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. 

Local credit

At Occupy's Alternative Banking think tank you'll find a mix of economists, ex-Wall Street quants (the redoubtable Cathy O'Neil among them), labor reps and assorted socialists and Marxists, and also young idealists reminiscent of the late '60's. One of these latter presented for us some recent work on alternative money -- not bitcoin stuff, but relational local credit/debit systems. The sharpest head there pointed out that these are already used by airlines as frequent flier miles. The consumer gains credit by buying but can use it only for the local purveyor.

The idea is half-baked. After a couple of minutes I asked: what prevents a large corporation from offering to undercut the local credit with an economy of scale (we'll fly you farther!)? The consensus was, the locals would have to keep faith with the local purveyor. But of course if the local exchange is maintained by faith, there's no need for this alternative credit at all. We talk about capital as if it were a system, and we look at systemic supports in capitalist nations, but really it's just human opportunism wherever there's private property and a market.

The notion of local credit belongs to the youthful idealistic spirit of Occupy. Maybe they can get it to work, but locality seems underlyingly Luddite to me or at best old-style anarchism. The notion of alternative credit, though, that's got appeal. What are the possibilities? It's not so far-fetched. The gold standard was a kind credit limit. Fiat money, by contrast, has turned out to be an unleashed beast, difficult to tame. It could be tamed in flush times, but in bad times, monetary policy, as Keynes said, is like pushing a string. Something to think about.

NeverNeverLand

Some years ago (14? 15?) I was walking back home through TSP from a civil disobedience arrest -- earlier in the day I'd intervened with a cop giving a bike ticket to an elderly Latino who'd innocently biked through the intersection of 11th and B on a Saturday morning with no traffic anywhere in sight (except the cop car). The cop was already incensed, since he'd been barking orders over his car megaphone trying to get the old man to get off his bike, this cop too dim (nothing against the force -- some are smart, others not) too dim to grasp that the old man obviously didn't know a word of English and had no clue he'd done anything wrong and the cop too lazy to get out of his car and use gestures to explain himself. I knew the old man -- he bagged groceries for the local supermarket. A $100 fine would be more than he could afford, probably ten times more than the price of his funky third-hand bike. After I tried, nicely, to persuade the cop to let the old guy go, the cop brushed me off insultingly when he'd done with the ticket. I yelled back at him, "Get out of my community," for which he arrested me. I'd already been arrested for civil disobedience a couple times before (was this civil disobedience or just self-expression?) so I didn't think much of it, but my roommate, a gentle soul not from New York, who saw it from down the block, was terrified. If you break the law and are arrested for it, at least you know what the charge will be and something of what to expect from the police. But if you're arrested for nothing illegal but for angering the arresting officer -- well my roommate was convinced he'd never see me alive again.)

So I was coming back from this arrest -- as it turned out, the two hours I spent in the holding cell was passed with talking to the cop, intermittently explaining why ticketing old immigrants just to raise city revenue or personal quotas is really shameful. By the time the two hours were done, he was embrrassed enough that he wrote up the charges intentionally so that the judge would throw them out instantly -- disorderly conduct for talking back to an officer. Several weeks later in court, the senescent nonagenarian judge did dismiss it along with a doddering admonition to me that I should be more respectful, young man.

Well, coming back home I ran into Hippie. "Hippie" is not actually his name, of course. From Puerto Rico, here he was called "Hippie" for his long, flowing, reddish pony tail. I asked Hippie what he was doing back in the neighborhood. Since he'd been released from prison -- some stupid drug charge I suppose, I say stupid because Hippie was one of the most honest, decent, charming, pleasant men I've known -- he'd been diagnosed with Hep C, so the Dept of Social Services had arranged a free apartment for him in Brooklyn, yet here he was homeless and couch-surfing in Loisaida. "Hippie, you have an apartment, you're seriously sick and then some, why are you hanging here homeless?"

"I always come back to this neighborhood. I come back here for one reason and I can tell you why. Because it's mixed. I don't want to live in a ghetto. I always liked that this place is mixed. It was mixed back then. It still is."

That was about 14, 15 years ago. I don't see Hippie anymore. So many of the best are gone.

I grew up in a white 'ghetto.' Sometimes I ride my bike past it, but I never stop. It wasn't much interesting back then, and it's just as uninteresting today. For a while I lived up in Inwood -- huge, bright apartment, immense rooms; the hallway between the livingroom and the den so wide I had a piano in it -- a view of the Cloisters from my bedroom window, and cheap rent too. I was never happy there.

It's only been in Loisaida that I've found that urban mix, even when it was most abandoned -- because it was abandoned, abandoned by ownership, abandoned by commerce, abandonned by law and all authority. Landlord? Invisible. Work? No one worked except the dealers. The only people who cared about what you did were the people you lived with on the block. It was scarier than it was dangerous, but it was too scary for slummers. The place drew only outcasts, loners, misfits and marginals. And artists -- blacksmiths, poets, muralists, brilliant muralists, their work all gone.

Some places are more interesting than others, some more extreme, some more free; few are all those together. Never say NeverNeverLand never existed if you never lived there once.

David Graeber's recent book on debt ends with a defense of the chronic unemployed. He hints that maybe the economically unproductive are actually busy with useful services to their local communities.

Previously
the feeling for place -- the sacred and the profane; 

sacrificing for progress

The work of Martin Wong, the only way to understand what we saw. Photography captures nothing -- nothing -- of a space so emotionally rich.

Rent regulations

Thinking about the construction boom and the Rent Guidelines Board rent hike, I went back to a piece I did for Met Council refuting the claim that rent regulations artificially raise market rate rents. The key insights were two: 1) in New York, newly constructed apartments are not required to be regulated, so regulation doesn't add to the tight housing market (in fact, rent regs are one of the few incentives to construct in NYC); 2) deregulation doesn't flood the market with new apartments since evicted tenants don't leave the local pool of renters, and wherever they go they tighten the housing market there, displacing lower-income renters. 

