Zorhan the friendly neighborhood grocer | Hour 2

What's going on. Thank you so much for listening to this podcast. It is heard live every day from noon to three on WBT Radio in Charlotte. And if you want exclusive content like invitations to events, the weekly live stream, my daily show prep with all the links, become a patron, go to thepetecleanershow dot com. Make sure you hit the subscribe button, get every episode for free, write to your smartphone or tablet, and again, thank you so much for your support. Last hour, I was reading from a piece by Rob Henderson at Robkhanderson dot com. He was the guy who created the term luxury beliefs. He also has an insight I guess i'll call it where he says fascists are proles, so proletariat fascists or proles who cosplay as aristocrats, and communists are aristocrats who cosplay as proles. In other words, fascists are poor kids pretending to be rich, and communists are rich kids pretending to be poor. And I think that's pretty spot on. I've been talking for a while about how the revolution is led by the haves versus the have mores, right, and this gets into what we talked about last hour, was you know, these working class versus upper class or middle class, right, all of these different social rules that nobody writes down, these social rules, and who populates the ranks of the communist revolutionary leadership, right, these are people that are well, it's the overproduction of the elite. Somebody I forget who was famously coined the term the overproduction of the elite. Many of them, too many people got these college degrees that now don't translate into any kind of profitable work to draw salary from. So they are indebted. They believe that they should have gained access to the elite strata. They have not. They are in debt, they are struggling, and so what do they do. They have envy of, you know, their parents generation. They have envy of people who are richer than they are, people who are in that elite strata that they can't join. And so it's not haves versus the have nots, or the have nots versus the haves. Right, the proles very very rarely do the proletariat actually rise up against the bourgeois right. That doesn't usually happen. It is members of the bourgeois or bourgeoisie that they lead the revolution and they frame it all as if they are speaking for the proletariat, they are speaking for the poor and the working class. But these people are not of the working class. They are of the bourgeoisie. So Zorn Mamdani, who is the poster child for this, he is speed running communism in Gotham, and I mean, I understand because he's probably on a clock. Here is one term is you know, four years or so, and so he's probably about three and a half now left if you know, he doesn't win reelection. So he's trying to implement all of these things. And one of the things that you know he campaigned on and has now begun to implement is the breadlines, right, because like, seriously, like what's the point of voting for a Kami or a Marxist if you don't get the breadlines? That's one of the main features of all Marxists society is waiting in line for a really, really really long time to get you know, a piece of bread or some food. Like that's like, what's the point of voting in Marxists if you're not gonna get a breadline? People? So there was a piece over at hotair dot com by Beach wellborn called grocery games, and she actually had a rundown because this has been tried. I know, I know, real socialism's never been tried. No, but these government grocery stores have been in America. For real. Kansas City, it took the mantra every neighborhood deserves a good grocery store. And it took ten years for that mantra to go from a seventeen million dollar cash infusion for a complete renovation of a grocery store, and in ten years it was it culminated in a single tomato left on the shelf, a single tomato. Oh, and a deficit that ran somewhere around seven hundred and fifty to eight hundred and ninety five thousand dollars a year that the city had to subsidize. The city had turned operation of the renovated store over to a nonprofit back in twenty twenty two. That nonprofit did not know anything about. The grocery business also happened to be in a crime written neighborhood or a food desert, right because like people think that the crime is because there's no food, and no, the grocery stores don't go to the high crime areas because what happens to the grocery store, right, it's a victim of the crime in the high crime area. Right. So you know, businesses and retail do not want to locate in an area where the cost of doing business is going to be increased so much due to crime. Theft A version also played out with a number of Save a Lot stores. This is in Chicago. Mayor Brandon Bear of Little Brains. Johnson's administration dumped a fortune into a partnership with store operator Yellow Banana. I don't know what the name means, but as opposed to Green Bananas. So so they renovated a former Whole Foods into an affordable, low income Save a Lot, and they had plans for six more, and they were gonna give it a whole bunch of money, but then the whole thing collapsed, crashed and burned, which brings us to Mom Donnie. In New York City. They set aside seventy million dollars for five stores. Okay, but the first one, and we covered this when he made the big announcement. The first one's going to cost thirty