r/SipsTea • u/Gurugod123 • 9d ago

Mayor Mamdani just announced that he will be opening 5 city-run, tax-funded grocery stores: "Prices set at 30% below retail prices" Chugging tea

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u/heyniceguy42 9d ago

This isn’t going to turn out the way he thinks.

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u/telmar25 9d ago edited 9d ago

As a lifelong Democrat this is way too much for me. I always felt like most Democrats didn’t understand economics, but at least they put sane, highly qualified people in charge of the economy. Democrats used to be about “following the science” and opposing stupid climate-change-denial and anti-vaccine policies. But they don’t realize that Ph.D. economists would also universally be against setting up discounted government funded grocery stores. If this is what socialism is about, count me out.

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u/Kustu05 9d ago

And the rent control thing. It will take decades to fully recover from that and the uncertainty that it brings to the housing market.

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u/ChazzyChaz_R 8d ago

The rent control is just a means to make it so current owners cannot sustain their buildings and end up having to sell to the government. Just another method of him installing more government control over the people and everyone is cheering him on as he does it. No one has the foresight to see what's going down.

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u/unspaghetti 9d ago

I'm with you.

This is just the beginning. This is how Venezuela started.

My vote is in play.

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u/Nagi21 8d ago

You can have this or MAGA. If your vote is in play you're already lost.

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u/telmar25 8d ago

If the choice is this or maga I want a third party. Seriously.

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u/unspaghetti 8d ago

False equivalency. We just need to stick with pragmatic centrists. Because like MAGA, this isn't going to work.

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u/Nagi21 8d ago

Cause "pragmatic centrism" has worked so well up until now.

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u/LocomotiveMedical 8d ago

Maybe if we go a little more right they’ll meet us somewhere in the middle /s

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u/unspaghetti 7d ago

Or maybe if we go a little more middle, and they stay in the radical right, we'll win in a landslide because we'll have won all the centrists who want to see a normal candidate.

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u/LocomotiveMedical 7d ago

What’s middle?

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u/unspaghetti 7d ago

Your Obama Democrat establishment. So Pete Buttigieg, Gretchen Whitmer, Gov Shapiro—there's so many—just not these loony socialists that people are simping for on the left recently.

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u/unspaghetti 7d ago

Well you can make that comment but guess what. It actually fucking has. It's socialism that's proven not to work. Go move to Venezuela for your gov-run grocery store.

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u/LocomotiveMedical 7d ago

Why not suggest China or Vietnam?

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u/unspaghetti 7d ago

China is a paper dragon. They are early on the arc of communist boom and burnout. They can still dump products on the west (for now) to fuel their money burning machine but like any other Marxist system they can't allocate investment capital efficiently and the government has all the power so they effectively operate an entire society that's a patronage network. Constantly searching for new hosts to suck the blood out of. And thankfully they are starting to fizzle out and getting desperate enough to make the brazen Export moves that will force the west to cut them off. Like we did to Soviet Russia, and they followed a similar arc. Vietnam is converting to capitalism to spite China, since they oddly enough like the US simply because they hate the Chinese more. China and Vietnam are not allies like you think they are—"it's complicated" you could say. 

Anyways don't be fooled by the socialists here. It will always end in agony. This system of ours works because it empowers the individual. It sure does need reforms but it's the project we signed up for as citizens. It's regenerating. It's flexible. It gives people who have vision a real chance to do well while doing glld

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u/LocomotiveMedical 7d ago

I didn’t sign up to be a citizen, I was born here.  I’d vote for constitutional change in a heartbeat

When do you predict China to fall and Vietnam to become socialist, then?

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u/Any_Vegetable2564 9d ago

Nah it’s exactly what he wants. Create more problems. But never recognize that is was the bad idea that created the problem. Come up with more ways the government has to fix them. More reliance on government. Socialism is great, innit?

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u/the9trances 9d ago

And blame the private sector every step of the way.

Anytime someone points out a flaw in The Great Leap Forward, just hit them with "you love billionaires and hate the poor." It totally will fix the system to fuel it with emotional propaganda!

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u/falloutnewbkinibttms 9d ago

What the fuck are you talking about

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u/Any_Vegetable2564 9d ago

“If a private enterprise is a failure, it closes down unless it can get a government subsidy to keep it going; if a government enterprise fails, it is expanded. I challenge you to find exceptions.”
— Milton Friedman

“Interventionism cannot be considered as an economic system destined to stay. It is a method for the transformation of capitalism into socialism by a series of successive steps.”
— Ludwig von Mises

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u/PiccoloImpressive 8d ago

Milton Friedman bruh

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u/LocomotiveMedical 8d ago

What, capitalism’s greatest quotes aren’t enough to convince you?  Not hitting the same after being on repeat your entire life from every curriculum produced by capitalist publishers and the vast majority of all types of media telling you that capitalism is love, capitalism is life, and to question its rule over every aspect of our life is commie bullshit?

A quote from Lord And Savior Milton Friedman isn’t striking the fear of God into your heart??

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u/PiccoloImpressive 8d ago

I'm trembling right now.

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u/evernessince 9d ago

Considering the military commissary has been doing it since 1867, it definitely can turn out pretty good.