Looking back, I'd want to explain explicitly why it is that displacement always shifts downward, and not just a musical chairs of apartments among renters. Deregulation eviction implies that the tenant can no longer meet the high market-rate rent. In a tight housing market, if they go to a lower-income neighborhood, they will find an apartment by displacing someone who was renting at a lower rate. The displaced renter does the same in the next lower-income neighborhood and so on.

[Update: on second thought I think I was right in the original, not as in the paragraph immediately above. Obviously deregulation evictions out of prime locations also allow high renters to move upward -- upward displacement. That displacement doesn't ease market rates: the evicted have created a tighter market down the line. On the other hand, if new upscale renters are entering the market from outside the pool, they would increase downward displacement pressure.]

Some of those deregulation-evicted tenants can pay higher rents than they'd been paying under regulation, just not quite as high as the market rent where they'd been. No one will seek a cheaper apartment -- if there was something cheaper suitable to them they'd have decamped long before deregulation. But some will seek apartments somewhat more expensive than what they'd been paying under regulation. So the only change in the economic equilibrium is the added funds available for rent among the deregulated. 

At the end of the day, deregulation increases the aggregate funds available for rents taken from whatever else the regulated tenants had been spending on in the economy. All of that increase goes to the landlords. Deregulation is just a pointless shift from the non real estate economy to landlords and a downward spiral of displacement, while more upscale renters flow into the city to raise the luxury rates. With more funds flowing into the real estate market, developers construct to meet those upscale renters, who then recreate the commercial economy in their own image, buying upscale items. 

So rent regulation is just a restriction on upscale real estate speculation and upscale commerce. It doesn't raise market rate rents, but actually dampens them. And it's good for non upscale commerce.

So here's the article. The point about the rent pool seems to have grown legs -- I've heard it repeated by lawyers as well New Yorkers on the street. 

Why Rent Regulations Don't Raise Market Rents 

By: 

Rob Hollander

Published: 

June 2011

"If rent decontrol would mean a fairer, less insane market, then it is a just cause," the libertarian-conservative Cato Institute argues.

In every debate over rent regulations, someone—often an angry tenant paying outrageous rent—argues that regulations are responsible for pushing market-rate rents way up. If those regulated rents were brought into the free market, the market would level down, allowing a fair rent for all.

This argument has had wide currency among conservatives in their effort to undermine rent regulation and promote developers and landlords, the market suppliers in the real-estate industry. It appeals directly to people who, bitter over their heavy rent burden, welcome a convenient scapegoat: their own neighbors. And the authority, the landlord, is conveniently exculpated.
This argument is false. It is based on these premises:
1) Rent regulation discourages housing construction, restricting housing availability;
2) landlords make up their losses on regulated rents by gouging market-rate renters; and
3) deregulation would level the playing field, lowering high rents

Its conclusions have been demonstrated to be empirically, factually untrue. It is time to put this claim to rest.

Let's start with the basics. Not only conservative think tanks like the Cato Institute, but the consensus of economists, even the liberal Paul Krugman, accuse rent regulation of discouraging new housing construction. Without new apartment units, the supply can't keep up with demand, and fierce competition for the few remaining units pushes market rates up.

Their observations are true where rents for new construction are regulated. But in New York, it isn't.

New construction is exempt from rent regulation in New York. Building new affordable housing is entirely voluntary in New York, and developers only provide it where the city gives them special incentives, such as allowing construction beyond the zoning restrictions or giving tax breaks. In fact, rent regulation encourages new construction, as the Citizens Budget Commission has pointed out, since new units can garner far higher rents than older regulated units. If landlords can't cash in on regulated units, the only other means to make money is to build new, unregulated units. Rent regulation is an incentive for construction.

The difficulty of building in the city has many causes—the cost of land and construction, restrictive zoning laws, building codes, permits and bids, and, not least, the private and political graft involved. Nevertheless, New York continues to see housing construction. Even during the recession year of 2008, the city issued 33,911 permits for new housing, the greatest number since 1972. In a city of obstacles to construction, rent regulation is one of the few encouragements to build.

The second premise contends that if landlords can't raise regulated rents, they will raise rents on unregulated units to make up for the lost revenue. Unfortunately for the landlords, the free market doesn't work that way.
Market rates depend on renters' willingness to pay, not on owners' costs or losses. Rents can't rise above what renters are willing and able to pay, and the nature of the profit motive ensures that market-rate rents will rise exactly to that level of renter willingness, regardless of what other renters are paying.
In a city where construction lags behind demand, it may be legitimate to ask whether deregulation would free up apartments and ease the market down—the third false premise. Quite aside from the consequences of displacing individuals or even whole communities, the answer is a surprising no.

Rent deregulation, believe it or not, raises market-rate rents. The conservative Manhattan Institute, in its 2003 study of deregulation in Cambridge, Massachusetts, found that, following deregulation, landlords invested in improvements to attract the highest possible market-rate renters. The result of the 1994 deregulation in Massachusetts has been better-quality housing, but higher market rents across the board.

That shouldn't be surprising. A tight housing market implies that many renters can't find apartments in their preferred locations. That's the meaning of a housing crunch. Renters can't find the spaces they want, and the ones they have to live in become overpriced. But when vacancies appear, those renters are willing to pay exorbitant rents for the locations they prefer, and landlords will meet their willingness.

The market value depends on three general factors: demand, supply, and the aggregate available funds for rents. If regulated renters are paying less than their available rent funds (the excess of which presumably goes into the goods and services economy), when they are forced to pay more, it will increase the aggregate funds going to landlords as rents, since most of those renters are tied to the metropolitan area by work, family, or preference. If their rents are deregulated, these people will force rents up wherever they go in the metropolitan area.

That's a recipe for disaster. When renters can't afford their location as a result of deregulation, they move to lower-rent neighborhoods, where they create a tighter rent market, raising the rents there and even gentrifying the area. Some of the longtime renters in those neighborhoods will be priced out and move to even lower-income neighborhoods, tightening those locations in turn.

More affluent longtime renters will see their rent increases as an opportunity to move to a more desirable location. But wherever they go, landlords will raise their rents as high as they are willing to pay. If the market is tight and people are not leaving the metropolitan area, the market rates will remain high.

