Economics live

As National Review Online is reporting, the just passed health bill will include the ridiculous but ominous calorie posting regulation that has proven to be an unmitigated flop in New York City: "The relevant section is titled “Nutrition Labeling of Standard Menu Items at Chain Restaurants,” and the gist is that restaurants and retailers that serve prepared foods will have to display on the menu a “nutrient content disclosure statement,” which will list the calories of each item and a “succinct statement concerning suggested daily caloric intake” designed “to enable the public to understand, in the context of a total daily diet, the significance of the caloric information that is provided on the menu.” The information must also be available in writing and there must be signage advising that it is available"

The cutting edge of this Nanny nonsense-ground zero, if you will, is in NYC. And, as a recently concluded NYU study of the city's calorie regs demonstrated, it hasn't worked out quite as Mayor Bloomberg and former Health Commissioner Tom Frieden (now, thankfully, exiled to the CDC) had envisioned.

As we pointed out in October: "So, as we warned New Yorkers when the silly idea of calorie posting was first proposed, there was no evidence that the concept would have the slightest effect on the behavior of fast food customers-and we have been proven correct. As the NY Times reports today, the whole experiment has been a colossal waste of time and money: "A study of New York City’s pioneering law on posting calories in restaurant chains suggests that when it comes to deciding what to order, people’s stomachs are more powerful than their brains...It found that about half the customers noticed the calorie counts, which were prominently posted on menu boards. About 28 percent of those who noticed them said the information had influenced their ordering, and 9 out of 10 of those said they had made healthier choices as a result. But when the researchers checked receipts afterward, they found that people had, in fact, ordered slightly more calories than the typical customer had before the labeling law went into effect, in July 2008."

Ah, the law of unintended consequences! But the failure of the city's regulation will, unfortunately, not deter in the least the Nanny brigades who have now-in stealth fashion-insinuated themselves into the current health care bills. Calorie posting is just one of the arrows in the oversight quiver, and the ultimate purpose is to control, through mandates and taxes what people eat and how they live.

And if ObamaCare does become law, this is just the first step in the development of a burgeoning health bureaucracy that will monitor and control the lifestyles of all Americans. Once everyone-through taxation and insurance mandates-is ultimately connected by this bureaucratic umbilical chord, the idea of bending the cost curve leads inevitably to enforcing what some administrative body of unelected officials deem to be healthier behaviors and choices.

As NRO goes on to explain: "It is not surprising that this regulation made it into the bills. Sen. Tom Harkin (D., Iowa) is a big supporter and, more broadly, the idea fits into the now-trendy notion among the Michael Pollan crowd that the focus on medicine and insurance is somewhat misplaced as the real focus should be on food and nutrition."

Otherwise known as "preventative medicine." But what this really means is that there's a Big Mac attack on the horizon: " Look ahead and suppose the very likely result: disclosure and education don’t produce the desired outcome. How long until the Feds will outright ban high-calorie foods?"

So, as bad as this overall health care reform is, the grafting on of the Nanny mandate bodes for an even more ominous future-one where panels of administrators will not only determine what procedures will be permitted to save your life; but will also be in charge of how you will be able to live in the time you might have left. And as this becomes entrenched, the area of personal liberty-already in danger of becoming an epiphenomenon-will be shrunk into microscopic dust.

We are always amused by the editorial outrage when-once in a blue moon in this city-a large real estate project goes down to defeat. What is inescapable, is the fact that the city's editorialists couldn't give a tinker's damn about NYC's small neighborhood businesses. These retailers are reeling from the impact of the Great Recession-and store vacancies and foreclosures are at record high levels.

But they are also reeling from the impact of the Bloomberg economic and fiscal policies-policies that Steve Malanga has underscored in such exquisite details in the City Journal. When the editorial savants, with a faux sagacity, point out the high unemployment rates in the Bronx, they always fail to correlate these high rates to the city's chief executive who should own them-and would if the city's press had belled this bad cat as it should have.

Instead of scrutiny, however, we had a year of obsequious fawning-beginning with the cheer leading for overthrowing term limits; and ending with the NY Post's shameful shilling for school test numbers that could nave been concocted by Bernie Madoff. And nowhere was it said, or has it even been hinted during this classless outrage over the Armory, that the city's economic dire straits can be attributed to the big government, tax, regulate, and spend policies, of New York City's mayor.

