Alcohol

Vetoing Liquor Privatization, Pennsylvania's Governor Says Competition Would Raise Prices

Tom Wolf claims a state monopoly benefits consumers.

|

Office of the Governor

Yesterday Pennsylvania Gov. Tom Wolf vetoed a bill that would have privatized the sale of wine and liquor while liberalizing the rules for selling beer in the Keystone State. Wolf counterintutively argues that replacing the state monopoly with private businesses would be bad for consumers. "During consideration of this legislation," he says, "it became abundantly clear that this plan would result in higher prices for consumers." He also worries that letting private businesses sell wine and liquor would result in "less selection for consumers."

According to the Pittsburgh Post-Gazette, Wolf and his fellow Democrats "warned that prices would rise as private businesses sought profit." In other words, private merchants will jack up prices because they want to make money—unlike the Pennsylvania Liquor Control Board (PLCB), which seeks only to raise revenue. If you think those two motives sound pretty similar, you are smarter than Pennsylvania's governor, who fails to recognize that the relevant difference between these two models for distributing booze, when it comes to how high prices can be raised, is the presence or absence of competition. Other things being equal, more competition leads to lower prices, so it is hard to see why Pennsylvanians would have to pay more for a bottle of whiskey if the state monopoly were replaced by profit-driven businesses competing against each other. 

If you compare the prices charged by the PLCB to the prices charged by, say, Total Wine & More across the border in New Jersey, you'll find that customers generally pay more for liquor in Pennsylvania: for example, just picking three products I often buy, $30 vs. $25 for Bulleit rye whiskey, $52 vs. $44 for 10-year-old Ardbeg Scotch, and $44 vs. $37 for Herradura reposado tequila (all in 750-milliliter bottles). Total Wine also has a bigger selection: 354 varieties of Scotch, for instance, compared to fewer than 100 at the PLCB. Is there any reason to think Total Wine could not offer similar prices and variety to Pennsylvanians?

The prediction of higher prices is not only inconsistent with basic economic principles and the experiences of the three dozen or so states that already have private liquor sales. It is also inconsistent with another major argument used by opponents of privatization, who say abolishing the state monopoly will lead to more drinking and more alcohol abuse. Last year, for instance, the union that represents the employees of Pennsylvania's state-run liquor stores warned that privatization would mean more deaths from drunk driving. Or as one union-sponsored TV spot put it, "it only takes a little bit of greed to kill a child." It is hard to reconcile Wolf's warning about higher prices with the union's prediction of higher consumption.

One point made by opponents of privatization is indisputably true: The current system is good for some people. The Post-Gazette notes that Democrats worry about "the state jobs provided by the liquor stores," while beer wholesalers, currently the only legal source of beer aside from bars and restaurants (including a few restaurants conveniently located in the middle of grocery stores), do not want to lose the legal privileges that line their pockets. Welcoming Wolf's veto, the Malt Beverage Distributors Association said the bill "would have eliminated most of our small, family-owned and operated businesses."

Such concerns are completely understandable but should carry no weight whatsoever. Any rigged market benefits certain interest groups at the expense of consumers and would-be competitors. For anyone outside those privileged groups, that should count as an argument against the system, not a reason to keep it.

The argument that monopolizing the liquor business brings in revenue that would otherwise have to be raised through taxes likewise proves too much, since it could be used to justify state ownership of any industry. As Senate President Pro Tempore Joe Scarnati (R-Jefferson) and Majority Leader Jake Corman (R-Centre) correctly observe, "Pennsylvania should not be in the business of selling liquor"—or any other consumer good. Imagine how much money could be raised if Pennsylvanians had to buy toilet paper from state-owned outlets.

Scarnati and Corman complain that "Gov. Wolf has rejected moving Pennsylvania into the 21st century when it comes to the sale of wine and spirits." That strikes me as excessively generous. The technology enabling private merchants to exchange booze for money is hardly a recent development. It has been around for thousands of years. It's the idea that governments should run this business that is relatively new, and its rationale had nothing to do with keeping prices low, contrary to what Wolf seems to think. Quite the opposite: The state liquor monopolies created after the repeal of Prohibition were designed to be bad for consumers, on the theory that making it harder and more expensive to get drunk would result in less drunkenness.

Through "modernization of our state liquor system," Wolf says, "we can support and bolster consumer convenience without selling an asset and risking higher prices and less selection for consumers. I am open to options for expanding the availability of wine and beer in more locations, including supermarkets. I have also put other compromises on the table, including variable pricing, direct shipment of wine and expanding state store hours." When Wolf talks about "modernizing" state stores to make them more customer-friendly, he is abandoning the goal of discouraging consumption, which was the main justification for putting the state in charge of liquor distribution to begin with. The more they strive to emulate private businesses, the more state liquor monopolies undermine their reason for existing.

NEXT: Movie Review: Magic Mike XXL

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  1. “it became abundantly clear that this plan would result in higher prices for consumers.”

    Unlike, taxes, fees and all the other liquor plans government approves.

    1. “it became abundantly clear that this plan would result in higher prices for consumers less control for the state.”

      Fixed that for him.

    2. “it became abundantly clear that this plan would result in higher prices for consumers.”

      And the more people in a race, the slower the runners go.

    3. In WA, prices went up after liquor sales were privatized. Due to massive tax increase which were supposed to be temporary, but the democrats would not part with the extra revenue. So now a $20 bottle of liquor cost $30.70 out the door.

  2. Wolf’s veto is simply a handout to the liquor store employee union.

    1. Yup. So not only is he stupid, he’s also corrupt. Hope to be moving out of Pennsylvania soon.

    2. THIS is likely closer to the truth.

    3. This is all about numbers: 4500 + 83 + 20 + 1 is greater than 12 million. That’s the LCB clerks, the House Ds, the Senate Ds, and the D Governor versus the people of Pennsylvania.

