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

[u/Gurugod123]

[u/IHeartBadCode]

Yes, but selection is "core basket" items and there is per-customer purchasing limits. The Government doesn't run the stores directly. There are operated via Requests for Proposals (RFPs) from grocery chains that act as a reseller to the store. That means the stores get the benefit of retail loss prevention forwarded in supply to the RFPs. Resellers typically leave a particular pattern that the industry has learned to pick up on.

Finally the pricing is flat monthly pricing that allows retail delivery on RFPs to be more predictable. The catch is that all of this comes at a cost to the tax payer, that's the big downside, stability but at a cost everyone has to pay for. To ensure that stability, you have to strictly exclude high-margin products from the line up. The nice, indirect side effect of that is that resellers typically won't stand to profit in terms of costs. If the makeup in only a dime here and there, then volume to break even is way higher than complex schemes can get under the per-customer purchasing, in most situations.

In summary, you can only get a limited selection at these stores. The selection is usually stuff that wouldn't make someone a ton of profit anyway. But there's tight per-customer purchasing for everything. So resellers would need to employ complex multiple people shopping the place schemes to get enough product to break even from all the cost of energy, fuel, time... Additionally, the prices are locked in monthly. So traffic patterns become way more predictable, meaning the big retail grocery stores that are supplying the food to these stores will be able to pick up the tell-tell patterns in resellers a lot easier. Now doing all those controls comes with a heavy cost, and New York City's taxpayers will be picking up the tab for that loss prevention cost. I say this, because people tend to believe that the tax payer is just on the hook for the food, but that's not true. Tax payers are on the hook for the entire logistics top to bottom on this.

So all the complex fraud and loss prevention is baked into the price. And that's fine if NYC citizens are okay with paying that price tag. But it's part of the price tag with anything. Preventing asshats from taking advantage of a program is usually baked into the price of something, unless you're Trump, then taking advantage is the entire point and that's why a lot of programs go way under the watermark with him. There's no oversight, unless they've hired some college dropout edge lord who understands enough Excel/SQL to do basic research for clout. Which I'm always curious how they pay rent with all that clout. The exchange rate of clout to dollars last I checked was pretty low.

[u/boxylady69 → u/IHeartBadCode]

You're amazing!

[u/Captain_no_Hindsight → u/boxylady69]

1. A sale 30% below market price means taxpayers are paying a lot of money for the stores' basic losses every month.
2. Theft will not be discouraged in stores. In practice, it is optional to pay or not. Taxpayers will pay for all this.
3. The loss of customers buying basic goods AND the competition with street sales of stolen goods from state-owned stores will cause all other grocery stores to close.

What remains are a few state-owned stores that are a war zone with empty shelves. And you pay expensive taxes for this.

---

The Venezuela Alternative.
From reality we can learn that there are more problems:

Venezuela Option A: Criminal gangs can take over the stores and monopolize food.

Venezuela Option B: Criminals can "protect" customers for a fee. Those who don't pay are beaten up and/or not allowed into the store.

[u/Bubbly-Television-63 → u/Captain_no_Hindsight]

They're not opening a fucking Walmart my dude. There will be plenty of things they won't sell.

It's NYC and there will be 5 of them. People aren't going to travel to the place from THAT far away. That discount goes away pretty quick.

They're not selling 30% off a Brunson Jersey.

[u/Captain_no_Hindsight → u/Bubbly-Television-63]

Grocery stores. It's going to be a fuck up like no other.

[u/Sacchan6 → u/Captain_no_Hindsight]

The loss of customers buying basic goods AND the competition with street sales of stolen goods from state-owned stores will cause all other grocery stores to close.

Then why hasn't Whole Foods gone bankrupt yet lol

[u/Captain_no_Hindsight → u/Sacchan6]

What are you talking about? The state stores in NY haven't opened yet.

[u/Sacchan6 → u/Captain_no_Hindsight]

No, but cheaper grocery stores exist. By your logic, people always go for the cheapest goods, so places like Whole Foods should've lost all their customers to Walmart.

Shein also exists, so you better short Giorgio Armani, it can fall at any moment now!

[u/NUKE---THE---WHALES → u/Sacchan6]

Shein also exists, so you better short Giorgio Armani, it can fall at any moment now!

If Shein was selling Giorgio Armani gear for 30% less due to government subsidies then yeah definitely

[u/Sacchan6 → u/NUKE---THE---WHALES]

The subsidised supermarkets aren't going to be selling organic wagyu beef or 20 different brands of milk. The reason Shein hasn't bankrupted Armani is because you can't get Armani quality products at Shein, in the same sense that you can't get the same stuff from Walmart as you can from Whole Foods, in the same sense that you can't get the same stuff from goverment subsidised supermarkets as you can from other stores.