million of the seventy, So almost half of the money allocated for this project is going to go to build a brand new store from the ground up. Okay, and as well Born notes, so far his commie math is holding up. Great, that's true. Seventy million dollars and we will all watch it go down the tube in real time, which is fine really because to them, you know, it's it's not their money. It's never been their money. Her colleague get hot air, John Sexton. Oh sorry, no, this is from Forbes. These stores can offer prices, which, by the way, what the promise is is that they're going to they're going to offer thirty percent lower prices on staples. That's what Mam Donnie Propt promised, a thirty percent reduction in the price to consumers for staples. Now, I don't know who needs to reload their staple or so many times that they're going to need that kind of a subsidy, but that's the promise, thirty percent lower prices. Okay. These stores can offer prices at this level, according to Forbes, because they operate with a lower cost structure. Unlike private bodegas, the city run grocery stores will not pay rent or property taxes. Government owned property is typically tax exempt in the same way like libraries and courthouses are This foregone tax revenue creates an inherent cost advantage relative to other grocery providers. Still, the effect on the city's bottom line is real. The city must make up foregone revenue elsewhere or absorbed it as a cost right. So this property was on the tax rolls. The government then buys it and turns it into a grocery store. Now it's not generating any property tax revenue, but you're also incurring the cost of operating this thing, and you're subsidizing it. So where does that money come from? John Sexton hodair dot com. He says, if you think about it, it's a perfect socialist plan. The costs are completely hidden while the savings are evident to the shoppers. It's not an economic miracle so much as a magician's trick. Another saving for the city stores is that the city is paying for the build out. So the city is covering the construction and build out costs with taxpayer dollars, meaning the stores won't face the same upfront capital cost as private competitors, no loans to pay back or anything like that, and unlike other businesses that fail to generate profits and then go bankrupt. Any financial shortfalls from these stores will be absorbed by the city, and that means New York City taxpayers will ultimately bear any losses. All right, For over a year now, you've heard me talking about create a video. Great local company in mint Hill that has helped more than two million families preserve their memories by turning old photos, VHS tapes, film reels and slides into lasting keepsakes. Now creative videos helping families and groups create brand new memories while they're traveling. 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The Associated Press reporting New York City Mayor zoron mom Donnie's plan to open a slate of government owned grocery stores stir up Critics note the framing right when the scandal involves a Democrat, and the story is the Republican response to the scandal, Because this is a scandal, by the way, you know, government opening up grocery stores and putting out a business nearby private enterprise, Because that is what's going to happen for people who aren't aware the grocer industry, particularly these small shops, the bodegas, because you know, New York City doesn't have you like the massive you know land mass for you know, new big box shopping centers like we're used to down here. So up there you have a lot of these you know, corner markets and stuff, and they call them bodegas. I'm not really sure why, but. They're not going to be able to compete with a thirty percent price cut at the gov cod run shop across the street because their margins are like two to three percent. Grocery store margins are like only anywhere from what usually depending on the product, but the total margin is somewhere around one to three percent. It is a very very lean operation. Like I saw somebody because there was somebody. Did an analysis here. I do. Oh yeah, I have it here Phil McAllister, who's an investor research, investment strategist guy, and he says, this is the stupidest industry for socialists to go after. Okay, why the median full time hourly wage is about thirty one dollars in America. Okay, for one hour of work, that's the median hourly wage. And for that one hour's worth of wages for thirty one dollars. Here is what you can get. A whole chicken about five pounds for about six forty five. A dozen eggs, a gallon of milk, a five pound bag of russet potatoes, a three pound bag of yellow onions, two pound bag of carrots, three pounds of bananas, two pound bag of white rice, a pound of dry black beans, one pound of spaghetti, a jar of pasta sauce, a loaf of bread, and forty two ounce canister of oats. That total is about thirty one dollars and fifty cents. Walmart comes in within a dollar or two of the same basket of goods. Right, And if you think about. It, bananas, three pounds of bananas for like a dollar fifty five and I saw this works out to be something like and mom, Donnie's holding up bananas at his press conference. And the irony there is that like a banana costs like forty five cents. Like, we solved the banana problem, guys, the free market has solved the bananas. Okay, whatever