      It’s a union litmus test vote for D politicians. And PA Democrats are nothing if not union.

  3. Wolf also vetoed a budget. The usual suspects are protesting in favor of more spending.

    Although a Republican-led budget was vetoed by Gov. Tom Wolf Tuesday, a group of more than 60 parents and taxpayers who rallied together at the beginning of the week are holding their ground until a state budget is passed.

    The crowd is part of the Good Jobs and Healthy Communities coalition and has occupied the front steps of the state Capitol, calling for “fair education funding, an increase in the minimum wage, tax relief for working families and a common-sense severance tax on Marcellus Shale,” a coalition news release said.

    Among the occupiers is Bellefonte-resident Alicia Witherite, who said she was participating on behalf of her 2-year-old son Gavyn and the state’s need for additional education funding.

    Your kid is your problem, not the taxpayer’s.

    But some argued that adequate educational funding was already part of the vetoed budget. Rep. Kerry Benninghoff, R-Bellefonte, said that an additional $100 million in education funding was part of the proposal.

    “Despite what some people want others to believe,” he said, “that is more collective money put into education ever in the history of Pennsylvania.”

    That’s $100 million of other people’s money.

  4. “Fails to recognize” the difference between a company’s profits and raising revenue for the government? I really, really doubt that.

    I’d say that it is far more likely that he is saying something different than what his true motives are. How often is someone going to give up a significant source of power and wealth? The only way to get him to change his mind on this is going to be to convince him that the direct payoffs from the distributors and merchant’s lobbies will be more lucrative than the power he can wield with the additional revenues.

    And even that is a tough sell, because that requires embracing change. Which means embracing risk.

    No, sticking with the status quo is the safe choice. It doesn’t require risk. And it preserves a significant revenue source.

    The only real challenge is figuring out how to sell that to the public as a bold and brave move to protect the public from evil special interests.

    1. He ran as a successful business man type candidate. Someone who understands how the economy works and what businesses need to be successful and grow the state’s economy. It’s pretty unbelievable that people believed that bullshit when he started spouting out policy proposals that amount to basically not being able to find a tax increase he didn’t like.

  5. Wow.

    What an ignorant clown.

    1. you do know that the GOP plan would replace the lost tax revenue with a massive licensing fee that would make alcohol more expensive than it currently is, right???

      1. Yeah, both plans are scams. Neither wants to lose that sweet-sweet booze money.

      2. WA jacked liquor taxes up when sales went private too.

      3. Assume that is true. You would still get better selection and service.

    2. you do know that the GOP plan would replace the lost tax revenue with a massive licensing fee that would make alcohol more expensive than it currently is, right???

      1. My plan would replace trolls and sqrls with something that would add more value to the conversation.

        1. I wonder how much money could be raised harvesting the organs of progressives for private sale? A clean sweep of a healthy college students torso might be able to bring, what? Maybe half a million dollars? It would also help reduce he cost of higher education. A win-win solution the whole way around.

      2. I read the bill. Besides one-time costs, the fee is 5% of their gross. That’s 5% too high, but it’s less than all three of the price differences Sullum listed.

        1. its revenue neutral, and the costs will be borne by those providing alcohol.

          1. “its revenue neutral, and the costs will be borne by those providing alcohol.”

            Yeah, no chance those costs won’t be passed on to consumers…

  6. Wolf is a politician, not an economic idiot. In other words, it seems unlikely that he actually believes this bullshit economic reasoning: he is just lying. The guy has a PhD from MIT and has a business background after all.

    The Commonwealth of Pennsylvania can survive a demagogue like Wolf. It cannot survive an electorate that falls for slogans like “it only takes a little bit of greed to kill a child” and “[competition] would result in higher prices for consumers.”

    1. Wolf counterintutively argues that replacing the state monopoly with private businesses would be bad for consumers.

      The people that voted for this guy don’t think it’s “counterintuitive” at all. It makes perfect sense to them.

      1. And that is the problem.

        American state education (“public education”) and mainstream media have been so effective in their primary mission (indoctrination and submission) that nearly a majority of adults actually believe such nonsense.

        1. The problem with Democrats and Republicans is that one believes 2+2=5 while the other is convinced 2+2=3. The problem with voters is that they are certain one of these is correct.

          1. Or that one believe 2+2= racist and the other 2+2=polygamy

            1. *clutches Bible*

              *clutches Rules For Radicals*

              HOW DARE YOU!

              1. You realize you’re holding the same book in both hands, right?

                1. Nonsense, silly man. They’re very, very different. You know what your problem is? A lack of faith. Pray with me now, for your immortal soul, before the global warming gets you.

      2. We don’t need 20 kinds of deodorant either, right?

    2. The guy has a PhD from MIT
      A PhD requires more commitment than intelligence. I know plenty who are smart, and I know plenty who are not. People need to stop believing that we’re something special.

    3. The de I rats have clearly accomplished their goals with the education system over the last 40 years of the teachers unions control, and social experiments. We now have an ignorant, vapid electorate that re-elects subhuman Marxist dogshit like Traitot Obama.

  7. Bulleit Rye is quite tasty, as is their bourbon.

    1. +1 Manhattan made with Bulleit

      That brand is a great middle ground between cheap and delicious.

      1. Not in PA- I have to use other brands for my mixed drinks–

  8. Wolf never really hid the fact during the campaign that he had no intention of making living or working in the Keystone State less expensive for voters. And yet Pennsylvanians voted him in anyway.

    I’m guessing Wolf will be tossed after one term and leave the place much worse off than when he started, which is quite a feat. If I didn’t live here I would be laughing at the fast downhill ride PA is taking.

    1. My wedding was in PA. I went with my wife to buy the liquor.

      We had to go to several different places, 3 IIRC, to get everything ew wanted. One private wine store, one grocery store, and a state liquor store. I was most surprised that the liquor store would allow us to return any unopened bottles so we bought much more than we though we needed as to make sure we didn’t run out. I was shocked that bars could sell beer to go which is a terrible sin in Texas.