And, in addition, in all of the high dudgeon over the temerity of the city council to act as an independent legislature, there has been no recognition that the Armory development-leaving aside the living wage issue-would have had a devastating impact on the neighboring commercial shopping strip on Fordham Road. Instead we get misdirection and calumny.

In yesterday's NY Post: "The City Council, overriding a mayoral veto, has finished off the proposed development at the Kingsbridge Armory in The Bronx -- effectively killing 2,200 new jobs in a borough with a 13 percent unemploymentrate. Bronx beep Ruben Diaz Jr. was ecstatic: "The notion that any job is better than no job no longer applies," he said. This proves that he is very good at killing jobs. But can he create them?

Wrong question. The city is hemorrhaging business-and local jobs-at the shuttered neighborhood stores all over the five boroughs. What is Mike Bloomberg going to do to stem this unprecedented loss of economic activity? A wrong answer, it would appear-the use of tax subsidies to build malls that will put these local shops further at risk.

Since 2002, Mike Bloomberg has given away the municipal store, increasing local taxes and creating an unsustainable debt while pursuing Olympic pipe dreams and mega-developments that exacerbate the conditions for sustaining vibrant economic activity. And then there's his new found commitment to the environment-expressed so eloquently in his pursuit of a congestion tax policy, one that would further hurt small distributors and the local stores that depend on them.

And here is the Daily News today on the Armory: "As the City Council voted Monday to kill the Kingsbridge Armory development, Bronx Borough President Ruben Diaz Jr. acknowledged that thousands of his constituents would have applied for jobs there.Yet he stuck to his position that it was better for the Bronx, which suffers the state's highest poverty and unemployment, to have no new jobs unless they met his wage standards. The Council bought into this destructive lunacy by a vote of 48 to 1."

"Destructive lunacy?" Not Diaz and the council, but a mayor running in 2001 on a no tax pledge who, no sooner does he take office, raises the city's real estate taxes through the roof-crippling the local stores who are forced to pay the rental pass through. Is it any wonder that NYC is at the bottom when it comes to rating business climates throughout the country?

So, when it comes to editorial standards, we are confronted by the fact that the two tabloids are bereft of them-unless double standards are counted. Instead of examining the long road to the Bronx's high levels of unemployment-a path that begins down at the doorstep to city hall-they are content to place blame on Ruben Diaz and the city council. As the News tells us: "Now the questions for Diaz, as well as for his 48 job-killing Council colleagues, are: Where are you going to find employment opportunities at the level of pay you desire? And how will you put the armory to productive use? They don't have a clue."

Cluelessness is, however, apparently as contagious as the swine flu-and maybe the issue of a living wage is more a symbolic expression of the outrage felt by many New Yorkers against the Bloomberg class-based economic follies that aggrandize a few at the expense of neighborhoods and the small businesses that support them.

We know one thing. The question of what to do with the Armory is not necessarily the right question at all. The real question is whether the mayor's plan made any sense in the first place-given the tax subsidies and the impacts that the mall would have had on the local economic activity. Was this a good use of tax dollars? Not in our view, or that of the store owners in the line of fire of this tax subsidized behemoth.

The city is in bad economic shape after eight years of, yes, cluelessness. If the NY Post's Rupert Murdock and the NY Daily News' Mort Zuckerman want to exhibit a modicum of journalistic responsibility they should begin by starting off the New Year with a vow to hold their fellow billionaire classmate to as high a standard as they have reserved exclusively for some of the city's minor political miscreants.

The sad fact, though, is that they are incapable of this kind of brutal honesty for one of their own. The sins of the various "knuckleheads" that the News points out periodically, pale in comparison to the tone deaf and misguided actions of the mayor-and the defeat of the Kingsbridge Armory should be seen in this light. Not so much for what it says about actual public policy, but more for what it says about the fed up mood of a public that is tired of policies that give the goldmine to the few while shafting the many.