problem you think exists in grocery stores and stuff, and oh those evil people profiting off of you know, people's hunger. You get a banana for forty five cents, and think about what that means, because where are bananas growing. We don't have bananas in America, right, We're not. They're not massive banana farms all over America. These things are being imported and they have a shelf life. Right, they bring them in, they're green, they turn yellow, then they turn brown. Right, I don't know how long the shelf life of a banana is. Seems like a couple weeks, though, And think about all of the grocery stores and all of the places you see bananas for sale that like, just the sheer scale and size. Of just the bananas that operation. It boggles the mind to get all of those bananas grown, harvested, transported, stocked on shelves all over the fruited plain, no pun intended, but maybe for forty five cents apiece. Ooh bad capitalism giving us bananas for forty five cents. The mayor offered a different vision for the city owned shops on Monday, announcing that they would instead provide a thirty percent discount on produce, meat, and a host of other kitchen staples as a way to offset the rising food prices in one of America's most expensive cities. The five stores are expected to be placed in each of the city's five burrows, with the first one set to open at the end of twenty twenty seven. In the Bronx. He plans to have all five operational by the end of his four year term. The city has started the process of picking private operators to handle day to day operations of the shops. The administration will provide storefronts while covering rental costs and property taxes. There you go, So there's your advantage that gov co Is going to use to put the other bodegas out of business all around these shops. And then what happens. What happens when there's no other options and now people have to go to the zodega, that's what I'm calling zoron Mom Donnie's grocery store, there's zodegas. So now everybody has, everybody in the neighborhood has to go to his government shop. And what happens if the subsidies don't make the budget cycle right? What happens if they get cut right? They never think this thing through because in the private sector, if a business is operating, if there's a grocery and they're operating and they're gouging people in the neighborhood. Another competitor comes in and undercuts the prices, and one of them survives. If the higher price one doesn't cut their prices right, then they're going to go out of business because everybody will go over to the cheaper one. Or they bring down the prices and you have competition. But what happens when there are no private enterprises to compete with the government one because they can't. And then if the government one closes down, Now what Now there's no food. And that's the point. It's about control, seizing the means of production. That's what this is. Albeit in a two step process I mentioned Phil McAllister. He runs through a few obvious points on the Mamdani grocery store scam. The supply of the discounted groceries will run out on day one, and every day there's a new shipment. This is basic econ one oh one. This means only the people who are lucky enough or fast enough will get these discounted groceries. Expect to see the city ration the groceries in some other way. They'll have to do it by income or neighborhood or some lottery system right, limit them, you know, one per customer or something like that. Number three Grocery store margins are notoriously low two to three percent. These stores will lose a bunch of money selling thirty percent below market, or they will sell so little it'll be insignificant. Hence the subsidies. Number four. There's absolutely zero chance that government bureaucrats can source these products from global supply chains as efficiently as Walmart, Whole Foods or anybody else, right, because those companies survival depends on it. It again, these companies survival depends on them getting the best prices right delivered on time to the stores to be sold. Their survival depends on it. Governments does not, so there is very little incentive here. This is the beauty of the free market versus mark sism, which is, if I don't make something or provide something that somebody else actually wants, I starve. Right. People talk about, oh. We want humans to have dignity in all of this, The actual, the dignified humane system is the free market. It is far more so. It is a more moral system than any command control system like Marxism, because in order for me to make money on the thing that I am selling, other people have to want it or need it. So think about what that means. At the point of inception. When I have the idea, the idea is this can help people. I have an idea that can make somebody's life easier. So I'm not actually thinking about myself. I'm thinking about this idea, this service, this product to provide to so somebody else versus gov CO. Right, that's they're like, oh, you've got a product, you've got a service that you've created. Now we're going to put you out of business. We're going to take your idea and we're going to charge you to give it to other people. That is not a more moral system, That is not dignified. Okay, all right, back to McAllister. He says, it's an incredible triumph of capitalism that you can get a pound of bananas that