      We didn’t run out but nothing was returned.

      1. Yeah, it’s bizarre what’s legal from state to state. The drive thru daiquiri bars in Louisiana blew my mind the first time I actually saw one. And being from California, I’ve just gotten used to not being able to buy booze after 2 a.m. (at least not legally).

  9. In other words, private merchants will jack up prices because they want to make money?unlike the Pennsylvania Liquor Control Board (PLCB), which seeks only to raise revenue.

    This sounds as retarded as it is to libertarians. Which leads many to assume that it is bullshit posturing to conceal the real motivation.

    However, it is a distillation of modern progressive socialists thinking.

    Government good.
    Business bad.
    Profits are evil.

    Admitting that private distribution is superior to government distribution, even of alcoholic beverages, Threatens their world view and self conception.
    Worse, when it works people will get crazy ideas about moving other things from government to the private sector.

  10. “It’s the idea that governments should run this business that is relatively new”

    Oh, come now. It is the idea that governments should NOT be run as profit centers for the people who rule them that is new and revolutionary. Government run businesses are as old as government. Historically they have been uncompetitive, corrupt, predatory, and have provided horrible service. But they ain’t NEW.

    This is something that I have come to realize just recently, BTW; that the Statist impulse is not a Shiny New idea from the 20th Century – or even an only slightly new idea from the 19th. It’s the aristocratic impulse dressed in fancy modern costume. It’s the OLD thing. The new idea, the revolutionary idea, the idea that the Liberal Intellectuals are fighting with every fibre of their being, is the notion that the Citizen should be sovereign and the government should be a service to him and nothing more.

    1. The new idea, the revolutionary idea, the idea that the Liberal Intellectuals are fighting with every fibre of their being, is the notion that the Citizen should be sovereign and the government should be a service to him and nothing more.

      No criticism against you, but the fact that you, a commenter on a libertarian magazine came to “realize just recently” is a very troubling sign for our nation.

      It’s the essential idea the nation was founded on. A new idea. An idea that made it exceptional. That it took us less than 250 years to start yearning for masters again, it makes one want to weep.

      As the Bible says, there is nothing new under the son. When God first set up the nation of Israel, he gave them judges instead of kings — the difference was essential, as it recognized the sovereignty of the individual. But the people of Israel were soon not happy with judges, they wanted a king. So, reluctantly, God gave them one, saying more or less, “OK, you fools, you get what you asked for.”

      Even if you’re an atheist, the sociological lessons you can learn from the Bible are amazing. It’s a needed slap in the face anytime people start thinking that they’re so modern and enlightened than primitive men of thousands of years ago, to be informed that they’re still making exactly the same mistakes those men made.

      1. “…under the sun,” darn it.

        1. Well, you were quoting the bible… “under the Son”

          1. That is how I originally took it – seeing the reference to the Bible – very witty. Cloudbuster you should not have corrected yourself.

      2. Oh, I was raised to the idea that, Representative democracy joined to limited service government was the true revolution. But I bought into the notion, agressively peddled by the Liberal Intellectual Radical Progressives, that Socialism was A New Thing. I always thought it was a STUPID New Thing, but I bought into the newness.

        It isn’t new. It’s just what Kipling called The Old King, in new(ish) clothing. It’s the aristocratic impulse thinly disguised, because the last few tries at an open aristocracy ended badly.

        1. BTW; the Kiplimg poem is called THE OLD ISSUE. It refers to The Old King in the text.

      3. That it took us less than 250 years to start yearning for masters again,

        I would say that the yearning for masters finally put the revolutionary idea in its grave sometime in the ’30s, so call it 150 years.

        1. The early 1900s were an era of progressive ferment. All of the crappy ideas that enslaved us began then and came to fruition in th 19teens. The 20s were a partial, but incomplete snapback.

          1. It’s because progressives are allowed to live and participate in our society. Which is bad.

    2. If monopolizing liquor sales worked for czarist Russia, it will work for PA.

  11. OT: Let her rip. How to celebrate a wedding.
    http://www.downvids.net/how-ar…..70702.html

    1. Trigger warning, literally: Turn your volume down before clicking.

    2. I hope for their sake they had earplugs.

  12. Gah. How can anyone plausible deny that Democrats are utter economic illiterates?

    We’re supposed to be obliged to ignore blatantly idiotic crap like this and pretend that suddenly when it comes to the minimum wage and Keynesianism that they are the experts.

    If their lower tier governors and legislators can’t even understand rudimentary economic principles, why the fuck should we believe for a second that their congressmen and senators and their President understand macroeconomics?

    1. Gell-Mann’s amnesia theory writ large…

    2. If their lower tier governors and legislators can’t even understand rudimentary economic principles

      Of course they understand the principles. You have to realize, they are evil, not stupid.

      1. Soulless, unclean things as well.

  13. Just bear in mind while you read the article that PA a year ago (and the 3 years prior) had a Republican governor and a legislature with both houses controlled by the Republican party. These types of bills came up several times during that period (with all branches claiming to support privatization), and stalled every time (mostly due to the hoses of the legislature bickering between one another about language). The idea that this is the Democrat’s fault is understandable, but upon inspection fairly stupid. The Republicans never really wanted privatization, and only appeared to get their act together when they had a governor who was guaranteed to veto.

    1. Partially true. Privatization had problems within the House Republican caucus for a while because of its religious conservatives and some union Rs from the southeast. But finally that came together last session and the House passed a bill.

      This time it was the Senate that stopped it Their leader and Liquor Committee chair were from the suburbs of Philly and needed union votes for election purposes. So they refused to move it and opted instead for “modernization.” So we failed. It was a mistake not doing it while we had a R governor.

    2. True- the Republicans have never rushed to change it- mostly talk- but if they had a good two terms they might have got it done. Note that Corbet only had 4 years- mostly during the recession and Democrats have had the Gov’s office for 8 years before. The legislature was balanced and Dems will never let it pass.

