Archive for May 18th, 2009

h1

Where I am not shopping for alcohol in Lubbock, Texas

May 18, 2009

Michael Giberson

From the Pinkies website:

Tom “Pinkie” Roden established Pinkie’s back in 1934, less than one year after the 21st Amendment to the Constitution was ratified (by an extraordinary 73%), ending 14 years of prohibition.

Carrying on the work that Pinkie started back in 1934, we have grown into a chain of fifteen wine and spirits retail stores with locations throughout West Texas.

Ironically, Pinkies Inc. is now taking action with the effect of extending the consequences of prohibition for just a little longer in Lubbock County, Texas. Joining them in that effort is Majestic Liquor Stores, Inc.

You know what? I think I’ll start shopping somewhere else.

(A complete list of Pinkies and Majestic stores is included below, after a brief retelling of the local “Bootleggers and Baptists” episode.)

After prohibition, Lubbock didn’t rush right back into alcohol sales. In fact, it wasn’t until 1960 that a small precinct outside of the city voted to allow package sales of alcohol. The precinct became affectionately known as “The Strip” by generations of students and other imbibing residents. In 1972, a city election permitted alcohol sales by the drink in restaurants.  A few surrounding towns have loosened restrictions a little bit.  But for the main population in the city of Lubbock, not much has changed; the status quo has been held together by a classic “Bootleggers and Baptists” coalition.*

Until now. The most recent election, held May 9, finally opened up alcohol sales throughout the county (subject to county ordinance, state law, and Texas Alcoholic Beverage Commission regulations, of course).  But the “bootleggers” haven’t given up yet.

The Strip gives all the appearances of being a competitive hub of activity, with 6 or 7 different businesses side-by-side. Bright flashing lights, separate ads in the local newspaper. Actually, just the two companies own all of the stores on The Strip – Pinkies Inc. of Odessa, Texas, and Majestic Liquor Stores Inc. from Fort Worth.  Not surprisingly, package beer, wine, and liquor prices are higher in Lubbock Texas than they are in the high income suburbs of Washington, DC, where I used to live.

A few days before the election, the two companies joined together to file a lawsuit against the city of Lubbock claiming an ordinance to govern alcohol sales in the city violated state laws and regulations. More details, and a picture or two from The Strip, are in this local TV news report.

It may be the case that the existing ordinance requires changes to conform to state law. I’m not a lawyer. The companies may be sincere in their desire to ensure proper local rules are put in place. But the timing of the lawsuit, their efforts to secure a restraining order to delay any local licensing activity until the lawsuit is resolved (estimates of the first new licenses have gone from “6-8 weeks” to “six months or more”) – I’m convinced this is primarily abuse of the legal process to maintain their near-duopoly status in the county for a few months more.

It just feels like anti-consumer activity to me, and so I’m turning myself into a former customer of Pinkie’s and Majestic stores.

Here is the list of the stores, some on the Strip and some tucked into a few of corners of the county where alcohol sales have been permitted lately, where I won’t be shopping:

  • AUSTIN’S KORNER (PINKIE’S INC., HWY 87)
  • AUSTIN’S KWIK KORNER (PINKIE’S INC., HWY 87)
  • CROSSED KEYS (MAJESTIC LIQUOR STORES INC., HWY 87)
  • CROSSED KEYS BEER & WINE (MAJESTIC LIQUOR STORES INC., HWY 87)
  • DOC’S BEER AND WINE STORE (MAJESTIC LIQUOR STORES INC., HWY 87)
  • DOC’S BEER AND WINE STORE #2 (MAJESTIC LIQUOR STORES INC., HWY 62 AND 82 EAST)
  • DOC’S LIQUOR STORE (MAJESTIC LIQUOR STORES INC., HWY 87)
  • DOUBLE T DISCOUNT (MAJESTIC LIQUOR STORES INC., FM 1585)
  • DOUBLE T DISCOUNT #2 (MAJESTIC LIQUOR STORES INC., CRD 7200 EAST)
  • DOUBLE T DISCOUNT #2 BEER STORE (MAJESTIC LIQUOR STORES INC., CRD 7200 EAST)
  • DOUBLE T DISCOUNT BEER & WINE (MAJESTIC LIQUOR STORES INC., FM 1585)
  • MINI-MART #1 (PINKIE’S INC., FM 1729)
  • MINI-MART #2 (PINKIE’S INC., HWY 87)
  • PINKIE’S CANYON STORE (PINKIE’S INC., FM 1729)
  • PINKIE’S LAKE STORE (PINKIE’S INC., FM 835 EAST)
  • PINKIE’S SLATON STORE (PINKIE’S INC., FM 835 EAST)
  • PINKIE’S TAHOKA STORE (PINKIE’S INC., HWY 87)
  • RAIDERLAND DISCOUNT WAREHOUSE (PINKIE’S INC., CRD 7200 EAST)
  • THE CELLAR (MAJESTIC LIQUOR STORES INC., HWY 87)
  • THE CELLAR BEER BARN (MAJESTIC LIQUOR STORES INC., HWY 87)

