November 4, 2025 • 42 mins
On this episode of The Federalist Radio Hour, Dr. Anne Rathbone Bradley, the George and Sally Mayer fellow for economic education and vice president of academic affairs at The Fund for American Studies, joins Federalist Senior Elections Correspondent Matt Kittle to dissect New York City mayoral candidate Zohran Mamdani's government-run grocery store plan and explain the historical and economic reasons socialized food programs don't work.
If you care about combating the corrupt media that continue to inflict devastating damage, please give a gift to help The Federalist do the real journalism America needs.
If you care about combating the corrupt media that continue to inflict devastating damage, please give a gift to help The Federalist do the real journalism America needs.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:18):
And we are back with another edition of the Federalist
Radio Hour. I'm Matt Kittle, Senior Elections correspondent at the
Federalist and your experience Shirpa on today's quest for Knowledge.
As always, you can email the show at radio at
the Federalist dot com, follow us on x at FDR LST,
make sure to subscribe wherever you download your podcast, and
(00:40):
of course to the premium version of our website as well.
Our guest today is Anne Rathbone, Bradley George and Sally Mayer,
Fellow for Economic Education, vice president of Academic Affairs at
the Fund for American Studies and economic professor at the
Institute for World Politics. And thank you so much for
(01:01):
joining us in this edition of the Federalist Radio Hour.
Speaker 2 (01:04):
Matt, thank you for having me.
Speaker 1 (01:06):
Absolutely as we talk, New Yorkers are heading to the
polls and they're going to vote for a few different candidates,
but it seems the front runner, certainly is this Zoran
mom Donnie, the Socialist candidate for New York City mayor,
and he wants the Big Apple to go into the
(01:26):
grocery store business. Mom Donnie's proposed pilot program aims to
open five groceries, one in each borough, funded and operated
by the city, funded by the city and its taxpayers.
Of course, what could possibly go wrong? Man, what could
possibly go wrong?
Speaker 2 (01:48):
Well? Everything is that to doomsday of an answer? No,
not at all.
Speaker 1 (01:54):
You write a great op ed in the Washington Post
and you refer to we have some history here behind us.
The old Soviet Union can tell you all about that,
the failed experiment of state run you know, enterprises.
Speaker 2 (02:13):
Yes, we have a lot of history here, and I
think knowing the history and just really knowing some of
the basic principles of economics is really helpful in terms
of cutting through policy proposals that sound very good on paper.
So in some sense I can very much understand why
(02:37):
he would run on this platform, because there's nothing better
than free things, and politicians who promise free things, you know,
Santa Claus, if you will, that sounds really good to
voters in a city like New York, New York City,
where groceries are very expensive, it's very expensive to live,
it's expensive to commute. So there's real, you know, in
(02:59):
my call them pocketbook anxieties that are f by not
just member you know, as citizens of New York City,
across the country. But I think we have to have
kind of sound reason to understand whether the things that
sound good achieve good and that's where economics comes in. So,
as you mentioned, I mean, this is not a new idea.
(03:20):
The Soviet Union not only you know, ran state grocery stores,
but every kind of store, and so the results of
that were catastrophic in terms of prosperity, in terms of
well being, in terms of just standards of living and
being able to put food on the table every day.
And so I think the problem is maybe you know,
(03:40):
kind of gen Z and younger generations who I think
are the ones that are excited about these ideas, perhaps
they don't, you know, we haven't taught them the historical
lessons of the Soviet Union. What's happening in Venezuela today
is another example. But I also think maybe we haven't
taught them how to apply some very basic principles of
economics to understand that this is a feature and not
(04:02):
a bug. That's what I want people to know is
that it's not like, Okay, well in New York City
is a very prosperous city. It's one of the best
cities in the world. It's kind of an image, iconic
image of American capitalism. And so we're the good guys.
And so if the good guys decide we're going to
run city on grocery stores, then somehow we'll get good outcomes.
And that's just wrong. And so this will fail the
(04:25):
same way that it failed, you know, in the Soviet
Union for eighty years, and the way that it's failing
in Venezuela and Cuba today. It just doesn't work, and
I think we need to know that, so we don't
kind of dish out these these promises that are false.
They're false promises.