were shipped to your neighborhood from Ecuador for like sixty cents, or fresh grapes from Chile in the dead of midwestern winter for two bucks a pound, or Norwegian salmon to cook in Italian olive oil for fifteen dollars or so I mean think of this is Milton Friedman did go pull it up on YouTube and he talked about the pencil. He did he tracked the life of a penny. There's a video about it. He did a TV show. And the wood, the lead or graphite whatever you know for the tip of the pencil, the metal casing around the eraser, the eraser itself, like all of these little pieces that go into a simple pencil. A triumph of capitalism. And you get all of that for pennies. The meat, and then he goes through and he talks about the you know, thirty dollars and what it can actually buy you, and he says, this is the stupidest industry for socialists to go after. And no, but this is the point. Food. You go after the food supply because now people are at your mercy. What else is mom, Donnie going after shelter? This should not surprise anybody, because what do people need for food? Clothing, shelter, right, healthcare? He's doing that too. You go after the essentials. And he says, everybody has a basic right to these things. Yeah, but if the free market is able to give it to you at the cost of pennies, why would you seek to replace that system? Here is. Daniel di Martino and he is an economist with the Manhattan Institute and he is originally from Venezuela. So Mamdani announced today that his government grocery store is going to have products start thirty percent cheaper than the other grocery stores, which brings up the question how are they going to be cheaper? Do they have cheaper costs or are the taxpayers going to pay for it? If the texpayers are going to pay for it then and all of us just buy it, then what stops me from going to the government. Grocery store, buying the meat and reselling it. Are the other products? Which is exactly what's going to happen. By the way, how what prevents it from running out? If it's going to be thirty percent cheaper, everybody's going to line up like in Venezuela where I go from to buy the products, and they are going to run out. There are going to be shortages. And at the end, even if the store does a bad job or they are about products, nobody's going to be fired. Because it's the government. Nobody can go broke. They'll just use more of your taxpayer dollars. Welcome to socialist New York City. This is third world ism. Okay, this is a component of it. Right, what happens when you discount hamburger met thirty percent? You got to ration it. I've talked about this when it comes to healthcare. Right, you cannot have limitless healthcare for everybody because you're going to run out of it. You have to ration, either by access or by price. Everything gets rationed access or price. Right, you either raise the prices so it limits the amount of product that people are buying, or you restrict access so people can only have, Like you can only buy one pound of hamburger meat, And maybe that's what the government grocery store of the zodega, Maybe that's what they're going to do, only one per customer. They're going to have to ration it. Because I could just go in there and purchase one hundred pounds of hamburger meat at thirty percent off, and then I can walk out onto the street and I can sell that hamburger meat for twenty percent higher than I bought it for and make a profit. What's to stop people from doing that? That's the black market that always happens right, because people are still going to be interested in buying the hamburger meat. If they can't get the thirty percent discount from the store because I bought it all, they'll buy it off of me for a ten percent discount. Now, a group of business leaders in New York City, people who can do math, they are planning to sue. The New York Post reports the Multicultural Business Coalition's board voted to file a lawsuit they expect to do so in the coming weeks to block this initiative. The mayor doesn't seem to want to sit down with us, said Frank Garcia, the group's chairman, saying Mamdanni won't be able to bully these lawyers we're going to bring in. The nonprofit plans to raise a million dollars to fight some of the mayor's initiatives, saying the suit should be a nonpartisan initiative. The group plans to send a letter in the coming days notifying Mamdanni's office of its plans to take legal action against the city. Good for them, and I hope they are successful. I really do. There is an Oxford PhD Fellow by the name of vuk Vukov. He runs a hedge fund called Araculum or auraclem Capital. Talking about the grocery store idea, the Zodega's in New York City, gov Co run grocery store wants to sell food thirty percent cheaper, he says only one of four things must be true. Number one, its suppliers are accepting thirty percent lower prices. Or number two, its workers are accepting thirty percent lower wages. Or number three, taxpayers are covering the difference through subsidies. Or number four, the store is operating at a loss and will soon be out of business. Right, the answer is number three, taxpayers are covering the difference. Prices are not actually thirty percent lower. They've just been shifted someplace else in the system. This is the quote unquote invisible hand. You know, Adam Smith came up with this idea pretty recently, so I know. So