Market rates only go down if demand goes down—if people leave the city entirely or excess housing is built. But New York's population is increasing, not decreasing, and construction is costly and difficult. Deregulation here will not ease the market any more than it did in the Boston area.

It's not even certain that in a tight market like New York, landlords would invest widely in improvements, as they did in Boston and Cambridge. Unregulated renters have few rights, so if they complain to the city about lack of services or repairs, the landlord can retaliate by refusing to renew their lease when it expires. Regulated renters can compel repairs without that fear. So it is possible that deregulation in a tight market would result in lowered quality of housing and a degrading of services, as well as higher market rents. That's exactly what happened in New York when vacancy decontrol was imposed in 1971.

Regulated rents actually help to depress market rates. Renters who pay exorbitant rents may think it's unfair that regulated tenants pay so much less than they do, but the source of exorbitant rents is not regulation. It is landlords' profit motive and New Yorkers' desire to live here. We are the market that sustains high rents.

So what is the effect of deregulation? It provides a cheaper means of placing money into landlords' hands than construction does. The chief effect of deregulation is an increase in the aggregate funds available for rents. It doesn't ease the market, it won't improve the quality of housing in New York, and it won't create more housing. It will give more money to landlords, it will raise rents all over the city, and it will wreak havoc on communities as markets are tightened even in low-income neighborhoods, causing a spike in gentrification and displacement.

Rent regulation does create an unfairness—the lucky get to spend their money on the local economy, not just on rent, while their market-rate neighbors have to suffer. But forcing everyone to suffer doesn't solve the suffering of the overpriced. It just makes life worse for everyone. Two wrongs don't make a right. Deregulation is a lose-lose. 

Boomtown

Matt Yglesias comments on US cities leading in construction spending. New York is not only way ahead, it's an outrider way ahead (though not quite at a Pareto distribution -- construction is expensive here, so that may be why there's no Pareto), and it's not correlated (pace Yglesias) with population; LA is next most populous, Chicago, then Houston, all on a Pareto distribution, but LA is low on construction; Dallas is constructing more than Houston even though Dallas doesn't have much more than half Houston's population size. In fact Dallas is about one seventh the size of NYC, but it's constructing at the absolute rate of 60% of NYC's.

In any case, NYC is booming. Given the high cost of construction in NYC, this boom means developers see huge money in development. How much of that do you think is affordable housing?

It also means that developers are not worried about diluting the luxury market. Why? Do they expect high-renters/owners to abandon older housing stock to move into new? Or locations further from the center into closer? Either of those would be good news for low-income neighborhoods -- less displacement pressure on them. But if developers simply expect more high-paying population in the city, then no one benefits but the developers.

A sad task

This post is just to correct some stats that have been floated on another blog about 7-Eleven wages. [To avoid embarrassing him in public, I emailed the blogger indicating where his errors lay, but he's intransigent. Since I don't want misleading information floating out there, I'm posting now.] 

The blogger claims the average weekly wage of a 7-Eleven clerk is $472.64 compared with a local independent restaurant's average weekly wage is $250. 

He gives the hourly 7-Eleven wage as $8.44. But instead of figuring a 40-hour week full time week, he divides the total hours of labor in the store by the number of personnel based on 7-Eleven's "7-10 employees per store."

As a result, his figure is for 56 hours per worker, not a 40 hour full time position (full time as defined by law).

But 56 hours would require overtime, which he didn't include. Correct sum should be:

(40hrs x $8.44) + (16hrs x $12.66) = $337.60 + $202.56 = $540.16

for 56 hours with overtime.

Obviously the franchisee isn't going to pay all that overtime. It's a 60% increase in his payroll! In fact, he doesn't have to pay any overtime. He can hire part-timers instead to take him through the week.

How many part-timers at a 7-Eleven? My guess: all the employees are part-time. If the franchisee uses only full timers, and a shift has to be covered for, say, an illness, the franchisee might have to pay expensive overtime to an employee. If all the employees are part-time, it's unlikely that any overtime will ever be necessary.

When 7-Eleven says it has 7-10 personnel per store, clearly they mean full time equivalences, not 7-10 individual bodies. To compare FTE's:

$337.60 full time at 7-Eleven (7-10 FTE's)
$400.00 full time at the restaurant (20 FTE's)

Perhaps more important, the total payroll of the independent is $8,000 per week if the $10/hr is correct; a 7-Eleven, $4,726.40 (unless the franchisee is an imbecile or a crook). A 7-Eleven occupies about twice the space of this particular independent restaurant, so the indie funnels $8,000 into its labor for a single storefront store, 7-Eleven only about $2,363.20 per single storefront store size. 7-Eleven provides less than a third (29%) of the wages of the independent. 

$16,000.00   per 25 ft wide storefront (independent restaurant)
  $4,726.40   per 25 ft wide storefront (7-Eleven)

At this point the blogger asks whether the independent, providing more than 3 times as much labor value, is sustainable. That question feeds directly to the justification for the NO711 program, since it's the chain stores like 7-Eleven that are raising commercial rents, closing down the indies. His question justifies NO711's program.

(NB -- The restaurant is busy. The 7-Eleven on Bowery looks deserted. The restaurant is staffed with twenty/thirty-somethings -- actors? film workers? students? -- 7-Elevens are staffed with 18-year-olds (?) in orange uniforms. Where are we headed if global capital wins? Everyone working in uniforms eating bad food? The one thing that I like about 7-Eleven is that they do employ a lot of non white employees. It's a shame they have to wear uniforms and work at such low wages with so little advancement.)

Now, I want to be very clear about the following. The blogger's very first comments about NO711 were derisive and smug, describing NO711 as full of "ridiculous claims." He's called us a variety of names that are false and derogatory. Now he has posted an animation that tells us "numbers are not your strong point." He brought a lot of derisive, ugly rhetoric into the space. I really don't want to be in that space, but here I am stuck in it. 

$4,726.40 published as the weekly average for a 7-Eleven clerk?

56 hrs/wk with no overtime?

