Left and right knee jerks

If I'm playing devil's advocate, it's because the liberal arguments put forward for raising the minimum wage have not been pro-labor. I'm thinking of these two: it will stimulate the economy (Stiglitz and Reich among others) and it will disburden the taxpayer who is subsidizing the welfare safety net for minimum wage earners (even Occupy's Cathy O'Neil seems to buy this argument). There's even the argument that Wal-mart and McDonalds would benefit by a raise because their employees would spend more money there (the Henry Ford business model). The only pro-labor argument points to the fact that a family can't survive on minimum wage. But the raise that Obama has proposed is not enough of a raise to solve the problem for minimum wage-earning families. 

It seems clear then that Obama's proposal is intended not to improve the welfare of low-income wage earners -- especially those with multiple jobs who will lose their medicaid or food stamps -- but to provide a mild stimulus to the economy without increasing unemployment (small increases in minimum wages have been shown not to increase unemployment, as studied by Card & Kreuger -- I've posted their work before here and here -- and more recently, Dube, Lester & Reich) and without increasing federal spending or taxes. In other words, Obama has found a expedient means to appear progressive without alienating conservatives -- and without actually being progressive. An expansion of the welfare net would be truly progressive, especially if it were met with a commitment to free public housing (Occupy has been working on this by occupying foreclosed properties) and free higher education.

This nation is incredibly wealthy despite its long relative decline, its dependency on dollar devaluation and debt financing. It's instructive to me that the current recession was not caused by a business cycle but by deregulation and overspeculation. It wasn't caused by higher taxes (they had been lowered, in fact) or spending (the economy was growing through two hugely expensive wars). That suggests to me that the economy can withstand all sorts of Keynsian measures including both higher taxes and more government spending. 

Transformation requires a shift from playing the political-economic game to demanding change, and that requires a shift in our discourse. In a world of knee-jerk conservatism, knee-jerk libertarianism, knee-jerk liberalism and knee-jerk leftism, that's not likely outside obscure blogs that don't matter. 

The confusion

To assume that any policy is by definition pro- or anti-labor is a mistake of knee-jerk liberalism. A policy isn't pro-labor if it throws laborers out of mediciad and food stamps. Wal-mart shows a structural contradiction in our current capitalist economy, driving both wages and prices down. Raising the minimum wage does nothing to resolve that structural contradiction. Expanding food stamps and medicaid, and similar welfare state policies, do.

To be plain, I'm pointing out that labor activism has two directions that are in important respects incompatible: socio-economic transformation (including revolution) and socio-economic entry. Union activism succeeded in bringing labor into the middle class, a material improvement, but not a transformation. It's an expansion of conformity of the individual as commodity and consumer-of-commodities. The New Deal social welfare state was transformative, protecting people as they are, leaning the nation towards a socialized society.

The social safety net seems to me the visionary direction. Why shouldn't food and health care be as much a right as public education, public libraries and public parks? Why not public housing as well? It's not just libertarians who object to the social safety net. Liberals also don't seem to get that expanding the net is liberatory. Maybe they're afraid of it. Liberals seem much happier supporting a unionism that shepherds its people into middle-class consumerism than allow them any measure of real freedom beyond their own horizon. 

I'm much more sympathetic to liberatory transformation. But even if I weren't, in an economy that is increasingly stacked against the 99%, requiring ever more debt, I'd be wary of the entry game. And I think labor ought to take a stand on it in favor of expanding the social safety net. Since Reagan-Thatcher everyone seems afraid of the social safety net. It's the new McCarthyism. 

Labor activism is confused

Wal-mart employees are the largest food stamp and Medicaid recipients in many states, at taxpayer cost. So labor is agitating for a raise in the minimum wage, claiming that it would not only improve the lives of low income earners, but also increase the liquidity of the economy. The latter argument is debatable, the former is just false. 

Medicaid and food stamps are great. They directly, without any economic mediation, give people who need real food and health care exactly those needs. Raising the minimum wage, on the other hand, plays into the economic equilibrium — and what economist really knows how that will play for sure? — without providing those people’s actual needs. Food stamps are much less of a relativized abstraction than cash, which is entirely abstract and relative. 

Food stamps and Medicaid paid for by higher-income taxpayers are much better and more progressive social and economic policies than either raising the minimum wage or guaranteed income.

Some small businesses with narrow profit margins will have to pay for a raise in minimum wage (that’s regressive) and both raising the minimum wage and guaranteed income play into a market equilibrium than can backfire through inflation. Why flee food stamps and Medicaid, two of the best welfare-state models we have, for the sake of subserving a wage economy without guaranteed food and health, where you’d have to buy health insurance and where the wage-earner buys discount junk food with cash at a Duane Reade rather than at a supermarket where fresh produce are at least available and encouraged by the stamps?

I can see only two advantages to raising the minimum wage: once implemented, it is not likely to be revoked or curtailed, as food stamps have been; there's a chance that it might increase the overall liquidity of the economy. But to force labor to buy its own food and health care seems a really regressive and upside down way to improve the lives of low income workers. The underlying issue of dignity notwithstanding, labor ought to be demanding increases in food stamps and medicaid, not begging to abandon them. I wonder whether Wal-mart might actually help labor in agitating for increases in social programs. That would be much more effective than just a day of labor protest.  

Wal-mart has two sides to its business model: low wages and low prices. Only small businesses object to the latter. A raise in the minimum wage might solve the price problem for those small businesses, but at the expense of the wage problem for them. So it's a wash for them. On the other hand, if government subsidizes the wages with increased food stamps and medicaid, the small businesses won't be helped, but a much larger sector of the population will be helped not only with food and health, but also with low prices. That's persuasive to me. Let the small businesses cater to the upscale. Let government subsidize labor and low prices.