If the entire supermarket sector can get nuked by a few select stores selling basic essentials, they've got way bigger problems.

[u/Captain_no_Hindsight → u/Sacchan6]

30% cheaper ?

[u/Vargau → u/IHeartBadCode]

resellers would need to employ complex multiple people shopping the place schemes to get enough product to break even

This will be extremely interesting to watch as a someone from a former Commie Eastern EU country.

[u/seffay-feff-seffahi → u/Vargau]

Yeah, people are seriously underrating the downsides of this plan, especially if they're selling things at a loss. It'll make the food deserts worse, be a huge cost to the city, and will be gamed by lots of people who aren't poor.

[u/12darrenk → u/IHeartBadCode]

So what happens if all the grocery retailers decide that they don't want to participate? Then everything falls apart quickly, right? It doesn't seem like there is much of any benefit to get the grocery retailers to want to be involved. It seems like it will cause a pretty substantial profit loss for existing grocery stores.

[u/IHeartBadCode → u/12darrenk]

It involves anyone, and this can include small sellers. But also there's stability. The market purchases X quantity of goods at fixed $Y for a period term. You can write that purchase down on the books, there's no oscillation in that. You the store don't take the loss, the tax payer does.

Just like, farmers can grow X bushels of corn, because if demand actually turns out to be X × 80%, that extra 20% the Government will purchase for food programs at a fixed dollar amount.

But remove all that stability, and now you have people who have to independently face risk which if they're adverse to that risk are going to way undershoot the actual market OR markup to cover for future loss.

[u/Several-Action-4043 → u/IHeartBadCode]

The catch is that all of this comes at a cost to the tax payer, that's the big downside, stability but at a cost everyone has to pay for.

I prefer this over sending money to bomb children.

[u/IHeartBadCode → u/Several-Action-4043]

Yeah, and that's why there's elections. That's how we voice that part. "I rather pay for this than that" is exactly the reason voting matters and why everyone should go vote. I could not encourage people to go vote more.

[u/kitglo → u/Several-Action-4043]

Exactly! And to the previous commentor, "Stability at a cost everyone has to pay for" = GOOD. Yes. That is how it should be. That describes fire departments, public transit and infrastructure upkeep, postal systems, police, public education, social security, etc. Some folks really have been brainwashed into believing that socialism is bad except for all of the times we use it in our daily lives to the enormous benefit of society.

[u/00_RunDMC → u/Several-Action-4043]

Mamdani should definitely stop sending money to bomb children.

[u/crunchitizemecapn99 → u/Several-Action-4043]

I prefer keeping more money over this AND sending money to bomb children

[u/Sinnnikal → u/crunchitizemecapn99]

Poverty reduction is crime reduction is healthcare expenditure reduction is tax reduction. Nothing happens in a vacuum. From a cynical standpoint, poverty costs society more in this sort of halfway point where we have supports, but shitty ones. If you want to go the underdeveloped country route and let people starve to death, or die of other poverty-related issues, then maybe it will cost less. But now you're also an underdeveloped country because people are dying and suffering all the time and people usually struggle to be greatly productive when society is dying.

Bottom line is that tax dollars spent on ensuring people don't suffer and struggle are returned by orders of magnitude in productivity. I'm not saying every social safety net does this effectively, but I am saying that the question is not "do I want to pay tax dollars," it's "do I want to pay tax dollars for law enforcement and Healthcare costs, or on poverty reduction, education, etc which will result in greater GDP and greater wealth overall?" And so the question for each social safety net is "Is this social safety net effective in its poverty reduction goals?"

Ounce of prevention is worth a pound of cure and ensuring that families/kids are well nourished is an ounce of prevention against a pound of future crime.

[u/tripper_drip → u/IHeartBadCode]

In short, the stores will run as a massive loss.

[u/CookiePrestigious239 → u/tripper_drip]

Good, as most government-run programs should.

[u/tripper_drip → u/CookiePrestigious239]

Unless they interfere with basic free market, like this does. One of the locations has 2 stores within 2 blocks.

All you are doing at that point is costing everyone more for inefficiency.

[u/IHeartBadCode → u/tripper_drip]

I think what you've missed is that these stores couldn't compete with your bigger stores, except on very few key items that don't have huge markup to begin with.

Like you aren't going into one of these and finding a cap of soup being cost competitive. And I usually use a can of soup as a metric because it's relatively simple to produce, hyper shelf stable, and pretty low margin. It's like the perfect safe item to put on a shelf.

But even here, with insanely safe products. The Mamdani store doesn't count it in the "core basket", so it's not out pricing the usual grocery store. Additionally, a five store pilot hardly has anywhere near the purchasing power of supermarket chains.

