The PLCB. A failure of an idea and the beginning of a fiefdom.

Sometime in December of 1933, then Pennsylvania Governor Gifford Pinchot sat down to write an editorial piece for the Rotarian magazine [you can read it, starting in page 12*]. He laid out his reasons for "The Pennsylvania Plan," his reasons why he felt that the government had to restrict alcohol for the citizens, because they couldn't control themselves. Let's look at the points he made in The Pennsylvania Plan, and see if Pennsylvania needed them then...and if we have any need of them now.

Pinchot said that Pennsylvania's liquor control legislation is dependent on five cardinal points.

1. The saloon must not be allowed to come back.
2. Liquor must be kept entirely out of Politics.
3. Judges must not be forced into Liquor politics.
4. Liquor must not be sold without restraint.
5. Bootlegging must be made unprofitable.

Ardent environmentalist; ardent prohibitionist

After a quick look, you might conclude that all of his points have failed except #4. (We do our own bootlegging these days, thanks to the big liquor stores on the New Jersey, Delaware, and Maryland borders.) However, during the 85 years since Repeal, the meaning of the language in some of the points has changed.

Take point #1: saloons pre-Prohibition were in a large part controlled by the brewers. Prices were kept low, so demand was high. There were enticements like free food or snacks for those buying beer, which is why you see strangely detailed happy hour laws about how much food can be given away, and what kind. Bars were "tied" to the brewer that backed them; the only way you could get a Miller instead of a Bud, for instance, was to go to another bar. The corruption this caused, both in business and in politics from the free-flowing graft money produced, was one of the big drivers for Prohibition. 

That all changed with the three tier system in place in Pennsylvania (and most of the United States) today. That created three defined "tiers:" producer/brewer, wholesaler, and retailer, and forbid owners of one tier from owning businesses in the other two. No "tied houses." So did the saloon come back? Yes, but not in the same way, and that hasn't been all bad for the consumer. We'll call this point a draw.

In point #2, Pinchot was talking about patronage, the "spoils system," in which state jobs were handed out as political favors. He's already planning the huge jobs program of the State Store System of Stores. Point #2 meant that employees would be selected based on skills testing instead of loyalty testing; who they knew and the favors they could do. This was mostly true for the rank and file store workers, not so much for the managers, and not at all for the Board who have all been political hacks, cronies, and lawyerly hangers-on since day one.

He also thought that this new system would keep politicians from buying votes with booze, and thus fall under the control of distilleries and brewers. Did that work? Hard to say, because how people drank changed during the Depression. More drank at home after Repeal, because they could buy at a local store instead of having to go out to a speakeasy or club. This all changed again once the stores were unionized. Now the money flowed from union coffers into politician's pockets to buy votes to keep this archaic system alive. Although the jobs are still subject to civil service rules -- despite recent efforts to change this, under the guise of "improvement" -- overall this has failed.

Money, money, money, moooooney...

Point #3 is keeping the dollars, booze and votes away from judges and their decisions. Now we have judges working for the the PLCB...well, mostly 'working.'  I wonder what Gifford would say about that. This has worked, but largely because judges working on booze have been ring-fenced, as the British say.

Point #4 was probably true for the first 70 years of the State Store System of Stores -- ah, fond memories of the completely customer-unfriendly counter stores! -- but no longer. When the board that was put in place to control drinking is now advertising, having sales, sponsoring fests of various kinds, even trying to sell booze by robot! -- you can say that the restraint is limited at best.

Point 5 is pretty much irrelevant. As we said, bootlegging went from criminal enterprise to an everyday crime cheerfully "committed" by private citizens. Governor Pinchot thought that the state would be able to sell alcohol for less than the bootleggers, and they mostly did. But the power of the police-enforced monopoly and pure greed kept them from selling wine and spirits for less than the border states, which made them complicit in making criminals of everyday citizens.

