Poltroons who picked your pocket on April Fools Day
Expanded from the 4-4-99 Sunday Daily Sparks, Nev. Tribune
April Fools Day kept its
promise last week. You and I were played for suckers from the first tick
of the clock.
Promptly at midnight, new
taxes went into effect designed to make you and me a little poorer while
helping out those penniless downtown Reno casinos and Union Pacific Railroad.
Special thanks is due to Gov.
Kenny "No Tax Increases" Guinn for signing the law just in time.
Not to be outdone, Washington
allowed cable television to become totally deregulated on April 1, and that's
GAS PRICES BLOW UP. Regular
Barbwire readers have long been forewarned that any disaster, large or small,
real or imagined, will be used to jack up retail gasoline prices. First came
the Bay Area TOSCO refinery fire, followed by another blaze at a Chevron
facility. Retail prices skyrocketed by a third in just a few days.
My Tribune series from
late April through September of 1996 showed in great detail how the game
is played. You will find a summary in the
25, 1997, Barbwire .
The grand strategy is to
drive independent retailers out of business. Over the past 20 years, the
number of gas stations has dropped drastically. Many formerly independent
dealers have been forced to become major brand outlets in order to survive.
In the early 1980's, ARCO
came up with an ingenious redlining scheme which has withstood most legal
challenges and driven thousands of independent retailers out of business.
Because of it, major oil companies need not conspire to fix prices. They
can just look down the block at ARCO signs.
John Arfuso, a Las Vegas
retailer for Texaco and Exxon, told a Nevada legislative committee in 1995
that "there is a direct correlation between our suppliers' pricing strategy
and ARCO's reported price. We constantly follow ARCO."
ARCO prices gas to retailers
according to the physical locations of stations within a gerrymandered pricing
zone. The arbitrary boundaries make no sense unless analyzed as part of a
strategy to force independent retailers to either go major brand or go
This explains how ARCO
stations within a few blocks of each other might offer substantially different
prices. Their goal is not to compete with other major brand dealers, but
to squeeze the nearby independent. Other major brands seem perfectly content
to follow ARCO's lead, knowing that in the long run, eliminating independent
dealers means cartel pricing.
Bizarrely, ARCO lawyers
have convinced courts that they have a legitimate competitive purpose for
inexplicable price differences: The ARCO outlet selling for much more six
blocks away is simply part of another marketing zone.
ARCO posts a price usually
lower than other major brands which then follow ARCO's price downward but
do not match it. The independent dealer inside that target zone soon finds
his major-brand competitors selling for less than his wholesale price.
He must either sell his
gas at a loss or lose customers to ARCO and its buddies. Sooner or later,
that dealer becomes a major brand affiliate or goes under.
Big Oil uses every news
opportunity to raise prices which they ratchet down very slowly after maximum
profit has been gouged. The poor unaffiliated dealer gets squeezed at both
ends of the vicious cycle. Prices rise quickly and fall very slowly, led,
of course, by ARCO. A few independents die a slow death every time it
U.S. west coast prices
have often risen on news of shortages in other regions which don't affect
this area's supply at all. West coast prices are currently much greater than
elsewhere and Nevada's are among the highest anywhere.
West coast prices reflect
that the ARCO prize zone scheme is much better refined here and has not yet
been fully implemented in other parts of the country. Add Nevada's chronically
high gas taxes and you can begin to understand why our prices currently contend
for highest in the nation.
Some major-brand dealers
told the legislature that they have been forced by their corporate suppliers
to sell below cost for a period of time in order to crush a nearby
In November of 1997, the
U.S. Supreme Court ruled that wholesalers who dictate prices to their retailers
may do so legally despite anti-trust laws.
Within a few years, all
gas will come from a handful of major brands, all selling at inflated prices.
The technical term is oligopoly, meaning market control due to few sources
Gasoline is a necessity
and such manipulation affects every resident of the country. For reasons
unknown to me, very few newspapers bother to print this story.
So I keep repeating it
every time consumers scream in hopes that someone will finally listen.
CABLE TV JACKED UP. Showing
its usual sense of timing, TCI Cable announced a $1.50 per subscriber rate
increase a few days ahead of April Fools Day deregulation. Thanks to that
bi-partisan disaster called the Communications Act of 1996, cable companies
now enjoy unregulated monopolies and may fix prices at will.
The only good news for
cable customers this month is decidedly mixed. On April 11,
Michael Moore returns to TV with his
new series "The Awful Truth."
Alas, it's available only on the Bravo Network, for which you must locally
subscribe to TCI's premium digital cable service.
UTILITY BILLS IN JEOPARDY.
Sen. Randolph Townsend, R-Reno,
has apparently forgotten the first rule of utility regulation we both learned
from noted economist Dr. David Schwartz almost 20 years ago. Effective consumer
representation involves both an independent consumer advocate
and an effective public utility commission staff
Townsend now proposes to combine the commission staff with the advocate's
office, leaving regulators no personnel to evaluate conflicting points of
PROPERTY TAX WON'T GET
WHACKED. Tax reformers accuse Assembly Taxation Committee Chair
David Goldwater , D-Las Vegas,
of refusing to schedule a hearing for Assembly Joint Resolution 17. The proposal
from Assemblyman Don Gustavson
, R-Reno/Sparks North Valleys, would allow Nevadans to vote for a latter
day version of California's Proposition 13. I suggest calling Goldwater at
(775) 687-4848 or (800) 978-2878. You may fax him at (775) 684-8888. (Note:
Mr. Goldwater subsequently scheduled a hearing and has promised another.)
HEALTH INSURANCE PROPAGANDA.
Who's behind all those alarmist TV spots asking you to call
Rep. Jim Gibbons, R-Nev.,
and tell him to vote against his own health care reform bill? It's not the
poor small business people and soccer moms on the commercials. The big money
comes from major corporations who don't want HMOs made more responsive to
Be well. Raise hell.
Barbano is a member of CWA Local 9413. He is a 30-year Nevadan, editor
of U-News and head of
Casinos Out of Politics
(COP). In 1998 he served as gubernatorial campaign manager for
State Senator Joe Neal, D-North Las
Since 1988 Barbwire by
Barbano has originated in the Daily Sparks, Nev., Tribune, where an earlier
version of this column appeared on 4/4/99.