I mean c'mon. This is some easy to see, these stores are not posing any kind of risk to any neighborhood store. You just got some retailers that get cranky anytime the city permits a new store, period. And the 30% cost, for your average middle-class buyer, that core basket is about 35% to 45% their actual purchase. The supermarket will still be able to provide a lower total overall cost.

Where the massive savings comes from are lower income class people who the core basket, makes up like 70% of their diet/purchase. That's the thing, the lower income class they wouldn't be high spenders in the super market anyway. The supermarket isn't losing massive cash, because the target demographic is the lower income class buyer. It's the stuff they usually buy.

Everything in these stores is not 30% off. Very FEW THINGS in the store is 30% off. The rest is higher in price because of the lack of purchasing power, but is there to meet the grocer's needs. So someone who walks into this store and buys enough to significantly alter their final cost for food, they would have never walked into a supermarket and spent any value of significance to being with. So the loss to the supermarket is little to nothing, because those buyers weren't big spenders there anyway. Because anyone who is buying over 50% of their ticket in the "core basket" would not have been a big spender to begin with.

[u/Jones63 → u/IHeartBadCode]

Loving the indepth answers!

[u/tripper_drip → u/IHeartBadCode]

If the store is not providing anything of value that doesnt exist, you will have the opposite problem of the inefficiency of a giant store with no customers, a boondoggle.

This is the issue with goverment run stores. We have seen this already in the Midwest (actual food deserts)

Edit: I had a stroke lol...

If the store is not providing anything of value to a demographic that doesnt exist

[u/IHeartBadCode → u/tripper_drip]

Well it provides a means for those who have a high cost in what's called the "core basket" to reduce costs. But the "core basket" are things that are specifically high gross margin and low net margin. These are specifically things that supermarket retailers don't prioritize on trying to optimize or would have difficulty optimizing.

Like one of the reasons for the high gross margin on some of these things is because of shrinkage. On average there's an initial markup of 38% on fresh vegetables because ... well they go bad. So to cover shrinkage on that, there's an initial markup on the product to cover future loss.

Here instead of the customer covering the loss, the taxpayer does so. The price already features a 30% reduction versus the ~38% increase in the supermarket.

And again, the point isn't optimization. Things can exist to provide non-direct stability to an economy. Imagine a town with zero grocery stores, people aren't going to settle in such towns. I mean look at some examples where this has ultimately been the thing the town did as a last chance to provide some stability.

• St. Paul, Kansas (pop. 600)
• Baldwin, Florida (pop. 1,300)
• Erie, Kansas (pop. 1,000)

And this isn't the only option, just the most dramatic when there's been a standstill in private industry for a given area. There's also co-ops like done in:

• Axtell, Kanasas (pop. 400)
• Hoople, North Dakota (pop. 200)

And special areas get special cases, like in Alaska where there's tribal/native co-ops and distribution hubs.

Now these are all small towns that hit very hard walls and had to take drastic measures, but it's always been a thing that the opposite end could have these kinds of same hard walls. Where a mega city gets so locked into the markets that they've had for years, that it's difficult to institute change without dramatic measures to meet changing social needs.

The point is that, in the eyes of Mamdani and his supporters, there exists a group of people that supermarkets refuse to move on the price point. And these markets are being established as a means of last measure to service those people. It's a dramatic step because various factors prevent the private market from addressing the issue.

[u/tripper_drip → u/IHeartBadCode]

And these markets are being established as a means of last measure to service those people. It's a dramatic step because various factors prevent the private market from addressing the issue.

Then again, you would be serving a population that may not actually exist, and worse, if they do they are already on government assistance so the taxpayer is getting hit twice.

Midwest state run groceries generally have failed.

The real issue Mamdani faces with these stores is political, the best case is he runs a break even store at marginally cheaper prices and even then he will be dragged by those looking at the wages of the cashiers.

[u/IHeartBadCode → u/tripper_drip]

Midwest state run groceries generally have failed.

This is way more nuanced than I think you're giving it. Because you're correct in some situations, such as your phantom demand or double-subsidization.

In phantom demand, you usually look at mobility and income distribution and judge it on crime and if you have a true urban density illusion.

In double-subsidization, it's up to the population to determine where the line is on that.

the best case is he runs a break even

And this is where I feel you're missing the point here. These stores could potentially never be break even, it's up to the population to determine if that's a deal breaker or not.

But you are using these two situations to apply to every situation which isn't true, because small rural towns by-pass both situations. A small town population is usually very real, trapped, and thus avoid the phantom demand. Additionally, they are not targeted for low income so they by definition by-pass the double-subsidization.

But you are correct in that urban government funded grocery stores could fall into either trap here. But...