  14. The evil profit motive is also used against marijuana legalization:

    If a profit-maximizing firm wants to make serious money in the marijuana market, they will have to focus on creating and maintaining a large stock of heavy users. There are also concerns that a for-profit industry and its lobbyists will fight against regulation and taxation.

    Thus, serious thought should be given to whether marijuana should be supplied by profit-maximizing firms. Besides home production and cooperatives, other options include limiting the market to nonprofit organizations or “for-benefit corporations,” which typically focus on the triple-bottom line of people, planet and profits.

    http://www.newsweek.com/so-you…..eed-347462

    Now how could you be against a triple bottom line?

    1. You mean, somebody still reads Newsweek?

      1. Both Newsweek readers were offended by your comment.

    2. If a profit-maximizing firm wants to make serious money in the marijuana market, they will have to focus on creating and maintaining a large stock of heavy users. There are also concerns that a for-profit industry and its lobbyists will fight against regulation and taxation.

      So I guess MackDonald’s, Carl’s Junior, et al have to focus on creating and maintaining a large stock of heavy gluttons to maximize profits. We’ll just have to replace them with firms that focus on people, planet and profits. That way, when you have to pay $20 for your quinoa patty sandwich with one slice of wilted kale on top, you’ll know it was because the restaurant cared about your health, the environment, and making sure it’s workers earned a living wage…

      1. “your quinoa patty sandwich”

        I did not claw my way to the top of the food chain to eat VEGETABLES

        1. That’s because you’re a planet-hating, patriarchal, rayciss wrecker…

          1. Vegetables are what food eats.

            1. Some fruits and vegetables are also good for making beer, wine, and whiskey.

              1. No vegetable should ever be used for making beer or whiskey.

                No fruit should ever be used for making whiskey.

                That is all.

                1. To be clear, you count corn as a grain and not a vegetable I assume? Because I will never give up bourbon whiskey although I may agree with your larger point.

                  1. Sorry, the only grain which should EVER be used to make whisky (notice the spelling) is barley.

    3. This person has apparently never actually dealt with or worked for an actual nonprofit organization. It’s a great idea if you want a completely inefficient market for marijuana consumers.

    4. Legalization opened a blossoming world of newly developed strains, improvements, specializations. Weed is now stronger, cheaper, tastier with fewer of the unpleasant side effects marijuana used to be known for. Are you looking for a low-level high with predominant effects being the urge to eat? Maybe you’re suffering from PTSD and just want something to nip the emotional spiral in the bud and help you get the anxiety and heightened startle reflex under control. Or maybe you just wanna get massively loaded and spend six hours in the bathroom talking to a complete stranger about how to solve the world’s problems.

      Fucksticks are going to have us right back to smoking shitty Mexican ditchweed, paranoid that people can see us taking a shit in the bathroom. Only with a 50% tax this time. Jackasses.

  15. You know if there was some enterprising muck raker in PA, they could read this story in our local rag here in Minnesoda and maybe confront this asshole with some real world facts?

    http://www.startribune.com/tot…..310351791/

    When Total Wine announced it was entering the Twin Cities, Trone said that Minnesota liquor stores’ profit margin was around 50 percent, well above the 25 to 35 percent range in other states.

    Pretty entertaining read. It is amazing how one major chain is eating the lunch of the municipal liquor stores here.

    1. Of course, those evil private sector bastards had to cross the line of basic civility:

      When the national retailer Total Wine & More opened a store in Burnsville last September, Brenda Visnovec expected the three city-owned liquor stores she oversees in nearby Lakeville to feel some competitive pressure.

      She didn’t expect them to get called out in ads in the suburban newspaper.

      “Hey Lakeville! Save at the Burnsville Total Wine & More!” beckoned a headline in a December ad that showed how the prices of 18 products were lower at Total Wine than Lakeville Liquor. “In the past, ads didn’t intentionally target someone,” Visnovec said.

      1. Awww,,diddums!

        1. You be nice to her! She is doing the Lord’s State’s work!

          Reserved and soft-spoken, Visnovec, 53, said her resolve stems from a strong belief in the benefits her town receives from liquor sales. “I’m not in business to be the cheapest. This is a service to the community,” she said.

          “Brenda is extremely dedicated to Lakeville,” said Allyn Kuennen, assistant city administrator and Visnovec’s boss. “She’s worked here for 32 years, spends 60 to 70 hours on the job in a typical week, and goes above and beyond any expectations anyone has in the liquor business.”

          1. “Brenda is extremely dedicated to Lakeville,”

            Fine, then let her dedicate her life to charity.

            “”I’m not in business to be the cheapest. This is a service to the community,”

            Then get OUT of the business of selling, and accept donations.

            Miserable statist twunt.

            1. I would like to know what salary this “self-sacrificing” individual makes, especially how it compares to the salary of an individual in a comparable job in private industry.

      2. OMG, target someone??? Those adds were targeting children. We know this because children live in Lakeville,

        1. Yep, I was one of those children once. God am I glad I got out of Minnesota.

    2. So let me understand. In PA having government owned liquor stores is needed because only that will keep prices lower rather than having for-profit businesses own liquor stores, thus benefiting society. But in MN having higher prices at government liquor owned stores, rather than those at for profit stores, is warranted because the higher prices they charge benefit society. Wow, I never realized the magical power of state borders and how simply crossing them can result in an opposite economic reality. So, does Pi change depending on which state one is in?

  16. Well, Tony assures us that up = down, so why are we surprised?

  17. Your article failed to mention that the GOP would replace the lost revenue from privatization with a large liquor tax.

    the new large liquor tax would, in fact, make private stores more expensive than the public stores.

    so the governor is correct.

    you could always raise property taxes or income taxes or cut programs or something. but “all things being equal”, he’s correct.