Where's it all going?

It looks like NO711 is headed towards a racially divided face-off. NO711 is 100% white and mostly middle-class. Store employees are neither. 

Two months ago, when the opening seemed inevitable, I asked 7-Eleven Corp if they'd be willing to give back to the community. Their public relations consultant agreed. I suggested engaging with youth services, men's shelters, services for abused spouses and healthy food services. Together we began looking for options. But, as one local social service director explained to me, the social service organizations here depend on the good will of the local community, so it is unlikely that any service will collaborate with 7-Eleven as long as a local group like NO711 opposes it. 

Meanwhile, the 7-Eleven store opened despite a stop work order. Apparently 7-Eleven feels that their illegally placed refrigerator units and industrial fans are the building owner Jared Kushner's problem, not theirs. That's a low blow for 7-Eleven, but they've got a high commercial rent to pay, and with the rent Kushner's getting from them, it's even lower of Kushner not to resolve the stop work order immediately. But what does he care?

The store will, following standard procedure, give its outdated foods to a church soup kitchen, in this case the church on Avenue B.

So the store is here, so is NO711, an ugly race confrontation is imminent, and no community give-back beyond the pro forma. 

At a meeting with the NO711 group in June, I let the group know that I didn't want to be involved beyond cutting the checks for the grant that I got for them as the block association treasurer. I support NO711 as neighbors, but years ago I recognized that the neighborhood as it is today is nothing that I beleive strongly enough about to work to preserve.  It's a gentrified neighborhood, belonging moslty to youth of privilege. I accept that reality. I stay here only because I have an affordable apartment a block away from a park and a pleasant library I enjoy, and within walking distance of Chinatown and the East River, and I know this place and many of its people of whom I am fond. 

In September, the 11th Street ABC Block Association board asked 7-Eleven to meet with the block. They wanted to meet with our board alone (presumably to gain the credibility of having met with the block association) but would not commit to meeting with the block (presumably because it would be a public meeting and many of the explanations of their business model might not look good to the press). When we insisted on an open block meeting, they asked to meet with me alone, not as a representative of the Block Association or NO711. I agreed. That's when we got started on a community give-back. I wish it would go further. 

Lately my feelings have been all over the place. Would a zoning restriction on chain stores save the local butcher? Probably not. It would save New York for upscale restaurants. That'd be great for tourists who look to NY for a change from suburbia, but I don't feel that as something worth fighting for. I don't feel proud of washing my hands of all this, and I wish 7-Eleven had backed out long ago, but I don't see the situation now going towards good for anyone. The corporation appears to be still willing to give back to the community. But the residents around the store are unhappy and you can't blame them. 

Defacing Banksy bothers you?

Consider what graffiti means to the course of western art. It's not just raising the cry against the defacing of NYC by developers from the city admin top down -- the demolition of 5Pointz, the graffiti center -- that's just the content message. 

Transgressive is the distinctive hallmark of western culture's art -- the abiding dissatisfaction with normal, of workaday and wifery and whitesupremacy. Traditional arts of traditional cultures celebrate their normal with gods and godesses and Buddhas and bodhisattvas. Not here n the West since industrialization raped society and gave us Romanticism and angry, moralistic art from Dickens to Beethoven, desperately seeking authenticity in feeling and rebellion. 

Transgression in NYC-wide art is so much more satisfying than Christo's pretty orange banners of decorum that the mayor endorsed in his stately backyard of Manhattan's Central Park, the world's most upscale leisure ground. At last, Banksy -- the perfect hipster art: it can't be untransgressive or acceptable even if the mayor allows it or Kelly ignores it. It can be acceptable and normal only to hipsterism. Even if it becomes the popular sensation of the doucheoisie, it's still illicit graffiti art -- transgressive art of the mischievous kid, pre-adult pre-normal culture, marginal to the emotional-death-in-normality and alienation. 

There is no affect in normal. Only a western mind could write "The key to joy is disobedience." Banksy is the latest NY cronut and defacing his art scrawls all over Bloomberg's signature on this city and repos his Midas touch that silenced all urban pulse. Silence is Death; Speakout=Deface.

Banksy is clever and cool. Defacing his art repossesses graffiti and the city from Bloomberg's self-congratulations. 

Over capacity

The Historic Districts Council informs me that seating for the lecture "Solving the Tenement Puzzle" has reached capacity and there is already a waiting list.

Solving the tenement puzzle

I'll be giving the illustrated lecture Solving the Tenement Puzzle again, this time at the Neighborhood Preservation Center/Historic Districts Council, 232 East 11th Street (between 2nd and 3rd Avenues), Wednesday, September 25, 6:30pm. Light refreshments will be served.

The talk involves the whole social history of 19th century New York, New York's wild politics, economy, real estate and land use, the development of the immigrant ghetto, speculation, arts, culture and reform. Using the photography of Stefania Zamparelli and Amy Chin, we'll read it all on the face of the tenements. And we'll debunk popular - and even historians' - misconceptions about the tenement.

I'll also address the surprising paradoxes of the immigrant real estate economy in which land rent declines as building rent rises, and the quality of living space (a use value) declines as price (exchange value) increases, contrary to the market outside the immigrant quarter. 

Solving the Tenement Puzzle: dispelling myths and misconceptions of an architecutral vernacular. 

