When I first read this story I did a double take because there could just not be any way that an educated adult could believe that privatizing something could lead to higher prices and fewer options. The very notion that this might even be considered in the realm of possibility is ridiculous – bordering on the fantastical! But Governor Tom Wolf (D-PA) actually said it…
The Governor vetoed House Bill 466, House Bill 762, and Senate Bill 655. In veto messages to the General Assembly, Governor Wolf spoke to why he vetoed these bills, which failed to adequately and responsibly address the pressing issues facing Pennsylvanians.
Regarding House Bill 466: “This legislation falls short of a responsible means to reform our state liquor system and to maximize revenues to benefit our citizen,” Governor Wolf said. “It makes bad business sense for the Commonwealth and consumers to sell off an asset, especially before maximizing its value. During consideration of this legislation, it became abundantly clear that this plan would result in higher prices for consumers. In the most recent case of another state that pursued the outright privatization of liquor sales, consumers saw higher prices and less selection.”
“Modernization of our state liquor system would provide additional revenues to the Commonwealth and save important, family-sustaining jobs. 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.”
This is absolute hogwash. Almost every example that could be considered would show that when goods are privatized the price immediately drops and the selection immediately expands (thanks to competition)! The Governor mentioned the state of Washington’s experience privatizing liquor sales and said that they were proof that prices would rise – but Wolf failed to mention that prices only went up because the state passed an enormous new alcohol tax at the same time. (I’m sure that he simply forgot to mention it…)
In the Washington Post Jonathan Adler argues that if he truly believes this, then the Governor must be a complete and utter imbecile.
If Governor Wolf believes the explanation he offered for vetoing the liquor store privatization law, he does not understand basic economics and is immune to empirical evidence. More likely, then, he had other reasons for the veto — reasons he’d rather not share publicly.
So what’s really going on with liquor sales in Pennsylvania? The truth is that Governor Wolf is a liberal and he values government control and a planned economy over personal freedom and the free market. To Wolf, it is simply better for the government to control liquor sales because privatizing liquor sales would mean less power and revenue for the government. And that’s the bottom line for a Democrat. Power and money.