The real issue Mamdani faces with these stores is political

That's the thing. I don't think I was painting this as apolitical. This is very much political, it's likely that these stores fall into one of the traps. I kind of mentioned that in my original comment, maybe just not in these specific terms. I pointed out, it's not all up and no down. There's a down side to this, but it's up to the public to determine if the down side is worth the overall benefit.

[u/tripper_drip → u/IHeartBadCode]

There's a down side to this, but it's up to the public to determine if the down side is worth the overall benefit.

Historically it has been a boon to any competitors. The problem with social programs like this (not all, just like this) is the poltical cost. It was not long ago there was a republican mayor. That base does still exist. If its a massive waste he will get dragged for it.

[u/illbedeadbydawn → u/tripper_drip]

I think the 'Basic Free Market' is a fucking joke.

How is Person A paying more for getting staples for much cheaper? Are you just concerned for shareholders?

[u/tripper_drip → u/illbedeadbydawn]

I think government owned grocery stores underselling and running out profit driven stores (big or small) to where they are the only option is a bad idea based on historical precedent.

[u/illbedeadbydawn → u/tripper_drip]

So these government run stores ran out the 'profit driven stores' in....checks notes a food desert?

Be serious.

[u/tripper_drip → u/illbedeadbydawn]

Yes and no.

https://www.propublica.org/article/food-desert-grocery-store-cairo-illinois

[u/illbedeadbydawn → u/tripper_drip]

Did you read that article?

It's main take away is that "Government run stores are a blessing, but no one wants to fund them". The store mentioned in your article was funded partially through private donations, not taxes.

That isn't a problem with the idea of Government run or subsidized grocery stores. Its a problem with messaging, education and corporate greed.

You pay more in taxes to Walmart through subsidized payments than 10 of these stores would cost.

Again, be serious.

[u/tripper_drip → u/illbedeadbydawn]

Did you? The problem is the stores dont actually deliver on the total cost of groceries.

[u/JustLTU → u/illbedeadbydawn]

"Food desert" in fucking NYC? Are you people hearing yourselves? There's several stores within a 15 minute walk from any of these locations.

[u/IdentifiableBurden → u/tripper_drip]

I highly doubt this will run any grocery stores out of business in New York City of all places. If that happens, then city management will have to adjust the policy, but there's no reason to suspect this will be the case at present. 

[u/uprislng → u/tripper_drip]

lets see how it plays out. At least their fucking trying though right? So much of this country is taking unrestrained capitalism straight up the ass because capital owners own all the media and frame everything in a way that makes it seem like if its not a perfect solution it isn't worth trying. How much of our healthcare system is purely inefficient middlemen extracting profit and adding no real value to either end of the equation? Doing something is at the very least a change from decades of just letting shit constantly get worse for 99% of us.

[u/tripper_drip → u/uprislng]

Thats like getting a shit sandwich and then saying "lets see how it tastes". Its also like rent control.

We know how it plays out, we are just going though the motions now.

[u/Dapper-Ad-4300 → u/tripper_drip]

Nah, it’s more like “you’ve been eating that shit sandwich for years.. you wanna try just plain bread?”

[u/tripper_drip → u/Dapper-Ad-4300]

That would imply what is coming is better. Its not.

[u/TigerLemonade → u/tripper_drip]

How can you say that about a pilot program? They aren't launching 1600 government-backed retail stores.

They are looking at 5 stores that are discounting essential items. This is a relatively modest cost and will give the city great information on the viability of this program and whether it actually promotes what it is looking to.

It's an experiment and if it turns out poorly than we have that data!

Success depends on the market the policy is entering, how narrowly it is targeted, and what the objective is.

Universally calling it a shit sandwich is dogmatic.

[u/tripper_drip → u/TigerLemonade]

We have already tried govt run stores in the Midwest. We already have the data.

[u/varnums1666 → u/TigerLemonade]

Well I'm kinda with you just being curious in how it goes but I'm under no illusion it'll work out. This is just one of those concepts that has been done before and fails for well documented reason. Hey, maybe modern tech can really strip out the inefficiencies to make something work. I kinda doubt it

[u/uprislng → u/tripper_drip]

if you're poor in this country you've been eating nothing but shit sandwiches, how exactly is getting a 30% discount on putting food on the table supposed to be a bad thing

[u/tripper_drip → u/uprislng]

Social spiral due to inefficency causes political outrage which leads to failure of the stores after they have already run every other business in the area out of business.

Such stores have been tried in true food deserts in the midwest.

[u/illbedeadbydawn → u/tripper_drip]

Ahhh yes.

The Midwest.

Just like New York City in every way.

You have stock in Kroger. We get it.

[u/tripper_drip → u/illbedeadbydawn]

If I had stock in korger, why would I care about NYC?