Communists aren't really up to speed on this. It's only been around for about three hundred years. Something that people have a very hard time understanding is that prices do not disappear. They don't disappear. They allocate scarce resources. You could move costs around, you can hide them or delay them, but you can't make them vanish. Having said that, he says, let them do the experiment. They'll destroy small grocers and produce Yeah. Sorry, they'll destroy small grocers and produce food shortages. People maybe will learn a lesson. Then perhaps this failed enterprise will represent another nail in the coffin for bad ideas that never work. But probably not. Washington Post columnist Megan mccartal. She says, you can also achieve lower prices the way that ald and Costco do fanatic cost focus and reducing the number of items that you stock in order to simplify operations and reduce spoilage. The problem is Ald, Costco, TJ Litel, all of these they already do this, and they do it very very well. The city is not going to improve on their margins, right grocery stores, Like the food distribution system has been solved, Like feeding Americans, that's been solved. And in fact, Mom Donnie was asked about this at a press conference at this one where he held up the bananas and he's like thirty percent lower and all of this, right, why not just take the millions of dollars and give it to the food banks, right? Like, why not just do that. They already have the whole system in place, so why not just throw a bunch of money over there. Why does the government need to run the store? And then he tap danced around it and you know, human dignity and all of the flowery language. There is a Twitter account called McGill's which is quite funny, and he says that there's an important lesson here is that if you, even if you become something as impressive as mayor of the most important city in the United States of America, if you are of Indian descent, the inevitable pull of owning and operating a convenience store will win out at I don't I don't know. I don't think that's true. But still, and then there's Peter saint Owns. He is a PhD economics ex professor, ex bartender as well, he's an Austrian economist. Mamdanie announces city hre and grocery stores are going to set prices thirty percent below retail. Typical grocery margins are two percent, meaning first the city will lose ungodly amounts of money at least twenty eight cents on the dollar. Second, below cost stores will steal enough market share that real groceries will then abandon the city. Now there's only five of these opening up under Mamdani right now, that's the plan, And so will it be widespread throughout the city, probably not, But will it be highly localized in a neighborhood absolutely right. If this thing opens up right next door to your shop, you're not going to be able to sell what they're selling inside for thirty percent off. There's no way you're going to be able to meet those prices, and that will eventually force you to stock different things that have margins that you're going to be able to recoup your profits. Right, So it's going to put you out of the business of selling those things, whatever those things are. Third, taxpayers will get tired of the money hole and eventually slash the subsidies, at which point city groceries become money holes full of rotting food. So New Yorkers will have to then take two trains and a bus to find a real grocery store. But socialism will totally work this time. All right over on the text line, let me see here, I don't know where I was, uh seven oh four number about the subsidized grocery stores. They want the small privately owned stores to shut down so they can say, well, we have to take over all the stores to fix this and have the government run them all. Yeah, they will blame the free market. They will blame capitalism. If the gov cost stores fail, or if any of the bodegas around the Gove Coast stores fail, they will blame the market. Right. And here's the thing. Why are the grocery price is higher? Why is the cost of living higher? Right? I got this silly argument from Dean on the text line like, oh, they saw their prices for beef go up and all this. Okay, why did that happen? Inflation? Why did inflation happen? Why is the cost of living so high in New York? Number one? Limited real estate? Right? I mean Manhattan, for example, is an island, right, so it's really dense built up. Right. You have government regulations. And when it comes to inflation, that's from government spending all of the build back better and the Green New Deal, like all of the government spending. We had nine percent inflation one year I think it was like twelve percent or over two years nine like it was a fifteen percent inflation rate under Biden because of all of the spending. That's why the prices went through the roof and they're never going back down. They're never going back down, but the salaries over time will rise. It just legs all right. That'll do it for this episode. Thank you so much for listening. I could not do the show without your support and the support of the businesses that advertise on the podcast, so if you'd like, please support them too and tell them you heard it here. You can also become a patron at my Patreon page or go to thepetecleanershow dot com. Again, thank you so much for listening, and don't break anything while I'm gone.