But the independents are really getting hit. Take Eranell Miller. He has owned a filling station and repair shop in Baldwin, Pa., just outside Pittsburgh, for 31 years. But lately, he has been losing money on every gallon of gas he sells. Some weeks, he can't come up with enough cash to fill his tanks and has run out of fuel. "If it gets worse I'll close my pumps down and just rely on my garage," Miller says. "I don't want to go bankrupt."

Here's why small independent filling stations like Miller's are hurting. He buys his gasoline for $4.04 a gallon from a local distributor and charges $4.09 a gallon. Since credit-card companies charge fees that are a percentage of the dollar transaction value, higher prices at the pump just mean Miller pays more for the service but without anything padding his margins.

Miller says the credit-card fees now add up to an average of about 5¢ a gallon at his store. That means, including shipping costs and overhead, he loses money selling gasoline. If not for his three-bay repair garage, he'd be out of business.

People just have no perspective, no understanding that people in the oil and gasoline industries are trying to make a living too, whether running gas stations, manning pipelines or working on oil rigs. Nobody felt sorry a decade ago when oil was a tenth of today's price, but the minute you make a buck, the implication is that you "stole" from the public.

Some years ago, the Maverick gas station chain in Utah tried the reverse, offering a discounts of a few cents if you paid cash. Sure enough, the local government forced them to stop, because that was "anti-competitive."

The Justice Department strikes again:

A Cincinnati packaged-ice manufacturer pleaded guilty to allocating packaged-ice customers and territories, the Department of Justice announced today.

The Home City Ice Company (Home City Ice), pleaded guilty to a one-count information charging the company with conspiracy, filed under seal on Nov. 5, 2007, and unsealed today in the U.S. District Court in Cincinnati. Under the terms of the plea agreement, which is subject to court approval, Home City Ice has agreed to cooperate in the ongoing investigation. According to the charge, Home City Ice participated in a conspiracy to suppress and eliminate competition by allocating packaged-ice customers and territories in the Detroit metropolitan area and southeastern Michigan. The conspiracy began at least as early as Jan. 1, 2001, and continued until on or about July 17, 2007.

Um, you know there are other ways to get ice, such as, I dunno, filling plastic trays with water and putting them in a freezer.

Moving on to the substance of the DOJ’s complaint:

According to the charges, Home City Ice and co-conspirators carried out the conspiracy by:

* Participating in meetings and conversations to discuss packaged-ice customers and territories in southeastern Michigan and the Detroit metropolitan area;

The First Amendment to the Constitution: “Congress shall make no law . . . abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble”

* Agreeing during those meetings and conversations to allocate packaged-ice customers and territories in southeastern Michigan and the Detroit metropolitan area;

Once again, see my recipe for ice above.

* Exchanging information during those meetings and conversations, for the purpose of monitoring and enforcing adherence to the agreements to allocate customers and territories in southeastern Michigan and the Detroit metropolitan area; and

See, again, the First Amendment, which protects the exchange of information, even with the subject is packaged ice.

* Refraining from competing for packaged-ice customers and territories that were so allocated.

So there’s some constitutional duty of a firm to compete even when it doesn’t want to? Am I restraining trade by refusing to sell packaged ice to folks in Michigan?

And here’s the kicker:

Today’s case is the first to arise from an ongoing investigation into the packaged-ice industry. The investigation is being conducted by the Antitrust Division’s Cleveland Field Office and by FBI offices in Ann Arbor, Mich.; Indianapolis; and Cincinnati and Toledo, Ohio.

The FBI? Really? Nothing better to do over there I suppose…

...financial disclosure forms released Monday, House Republican Conference Chairman Adam Putnam (R-Fla.) revealed that Countrywide holds the mortgage on his Washington town house. An aide said Putnam got the mortgage just like any other consumer would: “by calling the 1-800 number and working with the operator for an hour and a half.”

Conrad, by contrast, has acknowledged calling Countrywide CEO Angelo Mozilo when he needed a loan for a Delaware beach house in 2002. But both Conrad and Dodd have said they did not request — and did not know that they’d received — lower than usual rates on the mortgages they received from Countrywide.

Conrad spokesman Sean Neary said Monday the senator welcomes an ethics investigation because he did nothing wrong.

For Dodd, however, the situation is somewhat more complicated.

As chairman of the Senate Banking, Housing and Urban Affairs Committee, he’s the Democrats’ sometimes reluctant point man on the subprime mortgage and housing crises.

Dodd convened a summit on the emerging mortgage crisis in April 2007 but announced that he wasn’t “overly anxious to legislate. … We think there may be enough laws on the books.”

While his House counterpart, Rep. Barney Frank (D-Mass.), plunged ahead with ambitious legislative remedies, Dodd turned his attention toward his ultimately unsuccessful run for the Democratic presidential nomination. As a candidate, he further irked housing advocates by collecting millions of dollars in political contributions from subprime lenders, investors and the real estate sector.

Now Dodd is trying to negotiate a major housing bill while his own mortgage is under scrutiny. Senate Democratic leadership could decide that debating the bill — which faces a veto threat from the president — isn’t worth the additional attention it will bring to the Countrywide imbroglio, but Democratic aides say they still expect the bill to make it to the floor later this week.

Posted by Donald L. Luskin at 8:28 AM | link