Speaker 1 (04:40):
This is a great line from your column again in
the Washington Post. The cruel joke of socialism is that
it always starts with free stuff and ends with no stuff.
Not only is there no free lunch, there is no lunch.
And again I draw back to the examples of Boris
(05:01):
Yeltsin and khrus Chef, one in the late eighties, the
others in the nineteen fifties, both visiting the United States,
both at supermarkets different cities in the United States, and
both marveling that these grocery stores had more products in
(05:24):
there than would be available to the leaders of the
Soviet Union. That's what New Yorkers are rolling the dice
on here, isn't it.
Speaker 2 (05:35):
That's correct, That's right, And I think the way you
put that is just it's such a powerful lesson. I mean,
in particular, drawing on Yeltsin's experience, this really had a
profound impact on him. And you have to think about
Yeltsin was an establishment communist, right like a Marxist foot
(05:56):
soldier in the political class. This is not a person
who it was like toying with capitalism or free markets.
And so coming to the United States and asking to
visit a grocery store. He visited Randall's grocery Store, which
is a chain I believe that still exists today. He
was in Clearwater, Texas. I believe they had just recently
(06:18):
been at the Johnson Space Center. And the word that
you used is so important, Marvel. That is a word
that Fa Hiek Nobel Prize economist and staunch defender of
capitalism against the socialists used to explain what happens in
market economies. And it's the idea that no one is
(06:39):
in charge, there's no grocery stores are that can figure
out how many even varieties of Apple's need to be
in the grocery store on November fourth, twenty twenty five.
Nobody kind of really knows that answer, right, especially not
ahead of time. And so I think that's what really
(07:02):
amazed Yeltsin And here's why I think it should amaze us,
but it doesn't. And it's, you know, we get we
are so wealthy in the United States that it's very
ordinary going to the grocery stores an ordinary experience. You
put it on your to do list, you're happy to
cross it off. I mean, I like grocery shopping, but
not everybody does, right. Some people even outsource this to
(07:24):
instacart or something like this, So it's just so mundane.
But when you don't have access to grocery stores again.
In nineteen eighty nine, yeltsin Is is the member of
the elite political class about to take over the country,
and he says he marvels at what he says, and
he actually says that it makes him both overwhelmed and depressed.
(07:45):
Overwhelmed because he just didn't realize that it was possible
that that amount of abundance could be available to ordinary people,
not political elites, not just wealthy people, but ordinary you know,
Mom's grocery shopping with Boris Sielson on Tuesday, right. This
amazed him and he says that he's depressed because, you know,
(08:10):
this was the quest, this was the promise of socialism.
It's always the promise that the stores will be full,
the shelves will be stopped, and there's no lunch, as
you mentioned, as I mentioned in my article, there's nothing.
People stand in line for hours, they can't get what
they want or what they need. They're forced to barter
on the street. I mean, nobody wants to grocery store
(08:32):
or grocery shop in that manner, but that's always the
predictable result.
Speaker 1 (08:36):
Yeah, well they should have taken into a costco that
would have read, oh yes, flipped his mind absolutely. I'll
tell you what makes me a bit overwhelmed and certainly
depressed is a poll that found sixty two percent of
Americans aged eighteen to twenty nine hold favorable views towards socialism.
(09:00):
And that has to speak to our educational system we in,
certainly in public education, I think we're failing to drive
home those lessons of long breadlines in the Soviet Union
and Soviet controlled countries what central control can do. And
(09:25):
I'm worried about this grand old republic, this grand old
experiment of ours.
Speaker 2 (09:31):
I share those concerns when you look at how far
we have come. Just thinking about again the grocery store
as the example, just what is in your average grocery
store today compared to when Yeltsin visited and then compare
that to nineteen fifty nine when Christ Jeff visited. So
it's just the bounty is just mesmerizing, but again to
(09:56):
us ordinary mundane, boring maybe, And so I think we
take that for granted and we think, Okay, I live
in a very expensive city. I want the politicians to
do something about that. And so socialism sounds like a
great idea. But you know, we're not going to have
the force, We're not going to have the famines, we're
not going to have the authoritarian violence. We won't have that.
(10:18):
We'll have kind of a kinder, gentler socialism, if you will.
And I think that's what you know, eighteen to twenty
nine year olds are, that's what they want. They don't
want a labor camps. They want things that are affordable.
