Socialists have only the vaguest notion of how money actually works, and so they actually take Zohran Mamdani seriously when he promises to bring to New York City a number of efficient, well-functioning, city government-run grocery stores that will make goods available to New Yorkers at readily affordable prices. Anyone who knows what food stores are really like, and always have been like, in socialist regimes is more than skeptical of Mamdani’s promises, and now it has come to light that his confident assertions that the city already has plenty of money to pay for this scheme are based on his misreading of the records. Yeah, the guy is making a misunderstanding a centerpiece of his campaign.
On his campaign website, Mamdani makes it all sound simple. First, he states the problem: “Food prices are out of control. Nearly 9 in 10 New Yorkers say the cost of groceries is rising faster than their income. Only the very wealthiest aren’t feeling squeezed at the register.” Then comes the all too easy solution, which apparently other politicians have overlooked because they’re in the hip pocket of the greedy billionaires who have been profiteering off poor New Yorkers:
As Mayor, Zohran will create a network of city-owned grocery stores focused on keeping prices low, not making a profit. Without having to pay rent or property taxes, they will reduce overhead and pass on savings to shoppers. They will buy and sell at wholesale prices, centralize warehousing and distribution, and partner with local neighborhoods on products and sourcing.
Ah! Why didn’t anybody think of doing all that before?
The inevitable question, however, is who is going to pay for all this, and Mamdani’s ready answer is that the city is already giving money to privately-owned grocery stores, so why not just give that money instead to low-cost, city-owned stores? His website explains: “With New York City already spending millions of dollars to subsidize private grocery store operators (which are not even required to take SNAP/WIC!), we should redirect public money to a real ‘public option.’”
It sounds great, until one looks at it for a couple of minutes. On Monday, however, the American Enterprise Institute’s Timothy P. Carney explained in the Washington Examiner that Mamdani’s “claim is based on a basic misunderstanding of the city’s current grocery subsidies. The money he plans to use to pay for his city-owned grocery stores is money the city doesn’t have.” The mistake Mamdani makes is that he “wrongly believes that the city is spending $140 million to subsidize private grocery stores, and he thinks he can take half of that money and use it to build government groceries.” Even less than half, as Mamdani has said that he will open five socialist grocery stores at a cost of only $60 million.
Mamdani has crowed about this, promising: “We will redirect city funds from corporate supermarkets to city-owned grocery stores whose mission is lower prices, not price-gouging.” According to Mamdani, his five grocery stores would cost $60 million, and this amount “should be compared to the city’s existing program called City FRESH, where they are set to spend $140 million, subsidizing corporate grocery stores… So we would take less than half of the money the city is already set to spend, and actually deliver results.”
Carney explains that the FRESH, or Food Retail Expansion to Support Health program, is “a bundle of tax breaks and special regulatory relief for grocery stores that open up in so-called food deserts: poor neighborhoods where the city has concluded residents don’t have adequate access to produce and other healthy foods.” So the New York City government gives some tax breaks to grocery stores that open in areas where there were no grocery stores, and in Gotham, there are plenty of areas that retail chains of all kinds would prefer to avoid.
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And so the city, says Carney, “has given up about $30 million in tax revenue through this program. In the last six years, since FRESH got into full swing, the program has reduced revenue by about $20 million total, according to the city’s estimates. That is, it costs an average of $3.3 million per year. So, this program would take 42 years to cost the city the $140 million that Mamdani says ‘the city is set to spend’ on it.”
It seems that Mamdani got his $140 million figure by misreading a city website. Carney notes that New York City’s “Economic Development Corporation estimates that grocery stores have invested $140 million of their own money thanks to the FRESH program.” Yes, the socialist wunderkind is making a basic, embarrassing error: “Mamdani is counting the $140 million in private spending as government spending. That money was invested not by the city, but by ‘corporate grocery stores.’”
Thus the Man Who Would Kill NewYork “is planning to pay for his grocery stores with money that doesn’t exist.” At last: true socialism!
If Zohran Mamdani becomes mayor of New York City, the world will get another illustration of why socialism doesn’t work. But the establishment media will never tell you that. That’s why you need to become a PJ Media VIP today—use code FIGHT for 60% off—and get all of our exclusive content: all the articles, all the podcasts, all the other good things. Above all, you’ll get the truth the media never tells you.