Jewels

LES Jewels, the most transgressive man I know: indifferent to safety, security, health, decorum, decency, police, imprisonment, violence, or any protection from all the dangers we fear, the dangers we hide from to crawl nightly into our narrow caves to sleep in beds of denial, dreaming our small worries. He loved to wear crazy jewelry and would always show off his latest, wordlessly. Arihood admired him to no end. The spirit of the old neighborhood lived in him.

A chance for Chinatown

There has been growing support for city council candidate Jennifer Rajkumar in Chinatown. Several local Chinatown leaders have explained to me their support for Jennifer and their loss of faith in Margaret Chin. Now Jan Lee, Chinatown's most outspoken activist, writes about his disappointment with councilmember Margaret Chin at the CCRC blog. It's a clear and thoughtful piece. Wednesday, Jan walked through Chinatown storefronts with Jennifer Rajkumar to discuss with the store-owners their issues and challenges.

Following up on the debate

Last night at the debate, candidate Jennifer Rajkumar cited this article at City and State. Chin responded by dismissing it as "just a blog."

The piece explains that the "affordable commercial space" that First American International Bank promised Chin in exchange for de-landmarking 135 Bowery is a fiction. There's no category of "affordable commercial space" in law or city zoning or land use or regulation or legislation.

But we already knew that. When FAIB and Chin presented to the City Council this promise of affordable commercial space they produced no contract, no written agreement, no letter, no email, no paper trail, no evidence, no document whatsoever. And, btw, the Council Committee, chaired by Brad Lander, didn't even ask about it. In other words, this was a favor to the councilmember that the council members all understood as a favor to the bank -- best not ask questions, just look away and nod assent.

And what contract could there be? How could it be enforced? What measure of affordability? How much under market-rate? How do you negotiate a give-back without getting an enforceable contract? Or even any contract?? The whole transaction was a fabric of malfeasance and cronyism.

Barron's article describes FAIB as a "Chinatown bank." But as I recall, when the bank demolished 135 Bowery, its headquarters were located in Queens, not in Manhattan's Chinatown. At a moment when Chinatown is threatened by outside capital, that's an important detail. The fact that FAIB is moving into Chinatown should not deceive anyone into thinking that they are now integral to the community. Having promoted and won the Chinatown BID and now begun developing in Chinatown, FAIB looks like the spearhead of Chinatown gentrification, an outsider preying upon the built neighborhood and its community.

It always annoys me to hear challenger-candidates mouth the empty promise formulas "If you elect me..." or "You need a councilmember who will...". I mean, after you explain how the incumbent has failed to negotiate effectively, mouthing these formulas are kind of an insult to the audience's intelligence. But in this case, it really is true that Margaret did such a poor job negotiating this deal, that you want to hear someone say, "I know how to negotiate, and I will negotiate for you."

Chin-Rajkumar debate

I attended the Chin-Rajkumar (Council District 1) debate last night. Although the audience, mostly white, seemed to be evenly divided between the two candidates, I was struck by the aggressiveness of the Chin supporters, who heckled, yelling insults, sometimes gratuitous insults. Don't get me wrong, the Rajkumar crowd booed Margaret a couple of times too, but no verbal abuse that I heard.

A friend tells me that Christine Quinn's crowd behaved with similar aggressiveness at a mayoral debate the night before, more aggressive than the other candidates' people. Quinn and Chin are both incumbents, both carrying a lot of baggage and a lot of negatives. They are both supported by big real estate money, viewed by the public as its enemy. I wonder if those negatives have put their supporters on the defensive. The worse the candidate looks, the more her supporters will lash out? People are never more vicious than when they sense they are wrong.

Chin has a lot to answer for in public: promoting the Chinatown BID that serves big businesses and big developers, despite widespread local Chinatown opposition; supporting the NYU plan (albeit with a 25% reduction) despite pretty much universal opposition from her constituency except NYU's president; de-landmarking 135 Bowery to let First American International Bank demolish it -- the very same Queens bank that promoted the BID and contributes to her campaign; supporting a SoHo BID that is also widely opposed by the local constituency; initiating a bunch of absurdly draconian bills that luckily have gone nowhere -- steep, punitive fines on street food vendors, for example, that benefit established businesses and harm the immigrant little guy getting a first start. It's been a record of one slap in the face of her constituency after another. You'd think her opponents would be the ones heckling, yelling and threatening.

Rajkumar has one negative that I can see: she doesn't have a legislative track record. Chin makes a big deal of her lack of legislative experience, but really now, City Council is a first job -- there's no legislative job below it where you can acquire experience. Chin didn't have legislative experience before she was elected either. I have not seen Chin address Rajkumar's work as a civil rights public interest lawyer. That's her record. Chin ignores Rajkumar's civil rights record entirely. Attacking her for not having experience in the job that she's seeking to get experience in is the kind of comical cheap shot you use when you have nothing substantive to say.

Chin also points out that Rajkumar never attended SPURA meetings. But did Chin attend the meetings prior to becoming Councilmember? I never saw her there when I went to the meetings before she was elected. I'm told she attended five meetings in a three-year monthly process. I'm guessing all of them were after she was elected as councilmember.

The loudest commotion occurred when Rajkumar criticised Chin for initiating a bill to jail tourists who buy knock-off goods. The audience seemed to go wild with anger. I can see the virtue of burdening the demand, though jailing tourists seems extreme. But why did the audience respond to this issue? Do they resent tourists for encouraging a blackmarket? Gang violence has subsided in Chinatown. Is there more trouble under the surface?