    1. But “all things [are not] equal”. Sales would go up with greater choice and easier access. This is what the prohibitionists don’t want, of course. They’d rather wine, beer and spirits be so difficult to get and pay for that only the most dedicated drunk would run the gauntlet of government un-service. To hell with the person who just wants to pick up some margarita fixings when a friend drives into town at the last minute.

      1. sales would have to go up an unfathomable amount to make up for the added margin for gross profit, sales & advertising, redundant distribution networks, etc.

        oh, and loss of monopsony buying power by the state.

        this is market fetishism, plain and simple.

        1. Yep, private concerns never have an incentive to streamline and efficientize operations to maximize profit. Bit then, oh noez, the workers might not be government union employees that make a living wage and have the right to demand July THIRD be a holiday just because the fourth is on a Saturday…

          1. State run liquor stores also have an incentive to streamline as all profits are handed over to the state every year. the state desires to maximize tax receipts.

            1. Nick the only way State run liquor stores make a profit is when the state does not have a sales tax, and the surrounding states do. With great misfortune the consumer also gets less choices. Look up the N.H. model.

            2. So, a business owner who must make a profit in order to feed her family is has no more incentive than a mid-level government bureaucrat to increase gains and decrease losses?

              You’re telling me that a government bureaucrat lists to the profit motive? Doublespeak!

              1. yes! their budget has oversight from the agency extracting the profits from the state run stores!

                1. You missed my comparison/contrast of the two profit motivations. One has personal incentives and the other merely meets agency goals (and can rarely be fired for missing them)

                  The other thing you missed is my irony regarding the profit motive used in a socialist argument for government intervention and control of an industry. Progressives/Socialists regularly blast the profit motive as somehow immoral, but here you use it to convince others that government incentives are good. Socialist government programs are supposed to have the Common Good as their incentive rather than that dirty old Profit Motive. Still here you are arguing that profit motive is good when used by government but–evidently–bad when used by private enterprise.

                  1. you can’t get blood out of a turnip. there are efficiency gains to be had, and management sciences are applied every day by non-profits and the public sector.

                    The Post office is cheaper than UPS and I don’t think the CEO of UPS’ massive salary has any real influence.

                    1. The USPS gets $18B a year in subsidies. They should be cheaper than UPS.

                      The USPS also has a monopoly on first-class mail (although this is becoming increasingly moot as more “mail” goes electronic). Furthermore, they charge differently so “cheaper” is a matter for comparison.

                      For example, USPS charges for girth and weight while UPS and FedX charge for weight only. Therefore, a large but light package will cost much less on UPS and FedX than on USPS.

                      You might want to study up on these if you do much packaging.

                    2. I wouldn’t send anything important through USPS, ever. Their tracking is shit, and they have almost no accountability. I would rather deal with one of the private shippers. Even if it’s more expensive.

            3. Nick you funny, you stupid little man.

        2. …redundant distribution networks…

          Speaking of fetishisms, this is a planned economy fetish.

          In a free market distribution becomes increasingly efficient–no matter any so-called redundancy. One of the great economic gains since the end of the 1980’s is with supply chain efficiency. I would be willing to bet a bottle of 12-year scotch that the PA government does not exploit these efficiencies adequately. So keep you planned economy and its single distribution network. How ridiculous.

          1. you say this as a matter of faith when its not really true. high sales and advertising costs from market fragmentation are a reality, are (again!) competing supply infrastructures.

            This is a constant problem on the Right. For instance, if you plug in the same variables for fuel, labor costs, capital equipment, and security, airfares set under the old CAB formula would be roughly the same as today. maybe a little more, maybe a little less — fuel costs are a huge variable.

            but instead, we get deregulation trumpeted as a momentous victory for freeeedom.

            you get to pick between a wide variety of really shitty airlines.

            1. Did airfare go down or up, since deregulation? Did the number of passenger miles go up or down, in that same time period.

              You can list your leftist talking points all day, but the rubber meets the road at consumer cost and service. We’ve had several old, and lazy behemoth airlines go bankrupt and some (mainly Southwest) young and nimble carriers grow substantially. Again your talking points ignore reality.

              1. the right takes cognitive shortcuts, studies show.

                This is a good example. I posted how that if you control for inputs, airline deregulation didn’t reduce airline prices.

                And you respond “Prices still went down!”

                  1. He won’t believe it, because it’s from the Atlantic, that bedrock conservative rag.

                    1. Worst quote in the article, by far:

                      “Why did deregulation create such dramatically falling prices? “Flying is neither a life necessity like tuition, milk, or medicine, nor is it addictive, like alcohol or drugs,” said John Heimlich, vice president and chief economist at Airlines for America. “When you have intense competition for a product that is price sensitive, you have falling prices.””

                      Now there’s an idiot. Suddenly tuition and milk are life necessities. And apparently price sensitivity doesn’t apply in any of the categories he listed. But hey, he’s an economist, so I suppose we should all just genuflect at his brilliance rather than point out the stupidity of his statement.

                    2. Yes, and as frustrating as air travel is these days, few people would choose to fly for fun. I suspect many air travelers, on a typical business day, are there because they feel it a necessity.

            2. If that’s the case, why not nationalize EVERYTHING instead of leaving anything to the vagaries of the market? What’s so special about alcohol over a certain proof, or weed, or healthcare?

              1. … why not nationalize EVERYTHING…

                I think that’s their ultimate goal. Giving in on this one be going backward–not Progress?.

                Good point, nonetheless.

                1. nobody wants to nationalize everything

                  1. But wht the fuck not, if it’s more efficient?

                  2. Not all at once, eh comrade?

              2. I know libertarians don’t give a shit, but econometric studies put sin taxes on alcohol at a really really high level to be the most economically efficient. That’s not “Freedom” or whatever, but its the most efficient approach.

                and no, you shouldn’t nationalize everything. Some things should be regulated, some should be nationalized, most should be free and open. consumer goods with no negative externalities don’t need to be regulated. capital-intensive industries that tend towards states of monopolistic competition should be more regulated.

                industries with massive negative externalities — coal industry is a great example — should be heavily regulated.

