Thursday, September 04, 2008

"The Big Ripoff" in Wisconsin

Occasionally I've mentioned Tim Carney's The Big Ripoff , a very enlightening counter-intuitive book.

The most 'counter-intuitive' thread in the book is Carney's demonstration that Big Business LOVES regulations--so much so that they often employ legions of lobbyists to write regulations (and laws) which benefit Big Business. They also purchase make campaign donations to Congressmen and Presidents. LARGE donations.

There are two principal reasons for that. First, BigBiz has the resources to comply with complex and arcane regulations. A $500K tab for complying with SarbOx is nothing to Exxon--but it is utterly crushing to a $10 million manufacturer. Secondly, BigBiz writes regs and laws (or influences them) to 'outlaw' products of their competitors--or to 'in-law' their own products. The best example was Archer-Daniels-Midland's wholesale purchase/lobbying of congresscritters and the President, resulting in Corn-A-Hole's EXCLUSION from the list of pollutants assembled by EPA. (You can look it up, folks.)


P-Mac found another fine example of the same in the Wisconsin Minimum Markup law.

Wisconsin says gasoline has to be marked up 3% by wholesalers and 6% by retailers

...Bhandari says he gave discounts to lure people to his gas station far from the chains' convenient sites near U.S. 51

...and one of the BigBoyzzz' franchisees complained.

The story of Wisconsin's minimum-markup law came up again:

Pam Kaleka runs the south-side station named, appropriately enough, Cash Discount. The Journal Times covered this Monday; WISN-TV last night, but the story amounts to this:
Kaleka charges a price competitive with other gas stations -- $3.69 Tuesday night. But if you pay cash instead of with a credit card, you get four cents off per gallon. That's lower than the competitors and it's well below the minimum markup that state law demands. Competitors sicced the state Division of Trade and Consumer Protection on her.

P-Mac asks:

Why isn't this law gone yet?

I'd suggest a harder look at the "small-business" lobbyists--and where their money comes from.

1 comment:

Steve Burri said...

Power aligns with power.