With all the predictabilities in a debate, that response to the knock-off bill was the most alarming moment of the evening. The blackmarket, its potential for violence, its human smuggling and the desperation it brings, its secrecy and dangers, its exploitation, are still feared and hated in Chinatown.

Division

[Cross-posted at http://chinatownforchinatown.wordpress.com/]

There are two sides debating in the Chinatown Working Group. Some want to see more tourists in Chinatown to support business. Developers, financiers, some business owners, the Business Improvement District, for example, sit on this side and arts purveyors as well. On the other side stand the labor and tenant adovocates who want business to serve the local residents. You might ask, why not have both, local services and toursim?

If only the sustainable market forces were balanced. But they’re not. Gentrification is an opportunistic tide that, once it gains an entry, will flood the locality resistlessly. To use urban planning to help the juggernaut of monopolistic market forces is unnecessary. The empowered need no help.

In any economy, there are vulnerable sectors even among the most sustainable. Local services are actually highly sustainable since local residents have consistent, reliable purchasing needs. You see those needs reflected in the streets of Chinatown. As long as the community remains, the local services will be sustainable.

Although they are highly sustainable, local services are also highly vulnerable to attack from giant outside capital which has more resources, government connections and mobility. Ironically, the least vulnerable — giant capital, developers, big businesses, chain stores — are also the least reliable because they are mobile and least tied to the locality. Like a corporation that protects itself in bad times by laying off labor, giant corporations are most capable of protecting themselves at the expense of the locality, whereas small local servers depend on the locals.

Tourism is closely tied to development and big capital — high prices and upscale values that can be marketed to upscale spending. Local services, especially in Chinatown, depend on low prices and high volume. If giant capital gains a foothold, commercial rents will rise, replacing local services, and  gentrification will displace the community, killing the viability of any remaining local services. It’s a snowball effect.

This is not to say there shouldn’t be tourism in Chinatown. There’s always been tourism in Chinatown back all the way to the 19th century. But here’s the paradox of tourism: people come to Chinatown not to see a spectacle staged for them but to experience Chinatown as it is, a lively working community, culturally distinct from the rest of New York because it serves its own. Cater too much to the tourist, and you lose the Chinatown that tourists come for. You’d then have to market Chinatown as a brand, constantly hoping that that brand doesn’t go out of fashion. Chinatown business becomes the slave of an outside community that it has no control over, and it turns a community with businesses in it into a business with no community in it.

In planning, as everywhere, there are empowered sectors that need no help, and disempowered groups that need support. Were it not for the 1% predators, the 99% disempowered would be fully sustainable. That’s why planning should always keep as its goal protecting the disempowered and avoiding giving ground to giant capital.

The rent gap: a logical gap

Neil Smith attempted a predictive theory of gentrification within a Marxist frame with a close examination of the phenomena in the US, particularly in NYC during the period since the word "gentrification" was coined around 1964 by Ruth Glass. Smith observes that when property values decline to its bottom, investors see an opportunity to buy low in the expectation of revalorizing the property to reach its potential. The rent gap -- the gap between the low rent of a devalued property and its potential -- opens an opportunity for capital to fill in.

The notion is at best post hoc predictive, which is to say, not predictive at all. Consider Detroit. Property values have declined, but the properties are not ipso facto an opportunity for capital to invest at the bottom under the assumption that the values can't go anywhere but up. A property's potential is not a determinable quantity.

Property potential depends on many factors: cultural or economic interest in the location; government subsidies or incentives; a housing crunch in upscale neighborhoods driving money to seek options in less upscale locations. Speculation is not one of those. Real estate has speculated on neighborhoods before without raising values. The construction of Harlem around 1900 is the most obvious case in point. Built for the wealthy, it didn't take hold and declined.

Gentrification might not be so much a reflex of capital as of policy, including zoning (creating a housing crunch, e.g.), incentives and subsidies. A too abstract economic view of gentrification will miss the role of government policies that reflect conflicting interests, especially where the owners of capital live.

One might say that as long as population grows, just about every location has a rent gap. But this does not imply that properties must decline before they achieve the gap. Neighborhoods can gentrify even if they have never declined. Glass coined the word to describe the spread of gentry, displacing and transforming working class neighborhoods. Working class neighborhoods are not all the result of decline. Some working class neighborhoods are built for the working class, and appreciate as the neighborhood grows more dense. That was certainly true of the LES in the 19th century.

The urban decline that Smith observes is more an effect of transportation than the age-decline that he attributes it to. The automobile and mass transit allowed the opening up of suburbia and the downward spiral of white flight in the 1950's and 60's.

Though it isn't stated explicitly, Smith's analysis predicts that Park Avenue should turn into the next slum. I think that's possible, but not because the buildings will age-out. Age does not entail decline. There are older buildings in Greenwich Village which attract even wealthier owners. If Park Avenue declines, it'll be because wealthy owners have been attracted to the single-family tenement. Park Avenue can't keep up with the scale of income inequality. The new New York will be full of these repurposed, culturally valued mansions that we are beginning to see in the EV. Three years ago, 47 E. 3rd was an aberration. Today there are four such single-family tenements here. Trends take a while and appear at first as insignificant. Give it time...

AND NOW, due to popular demand, NO 7-ELEVEN! -- the Margaret Chabris skit

NO711 performed the skit again at the Tompkins Square Memorial Riot Concert today and again got requests to post the script, so here it is in all its glory:

NO 7-Eleven!!

[the unexpurgated version]

by Sugar Di Abetes with Tess LaCardboard

Characters: 

"Local" a Bodega owner; 

"Lady from Texas" 7-Eleven spokesperson Margaret Chabris; 

"A customer."

