View from the Shutdown 5: The Problem With the Governor's Latest Rule

Yesterday, in a press conference at around 3 pm, Pennsylvania Governor Tom Wolf announced new rules in response to rising rates of COVID-19, after a few weeks of improvement in the Commonwealth. His new rules were mostly focused on bars and restaurants (which includes PA breweries, wineries and distilleries). It banned ALL on-premise consumption of alcohol… unless it was accompanied by a meal. The rule went into effect at 12:01am this morning. Always trying to find some humor in dark times, we put up a Facebook post joking that, apparently, eating food protects you from COVID and expressing our frustration at the rule’s implementation. About one-third of people who responded joined us in an expression of “that sucks; sorry to hear it”; another third decided this was a call to action against the Governor, masks, laws and other things; the final third expressed disappointment in us for being selfish, blaming the governor for his rule instead of people who didn’t wear masks, not taking the virus seriously, and missing our chance to be a “community leader.”

If the shutdown should have taught us anything by now, it’s that 1. some will ruin a nice thing for all of us and 2. don’t read the comments. We’re dumb, because it apparently we didn’t learn.

A few things to clarify first, before getting into the real issues with the ruling:

1. Masks help stop Coronavirus spread. Wear them. Don’t be a jerk.

2. If you define being a “community leader” (in quotes because it was an odd phrase that several people used) as accepting every government action, or agreeing with one person, all the time, we were probably never going to fit that description. In fact, we spend a lot of time and energy trying to get rules we find unfair changed for the betterment of many communities of which we consider ourselves a part. It’s fine to disagree with us, but please don’t confuse that with a lack of character on our part, and we won’t on yours.

3. Of course governors everywhere have an impossible job right now trying to balance competing imperatives, and of course their primary duty is to protect citizens. But that doesn’t mean that they are immune to criticism when they do something wrong. So the idea that Wolf isn’t responsible for the shortcomings of the decisions he makes unilaterally is frankly ridiculous. Again, disagreement is good.

4. We absolutely agree that something needed to be done to protect people; we just don’t think this will do that, and it will cause real economic harm in the process of not helping.

On that note, let’s dig into the main issues with this rule, from the perspective of those of us who have to live it, every day:

Stolen from our friends at the Mint Gastropub: https://www.bethlehemmint.com/

1. The Timing.

   The rule was announced at his press conference, around 2pm. In it, he seemed to indicate outdoor seating would be unaffected. Then the press release came out around 3pm, which indicated that it was subject to the same meal restriction. The rule took effect at midnight, less than 8 hours later. As of this writing (around noon on Thursday) we still have no guidance from the state as to what constitutes a “meal”.

   This comes on the heels of two weeks in “green” and about a month in “yellow.” Every time we get set up for a state of operations (which involves things like new procedures, new seating arrangements, and new equipment to keep everyone safe), the rules change, with no warning at all. This is absurd, and does not need to be this way. If the governor’s office were considering this rule all week, giving us a heads up on Monday would have helped us prepare (for example, we have tours booked for this weekend). So, either: The governor’s office was thinking about this and was deliberately not transparent with its licensees, or this was a decision as rushed as it appears to be, and I’m not sure which is worse.

2. The Capriciousness

   This rule seems to boil down to: a person can sit in a seat at a table at an establishment. If they order a drink but do not know what food they would like yet, they can not have it. If they would like a drink but not food, they can not have it. If they order a meal and a drink, it is okay. There is, so far as anyone can tell, no justification for this on any level. Eating, like drinking, requires the removal of a mask. Either way, the person is seated at a table. Either way, the person is drinking. The only difference is the presence of food. This is what leads everyone to make memes about how COVID-19 apparently hates chicken fingers. It’s not grounded in any science, and so there’s no reason to believe this will help protect anyone.

   Some on Facebook made the argument that alcohol lowers inhibitions, and so people looking to get drunk would be less careful than those looking to eat a meal. Let’s set aside the rather cringe-inducing stereotyping embedded in that assumption, and examine it on its face. Either way, you have to sit at a table. Either way, social distancing and mask rules are still in effect. Either way, maximum party size rules were already in effect. The presence of a sandwich changes nothing.

   Ok, now to hammer the pretty ugly stuff under that assumption. It’s one thing to assume you’re a better person than someone else because of your behaviors and choices (it’s uncharitable, but at some level we all do it). It’s totally another to assume you’re better because you can afford to eat out with your discretionary income whereas someone else can only afford to have a couple drinks, or that someone else finds it healthier or more compliant with their diet or religion to eat in and drink out. There’s nothing morally superior or more socially conscious about your burger and glass of wine than someone else’s IPA and popcorn.