They want to, you know, graduate from college and be
able to afford an apartment and get a job and
buy their groceries. And I think that's all very reasonable,
(10:41):
and I think we all should but I think we
do share those concerns. I think the the trick in
socialism is that again, like I said, it's the false promise,
but the promise to sounds so exciting that you're willing
to make a bet on it. And if you find
someone's charismatic that can, you know, kind of make it
(11:01):
sound like it's all benefit and no cost, then of
course why wouldn't you vote for it? It sounds like, well,
let's just give it a try. And he's only talking
about five grocery stores. As you said in your opening,
you know what could go wrong? Well, I actually think
a lot could go wrong. I think we could disrupt
the local economy. And I think what we have to
keep in mind, and younger generations have to keep in mind,
(11:22):
is that even governments face scarcity, they have budgets, and
so there's a limited amount of money in any city's budget,
and if they're going to direct money at one thing today,
it means there's less money to direct at other things today,
and so there's real opportunity costs in doing this. So
I think, not only do we have to look at
this fails because we're not going to be able to
(11:44):
keep the shelves stocked, We're going to have theft problems,
we're going to have endurance problems. Just how can we
keep it open? And because what's missing is the profit motive,
that's what makes this work in the market economy. And so,
you know, I think we need to keep talking to
younger people in the classroom. I spend a lot of
(12:05):
time in the classroom, and you know, we start when
I teach economics, I start with the human person. What
is our anthropology? Right? We face scarcity, we're limited, we
need each other, we have to find ways to cooperate,
we're self interested all these things. Well, if that's true
of you and me, then it's true of all these
people in an economy. So then we start talking about
the institutions. What kind of institutions do we need that
(12:28):
allow us to cooperate share our human capital in a
way that grows prosperity. Well, markets are a very powerful
way to do that. And so I think we need
to be very winsome in the way that we approach
the topic with younger generations and the way we teach it.
So rather than saying socialis is stupid, why don't you
get that, we should say I too care about you know,
(12:52):
a twenty two year old who just moved to the
city and needs to pay their bills and wants to
get a job, and let's figure out ways to actually
make their dollar go farther, give them some income mobility
so that they don't have these problems in the long run.
I think that's the way to transition it so that
we can open their minds to more market oriented approaches.
Speaker 3 (13:16):
Talking heads are preaching that you're entitled to your social security,
but are you The watch Dout on Wall Street podcast
with Chris Markowski every day Chris helps unpack the connection
between politics and the economy and how it affects your wallet.
Two Supreme Court decisions have said connors can cancel social
Security tomorrow and you can get nothing. You may want
to believe the social security myth, but you're not entitled
(13:37):
to it. Whether it's happening in DC or down on
Wall Street, it's affecting you financially.
Speaker 1 (13:40):
Be informed.
Speaker 3 (13:41):
Check out the watch dot on Wall Street podcast with
Chris Markowski on Apple, Spotify, or wherever you get your podcasts.
Speaker 1 (13:49):
Well, Zron Mandani certainly comes across to me at least
as the guy who steps into the big trouble in
River City, the flimflamb man, you know, trying to sell
something that's been tried and failed multiple times. And you
know you don't have to You don't have to go
to the Soviet Union in nineteen eighty nine or nineteen
(14:10):
fifty six. You can go right here to the United
States of America, where this experiment has been tried and failed.
As you noted in your piece in the Washington Post,
Kansas City's Sun Fresh government backed grocery store, which recently
closed due to high crime and low prob profitability despite
(14:34):
receiving significant public funding. That is an example here on
the ground that we've seen in real time. And shouldn't
that be an alarm for the folks in New York City.
Speaker 2 (14:47):
I would think so, and it should be because I mean,
and this is as you mentioned, this grocery store was
heavily subsidized. It lost something like nine hundred thousand dollars
last year before it closed. So this is again, all
those resources have opportunity costs tied to them. So if
we know that something is going to fail and we
(15:08):
put money into it anyway, then we're basically saying that
we don't want that money, right it's worth the loss,
And of course that's not the case, and so I
think we need to highlight these examples. As I mentioned earlier,
I think part of the problem is if you haven't
lived through it, maybe you know, maybe nobody's read about
the Kansas City example. And I think it's getting more
(15:29):
attention because Mom Donnie is proposing it in New York City,
and of course a lot of people pay attention to
pay attention to what's going on in New York City.