Local: You own this 7-Eleven?

Lady from Texas: [Heavy out-of-town accent, very polite] Why no, sir, I am the corporate spokesperson for 7-Eleven.

Local: Oh yeah? Where you from, lady?

Lady: I'm from the Great State of Texas, thank you. Visiting here to check up on one of our target locations.

Local: "Target locations." Look, I own this bodega right here next door -- no not over there, RIGHT HERE NEXT DOOR. What the fuck?

Lady: Well, our corporate headquarters -- in the great state of Texas -- feels that your neighborhood is underserved.

Local: Underserved. I serve them right here. I already gotta compete with the deli down the block and the bagels store across the street and the yuppie cafe on the corner. And the yuppie cafe on the other corner. Yeah, and the yuppie cafe on that corner too. No the other corner over there is a pet store. They don't compete with me -- they serve coffee only to cats and dogs.

Lady: Well sir, [a little testy in her genteel Texas manner] the corporate strategy of the great state of Texas is to target your lovely neighborhood.

Local: Do you have a clue where you are?

Lady: Well it says here on our corporate app-map app that this is the [pronouncing firmly stressing each word with a nod] "East Village." Now that does sound charming doesn't it? Is there a North Village? I'd love to visit there while I'm here, you know. Love to see your charming and beautiful city.

Local: "East Village" [annoyed now]. Lady, this is no "village." This is Loisaida. Alphabet City.

Lady: Loisiada... Now I don't see that in our map app. I mean app map.

Local: [Disgusted] APP MAP APP. [Restraining himself, nicely] Look, you seem like a nice lady. You have a nice app map app. You wear some fancy ropa and I can see you gotta lotta dough. You speak very nice. [Lets loose waving his arms wide] Why the fuck are you trying to drive me out of business?

Lady: Well, [cautiously] sir, [sweetly] you might could convert to a 7-11.

Local: A 7-11. Right next door to a 7-11? What the fuck sense does that make?

Lady: [Explaining as if it makes perfect sense] Well, that's all part of our target strategy, sir. If there's a [consulting her iphone and pronouncing carefully] bo-dee-ga nearby, then there'd be competition. We can't have competition, you know. We won't succeed with competition. Oh no, no, no. Competition, oh competition's very bad. No, no, no. That wouldn't make our corporate headquarters in the great state of Texas very happy. And you know we mustn't make them unhappy in Texas.

Local: Jeez. Why the fuck should I fucking care about...

Customer: Mahmud! Washappenin? How you been brother? What's this?

Local: It's the new store. Believe it?

Customer: [To Chabris] This your new store?

Lady: Yes, sir, young man.

Customer: [Pause, looking up and down judiciously, then finally] Your store is fuckin ugly. My advice: turn the fucking lights down. [Walks into the bodega.]

Lady: Oh dear.

Local: So how is my store going to survive if I convert it to a 7-11?

Lady: Well our corporate head quarters in the [both say it together] great state of Texas will subsidize your store until aaaaaallllllll the competition is dead.

Local: And then?

Lady: Well then you know....

Local: You know what?

Lady: Well it's like Starbucks, you know...

Local: Like Starbucks what? We're gonna serve yuppie coffee all day?

Lady: Well you know Starbucks opened oh so many-many stores in their corporate-headquarters-capital-finance-growth-and-investor-service-strategy-consumer-demographic-catch-area, cornered the market and then of course...

Local: Of course what?

Lady: You know...closed the excess.

Local: The excess. That's me.

Lady: We close your store.

Local: That's your strategy.

Lady: From the great state of Texas!

Local: [mutters to himself] (Fuckin outta towners.) How about you wanna buy a bridge, lady...

Lady: Oh, like the Brooklyn Bridge? We bought that and we're very happy about it. Oh yes very happy. Such a pretty bridge. We're planning to put our logo there, so pretty.

Local: [Wipes his hand over his face in exasperation, leaving.] Holy Jesus Mother of God!

Lady: [Plays with her app map app. Occasionally glancing over the audience to her pretty bridge.] Such a pretty bridge, and such a lovely neighborhood. And won’t 711 be a welcome neighborhood friend...?

Margaret Chin, the developer's candidate

Margaret Chin is taking money from the Real Estate Board of New York's Political Action Committee. You'd want to ask, why would the founder of Asian Americans for Equality welcome large campaign support from real estate?

Affordable housing is built in NYC through incentives given to developers. So if you want to get any affordable housing here, you've got to welcome a market-rate developer, otherwise you get nothing.

Does that explain why Margaret voted for the NYU development (albeit curtailed)? Maybe. Does it explain why she voted for the Chinatown BID against widespread opposition within Chinatown? Maybe. Why she voted to help First American International Bank, the promoter of the BID, demolish and redevelop 135 Bowery?

The BID benefits larger property owners, larger businesses and developers and banks. But the small property owners and the small businesses are the anchor of Chinatown. At what point does a commitment to building new affordable housing sacrifice community entirely?

The city has shoved a wedge between affordable housing and community, turning affordable housing into a tool of gentrification and displacement. Look at Williamsburg. Chinatown next? The BID is a step towards the new Downtown Hotel District (DoHo?) formerly known as Chinatown.

From Crain's http://www.crainsnewyork.com/article/20130729/BLOGS04/130729878 about REBNY's funding of Chin's campaign

From City Council Watch, Seth Barron (writer for City & State) "Margaret Chin Progressively Awful"

Sean Sweeney in The Villager "The billionaires back Margaret Chin for City Council"

Bloomberg smoking gun, media fails to report on it

Remember how we were all told that the Bloomberg sugar "portion cap" exempted the Big Gulp because the Health Department had no jurisdiction over FSE's (gorcieries, bodegas, 7-Elevens, convenience stores)? All lies. 