The Village Voice's Tom Robbins does a good analysis of the Kingsbridge Armory defeat-and points to how a divide and conquer stategy is a danger for labor: "In the early days of the coalition that organized to win better-paying jobs at the new armory, all of the big unions were happily onboard. Gary LaBarbera, the ex-Teamster who heads the city's Building and Construction Trades Council, signed on to the goals of the Kingsbridge Armory Redevelopment Alliance. So did the building service workers of Local 32BJ, who are playing a steadily more influential role in city politics. But as the vote grew closer and Bloomberg refused to budge, the construction and building service unions peeled off from the coalition to cut their own deals with Related."

But, even without the trades and 32BJ, the KRA coalition and its political allies proved to be too formidable for the mayor and Related: "It's just our luck that the first time the City Council actually musters the courage to face down Mike Bloomberg, it's to kill a plan that—whatever its flaws—would have put hard-pressed New Yorkers back to work. Not that it wasn't a huge thrill watching it happen."

Indeed it was-and it also exposed the unseemly relationship between Related and the "above politics" mayor-something that Robbins is happy to point out: "It was a thrill, too, because Related's top people are personal friends of the richest New Yorker: Steve Ross is one of those who whispered in Bloomberg's ear last year, urging him to grab that third term. Ross was once a business partner of Dan Doctoroff, Bloomberg's old top deputy. Doctoroff is now back in the private sector running something called Bloomberg LP. When Related partner Jeff Blau recently needed references to help him land a lush pad in an exclusive Fifth Avenue co-op, the mayor wrote a nice letter and called people on the board on Blau's behalf (he was still rejected). Among the rich, this is called networking. It could also be called a conflict of interest, but the city board charged with examining such things is too busy scrutinizing school teachers and sanitation workers to notice."

And Robbins exposes the mayoral hypocrisy when it comes to an unbridled support for the fee market: "Even as his advisers told him that the Council would vote down the project without a wage deal, Bloomberg thundered against it, offended by the very notion. The Friday before the vote, the wealthiest New Yorker appeared on his regular radio show, hosted by his ever-agreeable pal, John Gambling. "It is not the city's business—it is not government's business—to tell companies that they should pay more," he sputtered. He brought himself up short when he realized he had just denounced the basis of all government wage legislation since the Great Depression. "There are federal minimum-wage laws," he quickly added, "and those are fine."

But, of course, there is no fee market when Related comes to feed at the public trough-and those businesses in the way can be excused if they don't quite see things the way that Mike Bloomberg does: "In fact, the marketplace being what it is, the minute that a gleaming-new, tax-subsidized food store opens at the armory, the longtime merchants across the street are likely to start going out of business. These are firms employing hundreds of local residents, many at union wages, with benefits—merchants who held on through the worst of the "Bronx Is Burning" years."

What made the entire campaign conclude with just the right level of euphoria was the spectacle of the city council acting, well, like an independent legislature: "The result, on December 14, was a City Council almost giddy at the prospect of finally defying the mayor. The same council that had largely rolled over for Bloomberg on some 200 previous zoning issues, the same council that cravenly conspired to let him overturn term limits last year, was aboil at the thrill of saying, at long last, "No." You could see it in the smiling, whispered asides as members popped up from their chairs and raced across the aisle to consult with friends and allies."

But whither labor on all of this? Robbins remains concerned: "This is how such coalitions often bust apart. At the end of the day, unions are responsible to their own members to make sure they have jobs, and the construction trades have never met a project they didn't like. The joke goes that they would build their own gallows if you let them do it union. As long as there is work to be had, there is nothing better: wages go to $50 an hour, along with deep benefits. On the other hand, for most of the residents in the north Bronx, such union cards are just a dream. Their career paths are more likely to deposit them in one of those part-time, minimum-wage jobs at one of those big stores that Related wanted to create than one pouring the cement used to build it."

In our view, the trades need to recognize that the other workers are in dire straits-and that it would be easier if all labor could coalesce in a common strategy. It will, however, not be easy to achieve, as race and class separate the factions: "It was the dream of Stu Appelbaum, the tough head of the retail workers union who helped lead the fight to win better wages at the armory, that the Kingsbridge battle might become a bridge to start healing that divide."

Coalition is still possible, but when the wealthy start to divide and conquer, it generally degenerates into a Three Stooges moment: "All for one, One for all-Every man for himself." Seriously, though, crafting a labor coalition in the middle of the worst recession in sixty years is daunting indeed. With all sectors of the work force really hurting, magnanimity-an essential ingredient in coalition building-is a scarce commodity.