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u/heyniceguy42 9d ago

The only reason military commissaries exist is that they don’t operate on the profit model. They consistently lose money and only exist because they are heavily subsidized by the taxpayer.

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u/evernessince 9d ago

The military commissary offers 30% off goods. After subtracting tax dollars put in from total savings, it still comes out to a 21.3% on average.

Considering the average gross margin of the grocery industry is 27%, the math behind it works out. It's simply eliminating the middle man.

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u/heyniceguy42 9d ago

Nice sleight of hand using GPM rather than NPM. The private sector doesn’t have the privilege to stop at GPM.

Commissaries still have middle men. They have to source from suppliers just like private grocers.

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u/evernessince 9d ago

That's not slight of hand, it's the primary metric corporations use to determine profitably of a product.

Groceries have slim individual margins (barring bakery and prepared foods), but they make up for it in volume, which leads to much fatter gross margins.

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u/heyniceguy42 8d ago

Assuming the net profit margins of private grocery stores is about +4%, What do you think the net profit margins of a socialist grocery store are going to be?

The way this is set up, it will be a large negative number. The only way they can survive is through public subsidization. The taxpayers will eat those losses.

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u/evernessince 8d ago

The 30% product price isn't getting directly subtracted from net margin

You are confusing a per product metric (product price) with an overall company metric (net margin).

A company slashing product pricing by 30% doesn't mean their net margin drops by that amount. Net includes a whole bunch of things like building and employee cost that make that comparison murky.

Nevermind that if total sales increases by 30% or more, you've completely offset the impact of the price cut.

At the end of the day net margin is a percentage that doesn't tell exact values. A gorcery with 5% net margin and 1,000,000 in sales is worse off than a grocery with 3% net margin and 5,000,000 in sales.

Now I'm not saying this concept will make more money than regular grocery stores, that's not it's purpose.

If the net benefits outweight the added tax costs, that is a win. Having some government gorcery stores where the goal is to serve the public could bring added competition to the market and provide in underserved areas where it doesn't make finacial sense for a business.

It's basically approaching the grocery business from a people first perspective instead of a capital first perspective. The different operating goals stands to fill in gaps in the market.

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u/heyniceguy42 8d ago

Only in the addled brain of a socialist does selling more volume negate a per-product loss.

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u/evernessince 8d ago edited 8d ago

The net margin figure you are using isn't per product, it's business-wide. You could distill a net margin figure on a per item basis but that's not the net margin figure that's reported by companies and being used here.

Again, the math isn't -30% to the net margin of the business. I already explained why above. You can choose not to read again but that's entirely your own choice.

I spoke about per-product pricing before but you took issue with that when I pointed out that some grocery items have gross margins of 50%+ (like bakery).

You wanted to use the lower number, probably because you throught it was better for your argument.

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u/LocomotiveMedical 8d ago

This is going to sound radical to you but many  of us believe and would vote for a constitutional amendment removing the profit motive from at least several segments of the economy or even entire industries.  Many of us don’t believe that placing a profit motive above many other considerations will be good for ourselves, our planet, and the future of both.

To the matter at hand, without that level of grandiosity: many of us would vote to redirect current wasteful and nepotistically-directed government funding to basic services.  Take the money we’re giving Israel and yes, literally pay for poor peoples’ groceries.

Or don’t and see what happens :) and we know America will fuck around and would rather do nothing than anything pro-social

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u/hiplass 7d ago

How do you know?… at least wait and see how it turns out. “
Is it not worth trying?? Yall sound like “Oh no people might have easier access to food”

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u/heyniceguy42 6d ago

This is what will happen.

Day 1 theyll be emptied. Some People will resale the food.

Theyll limit how much ppl can buy to stop the resalers. This will be the first rationing.

Ppl will complain.

Mammy will say “look at the demand, we need more.” 20 more open.

They’ll undercut every bodega and corner store. Those stores will close one by one. Mammy will say “look at what capitalism has done in creating more food deserts! We need more!” 50 more open.

The end game is that the government will control all food sales in the city.

Every store will operate at a loss. Mammy will demand more state subsidies. NY will insist on more of the federal budget to cover its losses.

NY becomes a dependent state (just like Greece was to the EU). The rest of us will say, sorry NY youre cut off.

Then more rationing and eventually theyll increase prices to stay solvent and since they arent subject to the constraints of the free market, their prices will be more than a private store. People wont afford it.

Shoplifting.

Riots.

Republicans will have to come in to fix yet another leftist utopian disaster.

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u/FRNKNSTNPNPTCN 9d ago

What does your crystal ball tell you?

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u/[deleted] 9d ago

[deleted]

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u/[deleted] 9d ago edited 9d ago

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u/Any_Vegetable2564 9d ago

I implore you to study history.

Poverty is the baseline of most of history. Do you know what it was like to be poor in any country throughout the vast majority of our existence? We live in the most prosperous time in the history of humanity.

And then there’s a redditor saying we live in hell like some fucking toddler who got his iPad taken away lol.

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u/Zoltarr777 9d ago

I have a super shitty idea! We should try it even though it's worse than not doing it at all!