At this point, NO711 deserves an honest apology. 

Here are the mistaken calculations on his blog:

Restricting global corporate access from the local level

Following up on the last post, I'm posting a cool piece Robert Reich wrote on his blog:

Comparative advantage is nice in theory, but in a world where powerful global corporations are using every strategy imaginable to maximize their profits and powerful governments are strategically employing market access to develop their economies, it’s just theory.

Economics writers like those affiliated with Forbes Magazine surely are sophisticated enough to know this as well. So why are they so eager to trot out such economic nonsense?

Perhaps because so much profit is at stake that those who pay their salaries – and who have also put many academic economists on retainers – prefer that they mislead the public with simplistic economic theory that appears to justify these profits rather than to tell the truth.

 and

Many of the world’s most successful economies – among them, China and Singapore – owe their successes in part to their conditioning market access on certain kinds of jobs and investments, including research and development. That’s the way they have come to use global corporations, rather than be used by them. 

In other words: resist corporate control by restricting corporate access. That's the NO711 program in a nutshell. He's thinking of restrictions from above. We're thinking of it from the local level.

 

Restrict access?

Saw this comment on EV Grieve about a street cart become a new store that everyone likes:

This is how it starts. The cart moves inside, the store becomes two, then three, and eventually an evil franchise that must be stamped out -- a symbol of "corporatocracy". Meanwhile, somewhere else, the process begins again, and is cheered.

EXACTLY!!! Just think, if we had a zoning law restricting chain stores (usually defined as 12 stores or more), then NYer's could enjoy places like this without watching them turn into huge global corporate human smuggling operations. 

We *can* improve the world if we speak out and take action. Resist corporatocracy, restrict global corprorate capital's access to our our streets. Join NO711! Join Occupy! (Yes, it's still active -- headed to a meeting tonight about coordinating all the local neighborhood Occupations in the city and all the Occupy policy groups.)

Emergency fund for local crash victim

From the Bowery Alliance of Neighbors:

Dear Bowery Neighbors & Friends,   Below are details re an emergency fund set for the bodega worker critically injured this week when a drunken driver racing down 2nd ave at 80 miles an hour careened onto the side walk mowing down a tree, Muni Meter, fire hydrant, and flower stand, injuring a biker and 3 bodega employees, most seriously 62-year-old Mohammed Akash Ali, who worked 7-days-a-week outside at the flower stand. The well-liked, always friendly Mr. Ali has a wife and 3 sons. Any support you can help out with will be greatly appreciated by all.   Direct link to fund:  "Aid for Akkas Ali and Family": https://www.giveforward.com/fundraiser/mvk2/aidforakkasaliandfamily   Many thanks to CB3 member Chad Marlowe who moved with lightning speed to set up the fund.  Thanks also to neighbors Bill Koenleinand David McReynolds who got the word out so quickly.   EV Grieve article about the fund effort: http://evgrieve.com/2013/06/campaign-launched-to-raise-money-for.html EV Grieve initial article about the incident: http://evgrieve.com/2013/06/report-car-smashes-into-east-village.html   East Villager article about the crash: http://thevillager.com/2013/06/20/drag-racing-driver-careens-onto-sidewalk-injuring-4/       Sincerely, David Mulkins, Chair Bowery Alliance of Neighbors 184 Bowery, #4 New York, NY  10012

Honestly, I shouldn't have to deal with this

The blogger who purveys misinformation about NO711 has taken to harassing me. On his blog, he posted graffiti he found somewhere with my name, implying that it was by me or about me. When I mentioned this on another popular local blog, he quickly deleted the graffiti post without leaving a notice or trace -- pretending that he never posted it. Worse, anyone who now goes looking for the post I publicly mentioned would get the impression that I was making it all up maliciously! Fortunately, I had already made a couple of screen caps of the post. 

So, just to prove I'm not making up this insanity, here's the graffiti he posted on his blog. 

He posted the graffiti again a few days later in another post:

Both the graffiti post and the photo in the later post have disappeared on his blog with no notice or trace. Here's the text now without the graffiti photo:

The photo had been at the paragraph break.

Honestly, I shouldn't have to deal with this.

AALDEF publishes new data on Chinatown land use

From AALDEF (Asian American Legal Defense and Education Fund): 

[scroll down for the pdf of the study]

June 21, 2013 – The Asian American Legal Defense and Education Fund (AALDEF) is releasing land use data on New York City’s Chinatown, as a preview of its forthcoming three-city study of Chinatowns and surrounding areas in Boston, New York, and Philadelphia.

"We have assembled data on the make-up of small businesses and properties in Chinatown that will enable us to document the effects of gentrification on Asian immigrants, who have been fighting for their community for decades,” said Bethany Li, staff attorney at AALDEF.

AALDEF, in collaboration with community partners, academic institutions, and hundreds of volunteers, spent a year recording block by block and lot by lot the existing land uses in Boston, New York, and Philadelphia Chinatowns and surrounding immigrant areas. Today’s initial release of land use data, combined with detailed analysis of Census data from the 1980s, provides a snapshot of the existing uses of New York’s Chinatown and describes its startling transformation in the past three decades.

New York’s Chinatown has served as the gateway for thousands of immigrants from Asia and is home to a thriving network of low-income residents and small businesses. However, property values in Lower Manhattan have increased substantially, and gentrification is threatening the neighborhoods’ historical and cultural significance. According to Census data, the overall population in New York’s Chinatown decreased 7% between 1990 and 2010 (from 125,574 to 116,722 people) due largely to the increase of non-family households and a decrease in family households -- a significant indicator of gentrification. As a result, many Asian immigrants face the prospect of displacement.

For example, AALDEF's study indicates that an overwhelming majority of commercial use in New York’s Chinatown consists of small businesses (94%), approximately 12% of which is classified as “high-end.” However, our survey shows that the most significant cluster of “high-end” businesses is in the area between Houston and Delancey Streets, where students and young professionals have displaced immigrant families in the past decade. "High-end" stores also dot the landscape along Allen and Orchard Streets heading towards more traditional parts of Chinatown.