Still, if common ground is to be reached, it must be based on the recognition of shared pain and shared gain. Where that location is on the policy map, however, is real hard to discern at this juncture.

The disastrous Bronx fire that consumed stores on 204th Street gutted the neighborhood's only supermarket-the Foodtown owned by our friends the Katz family. As Bronx News Network reports, however, the gutsy Katzes are planning to come back bigger and better than ever: "I just spoke to Dan Katz, whose family owns the newly renovated Foodtown on E. 204th St. that was just destroyed by yesterday's fire. The Katz's announced that they will rebuild an even larger store on the same site in 2010 and also provide groceries at Pricebusters, another store they own on E. 204th St. between Hull and Decatur avenue."

Good for Danny who, along with his brother Noah, run one of the best family owned grocery chains in the city-and beyond. The rebuild will not be easy or cheap, but the Katzes are committed to the neighborhood: "Everyone should know that we are committed to serving the residents and we will rebuild and even bigger and better store that what was there," said Noah Katz, Dan's brother, in a press release...Dan Katz told me that they have an agreement with the landlord to lease the two other properties claimed by the fire -- the American Diner and the dental office -- in order to expand their business."

So, in the aftermath of tragedy comes the hope of something better, reminding us at the same time, just how important local business is to the community. As one resident told the News: "The spate of fires on 204th St. has residents and business owners thinking the worst. "Two places in two months burned down. It's crazy," said Richard Vasquez. "This supermarket has been there a very long time and I can't believe it's down right now. The just redid it and now it's gone."

With all of the fires on 204th Street, the natural inclination is to suspect foul play: "It seemed like the whole block was burning down," said local Rey Marcano, 43, a bus driver. "I don't think it was accidental." And local council member Oliver Koppell told NY1 pretty much the same thing: "All of these fires started late at night when no one was around," said Bronx Councilman G. Oliver Koppell. "I mean, it just doesn't seem to me to be coincidental."

If so, there's an arsonist on the loose in the Bronx, bringing back unpleasant memories from the not so distant past. The potentially illegal nature of this tragedy behooves that the area elected officials and the Bronx BP act quickly to help the local merchants rebuild.

And, as the News points out, the city appears to be responding in the right way: "City officials said they are doing everything possible to help displaced workers and business owners rebuild from the ashes of the Norwood fires.The city Department of Small Business Services is holding a meeting Dec. 29 at 10:30 a.m. in Community Board 7 offices at 229A E. 204th St. SBS spokeswoman Laura Postiglione said the department has numerous tools, including grant money and loans, to get owners back in business. "We'll work to help the displaced workers get temporary employment if the business is not going to reopen or is temporarily closed," she said. "We're working...to get them back on their feet as soon as possible."

Which is good news for the Katz family who, much like the Sloans who own the MortonWilliams supermarket chain, are fixtures in the Bronx, and have dedicated generations to the borough's neighborhoods. We'll give the BNN the last word on this: "The Katz family, which owns 11 other Foodtown stores has operated the store on East 204th Street, first called MetFood, since Dan's grandfather, Paul, opened it in 1956. Their father, Sydney, joined Paul in 1962. Noah and Dan joined the company in the 1980s."

Can you believe that the Bloomberg administration acted arbitrarily and capricious-on yet another land use question? First there was the Columbia collusion where-to be fair-the state, in the form of ESDC, played the leading role; but the city was an unindicted co-conspirator. Now it is Randalls Island where the court has had to intervene to give equal protection to public school kids in the face of unabashed favoritism for private schoolers.

As City Room reports: "For the second time in two years, a justice in State Supreme Court has ruled that the Bloomberg administration had improperly struck a deal with 20 private schools to provide them with priority in using athletic fields on Randalls Island in exchange for $45 million." Well, you gotta gives the Bloombergistas some credit for tenacity, no?

Well, apparently the judge in the case wasn't as forbearing: "In the decision Tuesday, Justice Marilyn Shafer of State Supreme Court in Manhattan rejected the city’s revised deal with the private schools, saying it, too, was improper because it did not go through a public review. Justice Schafer excoriated the Bloomberg administration, saying its arguments were “audacious,” demonstrating “more daring than logic” She ordered the city to pay the plaintiff’s legal fees and costs."

