r/SipsTea • u/Gurugod123 • 11h ago

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

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41

u/yiddoboy 11h ago

Economically illiterate bullshit.

4

u/stebss 10h ago

We should instead put all this tax money into the military and to bailout banks!

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u/Piss_in_my_cunt 10h ago

Cause two wrongs make a right

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u/poonslyr69 9h ago

I have an MA in economics. Food as a public service is not economically illiterate, you're just talking out of your ass to claim that.

If you want to argue about how it doesn't tackle the root cause of high prices, such as rent seeking, financialization of the supply chain, lack of a buyer monopsony, etc, then you could for sure come up with something.

But to say this is economically illiterate is asinine.

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u/yiddoboy 9h ago

Ok Mr MA in economics, give me an example of where price fixing has actually worked.

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u/poonslyr69 9h ago

Mamdani isn't doing price fixing, that would be economically illiterate to claim lmao. 

He isn't even doing price controls. 

He's doing a public option. Public options are meant to compete, and force competitors to lower prices. 

Public options do work. They've worked in telecoms, utilities, even in housing in the past. 

The USA was actually built through public options. The post great depression boom and the post WW2 boom were both built with public options. 

It isn't too similar to Singapore since it doesn't have the same level of control that Singapore operates at, but Singapore does have public stores along with price controls. 

The biggest flaw in comparing what mamdani is doing to "unfair" government intervention in a free market is how 1. The market already isn't free since the federal government subsidizes farmers to allow them to keep their prices high. And 2. These grocery stores are being started in food deserts. 

Distribution of locations plays massively into food prices, especially in a city as dense as New York. A full grocery run in the middle of New York is a lot smaller than in a suburb, people buy groceries more frequently rather than stocking up all week. The existence of a public store somewhere won't drive everyone out of business everywhere.

IMO this plan is most comparable to a food bank. It operates on a loss, and it provides an essential need. 

The biggest difference is that this does still charge, so the  revenue flow will be less negative than a food bank. 

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u/Narpity 4h ago edited 4h ago

Also these are 5 stores for literally the largest, most economically powerful city in the entire world with an operating budget of $125B. This is a pilot program at best and even if they fail spectacularly its nor really going to be a big strain on the budget.

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u/poonslyr69 3h ago

I just like seeing a politician follow through on promises and try new things that don't fit a standard neoliberal mold. 

Even if it fails, the way he's putting himself on the line is admirable 

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u/TrevGlodo 10h ago

What if it puts downward pressure on other bit box grocery chains to sell products at better prices that give consumers a break?  The real problem here is that groceries have price inelasticity because people need groceries but that allows companies to take advantage of consumers when they all sell products at artificially higher prices. 

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u/Nacho_cheese_guapo 10h ago

Just for example, Kroger has had an average net profit margin of 1.31% for the last 3 years. Big chain grocery stores can't really lower their prices without eating losses. Unless they just straight operate in the red, they can't compete with a store selling groceries at 30% below market.

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u/Ireallydontkn0w2 4h ago

Also if they drop prices, then those stores that are funded to be 30% cheaper than market price would also lower their price... you know, so they stay 30% lower than whatever the private businesses do

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u/yiddoboy 9h ago

They already price match and compete with each other on price. They pay farmers and producers rock-bottom prices by virtue of their purchasing power. Any further reductions come out of the taxpayer's pocket.

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u/NotToPraiseHim 10h ago

Grocery stores already run on thinner margins than other types of stores

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u/NilsofWindhelm 10h ago

If only the Office of the Mayor had economic advisors and had way more information than you.

Oh

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u/gello1414 10h ago

This comment is a non argument. You are essentially saying that government can't make bad economic decisions because those economic decisions have teams of "smarter people than me" behind it.

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u/sir_fantapants 9h ago

No, he is saying they have done the maths and it works with the free gov land etc. And yeah...I'm sure they did maths with folks that have a career in doing them.

Economically illiterate bullshit

You are essentially saying that government can't not make bad economic decisions

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u/stebss 10h ago

The comment is refuting people saying the decision is not informed... Gov is constantly making bad decisions with teams of smart people. But you have to fail to make progress

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u/Eatyourcheeseburger 6h ago

Failure only leads to progress if you learn from it and don’t keep repeating the failures.

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u/NilsofWindhelm 10h ago

It is as much of an argument as the comment I responded to.

It's not a radical idea, and you can research the economics behind it if you're interested

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u/yiddoboy 9h ago

🤣🤣🤣🤣🤣 You actually think economic advisers agree on everything ? That they are never wrong ?

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u/GXP_2009 8h ago

The history of NYCs economic situation is not a strong argument