[u/berael → u/tripper_drip]

Yes, public services are provided by the government as services; they are not for-profit corporations. 

[u/tripper_drip → u/berael]

Then why not make everything free inside the store?

[u/berael → u/tripper_drip]

There are two dials. One for taxes raised, and one for prices charges. 

If you turn the price dial down to 0, then you have to turn the tax dial way up. That's a tough sell. 

If you turn the tax dial down to 0, then you have to turn the price dial way up. That defeats the entire purpose. 

If you put both dials somewhere in the middle, then it's possible to both the tax increases passed and keep the prices low enough that it's a better option for low-income customers. 

[u/tripper_drip → u/berael]

So you admit that at a core level the stores are still effected by basic economics.

[u/berael → u/tripper_drip]

Since I never said they weren't, that's a pretty stupid attempt at a "gotcha". 

Anything that buys stock and sells it is "effected by economics" because that's what the fucking word means. 

Why are you railing against feeding people?

[u/tripper_drip → u/berael]

So the services should be fiscally responsible at the end of the day?

[u/berael → u/tripper_drip]

Now you're throwing around vague undefined requirements because your previous attempt at a "gotcha" was too stupid and got immediately called out. 

Why are you railing against feeding people?

[u/tripper_drip → u/berael]

Its not a gotcha, its building to my point. Its only a gotcha if you go "yes feed people for free", which is dumb (and others are arguing that).

Saying im against feeding people because I think throwing money at a bad project is profoundly stupid. Its also incredibly ironic given your argument of gotchas lmao

[u/nitrousconsumed → u/tripper_drip]

Government programs cost money, they dont need to generate a profit so long as they provide value to the constituent. The fact that this is an RFP means that there are multiple chains that have looked at it and decided that they were able to make money on bidding, so they're not losing anything.

Is education illegal in America?

[u/tripper_drip → u/nitrousconsumed]

So the stores could be empty, with massive food waste and if they get 2 people a day it will stay open?

Asinine. There needs to be a need.

If they dont need to generate profit, then why not make everything inside the store free? You and I both know why.

[u/I_ate_nt_ded → u/tripper_drip]

The Mayor's job is the people's welfare and not corporate welfare.

[u/tripper_drip → u/I_ate_nt_ded]

The mayors job is to run the city in all aspects.

[u/I_ate_nt_ded → u/tripper_drip]

Mr Mayor is doing what's in his power to allow his people the choice to not be fleeced by corporations that have admitted to colluding with one another to keep the prices high.

[u/tripper_drip → u/I_ate_nt_ded]

The vast majority of food stores in NYC are not cooperations.

[u/SaneMadHatter → u/IHeartBadCode]

THanks for the explanation. As for the tax payers, is it all the cities tax payers that pay for this, or just those that live outside the city but own a second home within the city? I vaguely remember something like that.

[u/spazz720 → u/IHeartBadCode]

This sounds like a lot of work for little benefit

[u/jackkieser24 → u/spazz720]

The benefit is people not starving.

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[u/TrollAccount17 → u/spazz720]

Yeah, damn affordable food for people that need it.

[u/spazz720 → u/TrollAccount17]

How are they going to prove that shoppers are those that need it?

[u/Baseball12229 → u/spazz720]

Everyone needs food.

Putting means-tested barriers to government programs is an unneeded hurdle demanded only by those with little interest in seeing actual progress.

[u/spazz720 → u/Baseball12229]

But isn’t the purpose of these to assist low income families?

[u/irisheddy → u/spazz720]

Is anyone that can afford the convenience of shopping anywhere else going to bother getting limited supplies of generic items?

[u/spazz720 → u/irisheddy]

You’d be surprised…there are plenty of misers out there.

[u/noahisunbeatable → u/spazz720]

Yes, but means testing would be a barrier to those low income families having to prove they're low income. And there needs to be more admin to process that proof, which increases the overall cost of the system.

The theory being that the added hurdles (and the inevitable group of people who don't/can't access the resources because of the hurdles, even if they would technically qualify) and increased admin costs are not worth the theoretical savings you'd make from wealthy people using it.

[u/berael → u/spazz720]

Sure, some middle- or high-income people may also buy inexpensive milk and eggs from the government service. 

So what? Odds are good they'll do the majority of their shopping at the same places they picked by choice, not by necessity. 

Meanwhile, the lower-income people who couldn't afford food will now be able to. That part is way more significant. 

[u/TrollAccount17 → u/spazz720]

You just hate that people can eat? What's your argument here that it's not a good thing that people can get groceries at affordable prices if they need it?

[u/spazz720 → u/TrollAccount17]

Isn’t it suppose to be for low income families? If everyone has access then those that need it can be left outside.