“Gentrification threatens to transform these previously neglected neighborhoods into tourist centers and destroy the places where Asian immigrants have lived and worked for decades,” said Li. “We hope this data can be used to support organizing and planning efforts that help retain resources for New York’s Chinatown for current and future immigrants.”

This data was collected with the assistance of AALDEF’s community partners including Chinese Progressive Association and Boston Chinatown Neighborhood Center in Boston, Chinese Staff & Workers’ Association in New York, and Asian Americans United in Philadelphia. The University of Pennsylvania’s City and Urban Studies Department provided technical assistance on mapping and data analysis.

Download Chinatown: Then and Now >

Contact:

Ujala Sehgal
212.966.5932 x.217
usehgal@aaldef.org

Bethany Li
212.966.5932 x.213
bli@aaldef.org

Sustainability

Even if restaurants do provide many more jobs than a 7-Eleven, are restaurants as sustainable as 7-Elevens? That's exactly the question that leads right to the heart, goal and purpose of NO711.

Because they can get higher rents from chain stores, banks and bars, landlords raise their commercial rents on small businesses as soon as their leases come due and drive out those small local-serving businesses in order to open up space for higher-renting bars, banks and chains.

As the highest rent-payer, chains take the highest-density foot traffic locations, clustering to increase that foot traffic. Increasingly, chains are invading less dense neighborhoods. As long as there's no regulatory restriction on chain stores, there's no reason to believe this trend will not continue. Landords in less dense neighborhoods speculate on that trend by raising rents even leaving stores vacant until a chain takes it, as the Pratt Center has observed.

Small storefronts increased rents by as much as 600% in 2006 to make way for bars and chain stores in the EV. Commercial rent increases and upscaling are not static levels. They respond to speculations on itself -- a recursive function that spirals upwards to the highest bidder creating a context in which only the highest bidder can survive. CBGB's was lost to Varvatos, a chain store. Veselka, an independent restaurant, opened on the Bowery after Varvatos opened and has already failed. This is no coincidence.

(As it happens, the restaurant I mentioned a couple of posts back has been around for decades. It has a full liquor license as most successful restaurants have. It is also nowhere near any chain stores.)

Ugly scam

Everyone is sending around the NYTimes piece about the Feds raiding a bunch of 7-Eleven franchises for hiring undocumented immigrants using fake documents. 

I deplore what the Feds are doing to those franchisees. I'm assuming that the franchisees paid those employees their full 7-Eleven hourly wage since the payroll is handled by the corporation. If that's so, then what the franchisees were doing was morally alright, albeit illegal, and the corporation was unaware. There are independent groceries, delis and bodegas that exploit undocumented immigrants paying under minimum wage. That's both illegal and wrong. At least these immigrants were getting minimum wage -- in fact, a little above, if the franchisees weren't scamming the immigrants too. 

So only anti-immigrant sentiment would use this to criticize 7-Eleven. Personally, I applaud what  those franchisees were doing (except for using the former employee's soc sec # that resulted in an IRS prosecution -- that's abusive, and probably stupid, since how do you think the Feds caught on?). Other than that one case, they were scamming 7-Eleven and the law to benefit human beings. What's wrong with that? Encouraging illegal immigration? I think our borders should be open and all immigrants should be legal. Yes, immigrants increase the labor pool, but they consume too, increasing demand for production which demands more labor. Immigration makes us strong. 

Well, turns out those franchisees were abusing the immigrants, according to Reuters, "ruthlessly." So, good for the Feds. Screw those franchisee SOBs! What's going to happen to the immigrant victims?
http://mobile.reuters.com/article/idUSL2N0ET0UW20130617?irpc=932
http://www.nbcnewyork.com/news/local/Human-Smuggling-Investigation-7-Eleven-Long-Island-Federal-Agents-Police-211793521.html

Down for the count: 7-Eeven and jobs again

I ran into a local resident who owns a restaurant in the LES. It's a small space, single storefront (12.5 ft across). I asked him how many people he employs there. 20, he said. I asked how many are being paid at minimum wage. He replied with pride, none, not one. He went on about how important this is to him. It's an upscale place, so the waiters' tips are significant as well.

Since the restaurant is less than half the size of a 7-Eleven, he provides 4 to 6 times as many jobs as a 7-Eleven would in an equivalent space. 

Maybe 7-Eleven is ahead of the curve. Maybe the future will have no store attendants at all, just machines and engineered fare. 

Community Board 3's questions for NO711

Community Board 3's Economic Development Committee raised four problems for NO711. Here's one: 7-Eleven's conversion program will help bodega owners whose profit margin is slim.

It's true that some bodega owners would benefit from conversion to a 7-Eleven, but many bodegas occupy too small a space for conversion. My guess is that 7-Eleven's conversion program is designed to undermine the business community's opposition as much as spread 7-Elevens everywhere. I don't see any business associations opposing 7-Eleven. The Bodega Association seems to be silent. 

Although business is supposed to about the bottom line, some bodega owners are willing to forgo a bit of profit for the sake of what they have, their autonomy and their relation to the locals. (I know at least one person who will say those owners don't want to forgo exploiting undocumented immigrants, but if 7-Eleven conversion increases profit for the owner, then this can't be a reason to reject conversion. It may be that some owners want to continue employing undocumented immigrants for family reasons or through a tie to some underground human market. That's a deep issue that can only be resolved by immigration reform or amnesty.)

Another CB question for NO711

Here's another question from CB3: on what grounds could the community board deny a chain store?

This is really complex and tough. If it's done quantitatively -- say, no more that one Duane Reade in a half mile radius -- that doesn't prevent a Duane Reade from opening where the locals really don't want it, and may prevent one where the locals do want it. If it's done by local preference, well, the community board is inviting a fight between locals with differing preferences, or making determinations on it's own caprice, which invites law suits from the rejected applicants.

But a special zoning, which is what the CB is considering, seems to me to be worse. If it defines the number of chain stores in particular areas it will freeze those areas based on current circumstances. In five years that plan will be obsolete. Few documents are as depressing as old urban plans. 

