only supported Nixon but compounded the problem by layering on federal allocation controls.
Trump has not explicitly called for price controls or government allocation. But by declaring market prices wrong—labeling them gouging—and floating a target price of $2.50 per gallon, he is signaling that he believes government should override the market. History shows where that road leads.
Price-gouging laws would only make the current problem worse. They would effectively tell service stations "You must charge not a penny more than whatever number the government decides is acceptable." Posted prices might fall, but the number of gas stations would shrink. To see why, look back at the government-created energy chaos of the 1970s.
Nixon had formed the federal Cost of Living Council in 1971 to set wages and prices generally, but by 1973 its main role was to control the prices of gasoline and other petroleum products.
Refiners and retailers had to petition for price increases, and couldn't automatically pass on rising costs. Decisions were handed down at the start of the following month. As a result, many gas stations simply closed during the final week of each month while waiting for approval to raise prices. Allotments were also made monthly, and some stations had to close toward the end of the month having run through their supplies before they could replenish their stock. This only lengthened gas lines.
Because stations could not just pass along costs, government controls squeezed station profit margins. Consequently, hundreds of stations closed for good in 1973-4.
Fifty years later, price gouging laws could produce similar effects. No one wants to risk fines or jail time for posting a price that reflects today's higher wholesale costs. Many would shut down while waiting for regulators to catch up with reality.
Are there better options the government could pursue right now? Some ideas, such as new drilling incentives, offer long-term promise but won't give motorists immediate relief. Short-term measures are limited and cannot be repeated indefinitely. The Biden administration already tapped the Strategic Petroleum Reserve (SPR); the Trump administration followed suit. But the SPR is finite and stocks are at their lowest level in more than 40 years. Suspending the federal gasoline tax (18 cents per gallon) would modestly help, but it hardly offsets a dollar-plus increase.
In the end, the best path forward is the simplest: Washington should remember its own failed history and let the market—not government bureaucrats or presidents—set prices at the pump.