   Lastly: I’ve seen a few local places that are definitely not adhering to the rules. I’m not going to call anyone out, but they’re the same ones everyone has seen playing fast and loose with the rules. You know what they all have in common? KITCHENS. This rule stops us, not them. Which leads me to…

3. The Toothlessness

   We already had a lot of rules. Like most responsible business owners, we were abiding by them, and we were doing it in spite of the fact that we knew there was basically zero enforcement. Not everyone was so conscientious, and the ones who ignored the rules did so mostly to their benefit. The LCE (liquor cops) released their report for July 6-12, and it shows 77 warnings and zero violations given in 4,360 visits statewide. To some extent, I don’t blame the LCE. Everyone is winging it, and all of us were put in charge of policing someone else’s rules at our own establishments, so there’s a case for leniency.

   But, maybe, before enacting more rules that don’t promise to do much, we could try enforcing the ones we had? Because as far as I can tell, this will only impact the people who were already doing their best to keep everyone safe. The bars that ignored this before can still do it (again, they all sell food). Wolf is effectively demanding more of the responsible businesses because he finds it too hard to punish the unreasonable ones.

In case you thought July 4 weekend was more enforced.

The point of all this isn’t to complain; we know, lots of people are going through hard things, and our ability to sell mead is appropriately low on your priority list. But to the folks who dismissed this as being “inconvenient” on our feed: It’s way more than that. Decisions like this very much hold in the balance the ability of businesses like ours to exist, pay debts, and employ people. That matters a great deal to many people, and much more so when you multiply it out by all of the companies subject to this rule. Not to mention that, when a leader makes decisions that appear poorly-conceived, -planned and -executed, it raises questions about everything they do subsequently. But, even if you don’t care about the principles of fairness, effectiveness and transparency from governance, we hope you can at least care about the people whose families are affected.

So, what would we have done? Personally, I think almost every brewery/bar owner I talked to was fine going back to yellow rules, with outdoor seating only. Everyone understood them, and it was those procedures that kept the numbers moving in the right direction. Plus, it lines up with the research we have, that outdoor spaces are MUCH safer than even controlled indoor ones.

Instead, we appear to have preserved the far more dangerous indoor dining - albeit at a level that no establishment I know of can support, at 25% capacity including staff - put the hurt on responsible businesses who had just invested in outdoor spaces, and managed to do it all in a slipshod way that exacerbated partisan divides and undermined confidence in decision makers.

Once again, if you disagree with our assessment, we fully respect that. We understand that there’s a lot of not-very-clear information out there, and what we do know can lead smart, well-meaning people to disagree. We thank you for taking the time to read our views on things and consider them, and we hope to see you back in the tasting rooms soon.

View from the Shutdown 3: What Kind of Week Has it Been?

You know it’s getting bad when the Internet has run out of memes to describe the fact that 2020 seems to have no bottom to hit.

In the last week:

• We received a grant from the City of Bethlehem

• Governor Wolf, keeping with his apparent strategy of making sure none of his citizens can prepare for anything, said that, contrary to his prior announcements, we will be able to have outdoor seating next weekend.

• We were able to start spending PPP funds (correctly, we think)

• Local governments, scrambling to prepare for YELLOW and its new rules, are trying to figure out how to generate the most space they can out of parking spaces, parking lots, alleyways, parks, and whatever else happens to be around.

• Police in Minneapolis killed a man on video.

• In response, an agonized nation, full of people frustrated and cooped up, has begun tearing itself apart. Many protests were peaceful and law-abiding. Many were not. Four policemen were shot in St. Louis; one was run over in New York. Countless protesters have been injured by police and other dangerous conditions. Damages from looting and vandalism are being visited on large retailers and community establishments alike in cities all over the country.

• In response to the protests, the president threatened to send the military to effectively invade his own states. He then ordered law-abiding protesters to be shot with rubber bullets and tear gas so that he could take a photo in front of a church.

• June started. It’s Pride month.

Unlike past crises, this one comes on top of others and at a time when everyone is already experiencing some of the worst anxiety about our future as a nation that we’ve felt in decades. It also comes at a divided time, with an election upcoming, when leaders on both sides seem as focused on scoring political points as solving problems.

Already, I’ve seen breweries criticized for taking stands, and criticized for not taking stands. We’re in an era where everyone has to have a take, and while I am generally pro-discussion (see our values… we’re big fans of the respectful barroom debate), times like these make any type of communication hard. This is a time where empathy - usually a tool on which I rely for clarity - seems only to make everything hurt more.

The big winner of quarantine - aside from dogs and the Dunning-Kruger effect - has unquestionably been platitudes. “We are here for you,” say ads telling us to buy cars; “We thank you,” say billboards from companies that say providing hazard pay to essential employees is too expensive; “We’ll get through this together,” intones a voice promoting a business that has nothing in common with mine. On some level, I understand it. There’s not much more to do (for some of us) than say nice things and hope for the best. But for those of us facing the possibility of losing our businesses, it feels disingenuous to say we know what someone else is going through, because it’s become incredibly clear that most people don’t, really.

