PA Liquor Privatization Findings Too Good to Be True

A blog post by Stephen Herzenberg, originally published at Third and State.

The privatization of Pennsylvania’s wine and spirits shops will not do much for state revenues but will usher in alcohol-related social problems.

Those were the key takeaways offered by researchers working with the Keystone Research Center at hearings of the Pennsylvania House Liquor Control Committee last week in Philadelphia.

University of Michigan researcher Roland Zullo, who has worked with Keystone on privatization issues, presented the results of his analysis of a pro-privatization study commissioned by Governor Tom Corbett’s Budget Office. As Zullo’s written testimony shows, the study, performed by Public Finance Management  (PFM), was very open about its assignment: show how privatization will maintain annual wine and spirits revenue for the state, while maximizing upfront fees from privatizing.

As Roland shows, this is an impossible assignment. Consequently, PFM was forced to make implausible and incompatible assumptions. To maintain revenue neutrality, PFM assumed very high taxes on wine and spirits, a high annual fee from franchisees, and low price markups by private wholesalers and retailers.

These same assumptions, however, would make wine and spirits franchises a dud as a business opportunity – companies would make low profits or lose money, and they sure won’t give the state a big upfront check for the right to lose money. As Roland said, “I can’t square this circle.”

Keystone Labor Economist Mark Price reviewed the likely negative social impacts of privatization at the hearings last week.

He also showed that researchers for the Commonwealth Foundation left key variables out of their analysis of state differences in alcohol-related traffic fatalities, which they have used to argue that traffic fatalities are the same or lower in states with privatized alcohol distribution systems.

One of the missing variables was average miles traveled. Surprise! When people drive further they have a greater chance of an accident and a traffic fatality. Put the missing variables into the statistical analysis and you find that alcohol-related traffic fatalities are higher in privatized states than “heavy control” states such as Pennsylvania.

News & Notes December 3, 2011

Channel 69 News picked up my story about Tom Herman.  No one will yet comment about their resignation.  I’ve downloaded the fall dinner video done by Mr. Herman to pull out the section where he rants against blogs, email listers and progressives.  This is someone who co-founded a “progressive PAC (which gives to non-progressives) and who calls himself a progressive when it’s in his interest.  BS as we saw in his rant.

Donald Trump will moderate a GOP debate.  This is now, officially, a reality show combined with book tours.  At the end of the debate he should fire one of the candidates.  You cannot take seriously anything in which The Donald is involved.

Newt Gingrich claims people use their food stamp card to go to Hawaii.  This is shocking in that it illustrates the disconnect the 1% have with poor people.  Newt doesn’t have a clue how food stamps work.

The Milton S. Hershey School barred a boy from enrolling because he has HIV.  It’s been a long time since we witnessed HIV hysteria.  I thought the Ryan White days were passed us.  The only potential threat from others is the slight chance the boy would be subjected to a predatory sex offender hiring Hershey boys out for sex to older men.  Since the Hershey School has actually had that happen recently with one of its adult employees perhaps they shouldn’t be trusted with any children.

Michele Bachmann says she’d close the American embassy in Iran.  There hasn’t been a U.S. embassy in Tehran since 1979.  Shouldn’t candidates for president have some minimum sense of history and information?   Maybe, at a minimum, pass a basic civics test?

House Speaker John Boehner says the middle class payroll tax cut is “chicken shit.”  I think he has this confused with the way Republicans view the entire 99%.  Perhaps he should spend less time protecting billionaires’ incomes and rolled around in some chicken shit.  It’s right there in the GOP caucus room.

Penn State isn’t subject to the state Open Records Act and is using that shield to suppress requests for information about the Sandusky scandal.  They also used it to fight grand jury subpoenas.  As I recall the original controversy was around disclosing JoePa’s salary.  Penn State is just making itself look worse and worse by concealing what should be public information.  This is yet another disgrace.

Gov. Corbett ordered DPW to cut $470 million from its budget and social workers are now telling tales about poor women and children being cut from Medicaid.  All this, of course, is to fund tax breaks for corporations and allow energy drillers to NOT pay for extracting OUR natural gas.

Congressman Mike Kelly (PA-03) lambasted Obama for not taking responsibility for Republican failures.  It sounds like something you’d hear from a car salesman.  Kelly is a car dealer in Erie.

Rick Santorum says you shouldn’t get health insurance if you have pre-existing conditions.  It’s an excellent argument for single payer.

Death by Healthy Doses

by Walter Brasch

They buried Bouldergrass today. The cause of death was listed as “media-induced health.”

Bouldergrass had begun his health crusade more than a decade ago when he began reading more than the sports pages of his local newspaper, subscribed to his first magazine, and decided TV news could be informative if it didn’t mention anything about wars, famines, and poverty.