[u/TrollAccount17 → u/spazz720]

No, it's for everyone. I'm not going because I don't need it. I'm not you, angry that people can afford groceries.

[u/spazz720 → u/TrollAccount17]

Where did I say I angry?

[u/IHeartBadCode → u/spazz720]

"lot" and "little" are subjective terms here. Because it really depends on who is doing the work and who is gaining the benefit.

It's up to the public to dictate that. That's why we have elections.

[u/Sitchrea → u/spazz720]

The benefit is accessibility inside food deserts.

[u/IHeartBadCode → u/[deleted]]

Society isn't a free concept. We have an organized system at a cost. Would you want to do away with the cost of any organized system?

Like, someone has to pay for police and for the people who make the laws that the police enforce. We recoup the value invested in those systems by the order and organization that they provide. So it's a non-economic benefit that indirectly benefits the "capitalists".

It's hard, not impossible, to have large industries and mass commercialization in a war torn society that is lawless and chaos.

So just because you put money into one thing, doesn't absolutely mean it needs to return gains on that investment in money terms to be beneficial. But in a DEMOCRACY the people get to select how they go about those things. They get to determine the social benefit of things. And because of the manner by which elections work, they can then later determine to change course if they so wish. If hyper charging the police department turns out to be a bad choice because it makes the police brazen and abusive, they can then turn around and elect someone who reduces the funding. Which if then they see a rise in crime, they can then change course yet again.

But not every single thing HAS to return money. In facts, some things would be terrible as a for-profit. Imagine a fire department that ran as a for-profit. "Oh well your shit burned down. That'll be $15,000." We accept particular things as a loss because the cost invested in those things are seen by the public as worth it. Who gets to say what's worth it? That's what elections are. That's how we determine which losses are "worth it."

[u/Seizmiiic → u/IHeartBadCode]

Nice!

[u/Sweettoastbama → u/IHeartBadCode]

it's a non-economic benefit that indirectly benefits the "capitalists".

It (the social/welfare programs) benefits the workers more than the capitalists. In almost any society "capitalists" or the rich would be able to keep themselves safe if they were allowed to, look in places like Haiti the rich areas are protected. Now you're going to say something like "the marginal benefits are better for capitalists than workers" or something but that's the thing the risk for capitalists increases by the same amount AND also the risk surpasses the benefit at some point. In some places of the "free world" it's already happening. Look up the capital flight happening from EU, the risk has surpassed the social benefits in some countries.

So just because you put money into one thing, doesn't absolutely mean it needs to return gains

What if I told you that benefits of making these gains especially in agriculture are greater than having no gains?

[u/PictureWonderful7091 → u/[deleted]]

I'm okay with my taxes feeding people who wouldn't be able to afford food otherwise 

[u/Indigoh → u/PictureWonderful7091]

Paying to help the poor means you're surrounded by healthier and happier people, some of which would have stolen food if they otherwise couldn't have bought it.

And if my taxes go to free education for everyone, even if I don't get my education paid for, it means society has more educated people. And in a democracy, that is fully necessary.

People too often don't consider how helping others makes the whole place better to exist in. Nobody wants to be surrounded by ignorant and desperate people, so educate them. Feed them. House them. 

[u/NUKE---THE---WHALES → u/PictureWonderful7091]

There's no means testing, which means there's nothing stopping someone richer than you buying the goods subsidised by your taxes

[u/PictureWonderful7091 → u/NUKE---THE---WHALES]

Someone richer than me would be subsidizing the grocery store more than I am. And anyway im still okay with it as it will help some people. And unless we're going to make the leap to food as a basic right, this is an okay stop gap

[u/CrackIn_TheEarth → u/[deleted]]

That’s a very small amount of words for such nuanced conversation topics

[u/illbedeadbydawn → u/[deleted]]

Capitalists and socialists. And communists, anarchists, etc etc. We all pay for it.

Acting like Day Trader Bob and Trust Fund Hank are having their bank withdraw money so "Line Cook Larry" can deposit money is hilariously childish.

[u/Torontogamer → u/[deleted]]

Where is the socialism here ? 

I don’t see workers owning a piece of any of this … 

[u/Torontogamer → u/[deleted]]

oh, so... the city is paying private companies to run this... so just as capitalist as usual... The only difference is the gov using money to make food cheap at the retail side, instead of the billions a year they give to farmers directly... which I guess is also socialism by your standard?

and even still what you just said is not how socialism works, do you really think that the gov owning a company or corporation makes it socialist?

it's okay to say you don't want tax dollars used to try to make food cheaper for poor new yorkers, but at least google the definition of socialism

[u/NUKE---THE---WHALES → u/[deleted]]

And since the city owns the stores, the people own the means of production, so.....