                1. forgot link to econometric study, in case anyone cares.

                  http://tigger.uic.edu/~fjc/Pre…..cy_XI1.ppt

                2. You’re right. Libertarians don’t give a shit if “econometric studies” (whatever that is) decide that high sin taxes are economically efficient. I read the powerpoint to which you linked. A powerpoint is not a study, by the way. The author of the powerpoint leads off with sin taxes are good because they decrease the rate of drinking and driving, domestic violence, and so forth, all of which are highly dubious propositions if you look at the actual studies cited and their methods. Then he goes on to talk about what the optimal rate of sin tax might be.

                  There’s no discussion of what makes these things economically efficient, or what that even is supposed to mean. What is economic efficiency? Is it a desirable goal and why? All questions left unanswered. So no, your case as presented does not make a persuasive argument. At all.

                  Moving on, who gets to decide what is regulated, nationalized, or free and open? You? Some panel of experts? I’m confused as to where you find consumer goods with no negative externalities. All goods generate something negative, at least in someone’s view, even if it’s noise pollution, degradation of the culture, or some other nonsense. “Monopolistic competition” is a contradiction in terms, by the way.

                3. Werent you just arguing that privatizing would result in sin taxes hurting the poor?

                  1. Progressives always fuck the poor. But then, most of them are elitist a and hipsters.

            3. “you get to pick between a wide variety of really shitty airlines.”

              Before the fall of the Soviet Union, Aeroflot was a monopoly carrier in that country.

              It was also the most dangerous airline in the world.

              As for North America, in the 1970s (pre-deregulation) it cost $300 (=$1300 in 2015) to fly Vancouver to Edmonton in 1970s dollars. The seats were wider and there were no baggage fees. We got a ‘free’ meal, but it was pretty unappetizing.

              It now costs $540 (in 2015 dollars) but 50 percent of the price is new taxes and fees. Flights are more frequent, though the seats are narrower and there is no free food or baggage.

              I could upgrade to business class and pay about $900, but that is still cheaper than the inflation adjusted fare from 1975.

              Oh, BTW, the rate of fatal air crashes has gone way, way, way down since deregulation.

              1. (pre-deregulation)

                That’s almost humorous if it wasn’t so tragic.

                Aviation is one of the most regulated industries in the world. Which is precisely why there hasn’t been a fresh idea in the industry in 50 years.

                “Deregulation” such as it was, brought the price down, imagine where we’d be if the government wasn’t mandating how to build and effectively utilize aircraft?

                1. Yeah, I realize that such deregulation as occurred was pretty minimal.

                  For the little we got, (and Canada got much less of it than the US), it still had an overall beneficial effect.

                  Flying is a means to get from point A to point B. If you want luxury, take a cruise.

                  However, I will still point out that none of the ‘catastrophes’ forecast have come to pass (airlines price gouging, decrease in safety, less frequent flights). The only catastrophes – if you want to call them that – have been that bloated airlines have died and the various unions have lost a lot of their power to hold passengers hostage.

              2. None of that matters to Comrade Nick, because some Krugman disciple put up a PowerPoint about how regulated monopolies are better. So the science is settled. Case closed.

                His smug ass won’t hear another word after that.

    2. No. The taxes woudl have remained the same. the only loss from privatization is $80 million in “profit” the LCB gives to the state annually.

  18. Wow. It must be very disappointing for the people of Pennsylvania to learn that their governor is functionally retarded.

    1. but his statement is true! the bill would replace the $500m state funding lost from privatization with a $500m licensing fee. and then you add in profit margins.

      so who’s “retarded”, again?

      1. The people who don’t say “Fuck you cut spending?”

      2. Even so, private, and free, companies would reduce costs to consumers by taking out waste and redundancy. Sales would go up and PA would enjoy increased sales tax revenues.

        1. That’s a statement of faith.

          1. You have an awful lot of faith in your personal Lord and Saviour, Gov…

            1. Have Faith in the Market, and Ye Shall Receive!

              1. Yeah, I’d say history bears that out

              2. The Market is just people doing what people do, Nick. A Free Market is free people doing what people do.

                Socialists hate a free market because they think it’s messy and chaotic. But, like chaos theory tells us, there is nearly always (maybe always) a pattern to what looks chaotic up close, when one gets far enough out to see it. There are many patterns to markets and they are “planned” at the individual level. Socialists are just ignorant about markets and assume that their lack of understanding is evidence of chaos, and seek to take hold of something they don’t understand and somehow make it better by benefit of their inherent ignorance.

                1. Yea the idea that a fuck stick like Nick could turn some knobs to control a giant coupled non-linear system is amusing.

      3. No, the current taxes would stay. Again, the only loss is the $80 million “profit” transfer to the general fund. Which would be made up with the end of border bleed.

  19. Isn’t reducing alcohol consumption something that our betters get all excited about? And, if this indeed resulted in higher prices and poorer selection, wouldn’t this accomplish that? Why is government peddling booze? (Rhetorical question. Same reason they produce PSAs against gambling then fund enormous gambling operations).

    1. So you want higher prices and poorer selection? I don’t get your argument.

      higher prices are a regressive tax on the poor – I know the Right loves those, but c’mon man.

      1. Can you explain why it would result in poorer selection and higher prices?

        Say your license claim is true, please back up…have you considered the opening of the new stores to spread this 500M around? I would like to see all the details of the license thing

        Do you support carbon taxes? This pertains to your tax on the poor comment.

        I am not really sure booze sales privately would equal a regressive tax (how so?) and they aren’t forced to buy alcohol. Weird take

        1. I didn’t. the post I was responding to did (I think?) I wasn’t sure

          yes I support carbon taxes and providing 100% of the receipts back as a dividend.

          poor people consume lots of alcohol. poor people pay lots of sin taxes. Reason magazine has written about this a lot.