Based on what he read and saw in the media, Bouldergrass moved from smog-bound Los Angeles to a rural community in scenic green Vermont, gave up alcohol and a two-pack-a-day cigarette habit, and was immediately hospitalized for having too much oxygen in his body.

To burn off some of that oxygen, he joined America’s “beautiful people” on the jogging paths where the media helped him believe he was sweating out the bad karma. In less than a year, the karma left his body which was now coexisting with leg cramps, fallen arches, and several compressed disks. But at least he was as healthy as all the ads told him he could be.

To make sure he didn’t get skin cancer from being in the sun too long, he slathered four pounds of No. 35 sunblock on his body every time he ran, and went to suntan parlors twice a week to get that “healthy glow” advertisers told him he needed. He stopped blocking when he learned that suntan parlors weren’t good for your health, and that the ingredients in the lotions could cause cancer. So, he wore a jogging suit that covered more skin than an Arab woman’s black chador with veil-and developed a severe case of heat exhaustion.

From ultrathin models and billions of dollars in weight-reducing advertising that told him “thin was in,” he began a series of crash diets. When he was down to 107 pounds, advertising told him he needed to “bulk up” to be a “real man.” So, he began lifting weights and playing racquetball three hours a day. Four groin pulls and seven back injuries later, he had just 6 percent body fat, and a revolving charge account with his local orthopedist.

Several years earlier, Bouldergrass had stopped eating veal as part of a protest of America’s inhumane treatment of animals destined for supermarkets. Now, in an “enlightened” age of health, he gave up all meat, not because of mankind’s cruelty to animals, but because the media revealed that vascular surgeons owned stock in meat packing companies. Besides, it was the “healthy” thing to do.

He gave up pasta when he saw a TV report about the microscopic creepy crawlers that infest most dough.

He gave up drinking soda and began drinking juice, until he read a report that said apple juice had higher than normal levels of arsenic.

He ate soup because it was healthy and so Mmm Mmm Good, until he learned that soup had more salt than Lot’s wife. When he found low-salt soup, he again had a cup a day-until last month when he gave it up because a Harvard study revealed that soup cans contained significant amounts of Bisphenol-A-, which can lead to cancer and heart disease.

For a couple of years, lured by a multi-million dollar ad campaign and innumerable articles in the supermarket tabloids, Bouldergrass ate only oat bran muffins for breakfast and a diet of beta carotenes for lunch, until he found himself spending more time in the bathroom than at work. He eliminated the muffins entirely after reading an article that told him eating oatmeal, bran, and hood ornaments from Buick Roadsters were bad for your health.

Bouldergrass gave up milk when he learned that acid rain fell onto pastures and was eaten by cows. When he learned that industrial conglomerates had dumped everything from drinking water to radioactive waste into streams and rivers, he stopped eating fish. For awhile, based upon conflicting reports in the media, he juggled low-calorie, low-fat, and low-carbohydrate diets until his body systems dropped into the low end of inertia.

At the movies, he smuggled in packets of oleo to squeeze onto plain popcorn until he was bombarded by news stories that revealed oleo was as bad as butter and that most theatrical popcorn was worse than an all-day diet of sirloin.

When he learned that coffee and chocolate were unhealthy, he gave up an addiction to getting high from caffeine and sugar, and was now forced to work 12-hour days without any stimulants other than the fear of what his children were doing while he was at work.

Unfortunately, he soon had to give up decaffeinated coffee and sugarless candy with cyclamates since both caused laboratory mice to develop an incurable yen to listen to music from the Grand Funk Railroad.

He gave up pizza when the media reported that certain “health care investigators” claimed pizza was little more than junk food. But, he began eating several slices a day to improve his health when Congress, fattened by lobbyists campaigns, last month declared frozen pizza was a vegetable. He figured it made sense, since three decades earlier the Reagan administration had declared catsup to be a vegetable, and five years ago the Department of Agriculture decided butter-coated french fries were a vegetable.

Left with a diet of fruits and vegetables, he was lean and trim. Until he accidentally stumbled across a protest by an environmental group which complained that the use of pesticides on farm crops was a greater health hazard than the bugs the pesticides were supposed to kill. Even the city’s polluted water couldn’t clean off all the pesticides. That’s also when he stopped taking showers, and merely poured a gallon of distilled water over his head every morning.

For weeks, he survived on buckets of vitamins because the magazines told him that’s what he should do. Then, after reading an article that artificial vitamins shaped like the Flintstones caused dinosaur rot, he also gave them up.