The importance of ignoring the community

A third question CB3 raised about NO711's zoning ammendment proposal:
Are other community boards willing to take on the burden of reviewing all chain stores?

At first this doesn't seem to tell against the NO711 proposed zoning amendment. Other community boards wouldn't have to consider any chain stores if they didn't want to, so the zoning proposal doesn't constrain or burden them.

But members of the community might demand a hearing over a chain store, and such a zoning amendment would make it difficult for the community board to ignore them. It's not a pretty reason to oppose the zoning amendment (to preserve the CB's right to ignore the community??), but it's a possible one.

Last CB issue: helping the rent-taker

A committee member also said there are too many empty storefronts in the East Village; we can't afford to deny opportunities.

Whether storefronts are empty is a problem for landlords almost exclusively. Are landlords hurting in the East Village? If they lowered the commercial rents, the stores would be filled. That implies the landlords are holding out for high-rent chain stores because they are not hurting. So if they knew chain stores, banks and bars were not available, they'd have to lower their rents, or keep them empty indefinitely. Is there something wrong with empty storefronts? I remember the empty storefronts in the '70's and '80's. I had no problem with it.

That CB3 is worried about filling stores for landlords is troubling to me. Why should the community board serve a group that isn't hurting, is a negligible percent of the community and most of whom don't live here at all. Maybe I didn't understand their comments about emptiness.

Impending change in Chinatown

Grieve posted the news yesterday that 11 buildings on the Bowery from Canal Street to Houston Street (83-5, 88, 103-5, 219-21, 262, 276-82-84) have just been bought by the owner of Dr. Jays, hip-hop clothing stores. With the exception of 276-84 at the corner of Houston, most of these parcels are not ideal candidates for demolition and redevelopment but the likely replacement of Chinese local-serving retail in 83, 85, 88, 103 and 105 — many of the leases are coming due – will carve out a piece of the Chinatown community.

If new commerce succeeds, it spreads. That's bad news for Chinatown, even though this portfolio was never Chinese-owned. Those four buildings are also residential, so watch out for evictions. The current hotel residents in 88 may be threatened as well. The building is overbuilt, so it's unlikely to be demolished, but it could be renovated and turned into an upscale hotel like the St. Mark's for those seeking the "authentic New York experience."

The Chinatown Working Group, Chinatown's community planning initiative, with over 50 lcoal tenant, labor and social service orgainzations participating, has been meeting on the future of Chinatown, hiring Pratt as their planning consultant. This troubling real estate/retail transaction should be right at the top of the discussion: here's the future, what can Chinatown planning do about it? 

Marxists' humor

There was humor at the Left Forum too. Michael Hudson, debating a couple of Georgists, opened by trashing Henry George as a racist, libertarian martinet, then called his followers Fascists and Nazis. He criticized George for failing to include a theory of value, but he barely addressed the Georgist program. It was a kind of circus side show of the Left trashing each other like clowns carrying play-baseball bats. No narrative, no substance, just slapstick.

It's more than a comical tradition in the Left. It's a disease that undermines it. No good comes of it. On the Left, divide and conquer is unnecessary. It divides and destroys itself.

If you disagree on analysis or strategy or tactics, why not just set out the differences and move forward on the common ground? It's true that Georgism is libertarian, capitalist-friendly (though it's intent is labor-friendly) and antiquated, but there are still useful insights in Progress and Poverty. The Georgists on the panel didn't engage in the comical bashing. Instead they looked at how the program can be updated to include all monopolization, corporate giantism and the financial system. I side with Marx on the danger of capital, but absent a revolution today, a Georgist anti-rentier program has something to say for itself.

Despair and cynicism on the left

At the Forum, I was particularly discouraged by Doug Henwood's cynicism. He applauded Bloomberg for being competent. "He got 311 to run on time" was his opening laugh line. When I asked him about Bloomberg's rezonings, he complained about more high-rises, as if this were the extent of the negative consequences. No mention of displacement of low-income communities and further erosion of manufacturing.

I get the impression that within the Left there is a strain of defeatism. Despairing of any wholesale revolution, Henwood seems to have made his peace with Neoliberalism. If it's managed well, then let's make the best of it! He worried that some incompetent Democrat mayor would mess up what Bloomberg has created.

So is Leftism now compatible with kleptocratic Republicanism?

Hope in organizing?

The panels I attended at the Left Forum on Saturday (mostly analysis) were depressing, Sunday (engaged activism), optimistic.

It's a public forum, so I shouldn't expect any revelations, but still, familiar boilerplate analysis is tired. Even the solutions were depressing since there was no hint of how to get the world to implement them.

Cathy O'Neil, from Occupy's Alt Bank group, provided the only positive suggestion I heard all Saturday: a people's lobby. She thinks office holders are completely in the dark (she seems to ignore their aids some of whom ought to know something) about the complexity of the financial system. All their information comes from corporate lobbyists with a biased slant that serves the immediate corporate interests' grasping. Electeds hear no one from the general public looking out for the overall health of the economy. Office holders, she maintains, need education in the dangers that those narrow corporate interests pose to the overall economy.

There's a big 'if' here: electeds will respond to knowledge if they are not already bought by the corporate interests. If they are bought, then the lobbying is really just providing electeds with their corporate-friendly talking points.

Money is not the only leverage on electeds. Voting is the counterbalance to corporate campaign money, but the voters also need education.

Sunday was more optimistic. Occupy held a round table about current local Occupy efforts including Occupy Astoria/LIC, Occupy Kensington and Occupy Sunset Park. These folks are engaged and getting somewhere. Occupy Kensington is focused on a labor struggle with a specific store, Golden Farm, but they've also become a hub of community discussion. That's also true of the Astoria/Long Island City and Sunset Park groups.

No tired analyses in this room, the discussion was about how to be more effective: how to connect with each other, how useful is the Occupy horizontal organizing, how to sustain momentum, how to get more people off their asses and make a difference, how to take advantage of not-in-my-back-yard & pocketbook issues to expand them into larger social justice activism.

