Winnipesaukee Forum - View Single Post

tis · 09-07-2011, 12:45 PM

It was Irving Reingold who created the crisis that led to the law banning self-serve gasoline. Reingold, a workaholic who took time out only to fly his collection of World War II fighter planes, started the crisis by doing something gas station owners hated: He lowered prices. Fifty-one years ago, gas was selling at 21.9 cents a gallon.
Reingold decided to offer the consumer a choice by opening up a 24-pump gas station on Route 17 in Hackensack. He offered gas at 18.9 cents a gallon. The only requirement was that drivers pump it themselves. They didn't mind. They lined up for blocks.
The other gas station operators didn't like the competition. Someone tried shooting up Reingold's station. But he installed bulletproof glass, so the retailers looked for a softer target - the Statehouse. The Gasoline Retailers Association prevailed upon its pals in the Legislature to push through a bill banning self-serve gas. The pretext was safety, but the Hackensack fire chief had already told all who would listen that Reingold's operation was perfectly safe.
The bill sailed through in record time, despite the objections of everyone who cared about the public interest. Journalists howled. "Chalk up another victory for the organized pressure groups," said WOR radio commentator Lyle Van.
Prices went back up. Reingold got out of gas and moved on to other endeavors, such as revolutionizing the sport-fishing business in Florida with boats that were bigger and more luxurious than anyone had seen. He died two years ago. His daughter Roni told me that on his deathbed he was still angry about the way the politicians ran him out of business. It's amazing that New Jersey consumers could still be suffering in the Internet era from a crooked deal that went through in the pre-television era. Amazing but true. We're now paying more than $1.40 a gallon for gas, but a before-tax comparison with Pennsylvania prices shows that New Jersey drivers could be paying as little as $1.20 a gallon if the state government hadn't rigged the market in favor of the retailers.
Friedman chuckled at other arguments politicians of both parties use to justify the current system. Whitman argues that thousands of jobs would be lost under self-serve. Furnari argues that small stations would go out of business. But both politicians insist prices would increase.
That violates every rule of economics, said Friedman. If prices increased, there would be no need for jobs to be lost or stations to go out of business. The real effect of self-service would be the one the politicians tried to prevent in 1949 - prices would drop. That in turn would lead to some loss of jobs and the elimination of some inefficient businesses. But that's how the free market works: to benefit the consumer.
''Of course, that's the usual pattern - using consumer protection as the excuse for preventing competition," says Friedman.
So there you have it. For us consumers, the gas pumps may be full-service. But when it comes to making sure the politicians protect their profits, the lobbyists are always helping themselves

Here is the story.

09-07-2011, 12:45 PM	#51
tis Senior Member Join Date: Jan 2006 Posts: 6,730 Thanks: 752 Thanked 1,457 Times in 1,014 Posts	It was Irving Reingold who created the crisis that led to the law banning self-serve gasoline. Reingold, a workaholic who took time out only to fly his collection of World War II fighter planes, started the crisis by doing something gas station owners hated: He lowered prices. Fifty-one years ago, gas was selling at 21.9 cents a gallon. Reingold decided to offer the consumer a choice by opening up a 24-pump gas station on Route 17 in Hackensack. He offered gas at 18.9 cents a gallon. The only requirement was that drivers pump it themselves. They didn't mind. They lined up for blocks. The other gas station operators didn't like the competition. Someone tried shooting up Reingold's station. But he installed bulletproof glass, so the retailers looked for a softer target - the Statehouse. The Gasoline Retailers Association prevailed upon its pals in the Legislature to push through a bill banning self-serve gas. The pretext was safety, but the Hackensack fire chief had already told all who would listen that Reingold's operation was perfectly safe. The bill sailed through in record time, despite the objections of everyone who cared about the public interest. Journalists howled. "Chalk up another victory for the organized pressure groups," said WOR radio commentator Lyle Van. Prices went back up. Reingold got out of gas and moved on to other endeavors, such as revolutionizing the sport-fishing business in Florida with boats that were bigger and more luxurious than anyone had seen. He died two years ago. His daughter Roni told me that on his deathbed he was still angry about the way the politicians ran him out of business. It's amazing that New Jersey consumers could still be suffering in the Internet era from a crooked deal that went through in the pre-television era. Amazing but true. We're now paying more than $1.40 a gallon for gas, but a before-tax comparison with Pennsylvania prices shows that New Jersey drivers could be paying as little as $1.20 a gallon if the state government hadn't rigged the market in favor of the retailers. Friedman chuckled at other arguments politicians of both parties use to justify the current system. Whitman argues that thousands of jobs would be lost under self-serve. Furnari argues that small stations would go out of business. But both politicians insist prices would increase. That violates every rule of economics, said Friedman. If prices increased, there would be no need for jobs to be lost or stations to go out of business. The real effect of self-service would be the one the politicians tried to prevent in 1949 - prices would drop. That in turn would lead to some loss of jobs and the elimination of some inefficient businesses. But that's how the free market works: to benefit the consumer. ''Of course, that's the usual pattern - using consumer protection as the excuse for preventing competition," says Friedman. So there you have it. For us consumers, the gas pumps may be full-service. But when it comes to making sure the politicians protect their profits, the lobbyists are always helping themselves Here is the story.