Governor Pinchot was a leader in the Dry movement and was a teetotaler himself.  He really thought that his plan would have "support of the vast majority of the citizens of Pennsylvania."  But he never actually let the people decide, and as we all know, there has never been a single scientific poll that showed the citizens to be in favor of the State Store System of Stores.

Looking back to what was envisioned by Pinchot, you can see how corrupt the plan became over time. Millions of dollars were "...to be made available to school districts to help schools that were in danger of being closed." Even if we sucked out every penny possible from the PLCB now, it would only be about $90 for every taxpayer** this year. That's certainly not a rate the PLCB could keep up, and not really enough to notice in my almost $5,000 tax bill. Pinchot also suggested that if an item wasn't available the system "would have to get it." Still failing at that one 85 years later. And don't forget: there were THREE TIMES as many licenses available back then as now. Where did we go so wrong, Gifford? A commonwealth turns its thirsty eyes to you.

Unfortunately, not everything he proposed went...wrong. The Governor said that "Whisky will be sold by civil service employees with exactly the same amount of salesmanship as is displayed by an automatic postage stamp vending machine." Sure enough, that is exactly what we have in almost every transaction! He also said that there will be no artificial stimulation of the demand for liquor. No PLCB sponsoring a flower show trying to get women to drink, no staying open longer for hunting season, no bottle signings by third rate celebrities.

As a naturalist, Gifford Pinchot was probably second only to Teddy Roosevelt in public service. (He was the first professional forester in America.) His main fault was that he never actually wanted to know what the citizens thought of his Pennsylvania Plan, because he thought he knew what was best for the masses.

And that is the thing about the PLCB and the Almighty Liquor Code that has changed the least.



*If you get the chance, read the "Regulated Licenses, Retail Plan" by Frank J. Loesch on page 14.

** 10.1 M adults, 68.6% are homeowners, ~90% of them pay some property tax

A Look Back At The Wine Kiosks

We have a guest post today. A member of our Facebook group -- Abolish the PLCB -- Rewrite the Code! -- Wende Phifer Mate, wrote a remembrance of the wine kiosks. It was so good, we decided to run it here (with permission, of course).

Great moments in PLCB history. 

Did anyone ever try to purchase wine from one these kiosks? I lamented the passing of them because they provoked more laughter than most comedians do.

Among the highlights:

• The instructions - not bad if you had an hour to kill.
• The ID checker - you had to put your drivers license into a slot, then look into a camera in order to pass on to the next test. Hard to do with a straight face.
• The breathalyzer - yes, you had to breathe into a weird tube before the machine would allow you to proceed. It did not always register that it had been breathed into until you were about to pass out from trying.
• Choosing your wine - you had to wade though the whole list of available wines on the touchscreen. There was no other way to make a selection. Needless to say, it took some people FOR...EV...ER to get through this part. 
• The delivery system - It was like those candy machines that push the item forward until it drops. Has there ever been a more stupid idea! I watched one of my bottles crash to the floor inside the machine before it got to the collection window. I read later that this was a very common occurrence.
• The bags - Plastic bottle bags were provided but three that I pulled out had slits in the bottom. Bottle goes in, bottle goes right out the bottom. (That's another sale!)

In short, they worked just as you'd expect they would, coming from the masterminds running the PLCB.


We miss them too, Wende, but like some of Joe "Da CEO" Conti's best moments, they are a gift that keeps on giving. Whenever the PLCB starts to seem reasonable, just remember: they're only one brain-fart away from another great idea like the Wine Robot Army. That's why we say:

Privatize.

PA Democrats need to go to Iowa

When you're talking about getting a bottle of booze, and the words "freedom," "consumer choice," "selection," and "benefiting the citizens" are mentioned, Pennsylvania certainly isn't the first state that comes to mind.  But then, neither is Iowa, even though they are decades ahead of what our blinder-wearing Pennsylvania legislators have come up with for liquor policy.