Juan Gonzales at the Daily News, who has been right on top of this story also weighs in on the court's decision: "Until now, Bloomberg has allowed only the Franchise and Concession Review Committee, a body he controls, to vote on the deal. Shafer's decision, which echoes a ruling last year by Supreme Court Justice Shirley Kornreich, means the mayor will have to put the Randalls Island contract before the Council...The judge not only ordered that the entire plan go through the normal land use review in the Council, but she also struck down the city's claim that no Environmental Impact Assessment is needed, a review that measures a project's effect on an area."

Ah, what a difference four years makes. Unlike in the BTM case, the courts seem more willing to challenge-and overturn-Bloomberg's audacity. And the city charter, in danger of being relegated to mayoral toilet paper, is being restored. As one East Harlem resident told Gonzales: ""I'm thrilled," said Marina Ortiz, one of the plaintiffs in the lawsuit and the head of East Harlem Preservation Inc. "Now, the East Harlem community will have a better chance for more direct input in how these fields that are part of our neighborhood are used," Ortiz said."

You know, if this keeps up, we may have to take back our disappointment in the mayor's purchase of a third term-Bloomberg III may be the gift that keeps on giving. And our buddy Norm Siegel, just as he was in the Columbia court smacking- was right in the middle of this: “It’s a major win,” said Norman Siegel, a lawyer for opponents of the city’s plan. “The city shouldn’t give a priority to people merely because they can pay for the use of public land. That discriminates against those who can’t pay to use the public land. We’re not saying the private schools can’t use the fields, just that everyone should be treated equally when it comes to public land.”

And hats off to another old friend, Geoff Croft of the NYC Park Advocates organization, who led the way. Croft has been in the forefront of the lonely battle to insure that the Bronx parkland stolen to make way for the new Yankee Stadium is replaced in a timely fashion; and he was an ally on the BTM fight as well, so he really deserves the victory on this-and on the bill he has helped to pass to make sure that more local representation is mandated on park conservancies.

And, with a special holiday shout out to the mayor, Croft gets the last ho, ho, ho: “I hope this forever puts an end to the city’s pay-to-play schemes,” said Geoffrey Croft, president of New York City Park Advocates, a group dedicated to protecting city parklands. “These parks are supposed to be for the public, not just those who can afford to play on them.”

Eliot Brown has an interesting little story in the Observer about the unusual display of obsequiousness exhibited by Mike Bloomberg when it comes to the Related Companies: "For the second day in a row, Mayor Bloomberg is headed to the West Side for a late morning press conference. And, once again, the mayor will be hailing progress on a development project by the Related Companies, the active real estate firm that was last week denied by the City Council in its bid to turn a Bronx armory into a mall."

Can you say favored nation, anyone? Brown can: "The giant firm is probably the city's busiest developer, and has long been considered to be close to the Bloomberg administration, particularly during the reign of Deputy Mayor Dan Doctoroff, who was an old friend of Related Chairman Stephen Ross. That close relationship has attracted criticism at times, particularly in the run-up to the Olympic bid in 2005, but generally the firm is quite effective at executing on projects (the Time Warner Center site, for instance, stagnated for more than 12 years before Related was selected to build on it)."

Yes, the Bagli story was a good one, but we did the full monty on the incestuous Ross/Doctoroff affair; and the city's love affair with Related seems to have survived Deputy Dan's departure-as the famous Bloomberg phone call on behalf of Jeff Blau dramatizes quite well. Courtesy of the Observer: "The Observer's Max Abelson reports that Michael Bloomberg personally called the head of the co-op board at 820 Fifth Avenue in an attempt to get him to approve the application of his friend Jeff Blau. The board did not budge...Blau is the president of Related, a major real estate firm in the city."

What's compelling about a living wage, especially when it might ruin a great friendship between masters of the universe? Someone should take a hard look at all of the favoritism going the way of Related over the past eight years-and it didn't even have to contribute to the Bloomberg campaign. Some things are more important than money, right?

