Republicans Sell Out the Free Market – Again

Just because the GOP is calling it a liquor privatization bill doesn’t actually mean that they are doing away with a government monopoly, cutting costs, or leading the fight for a remotely smaller government.

No, in fact, the leader of the new “amended” bill here in Pennsylvania that would end the complete control of all wine & liquor sales by the government is bragging about how he made certain to cut the private markets out of the picture by pricing the licenses to compete out of the range they were willing to accept. That’s right, the GOP lawmakers are bragging about trying to shut out the free market.

The current proposal will allow places that currently sell beer to sell wine, but only after they pay $50,000, plus an additional $15,000 every year after that. Oh, and if it’s a grocery store, we have to keep the same inconvenient current model of going to buy groceries from one part of the store, checking out, buying alcohol (beer only, for now) from another part of the store, and checking out yet again. Explain to me how this is an improvement.

Effectively, the state will still control prices and selection. While there is a wholesaler license available, GOP Rep. John Taylor from Philly purposefully priced it out of what he believes the market will pay at $100 million:

Taylor said he arrived at that figure by asking several groups what they would pay for a license to sell wine to retailers and then adding a few million. (emphasis added)

So, what we get is the perfect example crony capitalism. The prices are set based on private conversations that a lawmaker won’t reveal to potentially favor or disfavor anyone he chooses.

I also see this as potential burden for taxpayers. Sebastian and I sketched out this possible scenario last night while talking about the unbelievably stupid bill:

So let’s say a Total Wine opens up in the empty Circuit City in Warrington, PA to sell only beer & wine, as they currently do in Virginia. It’s right near the Wegmans grocery store which doesn’t have any room to expand their beer sales department to include wine. There’s a government-run liquor & wine store in the same shopping plaza, and they will be the only store allowed to sell liquor in the region – even if they carry a shitty selection.

Let’s assume that Total Wine ends up picking up most of the alcohol sales in the shopping plaza now. They can beat Wegmans on selection, and they just laugh in the face of the pathetic government store. (However, unless someone pays for the purposefully overpriced wholesaler license, they will face the same restrictions on what they can carry as the state store, and they will have to pay the same prices.) Wegmans maintains the small beer selection that people can pick up without having to move their car across the massive parking lots.

The state store may begin to lose money since no one wants to buy wine from grumpy, rude, less-than-helpful government employees who don’t actually know anything about the products they sell. The only reason they will remain in business with their union benefits and pensions is because the state has an interest in keeping stores open in the region so there is someone to sell the liquor that they refuse to privatize.

Now, we’re losing money on state stores, the market can’t really take off, and we’re only going to see the ultimate wholesale selection picked out by either bureaucrats or whatever companies Rep. John Taylor happens to like based on his pricing structure. How the hell are we better off as either consumers or taxpayers?

I can’t blame any Republican who votes for this bill. It’s not so glaringly bad for consumers that they can really justify a vote against it if they said they favored competition. But, it’s bad enough that those of us who live remotely close to the border will still find better selection and prices in New Jersey and Delaware. I can, however, blame John Taylor who drafted this sham of an amendment and is pretending for one second that he somehow defends Republican principles of a free market. It’s an amendment that never should have been written.

14 thoughts on “Republicans Sell Out the Free Market – Again”

  1. Before someone starts in with a rant to vote Libertarian, well, that’s just not going to happen at this point. First, the Libertarians would have to put up someone to run. Second, they would have to put up someone who isn’t crazy. Third, our local lawmaker actually isn’t part of this problem as far as I know. We’ve talked to him about it, and I don’t think this is an idea he would have hatched.

    Before Dems come on and tell me to vote Democratic, well, that’s just not going to happen at this point. First, the Democrats would need to put up someone who isn’t an outright asshole. Second, they would have to put someone who actually agrees with privatization. Third, none of the Democrats in the area are remotely accepting of any discussion that doesn’t involve full government control with huge union power over the bureaucracy.

    So, carry on your political bashing, but don’t consider that any “instructions” along those lines will be met with a friendly tone. I’m not a straight up party supporter. I’ve been a Libertarian and I’ve voted Democratic. It’s just that neither one of those is a viable option at this point in time in this area of the Philly suburbs. I’m working in the land of political reality here.

  2. I don’t much care how you vote, as long as somewhere along the way you learn that for Republicans, “free-market” is a swell rhetorical flourish that always stops short the moment crony capitalism is achieved. There, it gets locked in place.