Just like Pennsylvania at the end of Prohibition, Iowa instituted a state-controlled system for wine and liquor. Unlike the Commonwealth, they listened to their citizens and changed with the times. Maybe you're thinking that Iowa had a different societal outlook, that they were more likely to liberalize their liquor laws. Not even close: Iowa didn't even allow drinks by the glass until 1963. If you wanted a rum & coke, you drank at home or not at all. So for at least the first 29 years after Prohibition ended, we were doing better than Iowa.

Iowa also raised their liquor tax on licensees in the 60's from 10 to 15%, but they didn't hide it by calling it "temporary" for something that happened 30 years earlier as Pennsylvania did with the infamous Johnstown Flood Emergency Liquor Boondoggle Tax. They also didn't then bump it to 18%, either.

Since Iowa didn't have as many convoluted regulations and "interpretations," they were able to totally rewrite the liquor code in 1972, simplifying it from twelve chapters down to just one, all in one place in the code. When Pennsylvania "revised" The Almighty Liquor Code in 1951 they expanded it, and spread the regulations across multiple sections of the state code. Brilliant.

Kwik Star, Charles, Iowa

On May 4th,1972 the Iowa legislature decided that gas stations could sell beer...without having separate registers and cafes! Only 44 years ahead of PA, and they had hundreds of places instead of just nine. In 2011 they allowed gas station liquor sales, too. Don't hold your breath on that.

In 1981 Iowa, again decades ahead of Pennsylvania, allowed craft brewers to not only sell their own beer by the glass but ANY beer obtained from a licensed wholesaler for on and off premise consumption.  35 years later, we're just starting to catch up.

In 1985 the Iowa legislature started to unwind state control of wholesale/retail wine sales, acknowledging that they didn't have the knowledge or expertise needed to operate consumer-friendly outlets. The dual sale of wine in state and private stores took less than two years to show the clear winner, and the state closed state store wine sales in 1987. 20 years later, the Pennsylvania Legislature hatches McIlhinney's Mistake, and we're allowed to buy four bottles of wine at a time in a relative handful of grocery stores. Yippee, yay us.

Not in PA! You can only have 4, put one back.!

Shortly after wine was fully privatized in Iowa, retail liquor followed suit. The state transitioned from 221 state stores to 256 private stores in only four months. By the end of the four month period, Iowa had approved a total of 410 private stores. Even after lowering and eliminating some taxes — contrary to what State Store clerk union president Wendell W. Young IV says — the state of Iowa makes more money by not having state stores as reported by the state of Iowa itself.

Well before the U.S. Supreme Court Granholm v. Heald decision in 2005, Iowa legalized reciprocal wine shipping in 1996. It would be 20 years later, after almost eleven years of ignoring the Supreme Court's ruling, when Pennsylvania  finally came into compliance and allowed such shipments.

So here we are in the fall of 2016. Iowa and Pennsylvania started out roughly equivalent at Repeal, but the Hawkeye State has far outstripped the Keystone State in the race to booze normalcy. Iowa has far greater convenience, one stop shops, and no bureaucrats deciding which legal products are allowed to be sold in the state (the state still has a monopoly on spirits wholesale, but it isn't run in the draconian way the PLCB does it). Iowa is decades ahead in doing what their citizens want; in August, the governor announced another comprehensive review of the liquor code. Meanwhile, The Almighty Liquor Code has only gotten more convoluted and confusing (to legislators and licensees alike) since 1951. 

With over 1,400 retail liquor outlets serving a population a quarter the size of Pennsylvania's, do you know what else Iowa has? Less underage binge drinking, lower DUI fatalities (in both legal and underage drinkers), and lower DUI arrests.

What is the lesson of looking at Iowa? Simple. We don't need the PLCB: they're not convenient, they're not helping alcohol safety, and as we've been telling you for years, when you look at the entire financial picture, they aren't even making the state any money over and above the taxes that a private system could collect.

PRIVATIZE. It just makes sense.