*“Bootleggers and Baptists” is a nickname for a theory explaining certain “strange bedfellow” coalitions in support of social regulation, first articulated under that name by Bruce Yandle. As Yandle explains, “The theory’s name draws on colorful tales of states’ efforts to regulate alcoholic beverages by banning Sunday sales at legal outlets. Baptists fervently endorsed such actions on moral grounds. Bootleggers tolerated the actions gleefully because their effect was to limit competition.”

To be clear, in the above by “Baptists” I don’t mean to assert that only, or even predominantly, Baptist churches were involved in the political campaign, and by “bootleggers” I don’t intend to suggest that either of the two companies are involved in any illegal alcohol sales.

The list of stores is derived from information available at the Texas Alcoholic Beverage Commission website, here.

OCTOBER UPDATE: Finally, in late September 2009, the state began issuing licenses to retailers in the city and so it is even easier for me not to shop at the two companies that dominate the Strip.

Posted in Economics, Food and wine, Politics | Tagged , , , | Comments Off

h1

Congressman to Western New York gasoline retailers: We will be watching you

May 18, 2009

Michael Giberson

From the Buffalo, New York, BusinessFirst:

In a letter sent May 13 by FTC Chairman Jon Leibowitz to Higgins, the agency said after a careful and extensive investigation, regulators could not find any evidence of illegal activity in gasoline markets in any of the affected cities. The agency monitored prices in Buffalo, Jamestown, Rochester and Burlington, Vt.

“To the contrary, staff found evidence suggesting that it is unlikely that illegal conduct caused those price levels, although staff was unable to identify precise reasons why retail gas prices in Western New York did not fall as quickly as prices in other Northeast cities,” Leibowitz wrote.

What the agency did note was that after Higgins released an Oil Price Information Service (OPIS) report on Dec. 4, 2008 citing Jamestown and the Buffalo-Niagara regions among the top 5 most “profitable” for gasoline retailers, the prices for unleaded gas decreased from an average of $2.25 to $1.85 by the end of 2009.

Does this last paragraph suggest that a servile and pandering attitude on the behalf of the FTC toward the congressman? I don’t find the FTC letter online at either the FTC’s website or that of the Congressman, so I’m just raising the question based on the news article.

The congressman’s press release suggests, surprise!, that he is quite willing to encourage the view that his actions had something to do with prices falling back in line with state averages:

“Western New York consumers were getting ripped off and we sounded the alarm, which caused WNY gas prices to fall in line with state averages, again proving that when we stand up for ourselves we can get things done,” Higgins added.  After Congressman Higgins publicly released an Oil Price Information Service (OPIS) report naming Jamestown & the Buffalo-Niagara regions among the top 5 most “Profitable” for gasoline retailers on December 4th, 2008, the prices of unleaded gas decreased from an average to $2.25 in Buffalo to $1.85 by the year’s end.

To the congressman, absence of evidence is no barrier to action:

“While we might not have proof of illegal activity or a clear definition of why our prices were so high, what is clear is retailers were acting in bad faith trough some type of implicit collusion and retailers and consumers should know that we were watching then and are watching now and will continue to work to make sure this doesn’t happen again,” said Higgins.

A quick trip to the price charts at www.buffalogasprices.com tells some of the story (start here at the default Buffalo price chart for one month, then add two more upstate New York cities to the chart – Rochester, Albany, or Syracuse are options – and expand to at least 18 months).  Up until the 2008 mid-July gasoline price peak, retail prices in Buffalo tracked prices elsewhere in upstate New York pretty closely. When prices started falling, they fell more slowly in Buffalo than in the rest of the state.  By the time retail prices hit bottom at the end of the year, prices in Buffalo were back in line with prices elsewhere in New York, and since the beginning of the year prices in Buffalo have moved in line with other gasoline prices in the state.