Here's some more coverage that we missed in our all Armory, all the time commentary, that's about to get a deserved rest. Eliot Brown at the Observer weighs in on the mayor's hurt feelings: "On this subject, the mayor made clear his feelings. "It's a great tragedy," he said, listing benefits the $320 million project would have bestowed on the community, regardless of the minimum wages its retailers paid. "Now they have nothing, and we have a building that's been vacant for 30 years, it's costing the taxpayers something like half a million a year to maintain, and we're going to have to continue to pay that without anything to the community."

Addition by subtraction it seems to us-but not to the minority contractor who opines with ghostly eloquence this morning in the NY Daily News (no link) about his own lost opportunities; while talking with borrowed erudition about "lost shoppers to Yonkers." And he should take heart, because Speaker Quinn talks about the aberration that is Kingsbridge in the Observer: "We're not agreeing on Kingsbridge, the only economic development project in the four years of the mayor and I working together where we haven't been able to come to an agreement," she said. "We will never let one disagreement force us into a place where we can't find other points of commonality."

And check out City Limits for another shout out to KARA-and the mag provides this link to local reactions: "It is Bronx residents who will cope with the consequences of Monday’s vote, for better or worse. Joel Allen, a 44-year old Sedgwick Avenue super, applauded the vote.“What the City Council did makes sense,” Allen said. “Times are hard. Low wage jobs don’t benefit anyone. One of my tenants was just evicted. If you make enough for bus fare but can’t pay the rent, what’s the point of going to work?”

And the Bronx Times reporter points out that the supermarket issue was also salient: "Not so, the Retail, Wholesale and Department Store Union and Morton Williams Supermarkets, a chain with a store kitty-corner to the armory, argued prior to the City Council vote. They and KARA persuaded Diaz Jr. to demand that Related exclude a new supermarket from the armory.A new supermarket would have knocked scores of Morton Williams and bodega employees out of work, they warned."

So Speaker Quinn may be speaking with a bit of false bravado, as the battle for living wage continues to provide a glimpse into the ghost of Christmas future. As the Village Voice points out, the battle has shifted: "As shoppers scurried to snatch up last minute gifts inside the Queens Center Mall, local elected officials and community organizations painted the shopping destination's landlord,Macerich, as the latest Grinch in the ongoing fight for living wages -- just days after the city council rejected a Kingsbridge Armory plan that had no living wage requirement. Most of the 3,100 retail workers in the sprawling urban mall earn $7.25 an hour."

That must be the, "great tragedy," that Mayor Mike was referring to in his eulogy for the Armory. So the living wage coalition is gearing up to despoil the mayor's new term: "This is the second front of the battle for living wage jobs and community benefits," said Jeff Eichler, a coordinator with the Retail, Wholesale and Department Store Union, which helped staunch the Bronx development that would have created over 1,200 retail jobs and joined in the new Queens fight."

And the RWDSU has done a report that ought to make the Bloomberg economic team blush with shame: "According to the report, released by the RWDSU and Queens community group Make the Road, the massive mall has received $48 million in tax breaks over the past five years with another $50 million more to come. However, most of the 3,100 jobs at the mall pay at or slightly more than the $7.25 federal minimum wage and do not include health benefits. As a result, the Mall has helped create an entire community that is struggling under the weight of poverty-wage jobs, the report concludes."

And the coalition appears ready to really grow citywide in the New Year: "Standing on a snowy corner of Queens Boulevard, Santa symbolically held gift-wrapped boxes marked "living wages." A menacing green Dr. Seuss character represented the mall owner. Activists from Make the Road New York, a citywide organization focusing on economic justice, demanded that the landlord place a living wage clause in its leases -- which would require stores to pay $10/hour with benefits, or $11.50 without."

And so it grows: "The group and the officials plan to continue their campaign against Macerich with street demonstrations and letters. "Just like the story of Scrooge, where the ghost visited him on many occasions," said Councilman-elect Daniel Dromm, "we're going to come back, and we're going to visit this mall on many occasions until we get what the community needs."

The next step is the legislative push for living wage and labor peace-but the council needs to also focus more on the misused public monies for retail, and how these economic "benefits" are puny for the workers but robust for the real estate development community. In the process, local neighborhood businesses get the privilege of trying to compete with other retailers who have Mike Bloomberg as their less than silent partner.

It should be a provactive New Year.