At the last panel the last presenter, Nabil Kamel, gave us the most optimistic history: two instances in which rebuilding from a natural disaster became an opportunity for community groups to improve their circumstances, rather than yet another opportunity for capital to displace the disempowered and rebuild for the revenue-creating rich. Kamel finds that community successes are facilitated by 1) the existence of a prior community organization (e.g., Black Panthers in Oakland, where, decades after their creation, they managed to redirect the rebuilding of a bridge, eventually getting the municipality to train and employ and pay the community to build it themselves), 2) a network of organizations, 3) focus on a single site and 4) 'carving out' of capital interests to gain assistance.

On the downside, any local improvement tends to gentrify the neighborhood. So the Marxist analysis may have the last word if capital turns every reform to its benefit. Chomsky offered a bit of light observing the leftward turn in Latin America. It was fitting that the closing speech was given by the Bolivian Vice President Alvaro Garcia Linera. He made this point that local struggles must be placed in the largest context. Good advice.

Left Forum volunteers

There is admission to the Left Forum, but if you volunteer for it, you get in for free. It looks like they still need a few volunteers -- http://www.leftforum.org/content/volunteer-2013-conference

Left Forum

The Left Forum (formerly the Socialist Scholars Conference) opens tonight continuing through the weekend. As usual there will be too many panels to choose from, but at least there'll be something for everyone. Chomsky will speak on Saturday. Occupy will have a presence, including Alt Bank (Occupy's group of economy wonk-activists focused on the financial system), in case anyone's interested in what I've been doing with my Sundays.

Program guide and conference schedule -- at Pace, across from City Hall Park just south of the bridge.

White movies!

Grieve also posted the schedule of Howl!'s summer film series in Tompkins Square Park. Sufficiently Howl-ish not to embarass an EVer, it's targeted to a specific local white audience, cool-identified. It's good to see one Spanish-language film (scheduled for the dog days of August when presumably the white audience is at the Hamptons). Last year there seemed to be several series experimenting with target audiences both high and low. Unless I am mistaken, no Chinese film has been screened in the park. Neither the real estate industry that promotes these screenings nor the advertisers cater to the local AAFE residents. I don't see why. There are so many great Chinese movies. The NYU students would watch. Subtitles won't drive them away -- they watched a bunch of French films last summer in the park. Maybe the sponsors don't know how to deal with double subtitles.

Face the new EV

EV Grieve has been following the piecemeal clearance of all the commerce on 14th Street for some yet unknown development. Locals expect a huge high rise like the ones we saw south of Houston (The Ludlow, Blue, THOR, SVA), so I thought I'd show what is allowed there --

Photo: DCP

except maybe all glass and steel and ground floor storefronts. You can imagine which stores.

The strip from Avenue A to 1st Avenue is zoned for mixed use commercial and residential space with an 80 ft height cap and a maximum floor area ratio of 4, about the size of an Old Law 6-story tenement. It's similar to the EV/LES 2008 rezoning but without any affordable housing provision (beyond the 421a tax incentive which keeps it affordable only for about 25 years).

Will the developer get a variance to build higher? The Board of Standards and Appeals doesn't give out variances like candy -- the developer has to show some rationale. Otherwise the city wouldn't have spent millions on rezoning 120 neighbrohoods under Bloomberg. 

Right to the City

The group that started it all in Turkey was Istanbul Right to the City. The U.S. has a Right to the City too. The slogan has been around for a while. David Harvey wrote about it in a broad economic context here in the New Left Review. It raises a question: right to the city for whom? Of course, it's for residents, not for capital which preys on them. But which residents? Labor? The dispossessed? The disempowered? Artists? Professionals? Students? Gentrifiers?

The protest in Istanbul began with a confluence of middle-class interests including park conservancy and community groups: Taksim Gezi Park Protection and Beautification Association along withTaksim Solidarity and RttC, according to Jadaliyya. So do the middle-class have a right to the city? Is resistance in itself a progressive act against the powers that be, be they corporate or government or the collusion between them?

No. Community self-determination can be racist or reactionary. And it can be both regardless of class and income. I know upscale NoHo residents who support a new measure that will harass street vendors with hefty fines. (When I asked why, the answer was, there are too many. Sort of begs the question.) I attended a CB2 meeting at which Greenwich Village gentry angrily protested a small school's proposal to use a street for a playground during the day. Too much noise. I attended a meeting of low-income, subsidized residents who did not want a low-income assisted living facility next to their property. Beyond NIMBY, they asked that the facility be built in someone else's backyard a couple of blocks north -- it goes without saying that they didn't consult those residents. It made no difference to them that this assisted living facility was needed in the wider community, that two large senior facilities had just been closed not far away, and that this facility was dedicated to the disempowered and the dispossessed. Residents can be harsh and selfish. "Right to the City" is a romantic slogan. In reality, it can mean anything to anyone.

The credit goes to Istanbul RttC for seeing the park issue as more than a NIMBY issue, connecting it to a broader empowerment issue. That's what I see in NO711 -- the city-wide zoning amendment allowing community resistance to giant corporate control from afar, restricting access to capital, the Right to the City as Harvey means it, not just another reactionary NIMBY fight.

From shopping mall to political transformation

The protest in Turkey, like Occupy Wall Street, began with middle class discontent. OWS was ostensibly about money in politics, welfare for banks too big to fail and income inequality, but the pocketbook issues were student debt and unemployment. Critics thought these were spoiled, over-educated, middle-class kids, but we learned that they were economically and socially not the EV gentrifiers. When Penley tried to bring OWS to Tompkins Square Park, EV newbies howled and screamed: not in our backyard (here, also see the negative comments on Grieve's post.)