So, yes, prices did fall more slowly in Buffalo. Presumably, a good economic study could uncover likely causes. Those causes may not turn out to be politically useful to local politicians. In any case, of the congressman’s agenda intended to “prevent price disparity in [the Western New York] region” — raise public awareness, push for passage of a federal price gouging bill, push for passage of a bill to prevent excess speculation in the oil market, and invest in renewable energy — only the first is likely to have any real impact on local “price disparity.”

Posted in Energy markets, Politics | Tagged , , , | Comments Off

h1

Price Fishback on the Great Depression and today

May 18, 2009

Lynne Kiesling

Price Fishback is one of the best economic historians of the U.S. in the early 20th century, and he’s written a three-part series of posts on the current comparisons to the Great Depression at Freakonomics.

Part 1, How Does the Current Crisis Compare to the Great Depression?, puts our current unemployment and GDP growth patterns and rates in the context of the much-higher and long-lived unemployment (nine years!) and negative GDP growth of the 1930s.

Part 2, The Financial Meltdown Now and Then, offers a crystal-clear description of the causes of our recent financial crisis and compares it to what happened in 1929-1933. Price’s analysis of the current financial crisis is seriously one of the best and clearest ones I’ve seen, and I strongly recommend it to you.

Part 3, Let’s Avoid Other New Deal Policy Blunders, discusses the current federal policy responses relative to the anti-trade and New Deal policies of the 1930s. His conclusion:

We all want to know whether all of the government action will work to save us from a major downturn. There are questions about whether the spending and tax cuts in the stimulus package will happen soon enough to offset the recession. A significant part of the spending will not begin until 2010 and 2011 when most economists believe we will be into the next recovery. With unemployment rates only between 8 percent and 9 percent, we might expect the deficit and government hiring to make it more difficult for private firms to obtain investment funds and hire workers. Some recent studies of the New Deal relief programs suggest that additional work-relief jobs were associated with partial reductions in private employment. Meanwhile, the Federal Reserve has flooded the banking system with so much liquidity that we may be facing worries about inflation in the near future. The population can rest assured, however, that we have a very long downward path to follow before we get anywhere near the pain associated with the Great Depression.

A slam-dunk must read.

Posted in Economic history, Economics | Tagged , , | Comments Off

h1

2009 Energy Efficiency Indicator survey

May 18, 2009

Lynne Kiesling

Johnson Controls and the International Facilities Management Association have released their third annual Energy Efficiency Indicator survey. As summarized in this GreenBiz article,

  • More than 70 percent of respondents are paying more attention to energy efficiency now than they were in 2008.
  • Eighty-five percent of executives believe significant legislation mandating energy efficiency and/or carbon reduction is likely within two years.
  • Forty-five percent of business leaders say improving energy efficiency in their buildings is their top strategy to meet carbon reduction commitments.

Many materials related to the survey are available in the news section of the Johnson Controls web site. I particularly found the details in the presentation notes interesting, and I encourage you to look through the notes. One of the sets of details provided is the energy efficiency retrofit activities going on with the Empire State Building.

Johnson Controls also has an Energy Efficiency Now web site with more information and links.

Jeff St. John at GreenLight (a Greentech Media blog) also has a good article that discusses the various companies that have different interests in the business of energy efficiency, in the context of the results of this survey:

Johnson Controls has a dog in this fight. It and companies like Honeywell, Siemens, Echelon Corp. and, most recently, Cisco Systems, are making a big push to increase their presence in the building automation market, with an eye on energy efficiency primarily for commercial buildings (see Cisco Jumps Into Energy Management for Computers, Buildings and Echelon Beefs up LonWorks).

Then there are the demand response aggregators like EnerNoc, Comverge and CPower, which link utilities and their customers in programs to turn down power use during times of peak demand. That’s one way utilities are giving incentives for reduced energy use, if only during the scarce few hours of the year when they find themselves reaching the limit of their power generation capacity.

Note, however, that all of this discussion of energy efficiency fails to engage the transactive capability of building management systems. Building management systems can automate building controls response to a variety of signals, including price signals arising from dynamic pricing instead of from administrative demand response programs that have been the bread and butter for companies like EnerNoc and Comverge for the past five years.

Energy efficiency, dynamic pricing, and the transactive capabilities of building management systems and smart grid networks are complements; they go hand in hand to create value for all parties, both economic and environmental.

Posted in Economics, Electricity, Technology | Tagged , , | Comments Off

Follow

Get every new post delivered to your Inbox.

Join 50 other followers