    The Libertarians’ job has always been to make the Republicans’ crony capitalism sound “moderate.”

  3. I will continue to drive into Delaware and buy from Total Wine. High-end Scotch and Bourbon is only 2/3 the price there as it is here in PA.

    And on a somewhat related note, I will continue to buy everything I can from Amazon, rather than pay an 8% sales tax in local stores. Amazon does not enjoy an unfair advantage, it’s the brick and mortars who suffer an unfair disadvantage. A more reasonable sales tax would be 8% for the first $100, and 0.5% thereafter. Otherwise nobody will purchase expensive items at stores much longer.

  4. So can you get the local representative to sponsor his own amendment stripping out the ridiculous fees?

    1. No, he’s too much of a newbie. While he’s not a freshman, he’s only in his second term. Politically, it’s just not feasible. Besides, the original sponsor of actual privatization appears to have caved to this crony capitalism crap, so I don’t think there’s much political willpower to make this bill what it needs to be.

      At this point, the best thing we could hope for would be for the Senate to refuse to take it up. Considering the Republican leader in the Senate is pro-monopoly, I suppose his opposition could hold. His local state-run liquor store actually loses money selling booze. That’s why he opposes the market because his neighbors don’t drink enough to make it profitable to sell much. Clearly, in line with Republican values, that means we taxpayers have to subsidize the cost of keeping a liquor store open there even when people aren’t buying.

      1. Perhaps someone needs to explain to him that the reason the folks aren’t buying in the state store near him is because the selection is so damn poor.(And the prices too high.) All his constituents need do is drive across the Delaware.

        Added: Taylor is a jerk for this pricing scheme.

        I’m up near the NY border and just south of the Finger Lakes wine region. I can get a much better seelction of wines in a short drive around the scenic lakes area than I can ever get from the local state run shop.

        And don’t get me going on having to buy a case of beer at a time when all I want is a six-pack.

        1. The Senator who won’t allow the bill to move is from the middle of nowhere, so his constituents have to buy from the state stores if they aren’t on vacation. Trust me, they aren’t driving to Jersey for a bit of booze.

  5. It sounds insane to this Hoosier. What benefits can the State point to from their Demon Rum monopoly? Is there any less drunkenness and consequent ill effects, or are PA residents just screwed out of drinking what they would prefer, in favor of the State-supplied Victory Gin, etc.?

    Oh, for a Reverse Carrie Nation, who would take the battle to the malefactors-in-office!

  6. “What benefits can the State point to from their Demon Rum monopoly?

    Well, the state Liquor Control Board recently fielded a tasteless poster that portrayed a girl’s legs with her panties around her ankles, captioned “She couldn’t say ‘no’.” They explained that it was a warning about the dangers of over-consumption of alcohol, but we could be forgiven for thinking they were implying that by making alcohol more expensive and harder to obtain, they were protecting us from immorality.

    Historically, I would add that the state store system was introduced after Prohibition, in the depths of the Depression, and was also billed as a “planned” make-work program. I’m told that initially, you had to be a college graduate to get a job as a state story clerk.

    It is amazing how such bizarre stupidity can survive relatively unchanged over eight decades.

  7. I’m going to go out on a limb anyway and say you should vote Libertarian! At least, you should in theory…but in practice, “well, that’s just not going to happen at this point. First, the Libertarians would have to put up someone to run. Second, they would have to put up someone who isn’t crazy.” I’ll even add a fourth reason: “Libertarians never seem to notice that they are needed as much on the local level as they are on the State and Federal levels–if not more so–and that, without a solid local base, the party will *never* amount to anything.”

    If voting Libertarian isn’t an option, perhaps you should consider voting with your feet instead. Move to a place with more sensible liquor laws, like Utah.

    It still boggles the mind that I can say that! :-)

    Having said that, there’s talk about “privatizing” the liquor industry in Utah, too. Unfortunately, it’s still in quotes, because like the amendment to the proposal in your state, it doesn’t fully privatize things (if I understand correctly). But I agree with the radio host, that the government should not be in the business of selling wine and liquor.

    It’s an issue I don’t pay attention to very much, in part because I don’t care (since I don’t drink), but also because recently, I haven’t had the time to concern myself as much with niceties like keeping up with local politics. :-(

  8. It is so weird to see the tables turned when we talk about our state’s liqueur laws vs. gun laws. I can buy real deal absinth at my local grocery store here in the PRK. So why the difference when both guns and booze are quote unquote “bad” for you? Oh yeah, liberals like their alcohol…

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