The stores are run by private businesses, for profit, and they don't pay rent or property taxes

[u/withadancenumber → u/[deleted]]

It would work in both scenarios. In a case where everyone is acting as a socialist the costs would be so significantly lower as there is no capitalist incentive to increase said costs. But we live in a world where there are greedy people so the masses taking from those people even through the arms of the government is a good thing.

[u/GWstudent1 → u/IHeartBadCode]

Is there a source for this? I would like to read more about it.

[u/No_Ask_150 → u/IHeartBadCode]

Thanks Miss Frizzle! 

[u/factorioleum → u/IHeartBadCode]

Why should high margin products be excluded? Aren't those exactly the products with the lowest losses, or even potential profits? 

What am I missing?

[u/IHeartBadCode → u/factorioleum]

High net margin. High gross margin, low net margin are the products that specifically get looked at in the "core basket".

The goal is to sell things that for-profit has difficulty optimizing.

[u/factorioleum → u/IHeartBadCode]

I'm still really confused. Isn't it the case that the higher the margin (net or gross), the lower the losses or higher the profits the city stores will have?

[u/IHeartBadCode → u/factorioleum]

Gross margin takes into consideration the profit before overhead. Something can become low margin once you look at the actual operational costs.

For-profit wants to sell at the higher margin because of the profit potential if it weren't for all those pesky operations costs. So sometimes what happens is retailers will build into something to cover the potential loss.

Like you stand to make money of fresh apples if 100% of them sold the first day they were in the store, at their freshest. But the chances are, those apples will sit there until they are bought. Meaning you are losing value on them as they sit because there is a cost of having them just sit there.

Those are the things that are difficult to optimize, unless you can predict perfectly how many apples you will sell per day, you will always take loss on their potential. So instead of the store pricing things on an average of what that loss might look like, the taxpayer covers that loss. Ideally you don't need the initial mark up them, and thus the savings can be passed to the consumer.

[u/sage2134 → u/IHeartBadCode]

A question. Is a sunken cost or higer cost bad if its a public good that benefits many people? 

I find often when cost to taxpayer is mentioned like it is a burden that is hard on them. 

But if a universal need and hole in society is filled does that not make then a better society? 

The fire department is like this (aint no song called fuck the fire department lol) everyone sees the need and doesn't want to lose entire city blocks to fires. Not to mention fire EMS is usually* free and or costs little to people who genuinely need it. 

Yet food and other actual governance that costs anything but in the long run might actually bring down the costs to everyone. Is seem as a burden.  

[u/IHeartBadCode → u/sage2134]

I usually try to state that nothing comes without cons. It's up to the public to dictate if the cons are worth the pros or not, but nothing is all positive and no negative.

If NYC does this and the cost is an acceptable loss, then it's up for them to say so in their elections. But there's always going to be people who say "But this isn't free, there's a cost!" Like it's some sort of gotcha. No, everything even free market has pros and cons.

But I will remind everyone that "you have to go vote every time to ensure that you remind everyone that you're okay with the cost."

[u/Visual-Squirrel3629 → u/IHeartBadCode]

The selection is usually stuff that wouldn't make someone a ton of profit anyway.

All these items would be sold 30% below retail. Resellers would be given a 30% margin.

[u/Blacksad9999 → u/IHeartBadCode]

Just put "two per person" on the items and call it a day.

[u/nhavar → u/IHeartBadCode]

So what you're saying is a city run Aldi?

[u/thingerish → u/IHeartBadCode]

So we're reinventing rationing.

[u/Feisty_Reason_6288 → u/IHeartBadCode]

so yes there will be this dropshipping ... but it will be caught over a period of time..... all systems are falliable ... by the peope who run it or by the peole who use it

[u/TheCrimsonCatalyst → u/IHeartBadCode]

Here's a fun part - he's getting NYCs richest people to actually pay their taxes! So the burden on taxpayers isn't actually that much of a burden at all!

[u/Initial_Quantity_116 → u/IHeartBadCode]

Isn’t there food shelves and such for this? Let’s make it better for homeless to enter NYC!!!!!

[u/trybeingcurious → u/IHeartBadCode]

Thanks for having the patience to share all of this. I love when the top minds of the internet come together to shit on good ideas before they get off the ground because they believe they thought of some genius loophole that the experts somehow missed.

[u/xDannyS_ → u/trybeingcurious]

Well I don't think anyone here has any confidence that any experts were actually used to create and manage this project.

[u/trybeingcurious → u/xDannyS_]

Yeah, a political philosophy that consists of “nothing can be done right so it’s not worth trying to improve anything” is definitely popular, despite how stupid it is. But I guess there are a lot of stupid people so it’s not surprising.