          Oh, revenue neutral (and the state gets $500m from the stores):

          http://www.pahousegop.com/liquor.aspx

          1. yes I support carbon taxes and providing 100% of the receipts back as a dividend.

            And if you actually believe bolded will happen, then I’ve got a bridge connecting two of N.Y.’s boroughs that I’d be willing to short-sell you, you know, so I don’t make any of that icky, evil, inefficient profit on it…

            1. Okay so you base your opposition to a carbon tax on what would be done with the money?

              1. No, we base our opposition to a carbon tax on a whole host of things (doesn’t work to achieve its stated goals, is arbitrary, diminishes freedom, dramatically increases costs, etc). The poster was responding to your assertion that a carbon tax could exist that would return 100% of its revenues. That type of entity does not exist in any area of government, nor has it ever. Even if politicians had ever shown the ability to leave alone a huge stream of revenue that they could divert to their pet projects, there are still administrative and operating costs associated with any tax and regulation scheme. You need computers and software to track who owes and who pays the tax, software to do the same, administrators and other workers, buildings, and so forth. All of these things much be paid for by your revenue, which means it is impossible to have 100% revenue return.

                1. “must be paid”. I’m still holding out for an edit button.

              2. No I base my opposition to a carbon tax on my disbelief in the cargo cult that is the Church of Carbontology…

          2. Your post is a bit confusing. 100pct receipts back? What is the point of having a carbon tax then?

            Can you list why a carbon tax is needed and what you expect it accomplish? What is the plan for it?

            And you are arguing privatizing is a sin tax because the poor buy alcohol and not good…well the state sells now so that is also a sin tax using that logic. So it is hard yo buy your arguments you are making

            1. yeah. say the carbon tax raised $315bn a year. you would take the money and give every American $1,000 a year.

              this discourages CO2 because, well, the price is higher!

              1. So are you in favor of higher min wage say 15 or as liz proposed 22 an hr?

                Ok so what did you accomplish with that? You take their money only to give it right back?

                Can you detail how the less co2 had any effect on whatever problem you think there is?

  20. On a personal note, I’d like to state for the record how happy I am that I escaped the Statist nightmare that is PA.

    Crony, corrupt statists among a population of sheep (to include my family). What a shithole!

    Warty, you have my sympathies.

    1. Still the freest state in the Northeast even with the awfulness of the PLCB.

      Granted, the competition is not intense.

  21. “Wolf and his fellow Democrats”

    Good thing you mentioned Wolf’d party affiliation, otherwise I wouldn’t have been able to guess.

    /sarc

  22. “The state liquor monopolies created after the repeal of Prohibition were designed to be bad for consumers, on the theory that making it harder and more expensive to get drunk would result in less drunkenness.”

    One of the few instances where there’s actually a chance of socialism working as intended.

    Although I don’t know if hard-core drinkers would be deterred by something so trivial as price…they could just cut back on their other expenditures…like food.

    1. This. it is social engineering.

  23. Welcoming Wolf’s veto, the Malt Beverage Distributors Association said the bill “would have eliminated most of our small, family-owned and operated businesses.”

    That’s because we’ve established cozy little businesses with 80 years of protectionism. Like, taverns can sell six packs, but beer distributors can’t, and vice versa. Everybody wets their beak.

    You should have heard how the beer distributors bitched when we allowed them to open on Sunday. That was their day off. Now they’d have to open up for 5 hours.

    1. They don’t have to be open, do they? I mean, they can go ahead and take the day off, and let the competition get all the business.

  24. Quite the opposite: The state liquor monopolies created after the repeal of Prohibition were designed to be bad for consumers, on the theory that making it harder and more expensive to get drunk would result in less drunkenness.

    Like minimum wage and gun control, the supporters claim that these policies will have the exact opposite effect of why they were created. Amazing.

  25. Vetoing Liquor Privatization, Pennsylvania’s Governor Says Competition Would Raise Prices

    He’s right. Here in Washington, when we “privatized” liquor, it had to compete with the liquor control board, which added a 20% tax on all spirits. As a result, prices are higher.

  26. BTW, Jacob, awfully long post detailing how the PA governor’s logic is flawed.

    It wasn’t necessary.

    If the governor was correct, then everything would be sold through state stores. Your really only needed one sentence.

    1. I mentioned that upthread, and our new troll Nick said something about blah blah blah MASSIVE negative externalities blah blah blah…

      1. Oh and capital intensiveness…

      2. yes — you should only regulate things that should be regulated. its a crazy concept.

        1. That’s a tautology, not a concept.

        2. yes — you should only regulate things that should be regulated. its a crazy concept.

          How easy it is for you to put complex arguments into such concise language. In just one sentence you have described the exact break even point between a free market and a planned one.

          NOT.

        3. yes — you should only regulate things that should be regulated. its a crazy concept.

          They took that route in Venezuela. Didn’t work out so good for them.

          1. -1 roll of toilet paper

  27. So by Wolf’s logic it would be good for consumers for the government to have a monopoly on grocery stores. We all have to eat. Keep those prices down and have higher selection (except for body deodorant – this to please Bernie Sanders.)

    As someone who had relatives in East Berlin before the fall of the wall I can tell you from personal observation that in the stores in the East selection was certainly not higher and prices may or may not be lower but quality was definitely lower in general.

    1. Everything was controlled, and that’s what mattered.

    2. “… the stores in the East selection was certainly not higher and prices may or may not be lower but quality was definitely lower in general.”

      They just didn’t have The Right People? in charge! It will be different this time!