The last time I saw Bouldergrass, he was in a hospital room claiming to see visions of monster genetic tomatoes squishing their way toward him. He was mumbling something about cholesterol and high density lipoproteins. Tubes were sticking out of every opening in his emaciated body, as well as a couple of openings that hadn’t been there when he first checked in.

In one last attempt to regain his health, Bouldergrass enlisted in Michelle Obama’s Let’s Move army. But the only movement he was doing was when the nurses flipped him so he wouldn’t get bed sores.

Shortly before he died, he pulled me near him, asked that I write his obit, and in a throaty whisper begged, “Make sure you tell them that thanks to what I learned from the media, I died healthy.”

[Walter Brasch, a robust figure of health, doesn’t follow anyone’s advice on what is or is not healthy. His latest book is the critically-acclaimed Before the First Snow, a social issues mystery novel. Brasch says the book is a great Christmas or Chanukah gift, and increased sales will improve his own mental, if not physical, health.]

Walter M. Brasch, Ph.D.

Latest Book: Before the First Snow: Stories from the Revolution


Fed Bailouts Hit $7 Trillion

When news hit last week that the Fed used an additional $7 trillion to bail out the big banks people were stunned.  The banks, at the time, were failing but telling shareholders and investors they were solvent.  Of course I’ve been blogging about the real insolvency of the big banks for over a year.  The fact the Federal Reserve stepped in with a massive secret bailout means the bank CEO’s committed a massive fraud against shareholders and their customers.  

People who do business with banks should know if their funds are in jeopardy, if their bank is insolvent.  Investors certainly need to know the true financial condition of the corporations in which they invest.  The secret actions of the Federal Reserve show the critical need to begin making every move, every action taken by the Fed open and transparent.

Every individual involved in this conspiracy to defraud needs to be investigated and prosecuted.

Our economy continues wallowing in recession.  Jobs are being cut instead of created and idiots like Chair Tom Herman think we progressives should be more behind the President who is signing off on those cuts.  He thinks we should simply shut up and take it because this time it’s a Democrat who is screwing us.  He’s a typical Party hack who is blinded by his own ambition.  No one should support Obama after his pitiful caving in to Republicans.  He isn’t compromising because the Republicans aren’t giving in on anything.  There’s a big difference between compromising and caving.  Obama is a caver.  When George W. Bush was president and I and others criticized him people said dissent was patriotic.  Now, suddenly, it’s treason.

There are good solutions:  first we need a president with some backbone and some balls.  Then we need to pass tax increases on the rich, go back to the pre-Reagan era.  Tax cuts cost us jobs they do not create them.  Sound, long term fiscal policy will create jobs after we revive the economy with a massive new stimulus.  People on unemployment are a drag on revenues instead of adding to them.  Put people back to work.

We also need a new tax on financial transactions.  The runaway speculation by Wall Street is increasing the prices of food, gas and other commodities.  We need, once again, to limit the amount of speculation in these markets and tax them.  This isn’t rocket science but it does require people in Washington who aren’t beholden to Grover Norquist but to the people.  If your legislator is sworn to Mr. Norquist it’s time for a replacement.

News & Notes December 2, 2011

Here’s yet another example of why I left the Democratic Party:  the Senate voted 93-7 yesterday for the infamous Defense Authorization Bill which allows the government to declare the country a battlefield and arrest and detain any citizen without due process.  Don’t tell me there’s a difference between Republicans and Democrats when I see votes like this.  The Udall Amendment to strip the offending bit out of the bill was defeated.  Every Senator who voted for this needs to lose their next election for violating their oath to uphold the constitution.  Both Casey and Toomey voted for the bill.  Toomey voted for the amendment and Casey against it.

Casey remained in DC for votes on the bill rather than travel to Scranton to be with the President.  He should have gone considering his bad votes.

In other news Republicans blocked an extension of the payroll tax cut again protecting their constituency, millionaires and billionaires, at the expense of working people.

120,000 new jobs were added last month bringing the unemployment rate to 8.6%.  Public sector layoffs continue putting a drag on the economy however.  Every dollar spent on public employee salaries creates $1.42 in ripple effect economic activity.  

“For the year, government agencies have now announced 180,881 job cuts, 30 percent more than the 138,979 job cuts announced by these employers through November 2010,” the firm said in a news release, and a significantly higher percentage than the percentage of cuts announced overall in the private sector.

“With one month remaining in 2011, job cuts for the year total 564,297, officially surpassing the 2010 year-end total of 529,973. The 11-month total is 13 percent higher than the 497,969 job cuts announced over the same period a year ago,” the firm said in its statement.

