Tuesday, January 23, 2018

Rolling Stones – "Under My Thumb" (1966)

Under my thumb
The distributor who once had me down
Under my thumb
The retailer who once pushed me around

Most lawyers are familiar with this old adage about trial strategy:

If you’re weak on the facts and strong on the law, pound the law.  If you’re weak on the law and strong on the facts, pound the facts.  If you’re weak on both, pound the table.

Here’s a slightly different version of that adage:

A young lawyer who was consulting an older lawyer as to how he should act in the conduct of various cases.  He said, “What shall I do if the law is against me?”  The older man said, “Come out strong on the facts.”  “What shall I do if the facts are against me?”  “Come out strong on the law.” “Then, what shall I do if both are against me?” “Abuse the other fellow’s attorney.” 

Those who oppose the “Reform on Tap Act of 2018” – Maryland Comptroller Peter Franchot’s proposal to erase anticompetitive and anti-consumer restrictions on Maryland brewers from the statute books – don’t have good arguments to support their opposition.

Maryland Comptroller Franchot announcing
the “Reform on Tap Act of 2018”
I suspect they know they don’t have good arguments.  So they’re pounding on the table . . . and they’re abusing Comptroller Franchot.

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If you believe what you see on television, New Jersey is infested with mafiosi who spend most of their time scarfing down pasta, swilling red wine, and committing felonies (The Sopranos) while Oregon is the home of hipster snowflakes who insist on locavore food and favor artisan lightbulbs (Portlandia).

Television exaggerates, of course.  But most people would agree that New Jersey and Oregon are very different states.  So it may seem odd that they are the only two of the United States that prohibit the sale of self-service gasoline.

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According to columnist Paul Mulshine, New Jersey’s ban on self-serve gas stations was inspired by an eccentric entrepreneur named Irving Reingold:

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.  

[In 1949], gas was selling at 21.9 cents a gallon.  The price was rigged by a gentlemen's agreement among gas station owners.  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.  . . . Prices went back up.  Reingold got out of gas and moved on to other endeavors . . . .

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.

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As of January 1, Oregon no longer bans self-service gas stations.  Sort of.

I say “sort of” because a new Oregon law allowing Oregonians to pump their own gas applies only in counties with a population of fewer than 40,000 residents.

A woman who likes to live dangerously
Eighteen of Oregon’s 36 counties have a population of less than 40,000.  But the residents of those counties represent only 7.3% of Oregon’s statewide population.  That means the counties where 92.7% of Oregon’s citizens live don’t have any self-service gas stations.

Why does Oregon essentially prohibit self-serve gas?  You can click here to read Chapter 480.315 of the Oregon Revised Statutes, which offers no fewer than seventeen reasons why self-service gas stations are bad for the public.  

The Oregon legislature would have you believe that it is first and foremost concerned about public safety: “The dispensing of Class 1 flammable liquids [i.e., gasoline] by dispensers properly trained in appropriate safety procedures reduces fire hazards . . . [so] dispensing should, in general, be limited to as few individuals as possible, such as gasoline station owners and their employees or other trained and certified dispensers.”

When’s the last time you heard about a fire at a self-service gas station?  Americans who live in the 48 states where pumping your own gas is legal fill up their tanks over 16 billion times each year without incident.  Do Oregon lawmakers really believe it’s unsafe for anyone other than a “trained and certified dispenser” to pump gas?  

The other reasons given in the Oregon law are equally ridiculous.  For example, there’s “the increased risk of crime and the increased risk of personal injury resulting from slipping on slick surfaces” – which is “enhanced because Oregon’s weather is uniquely adverse, causing wet pavement and reduced visibility.”  (Oregon has the reputation of a pretty rainy place, but is it really that much rainier there than in other states?)

And consider reason number seventeen on the list: “Small children left unattended when customers leave to make payment at retail self-service stations creates a dangerous situation.”  Doesn’t the Oregon legislature realize that you can pay at the pump with a credit or debit card?  (If Oregon lawmakers are really concerned about people leaving their kids in the car to go inside a convenience store to pay for their gas, maybe they should prohibit the sale of soft drinks and candy and lottery tickets – after all, you can pay for gas at the pump, but you can’t pay for those items without going inside the store.) 