The Appellate Division's decision against Bloomberg's sugar "portion cap" addresses a complex web of intriguiging policy issues indicative of the Bloomberg administration. If a legilsative body, the City Council in this case, fails in its mandate to write effective laws, can a mayoral administration usurp its function for the welfare of the public? Under what conditions?

It turns out that the cap was much more than an administrative remedy for an ineffective legislature. The big news in the decision -- which has not been adequately reported in the media -- lies in the cap's favoritism. The mayor and the Board of Health claims that they have no jurisdiction over FSE's (groceries, 7-Eleven's, bodegas). But the decision explains that this is simply not true:

With regard to the exemption of certain FSE’s (i.e., grocerymarkets, 7-11s, bodegas, etc.), the DOHMH does not deny that the exemption has no relationship to health-related concerns. Still, the agency argues that it was not based on impermissible reasons, but on the agency’s allegedly reasonable view that such FSEs cannot be regulated by the Agency under the MOU signed with the state’s Department of Agriculture. However, the Board’s claim that the MOU tied its hands is belied by the fact that the agency [the Board of Health] has previously used its regulatory authority to promulgate city-wide health rules that regulate all FSEs (see e.g. 24 RCNY HealthCode 181.07) [city-wide regulation of common eating and drinking utensils]; 24 RCNY Health Code 71.05) [city-wide prohibition on the sale of “any food . . . which is adulterated or misbranded”]). Moreover, the MOU envisions “cooperative efforts between the two agencies [to] assure comprehensive food protection” and to avoid gaps in food surveillance.” Yet, the agency offers no evidence of any prior attempt to coordinate witht he Department of Agriculture on the Portion Cap Rule. The failure to obtain such expansion resulted in a ban that includes exceptions which necessarily favor some businesses and products at the expenses of others. Accordingly, the selective restrictions enacted by the Board of Health reveal that the health of the residents of New YorkCity was not its sole concern. If it were, the “Soda Ban” would apply to all public and private enterprises in New York City. By enacting a compromise measure — one that tempered its strong health concerns with its unstated but real worries about commercial well-being, as well as political considerations — the Board necessarily took into account its own non-health policy considerations. Judged by its deeds rather than by its explanations, the Board of Health's jurisdictional rationale evaporates.

Judge Renwick writing for a unanimous decision of all four Appellate judges, my emphases

What's important here is not just that the mayor could have extended the cap to delis, bodegas, groceries and 7-Elevens. It's that the mayor and the Board of Health lied about it to the public. 

The mayor purposely exempted FSE's exactly at the moment when 7-Eleven began its entry into New York. No wonder he lied.  

There's further evidence of malfeasance. The court found that the Department of Health didn't bother to include research in its cap policy, instead accepting a policy draft from the mayor's office itself without any research background. The research is easily available and pursuasive, but the Board didn't bother with it. The policy was a ukase from on high, handed from one office and accepted by another without demur or even window dressing. It shows excesive administrative control and a lack of agency independence, responsibility and accountability. Agencies are supposed to have and use specific expertise, not just hand over orders from above. Otherwise the agency has no justification for its existence or its expenses. 

Legislative bodies respond to constituencies as well as research, so popularity might be an obstacle to writing sound law. That's a justification for an administration, or certainly for a regulatory agency, to step in, where its expertise is wiser than popular opinion. But to step in without providing the evidence of the greater wisdom is hubris. You'd think Bloomberg would have been more careful. 

The answer to the questions at the top -- when can an administration overreach for the benefit of the public? -- has its answer. Checks and balances of government serve a purpose. Overreaching allows abuse of authority and cronyism. 

The court found that the Health Department overreached as a regulative agency on other grounds as well. One ground seems ambiguous: They found that sugar is not inherently dangerous, but only in large quantities, so regulating it depends on behavior, not flat out substance banning. That seems to argue on both sides: how else can the regulatory agency control the substance without overreaching into behavioral social policies that belong to the legislature? If the legislature is ineffectual, why not overreach? Is the slippery slope there too steep?

This seems to me to trade on a false dichotomy. Behavior is not the only means of controlling sugar. The soft drink industry can be burdened with the regulation, not the consumer. Problem is, the city has no jurisdiction over corn syrup production or use. 

In all organizations ruled by law, there are sectors that are protected from change, others that are easily pushed. By definition, those are the disempowered. Here it is the low-income consumer. Monsanto and Pepsi et al. should be burdened, not the consumer. In our society labor and consumers are mere pawns. Corporations and their products control our politics, our imagery, our information, our visibility. The bigger they are, the more control.

WNYC covers rent regulations

Adam Davidson, appearing on WNYC's morning "Brian Lehrer Show" discussion program, gave his strongest argument for rent deregulation without any analysis at all. Instead, he appeals to authority: economists on all sides agree that rent regulations are bad for the housing market and harm the middle class. 

True, economists agree on across-the-board rent regulations, but that's not New York's model. New units in NYC are not required to be regulated, so rent regulations here incentivize new construction. Deregulation would remove that incentive since raising rents and evicting tenants are cheaper and easier than construction. The New York model is actually healthy for the market.