Ann Coulter says the way to stop the Occupy movement is to shoot protesters.  That’s already happened Ann.  Ms. Coulter says the most outrageous things in attempts to revive her sinking TV career.  All she’s really interested in is selling books.

Dan Onorato, rumored to be considering the race for Auditor General, endorsed Eugene DePasquale Wednesday.

Will Kathryn Bookvar challenge Mike Fitzpatrick in PA-08?  She’d make a good candidate.

John Raffert formally entered the race for Attorney General.  The fallout from SanduskyGate will hurt him though after he said he supports Corbett’s actions there as AG.

There’s lots of controversy in Iowa over marriage equality and this young man spoke eloquently about being raised by two Moms:

Once upon a time extreme right wingers (Nazis) used to speak in code on issues to conceal their extremist views.  No more.  Today they are quite open about them and alienating good Americans and shocking many of us.  In the current example the Speaker of the New Hampshire House says students shouldn’t be allowed to vote because “they’ll vote liberal.”  You cannot, of course, disenfranchise entire groups from voting because you don’t like the way they vote.  This harkens back to the days of Jim Crown and Southern terrorism against Black voters.

Siri, the new voice recognition app on the iPhone has an interesting response when you ask where you can obtain an abortion:  it sends you to the nearest “pregnancy treatment center.”  These are religious based, taxpayer funded places where women are brainwashed about abortion.  Sign this petition against Apple.

How Much Does Child Poverty Cost the Economy?

A blog post by Chris Lilienthal, originally published at Third and State.

At a conference this week, a presenter posed an important question that doesn’t get asked very often: How much does child poverty cost our economy?

Based on an analysis of the U.S. Census Bureau’s 2006 American Community Survey data, researchers estimated that child poverty costs the nation $500 billion annually in foregone earnings, involvement in crime, and the costs associated with poor health outcomes. In Pennsylvania, the cost is $17.5 billion annually, based on the 2006 data showing 465,000 (or 17%) of children living in poverty.

In effect, this is money that would accrue to the U.S. and Pennsylvania economies if we took steps now to end child poverty once and for all, such as investing in education, health care and other vital family needs. And with poverty rates higher today in the wake of the recession, the benefits of doing so would be that much greater.

We have long grappled with the social costs of poverty and what it means for families across Pennsylvania and the nation. It’s also critical to look at poverty as a huge economic and jobs issue.

Lori Pfingst of the Washington State Budget and Policy Center, who took the national data and broke it down by state, explains:

The social and economic costs associated with childhood poverty are a powerful argument for policymakers to develop poverty reduction campaigns at both the federal and state level. Several states have developed poverty reduction campaigns and some have implemented new anti-poverty policies. … In light of these numbers, poverty reduction should be viewed as a social investment that generates billions of dollars in returns to society in the form of increased economic productivity, reduced expenditures on health care and the criminal justice system, and improvements to multiple dimensions of children’s well-being.

Berks Dems Revolting Against Chair Herman

Berks County Democrats began a palace revolt against County Chair Tom Herman this week.  Tuesday evening’s Executive Committee session saw officers demand his resignation.  When Tom Herman refused three of them resigned.  They were Charles Corbit, Barry Groebel and Dick Horton.  Herman went on a mad rant at the fall dinner and even was stupid enough to upload it to YouTube:

The low point was when the County Chair told Democrats they should simply leave the Party.  Of course many have since he became Chair and began wielding power irresponsibly.  As the number of active Committee persons declined so did Democratic performance in elections.  This year, again, several Republican row officers went unopposed and the turnout was pitiful.  The incumbent Commissioner came in third even though one of the Republicans was laid up and couldn’t campaign.  No matter though as his nickname is “The Third Republican.”  Under Tom Herman there hasn’t been a real Democrat on the County Commissioners Board.

His lust for power meant he preferred presiding over a diminished and ineffective County Committee rather than have a large and diverse one he couldn’t control.  This finally has come home to roost as his fellow Dems have finally seen the error of their ways and are planning to impeach him at the December 10th meeting.

Philadelphia Police MOVE Occupy Camp

The violent response of Philadelphia Police to a peaceful Occupy Philly camp in Dilworth Plaza evokes memories of its reaction to MOVE.  That was a radical African-American group holed up in a rowhouse in West Philadelphia until Mayor Wilson Goode ordered them bombed.  The explosion killed women and children before burning down an entire block.

The Philadelphia Police Department has a long tradition of corruption and violence and we witnessed more of it this week.  Hundreds of cops descended on peaceful, non violent protesters exercising their First Amendment rights and had them brutalized.

Though obviously not as brutal as having a bomb dropped on them (this was, after all, right next to City Hall) the brutality and violence unleashed by Philly cops was reminiscent of MOVE.