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George Will recently called a spade a spade in a column about the Oregon and New Jersey bans on pump-it-yourself gasoline:

[T]he ban is straightforward, no-damned-nonsense-about-anything-else protectionism: the point is to spare full-service gas stations from having to compete with self-service stations that, having lower labor costs, can offer lower prices.


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I’ve written previously about the “Reform on Tap Act of 2018” proposed by Maryland Comptroller Peter Franchot, who wants to get rid of current legal provisions that limit the ability of Maryland brewers to produce and sell beer to their customers.

Click here if you're a Marylander who wants to support that effort.

What do legal restrictions on Maryland brewers have to do with prohibitions against self-serve gas in New Jersey and Oregon?

Like the New Jersey and Oregon gas station owners who don’t want competition from self-service gas stations – especially those owned by convenience store chains – beer distributors and retailers in Maryland justify the anticompetitive and anti-consumer statutory provisions that currently exist in Maryland on the grounds of public health and safety.

An “advocate-for-hire” for those who oppose the reform effort recently accused Franchot of advocating expanded sales of alcoholic beverages to the detriment of Maryland citizens:

Franchot’s hands-on involvement advocating for the expansion of alcohol sales and consumption seems to be unprecedented for someone in his position.  This extraordinary focus on expanding alcohol sales – while ignoring the concerns of many in the state who don’t think a bar, brewery, or liquor store on every corner is needed – exemplifies gross disregard on the part of an elected state official.

As Len Foxwell, the Comptroller’s chief of staff, has pointed out, “Every single word” of that statement “is both incorrect and inane.”  

In Maryland, local governments decide whether a new bar, brewery, or liquor store can open on a particular corner – the “Reform of Tap Act” would do nothing to change that.  

The distributors and retailers aren’t concerned about excessive consumption of alcohol.  They’re concerned about losing their piece of the action when it comes to the sale of Maryland craft beer.

The focus of the “Reform on Tap Act” is to allow Maryland brewers the freedom to sell their beer at wholesale and retail rather than keeping them under the thumbs of beer distributors and retailers.  Those politically influential industry groups object to Franchot’s proposal because it will allow the brewers to control their own destiny.

To borrow George Will’s language, the distributors and retailers want the “straightforward, no-damned-nonsense-about-anything-else protectionism” of current Maryland law to remain in place.

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Here’s something else that the “advocate-for-hire” for those who favor the status quo has said about Franchot:

The Comptroller seems to have fallen victim to the industry’s deep pockets, becoming what’s known as a captive regulator who has lost sight of a balanced approach that’s critical to regulating a product that can cause great harm.

The chutzpah of that allegation is quite breathtaking.  

Carly and Brian Ogden, the “mom and pop”
owners of Attaboy Beer in Frederick, MD
Most Maryland breweries are small startups – “mom and pop” operations, if you will.  (I use that term literally – quite a few of those breweries are owned by husband-and-wife teams.)  If they have deep pockets, those pockets are mostly empty because the owners have sunk most of their savings and whatever other funds they could beg and borrow into their businesses – with no guarantee that their businesses will be profitable.

The people with the deep pockets are the distributors and retailers . . . not to mention the legislators who have benefitted over the years from the largesse of those entrenched special-interest groups.

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My apologies to Mick Jagger for tinkering with the lyrics he wrote for the 1966 Rolling Stones song, “Under My Thumb,” which celebrates a man’s success in getting the upper hand over the woman who had once held the dominant position in their relationship.  (It’s a great song, but it’s also about as politically incorrect by today’s standards as any sixties song I can think of.)  

It’s too early to say whether Comptroller Franchot and the Maryland brewers will be able to win their political power struggle with the special interests and their allies in the Maryland General Assembly, or whether the brewers will remain under the thumb of the distributors and retailers.

But as the poet Alexander Pope wrote, “Hope springs eternal in the human breast.”

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Here’s the studio version of “Under My Thumb”:

And as a special bonus, here's a video of the Stones performing the song live on British television in 1966:

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