Davidson refers to one economist, Christopher Mayer, but Mayer completely forgets that deregulated tenants don't simply disappear from the rental pool. If they have to vacate, they move from upscale neighborhoods into middle class neighborhoods and create a tighter market, raising rents there. So deregulation will hurt the middle class especially. In aggregate: 

deregulation = same # of units, same # of renters, just more wages going into rent, a windfall for landlords and no incentive to construct or ever ease the market. 

A land tax would help, tagged to upzonings in selected neighborhoods that can withstand increased development. 

The Times at it again

Rent regs in the Times again. Amazing to me that they can print baldfaced lies. 

This was empirically studied in Boston:  when rents were deregulated, all rents rose. 

Mayer's key assumption is false. When the deregulated renters vacate, they don't disappear -- they have jobs and family in the city. They move to cheaper neighborhoods where their numbers create a much tighter market in those lower-income neighborhoods, raising rents, displacing more renters who in turn move down the ladder creating a tighter market down the line.

So deregulation would raise rents steeply for the middle class and those below. The highest renters alone might get a break. Deregulation is a win for landlords and maybe the wealthiest renters, a lose for everyone else. 

Building new units will increase supply and ease market rates. Since new units are not required to be regulated in New York, our rent regulations incentivize new unit construction. Deregulation would end that incentive: raising rents and evicting tenants are cheaper than building new housing. Deregulation will likely raise rents steeply across the board while tightening the market even more, driving the middle class out to the further reaches of the metro area. Deregulation is a gift to landlords at the expense of nearly everyone else.

NYC's rent regulations are healthy for its housing market except it's deeply unfair for new arrivals. The state should really get back into housing of all kinds -- upscale to low -- using the upscale housing to finance the rest.

The future of government policy-making and the danger of giant global capital mobility

Walmart threatened to leave DC if their mayor signs the council's living wage bill. 

http://www.rawstory.com/rs/2013/07/09/living-wage-mandate-in-d-c-sends-walmart-running/

Chain store influencing public policy -- when does a chain store become too big to displease? It's the neoliberal dreamstate -- government of, by and for the corporate person. In the piece, Marion Barry called it "a stick-up." 

Walmart argues that raising the minimum wage will drive employers away, causing unemployment. But raising wages also boosts demand, creating more employment. Card and Kreuger's classic survey showed that minimum wage raises actually increased employment. Even more interesting, Neumark and Wascher showed disemployment effects only in large fast food stores, with a rise in employment among small restaurants.  

You can see what's going on. The large corporations disinvest because they are more mobile. They can leave a state with higher wages for a state with lower wages. Small owners are not as mobile, so they are stuck with the higher wages, but eventually reap the benefits of greater demand! 

And you can see where this is going. Walmart has already stated that it will disinvest, regardless of greater demand. After all, Walmart depends on low-wage bargain hunters. If wages rise significantly, the higher demand might not be good for their bottom-end offerings. Walmart has an interest not only in low wages to keep their pricing down, but also to maintain its low-income market demand. They promote themselves as offering low prices, but actually they are in the business of creating low incomes to feed their own market. And its model doesn't move upward as it grows. It grows by spreading the bottom. It's an impoverishment model. Their corporate goal is to vastly increase the bottom.

The DC living wage might have been a test case to see the efffects of demand vs employment cost-cutting, but by stating its intention to leave, Walmart shows up front that it will bias the results. So if employment declines, everyone can blame it on Walmart's political ploy.

Capital mobility is another reason to be wary of the neoliberal giant global corporation. Small businesses have to take the pain. Ironically, they also reap the benefit. 

But what's more shocking than the impoverishment model that Walmart is admitting to here, is Walmart's threat to public policy-making. When will corporations become so big that we can't say 'no' to them ever again? Think of the consequences for food (Monsanto), the environment, fracking -- it's not just about wages. It's the entire fabric of life. 

Reading incomprehension

Apparently 7-Eleven Corporation worries that its foreign ownership will impair its public image among Americans, according to unhappyfranchisee, a website that monitors franchises. I had to laugh.

The corporation is Japanese-owned, but here it promotes its national corporate headquarters in Texas. Now, given a choice between Japanese ownership and Texan, any New Yorker would choose Japan over Texas, unhesitatingly. New Yorkers, cosmopolitan to the core, all seem to partake of some Nipponophilia. We admire Japanese art, respect its religion, envy its corporate management style and we can't seem to get enough of its cuisine. Texas, with its gun culture, executions, religious fundamentalism, its flag-waving, anti-Darwinist textbook industry, its wealth, growth and political influence, inspires us with something between dread and terror. We even deplore its unhealthy cuisine. Texas is the anti-New York. Texas art?

It's a measure of just how distant 7-Eleven is from New York that it plays down its Japanese ownership. Not that it matters: even if it promoted itself as an efficient, streamlined, innovative minimalist Zen-like Japanese import, it wouldn't make their corporate packaged foodstuffs more palatable.

The role of the Fed

At a recent Occupy Alt Bank (Occupy's Alternative Banking think tank) there was this exchange. 

'Banks find ways to skirt any regulation whatsoever," said one member.

"Jailing the CEOs will curtail their risk behavior," replied another.

I wondered: "They can't be jailed for skirting the law unless they break it. But there is a way to curtail risk outside regulation and law entirely -- the Fed." 

Both Barry Eichengreen and George Cooper, independently and from different political perspectives, came to the same conclusion, and even Greenspan in effect admited this: the Fed encourages risk through stabilizing the economy, broadcasting its intentions to keep the money flowing. If the Fed (I know, I know, it's counterintuitive and sounds just awful) were less transparent, played its cards closer to its chest, and threatened to tighten money suddenly and by surprise, letting a few excessively risky institutions fall off the cliff, the banks would learn a piece of Old Testament Fear of the Fed. The threat itself might suffice after one example. It'd have an effect similar to jailing CEO's, but without the need for a law, a court, prosecution, evidence or lawyers. Of course, you wouldn't want the Fed to try this now in the midst of a recession, but during flush times. 