  28. Start making cash right now… Get more time with your family by doing jobs that only require for you to have a computer and an internet access and you can have that at your home. Start bringing up to $8596 a month. I’ve started this job and I’ve never been happier and now I am sharing it with you, so you can try it too. You can check it out here…
    http://www.jobnet10.com

  29. The Derp is Strong with this One.

  30. “Wolf and his fellow Democrats “warned that prices would rise as private businesses sought profit.””

    “the union that represents the employees of Pennsylvania’s state-run liquor stores warned that privatization would mean more deaths from drunk driving.”

    I’m curious if it hurts to be this stupid? I mean like actual migraines or something? Or is stupidity like a drug numbing one to all sense of reality so that you feel no pain?

  31. It is part of progressive dogma that government runs more efficiently than business because there is no profit involved. To admit that’s nonsense would undercut the argument for things like Obamacare.

    1. I’m sure that most progressives will grudgingly admit that government isn’t more efficient than business, but that’s not the point. It’s a moral issue. Profits going to rich people is immoral. They don’t deserve the money. What did they do, other than come up with an idea, invest into it, and take on all the risk? They don’t do the actual work, so they don’t deserve any return from it. That’s stealing from the workers.

      1. Some may, but I can’t count the number of times I’ve heard that single-payer healthcare is less expensive because there isn’t profit in it.

      2. Well, profits (or revenue) going to pols is immoral. They don’t deserve it, having done nothing but acting as parasites. They exert themselves only to rob people of freedom.

  32. ” “warned that prices would rise as private businesses sought profit.” In other words, private merchants will jack up prices because they want to make money?unlike the Pennsylvania Liquor Control Board (PLCB), which seeks only to raise revenue” This makes complete sense. The government will charge you more for booze so it will have more to spend. This is how government thrives. But alas, there are no figures provided as to how much actual revenue is generated over costs. And what of State Liquor employees pensions. When people use “jobs” as an excuse to maintain a bureaucracy, grab your wallet.
    And with a 2 billion deficit, there’s obviously no place to cut. The cupboard is bare. Or the liquor cabinet.

    1. ‘The government will NOT charge you more for booze so it will have more to spend’.

  33. Must not give consumers a choice says the pro-choice Governor.

    Today, NARAL Pro-Choice America PAC endorsed Tom Wolf to be the next governor of Pennsylvania.

    http://www.prochoiceamerica.or….._wolf.html

    Well, excuse me, he is pro-choice. He choses what’s best for you.

  34. so it is hard to see why Pennsylvanians would have to pay more for a bottle of whiskey if the state monopoly were replaced by profit-driven businesses competing against each other.

    That’s not hard to see at all: the state would not give up on the revenue, so they would jack up taxes. As long as taxes plus profits stay under the monopoly price, they can do that. Of course, the reason prices would be higher under a regulated free market is because of government regulation and taxation.

    So, Wolf is technically right, although it’s the kind of argument only a fraud or a liar would make. I’m not sure which he is.

  35. My daughter just moved out of PA so I have some experience with that state from visiting.

    PA liquor prices are not quite double what I pay in Florida where, obviously, rabid competition has severely affected retail prices… just not in the direction Wolf claims it would.

    What can you expect? He’s a politician and Democrat to boot.

  36. Mr. Wolf is neither unintelligent nor naive. He is, however, a lying statist who will say anything to retain and expand government power.

  37. The governor is either stupid or lying when he says that competition will raise prices. Actually, he’s beholden to state employees. That’s what happens when you elect Democrats.

  38. Yes, private stores would hurt choice, as all of these examples I’ve actually tried attest:

    Adam Carolla’s Mangria is only available by special order in the People’s Republic of Pennsylvania. A subject of PA legally cannot buy fewer than 6 bottles at a time. How many kids have to die because drivers weren’t allowed to drink responsible servings?

    A bottle of Commandaria can be bought in exactly three stores within 15 miles of the Delaware River. The closest to Pittsburgh is 300 miles (one-way). If you’re from Erie, it’s 340 (if your car gets 28 mpg highway, that’s $65 and 11 hours on the road).

    A bottle of Old Master’s whisky cannot be procured at all through the Glorious People’s Commissariat for Liquor Distribution. Despite the fact the distributor would mail it direct, I was forbidden from placing an order, though they offered to ship it to Ohio, New York, New Jersey, or Delaware if I could find a friend there to sign for it. (Yes, I was expected to go through that much trouble to bootleg a blended scotch.)

    In a further business move that would make Russia proud, the world’s highest concentration of Poles outside of Chicago cannot get a bottle of Wyborowa wodka.

  39. So competition results in higher prices and less selection? Here is concrete evidence that being a successful politician requires a much lower than average IQ.

    They say that those who can’t do, teach. Well those who can’t think, lead. (If you can call it that.)

  40. Wolf must have studied economics with Obama. Neither could run a lemonade stand.

  41. Would be hilarious- but its really sad- Wolf knows better- he ran a business. He’s not in favor of the state controlling cabinet manufacture (his business) or the pharmacy business (a big Dem argument is state stores keep people from abusing alcohol- so why doesn’t the state control drug sales?)

    No- this is a lesson to EVERYONE that Democrats would like to control everything- and will never give that power up if they can.

    I buy as much as I can in Delaware or New Jersey- I bought TWO bottles of Old Overholt Rye in DE for $26- no tax- it costs $20 a bottle plus 6& tax in PA.

  42. I think that there’s probably an optimum ratio of greed to killing children. The unions just haven’t figured it out. The number of children killed by private enterprise might be too low, for all we know.

  43. The left thinks that without profit everything would be cheaper in the amount of the profit margin. The sooner libertarians understand this, the sooner they will tell the left to @#$# off. They do not think competition reduces prices, they think profit RAISES prices. They are wrong, of course, but this is not just a talking point.

  44. By that logic, why have any private businesses at all? Get rid of those nasty profits, and see how much lower prices can go!

  45. Everyone from southeast PA who makes a run to Delaware, Maryland, or New Jersey to buy booze disagrees with the governor.

Please to post comments

Comments are closed.