I honestly can’t imagine what it’s like to live in a country where those that are supposed to protect and serve pose a real threat to your life for potentially no reason. I also can’t imagine what it’s like to live in a job where life is under threat on a routine basis. I can’t imagine being so angry at everything that throwing a brick through an unrelated window makes sense, and while I can imagine what it might be like to own the window the brick went through, I’m not sure I can imagine the mix of sympathy, empathy and anger that would engender in me if I knew it was part of a protest against absolutely intolerable conditions.

There was a great piece in the Atlantic a week ago, I’m a Chef in a Seaside Town. I’m not an Epidemiologist, in which Rob Anderson details the complete impossibility of trying to figure out the “right” thing to do in this time. What does it say that that feels like 10 years ago, and in a simpler time when all we had to worry about was the existential threat of a global pandemic. His point was that we’re all being asked to be things we are not trained to be: public health experts, city planning specialists, and now civil rights advocates.

We make weird booze, for crying out loud. And while we’ve never taken ourselves very seriously, currently it would feel insane to even take the business seriously, if it weren’t for the hundreds of thousands of real dollars affecting our real families.

And so on we push, like everyone else, and if it seems unbearable to us right now, imagine what it must feel like for the family of George Floyd, Ahmaud Arbery and Breonna Taylor. So if they can go on and have shared humanity, then so should we be able to.

Someone as privileged as me has no right to tell other people it’ll be okay when I’m not even sure of it myself, so I’ll defer to two people who have witnessed things I wish no one would ever have to:

“It’s OK to be angry, but channel your anger to do something positive or make a change another way because we’ve been down this road already,” - Terrence Floyd

“Hello babies. Welcome to Earth. It's hot in the summer and cold in the winter. It's round and wet and crowded. On the outside, babies, you've got a hundred years here. There's only one rule that I know of, babies - "God damn it, you've got to be kind.” - Kurt Vonnegut

Be decent to each other.

-GHL

VIew from the Shutdown 2: Good News, Bad News

Good news first: We got our first financial assistance, and it was from the Greater Lehigh Valley Chamber of Commerce. We received a $1,000 grant, and while you might think that’s not a lot, we’re in one of those phases where every little bit is huge.

We’ve also launched local delivery, which you’ve probably seen if you’re reading this. And we’re all still healthy.

GLVCC

Thank you.

Okay, now the bad news:

As I mentioned in the last post, we didn’t get the PPP first round. That’s in part because of what I described, and part, we all learned, because some very not-small businesses got tens of millions so that they could not give it to anyone who works in a restaurant. The responses to this were… mixed. I would say that, personally, all of the commentary I got from friends fell into three categories:

1. Yep, that sucks. Those guys should not have abused the program like this.

2. What did you expect? The system is rigged, man! Don’t you see?! RIGGED!

3. I mean, they didn’t break the law, so… get your stuff in faster next time.

I will let you decide which of those you think was most helpful and supportive to us during a bad time. I will just make a comment that: if you’re a non-entrepreneur telling an entrepreneur about the imbalances in the system, please know that you sound like a fan telling a AA baseball player that hitting a curveball is hard.

Shake Shack got $10M, then announced they’d give it back. Plenty of people thought they were jerks for applying to begin with, and maybe they are just giving it back out of sheer self interest (they got way more value in positive press, just as I suspect Ruth’s Chris may look back on the $40M as not worth the beating they received, especially if they’re pressured into returning it). I saw Shake Shack CEO Randy Garutti on CNN, and he sounded reasonable to me: People have already forgotten how little guidance we got on this program two weeks ago, and they had no understanding of how much their request would affect smaller businesses. Plenty of people disagree with me, though. Here’s a video if you want to try to judge the inner emotional state of a rich guy for yourself:

This guy has found a way to get a haircut.

Plenty appear to have doubled down on the stupid first-come, first-serve way of administering aid. Programs are now announcing when their applications will be live, which has basically three effects:

1. It absolutely ensures that the site will crash

2. It puts businesses with owners who are doing anything at that time at a massive disadvantage.

3. It feeds panic and anxiety

We had one this week that went live at 3pm. I was teaching, so I asked Mike if he could be available. He rearranged his schedule to be available. By repeatedly reloading, he was able to log in and get a form submitted by 4. By 4:30, the application was closed. We received a confirmation email at 5am the next morning, so our application got in.

I’m not sure how we’ve done it, but we’ve managed to convert emergency financial aid into a release line during Tampa Beer Week.

A modest proposal: Open applications at 12:01am on a day, announce at 8am that it’s open and that applications will be accepted for a set amount of time (say, two weeks), after which all applications will be evaluated.