Stiglitz has complained about this as well -- the Fed used interest rates to prevent business cycle downturns, encouraging risk.

The Fed has no oversight, so you can't even effectively lobby them. But it might help for the public to know this stuff and for Occupy to stake out a position.

Alt Bank is producing a book on breaking up the banks. I'm disappointed that they're not including a chapter on the Fed. Including a brief history of its failure in the Great Depression, Volcker's success stemming inflation, and Greenspan's questionable use of rates (in light of the flagging US export economy and the Fed's encouragement to shift to a financial economy -- another issue that should be addressed) would lead to a couple of recommendations: less Fed transparency and yet more oversight and accountability. Difficult to juggle those two...

Yet another chain store scam

Chains like McDonalds and Walgreen's have replaced their employees' paycheck with a prepaid ATM/debit card, generating fees that eat up the already close-to-minimum-wages.

http://www.nytimes.com/2013/07/01/business/as-pay-cards-replace-paychecks-bank-fees-hurt-workers.html?pagewanted=2&hp&_r=0&pagewanted=all


Chain stores screw their employees again. This time it's a collusion with banks. It's as if the corporate headquarters have no conception at all of a low wage or ATM/Credit card abuse. Just disgusting.

How doth the little crocodile...

NO711 attended Thursday's Seward Park co-op meeting with the 7-Eleven corporation described in the Lo-down. It was a friendly meeting. 

The co-op has had bad luck with previous commercial tenants. After a long internal dispute, the co-op agreed that a 7-Eleven was the fix they needed to support the co-op financially, though not without qualms about the character of the store. 

Residents expressed concerns about 7-Eleven offerings. The regional manager committed, as a "local-friendly neighbor," to selling just about whatever the locals might want -- lox, kimchee, you name it, 7-Eleven will stock it for you. But when a couple of residents asked if the 7-Eleven would refrain from selling pizza so as not to threaten the local pizza places (there's a really excellent one right there on Grand), the friendly mask was drawn aside. Even after the co-op offered to promote 7-Eleven in the media as a local hero if it took pizza out of its offerings, the manager refused without hesitation. These smart and savvy co-op residents had cornered the corporate spokesperson in a checkmate. The meeting was really an opportunity for 7-Eleven to expand its offerings and compete better in the local market. I don't see this as friendly at all, but actually dangerous. 

I'd suggest that the co-op residents not ask 7-Eleven to expand its offerings, but limit itself to its basic services. Otherwise the 7-Eleven is going to take the profit margin out of really unique and wonderful stores like the Pickle Guys, and meat off the table of their employees. If 7-Eleven starts selling pickles successfully, you may never again see the full variety of dills, or pickled garlic, peppers and tomatoes. 

Someone else in the audience asked whether 7-Eleven will kill local bodegas. The regional manager's response: 7-Eleven will help convert any bodega into a 7-Eleven if the owner feels the competition is too stiff. 

I hope the residents didn't accept this explanation. Many bodegas -- probably most -- are too small to convert to a 7-Eleven. Even more obvious, if a 7-Eleven opens directly across the street from a bodega, the corporation is not about to allow a conversion. Two 7-Elevens on opposite sides of one street? As the spokespersons said last night several times, they choose their locations based on data analysis. Despite the friendly PR presentation last night, they're there to compete, not be friends. It's a business. 

After the presentation, the real estate rep confirmed to me that the corporation guarantees the rent of the store. That's great for the co-op but it's exaclty the kind of monopolistic ploy that encourages landlords to raise commercial rents beyond the capacity of the old, ethnic stores and local services. The corporation can blame it on the landlords, but the incentive to evict comes straight from the corporation. 

When asked whether the corporation cares about a community that doesn't want a 7-Eleven, the real estate rep explained that they choose their locations based on foot traffic. NO711 had to point out that foot traffic is not always local. If there's a nightlife strip nearby, the foot traffic will be largely non local, and no local voting-by-their-feet will make a lick of difference in the profit margin. In other words, 7-Eleven's business model cares about access to consumers, not community sentiments. 

None of this is surprising. It's a business. But it's not just a business. It's powerful, monopolistic, unstoppable and non local. It's the neoliberal future around your corner. It's an omnivorous shark that cannot rest, its drive and motive, inaccessible and remote.

I was surprised at a couple of residents complaining about bodega pricing. Shopping at a bodega is an art, folks. They're all distinct as each bodega identifies its local market. One sells ice-cream sandwiches to the local kids $.50 @, a better buy you cannot find anywhere in the city. Another will fix you an egg-and-bacon sandwich folded into a roll for $2.50 -- you can't beat that either. But the chips will all be list-price. It takes a bit of a flaneur to appreciate the side-ways of a great city. 

[As an addendum: I asked them whether they will employ part-timers (of course you'd expect that they hire part-timers, and in fact they advertise lots of part-time jobs on their website and elsewhere, but I felt compelled to confirm) and at what ratio to full-timers. He said there would, of course, be part-timers but he didn't have any ratio stats. I asked if that's because it's up to the franchisee. He said yes.]

The 11th Street Block Association will probably have to invite 7-Eleven to such a meeting eventually, but the situation will be quite different. 7-Eleven on A is not dependent on local consuming as it is on Grand. Here the store will be playing to the barflies, not the locals.