WASHINGTON–If it all sounds bizarre, it nevertheless is happening up and down big business. Consider the following:
Gas and electric utilities who for a number of months were telling customers to conserve gas and electricity are now demanding higher rates because customers responded and reduced demand. These utilities have consumers coming and going because it wasn’t very long ago that the companies were asking for higher rates to be able to respond to increasing demand.
General Motors has led the industry in offering the air bag safety system as an option on 50,000 1974 cars, yet seems to want to keep it a secret by not promoting it. So Allstate insurance company places full page ads in newspapers promoting GM’s air bag! Allstate has been trying to get GM to feel less shocked about actually being first among the laggard auto companies on this safety feature.
The federal government is paying Ford and Volkswagen to develop a medium size advanced safety automobile. Ford which grosses $1.5 million an hour on the average 24 hours a day had no difficulty accepting its $595,000 share from Uncle Sam to do what it should have done on its own.
While several state insurance regulators have been pressing auto insurance companies to reduce their rates due to lower highway speeds and less driving arising out of the energy situation, the companies are actually pressing the Cost of Living Council for an increase in rates.
The oil industry which controls natural gas and hefty portions of coal and uranium resources insist on pushing prices of cheaper fuels up to meet the levels of its more expensive fuels. This is awesome market power indeed.
What these illustrations show is that both the market and government regulators are being snowed under by the unilateral power of giant business and their trade associations. Unless consumers spend more time fighting back instead of just groaning, the situation will worsen.
What can be done? Here are a few efforts that show the way:
Lawyers for the Oregon and Massachusetts student public interest groups are leading a national student drive to have states adopt their plan called “Lifeline Service” which would exempt small household users from future electric rate increases. The student goal is to change the present inverted rate structure where the biggest industrial and commercial users receive rates far lower than a small homeowner.
San Francisco Consumer Action, launched by Neil Gendel, a former California Assistant Attorney General, has published a “Shopper’s Guide to Banking Services” called “Break the Banks!” This booklet compares the price of loan, checking and savings services of banks in the San Francisco Bay area. Gendel says the guide is so designed that consumers in other cities can easily adapt it to local banks.
A leading insurance scholar, Professor Joseph Belth of Indiana University has started his own newsletter “The Insurance Forum” to tell consumers the truth about abuses and deceptions on a company by company basis. Belth, whose accurate charges against the insurance industry has jarred many a red-faced executive, will discuss such specific subjects as “What ITT Life is doing to college students?” or “What the Equitable of New York does to beneficiaries?” or “How to pay premiums for ‘a piece of the rock’ and have no insurance protection?”
Then there is the “Stone Soup”–one of many community food stores in Washington, D.C. and other cities springing up around the country that are organized around cooperative or non-profit principles. They’re buying wholesome food wholesale and by cutting overhead and merchandising frills are passing on the savings to neighborhood consumers.