In Istanbul the protest started as a defense of a local green space from another shopping mall. It almost sounds like a bourgeois NIMBY story from Greenwich Village protesting NYU. Police repression fanned the flames into a much broader anti-government repression movement. But the central issue is still community self-determination. From RT: 

"...respect must come back to the political approach and implementation… That has to do with the way people feel fed up with the interference, micromanagement of their lifestyles." -- Istanbul-based political columnist Yavuz Baydar 

The future of NYCHA

If NYCHA follows through with its infill plan, building market-rate housing among the subsidized projects, I bet that within a decade the city will come up with a plan to give the low-income residents ownership of their apartments for minimum maintenance in the expectation that they'll sell immediately on the open market. The city will require only that it get a cut from the flip to fund the program. NYCHA projects is quality housing stock, a lot nicer than tenement housing, and it's got those river views. Where will the current residents go with their windfall? The city doesn't care, and the city won't have planned for it either. DCP plans only for upscaling and revenue-enhancing real estate raising, not for people.

Failed generalizations

Physics doesn't lack for predictive theories of physical nature, but if it were evaluated on its ability to predict the weather, we'd call it a dismal science. Economics doesn't lack for predictive theories either, it's just that we evaluate it on its ability to predict reality. Reality is only partly predictable.

Looking at the history of the LES in the 19th century, you see a consistent pattern of quality of living space declining in inverse relation to density and rent. Demand at the bottom of the social scale was sticky -- choices were limited by the lack of convenient transit and work was concentrated between the downtown docks and downtown industry. Ghetto construction was structurally uniform for each decade. Outside the immigrant quarter, amenities chased big money as you'd expect in an elastic market: a broad gradient from middle-class town houses to immense mansions. 

Both trends are economically predictable, perfect fodder for economic theory. But there's a change in the LES that doesn't fit the pattern. After around 1910, virtually nothing is built, even though the American economy continues to grow. Not surprising, the reasons for the end of development are not economic. One was a technological innovation only marginally unrelated to economic production -- the subway system, which increased mobility and commerce but not so much production. It allowed labor to live far afield. Quotas on immigration in the 1920's turned the ghetto from a high-demand exploitative rent district to a low-demand, low rent district as residents left for better living spaces and no new immigrants replaced them. Less obvious was the third tenement house New Law act, which required so much courtyard space that landlords couldn't develop on single lots anymore, curtailing single-lot development. You can see it for yourself on 1st Avenue -- rows of four- and five-story Antebellum tenements on single lots. 

Disinvestment in the ghetto was not the consequence of a shift from capital. That would be a backward analysis. Disinvestment was the consequence of political policy (labor protectionism, anti-immigrant eugenicism paralleling growing isolationism), a technological advance in mobility, and an entirely unintended consequence of a progressive movement to improve labor housing (again, politics) with the New Law that made it harder to develop downtown. 

The historical lesson I get from it: politics, technology and public policies like zoning and housing laws have had more profound local consequences than constants like capital growth. Culture plays a role as well. Gentrification can no longer be described as a single economic phenomenon if the youth culture of Williamsburg drives upscale families to seek child-friendlier neighborhoods. That has consequences for construction, schools and commercial character. Until an economist comes up with a theory that explains why a fix-wheel bike with no brakes designed for race tracks with no inclines and no stop lights would be the trend among upscale youth in urban centers filled with lights and steeply inclined bridges, economics will be stuck with "60% chance of rain today."

Will the future be like the past? You can count on the constants, so maybe that's where policy should target, always bearing in mind the law of unintended consequences rules. The most depressing documents are the urban planning proposals of the past. In retrospect they look completely wrongheaded, as if their authors didn't have a clue.

That's why local community self-determination has promise. It's not urban planning from above; it's urban needs from below where life actually happens. 

Pickets, boycotts and strikes

Labor faces a challenge in both chains and small entrepreneurs. On the one hand, there's an economy of scale for public protest against a chain. A boycott against the Gap can target many stores at once. Using social media it might even be possible for cashiers, say, across Walgreens city-wide to co-ordinate a job action. But the larger the corporation, the more resources it has, including greater mobility, which counterbalances the scale of public and the labor organizing. Stella D'Oro picked up and left NYC rather than negotiate. The garment industry left the country rather that pay a minimum wage and rent here. Retail chains can't leave, but they can hold out, and those employees that aren't unionized don't have much of a chance.

On the other hand, pickets and boycotts can succeed easily against a small business with a narrower profit margin. But it's rare to hold an action against a truly exploitative small owner because the profit margin is so narrow that the owner might have to close rather than capitulate, and closing the store puts the employees out of a job; everyone loses. So even the loudest activists somtimes have looked the other way. What made the fight against Jing Fong was the size of the restaurant.

A chain like 7-Eleven hires almost no one, so there are no benefits to the local economy to having them here. They're just easy, the way a Citibank on every corner is easy. And now you can even Citibike directly from it to 7-Eleven. Corporate heaven.

De-romanticising mom and pop

One response to Yglesias' post The Tragic Inelasticity of Bar Supply points to the great virtue of the growth model: 

It's not just bar owners and land-owners that make good money if a sport-bar becomes popular. Workers benefit to. People will probably leave bigger tips if the drinks are more expensive. And if an entrepeneur wants to keep his bar high-profile he will need to invest in hiring the best workers possible. (They might have to offer better pay then a generic fast-food chain: if you pay good money for your drink, you expect good service) Those workers will spend their extra money on all kind's of stuff which will benefit the economy.

but another posted the inevitable response: 

Nobody goes there anymore. It's too crowded. - Yogi Berra

My favorite responses to Yglesias' post: 

Learn to love chains? The chains that tend to pay as little as possible, use the cheapest products possible and charge the maximum price possible in order to increase margins and make their shareholders happy rather than the customers? No thanks!

and

Why learn to love chains? Why not just encourage more lovable local dives to start up? Aren't we better served by true small, personal businesses than big corporate impersonal monopolies?

This is a bit unfair to chains, since small businesses have to keep costs down too, including labor costs. But the old-style mom and pop bore that burden entirely on themselves and their kids. However, increasingly small businesses are not mom and pops -- they are small entrepreneurs starting up, hiring employees and even managers to handle the day-to-day.

There are still true mom and pops in the LES: shoe repair, printing/copying, bike repair, a couple of bakeries and butchers, locksmiths, a drugstore here and there, hardware, an exterminator (he keeps a tank full of a hissing Madagascar cockroaches). Most of those cannot be replaced with on-line services. It would be shame to see them replaced with chains.