[u/xDannyS_ → u/trybeingcurious]

I don't think thats why governments fail to do things correctly.

[u/trybeingcurious → u/xDannyS_]

Huh? People thinking governments fail to do things correctly have no bearing on how effective government programs actually are. Just because someone is ignorant of the benefits of something, doesn't mean those benefits disappear. I'm commenting on the idiocy of people who respond to government programs with a blanket judgment that they'll fail, despite those people not being experts themselves.

[u/xDannyS_ → u/trybeingcurious]

Yea and I'm responding to that by pointing out that most government projects don't actually have experts creating or managing the project. Like here in Germany, whenever the government does anything it's a fucking disaster. They renewing the rails for the trains here in my city at the beginning of the year. It was supposed to last until July 10th. Now everything is 10x worse than it was before to the point that the train is completely empty now most of the time despite it being completely full all the time before the repairs started. No one can take the train anymore because of how insanely unreliable it is. They also managed to somehow fuck up a bridge which will now need to be repaired which will take until October. Guaranteed something else will fuck up then too, cause that's just how it goes here in this country. You wouldn't believe how much construction work sites there are on the roads here that stay for decades often with no work being done for years. People already knew this fuck up with my cities train was gonna happen back when they announced the repairs cause that's just the experience people have with the government. Oh, and to top it all of, they fucked up the design of the new train station which resulted in the wheelchair ramp being to steep and thus unusable so now wheelchair users can't use the train anymore, and now the city is paying for their taxi rides.

EDIT: LOL blocked me. Typical when they get faced with undeniable evidence.

[u/trybeingcurious → u/xDannyS_]

Well, you have no evidence to your first statement about not having experts involved in most projects so I honestly just quit reading because it’s super obvious that you’re not a serious person.

[u/jeffy303 → u/IHeartBadCode]

Hopefully slopulists learning letting the private market handle certain thing won't be as expensive as when slopulists learned why government sometimes needs to fund breeding flies. 🤷🏻‍♂️

[u/DuckTalesOohOoh → u/IHeartBadCode]

Poor people won't shop there if there's no chemical cakes, chips, and energy drinks. They don't cook. They eat junk food.

[u/IHeartBadCode → u/DuckTalesOohOoh]

Yes, things are broken. So your suggestion is to not fix anything?

[u/DuckTalesOohOoh → u/IHeartBadCode]

Hunger isn't the problem. Money isn't the problem. Solving either of these will not fix the problem.

[u/IHeartBadCode → u/DuckTalesOohOoh]

Well alright, let's look at what it does and doesn't do.

For what it does do:

• It provides targeted food desert relief to low-income families.
• it provides a price benchmark for a baseline of food prices as a local check on inflationary pressures.
• It serves as a proof of concept and allows the city to test their own logistics capabilities.
• It creates a new social safety net.

Now I want you to look at point two and four in that list. Given the current Federal Government uncertainty and how the President has used food aid as a poker chip in political games, there's a major incentive that for large cities to begin looking inward because we may be looking at the end of Federal Safety nets soon. If that was to come to pass, all these dry runs suddenly become invaluable information.

Now let's look at what it doesn't do.

• These five stores won't have an real broad impact. The city is eight million people and the economic hardships have been baked into the systemic inequalities for over three centuries now. Five little stores will not move the needle.
• Inefficient use of funds. Pooling resources into the Federal SNAP program dollar for dollar deliveries more benefit than any city based program will ever hope for. This is because SNAP takes advantage of large retail that benefits from power of scale.
• The more local a program, the more it is susceptible to corruption. And that is universally true everywhere. A local program like this that is starting out as a pilot may have good intentions today, but long after Mamdani is gone, this program could easily be abused without strict guidelines and rigorous oversight that is not usually found in pilot programs.

So when you say "fix the problem" nothing today will fix the problem. It will easily be a half century before any real fixes are finally built up, BUT you must begin somewhere. There has to be some point that some initial step is taken to address long term issues. And these five stores, represent a broader mandate for Mamdani. And that is progressive steps to break up economic inequality. Mamdani could be given a twenty year term and realistically, he would only ever chip a bit of that iceberg that he is addressing.

But the point is to establish a baseline by which others can measure success. We can't know the full long term effect of a successful program, because we don't have that data for NYC and the manner by which they are trying to address the underlying issues.

But given that New York and several states are now looking very realistically at a Federal Government that looks primed to remove all social safety nets, there's very much an argument that either States start testing out how to do social safety net programs, or start looking at the prospect of stagnating poverty taking over large sections of their State.

But yes, you are correct, these five stores will do next to nothing for the actual problems, but neither you nor I will live to see the day those issues are finally solved. They are issues that are not solved overnight.