Famous PLCB sayings in History

While the Legislature is taking their vacation, just walking away and leaving the most important business they have undone, we thought we'd have a little fun too. We took a few famous quotes from history, and adjusted them to suit the PLCB situation. After all, the Governor spent 35 minutes on the last meeting I thought I could spend 35 minutes working on this too.  Just having some fun...mostly.

Give me the PLCB or give me death. It doesn't matter that they are both the same. - Anonymous UFCW state store clerk

I cannot tell a lie, I really hate the PLCB. - George Washington Smith (the first customer from Pennsylvania at Total Wine in Delaware)

Ask not what the PLCB can do for you, Ask what you can do for the PLCB. Chairman's statement at first Board Meeting. 4/1/33

Let every citizen know, whether they wish us well or ill, that we shall pay any price, bear any burden, meet any hardship, support any friend, oppose any foe to assure the survival and the success -- okay, just the survival -- of  the PLCB - Governor Wolf on the current budget talks 

Real patriotism is a willingness to challenge the PLCB when it's wrong. - Ron Paul when looking for a good bottle of Scotch in Philadelphia 2015 

Never in the field of human conflict were so many held hostage by so few. - Winston "Churchill" Rabinowitz when asked about state stores in 1946 

You can always count on the PLCB to do the right thing - after they've tried everything else.-

Testimony of Auditor General about Wine Kiosks  3/14/11 

Nobody will ever deprive the Pennsylvania citizens of the right to price, selection and service except the Pennsylvania citizens themselves, and the only way they could do this is by continuing to vote for those who support the PLCB. - "Franky D" Roosevelt 1968 

Since when have we Pennsylvanians been expected to bow submissively to the PLCB and speak with awe and reverence to those who serve us? - William "Judge" Douglas buying drinks for a family reunion 8/9/54 

So, first of all, let me assert my firm belief that the only thing we have to fear is fear itself -- nameless, unreasoning, unjustified PLCB interpretations which paralyze needed efforts to convert retreat into advance.  "Franky D" Roosevelt  forty years later in 2008 

The PLCB way of "control"

The objection to Puritans, like the PLCB, is not that they try to make us think as they do, but that they try to make us do as they think. - H.L. Mencken,  The Bard of Baltimore


I have sworn upon the altar of God eternal hostility against the PLCB and every form of tyranny over the mind of man. - Thomas "TJ" Jefferson after waiting 4 weeks for his SLO order only to find out it still isn't in. 2009 

The Constitution only guarantees the American people the right to pursue happiness. If you are from Pennsylvania, you have to go out of state and catch it yourself -.Benny Franklin, buying liquor for his daughter's wedding at Moore Brothers in NJ, 1982. 

The cost of liquor is always high, but Pennsylvanians have always paid it. But one path we shall never choose, and that is the path of surrender, or PLCB modernization. - John F. Kennedy, Centre county resident speaking to his Democrat Representative Scott Conklin about privatization 2013

What do you need to run a business? Three simple things: know your product better than anyone; know your customer, and have a burning desire to succeed. The PLCB fails all three. David "Burger" Thomas owner of Dave's Liquors Pennsauken, NJ. 1983

No booze is good booze - Governor Pinchot speaking at the founding of the PLCB 1933

I'll leave you with this unadulterated quote:

Time is the friend of the wonderful business, the enemy of the mediocre. Warren Buffett

And the PLCB's time is DONE!

HISTORY

For the first time a liquor privatization bill has passed the Senate. It took 82 years but there is light at the end of the tunnel for Pennsylvania consumers. While there is no guarantee a deal can be made with Governor Wolf the next election rotation looks good to increase the Republican majority enough to over ride his veto.  Perhaps by then he will be able to read the writing on the wall and do what most residents want.  Close the state store system.

Please don't forget to write your Legislators to thank them or to point out the folly of trying to hold on to the past.
END IT! DON'T MEND IT!