Today, Congress is supposed to approve another 400bn to the program, so either we’ll be re-evaluated or PF Chang’s will get some cash. Who can say?

Pennsylvania’s noble governor has released his “plan” to reopen, which consists of loose guidelines and no timelines. It’s clear that operations like ours will be the last to resume normal service, and it’s not clear at all what will come before that stage or when. Which, to be clear, is entirely correct; no one knows where we’re going next, or even vaguely when that might be, until we have testing for antibodies widely available. So we, like everyone else, are trying to be patient and compassionate as everyone hashes out contingency plans and options.

View from the Shutdown 1: What Navigating the CARES Act Is Like

For a number of reasons, ranging from sanity to transparency, I’m going to start chronicling some of our experiences from inside the COVID collapse-recovery process. It’s going to be mostly our experiences, with the occasional opinion, and I’d be very happy if anyone disagrees or wants to share theirs in response. Stay safe; stay sane; stay decent. -Greg

So, today we received notice from our bank that no one was able to review our Paycheck Protection Program application before the SBA announced it was out of money. This was not terribly surprising to any small business owner that has been trying to navigate the deluge of slapdash programs that are the results of various levels of governments trying to save parts of the economy.

Ours was a small request (a little over $30K, and the average award was $206K), but it would have allowed us to bring some people back to work and avoid falling further behind in the various bills that are piling up for all of us while the shutdown continues.

The CARES Act directed the SBA to lend out about $340bn to small businesses in forgivable debt, capped at $10m and based on 2.5 months of payroll. The program began April 3 and was out of money less than two weeks later.

There was, of course, no guidance given to the SBA lenders on how to administer this program, beyond an application form. When we found out that our main bank, PNC, was going to be administering the program, we filled out the federal form and then waited for PNC to open their application, which they did in less than a week (I do not envy their IT department). We tried to fill out their application, but of course they wanted more information that a small business doesn’t have on hand (like payroll reports), so we had to stop the application and get that info, then finish it. Of course, though, there was no time to create a form that stored information, so we had to start over with the new information. Then we found that PNC did not want the federal form we had already filled out, but needed it done and esigned by Adobe, so we had to start over and generate the form that way. Apparently, by the time our place in line came up, there was no more money.

Each of these things is not really anyone’s fault, except for a total lack of leadership or organization at the highest level. The banks didn’t have guidance, the IT people didn’t have time, and the humans involved didn’t have enough information.

10% of the money went to loans of more than $5m, which is kind of amazing to think about for a business like ours. That means that we were competing with businesses whose monthly payroll is literally almost 10x our yearly revenue. When you consider that, perhaps it’s not surprising that we were later in submitting than a company like that, which can make the application a CPA’s job to have ready and done instantly. We’re just two people not getting paid right now, trying to hold things together; even with an accountant helping us, it took a few days to get everything right.

And the CARES Act isn’t alone in this model. A large statewide disaster loan program wanted roughly the same information you’d have to submit for a mortgage, which is an enormous undertaking for a truly small business; that program was full in less than two weeks as well (and those loans weren’t even forgivable!). Another grant program for a local area came to my inbox around noon one day, and because I was near a computer I got to the very simple application 24 minutes after it was emailed. It took about 5 minutes to complete, at which point I was informed the program was full and no longer accepting applications.

Every small business trying to navigate these programs has similar stories; relatively speaking, we are lucky to have stayed healthy and are at least still operating on some level.

But I do have a question about why we are awarding these funds based on a first-come, first-serve basis. We don’t evaluate basically any other program that way, and it doesn’t take a lot of thought to understand why being able to fill out a form is not necessarily going to be correlated with worthiness or impact. Even if we grant that it might (without any reason to think so), isn’t it going to disadvantage the smaller businesses by design, then? And we’ve got two people who know their way around a spreadsheet, with enough money to pay an accountant; what about the businesses that are just scraping by and run by people without ready access to service providers, software and banks? They’re completely left out (for more, this oped on how the next stimulus can help disenfranchised businesses goes into pretty good detail on some of the issues).

I’ve been talking to a ton of other brewery/meadery/hospitality owners, and we all understand that it’s unprecedented, and that there are going to be multiple steps in any recovery. Even the PPP was designed to keep people employed for 60 days, not fix a system. We’re all doing what we can; offering curbside, trying to change business models, pivot to conserve whatever future their might be for our businesses and employees. The idea of trying to get billions of dollars to millions of small businesses is a mind-blower even for someone who believes in the power of government like me. This stuff is hard, and I think most of us get that. So it’s up to us (including our legislators) to learn from these mistakes, and, if we want these tax dollars to be effective, to have some criteria for the next rounds beyond just who can respond the fastest.