So I just think this idea is generally getting more traction,
and in a way, that's a good thing. This is
an opportunity for us to say this will never work.
It doesn't matter how charismatic the politician is. It doesn't
(15:52):
matter how nice they seem, how well intentioned they seem.
We have to do cost benefit analysis, and we have
to know that without market prices and the profit and
loss signals that only come about in a market economy,
entrepreneurs do not know what to do right. And I
think that that's a lesson that comes out of really
(16:14):
understanding economics. And I think this is kind of what
blew away the Soviet leaders because they were masters in
planning everything. They thought everything could be centrally planned. They
hired a lot of PhD economists. People don't always think
about that, right. These are people who are well versed
and educated in economics, but that doesn't mean that you're
qualified to set the prices of tomatoes. Nobody knows what
(16:37):
those should be because they can't be known prior to
the act of engaging in exchange. And so there's some
nuanced ideas in there. But I think it's possible for
us to use this moment to be a teachable moment
so that we don't keep trying this, because I think
there's going to be more disappointment down the road, and
(16:58):
attached to that disappointment is going to be, you know,
at a cost, a fiscal cost that the city will
have to bear. And so in eighteen months or two years,
when this fails, then what And I think we need
to ask those questions and point this out now so
that hopefully we can avoid it. I know in Chicago
the mayor was also tying with this, and then the
(17:20):
idea was just kind of done away with. And that's
the hope here. I think that's the best outcome we
could get at the moment.
Speaker 1 (17:26):
Yeah, because it certainly looks like mom Donnie is on
his way to become the next mayor of New York.
We talk about opportunity cost the real costs though to
the private sector. You know, Mom Donnie says, and he
has said over and over again, you know, we'll take
out price gouging. This won't impact the mom and pop
(17:48):
stores at all. You know, we won't dominate the market
place and control all the prices. The other mom and
pop stores, the other supermarkets in this they don't have
to worry about this at all. Again, history tells us
something different. What do you think will be the ultimate
impact if you have this city run grocery store taking
(18:11):
out you know, inherent competition, right.
Speaker 2 (18:16):
I think that there's no way around that. I think
if you look at the concerns voiced by Bodega owners originally,
that were real concerns. Which is I mean, think about
your typical small mom and pop type of market in
New York City. It's run by a family, that family
(18:36):
works all the time their kids, work in the storm,
and just countless stories like this, right, So that's that's
what you're going to put out of business. So I
think you can't say I'm for you know, kind of
I'm doing this for low income, middle class groups can't
afford high grocery store when when the active of your
(18:58):
policy proposals will actually put those very people out of business.
And so that that's inevitable because one of two things
will happen. Either these city run grocery stores will open
and they will have kind of something like competitive market prices,
meaning they'll just mimic the prices that we see in
other grocery stores, or they will say, let's offer lower prices. So,
(19:20):
you know, because that's the whole point, right, The whole
point is, and I want to get to the price
gouging comment in a moment, but his whole point, I
think is people can't afford groceries. Grocery prices are out
of control. The way to solve this is to have
a city run grocery store where I'm going to put
experts in charge of the prices and we're going to
give people deals. And the way we're going to do
this is because we own the land, and we're going
to subsidize all this stuff. So he makes it sound
(19:43):
compelling like this seems like a good idea. But if
you lower the prices, if they are not market prices,
but they are undercutting retail prices, then all of the
other people, especially the small mom and pops, they are
not going to be able to withstand that competition. Moreover,
grocery stores in general, and I'm talking about the massive
chains like Stop and Shop which is in the Northeast,
(20:05):
or you know Safe Way, Harris Teeter, all these types
of Walmarts. Walmart is the world's largest grocer. They run
on one to three percent margins.
Speaker 1 (20:15):
Yes, very very thin margins.
Speaker 2 (20:17):
Very thin, I mean. And the way I like to
talk to my students about this is, think about when
you walk into any grocery store, Safeway or something like this.
There's all this prepared food, which is wonderful, it's very convenient, right,
but there's also all this produce and stuff. So you
can imagine the ice cream. If they don't sell all
the ice cream tonight, it's no big deal. It can
sit in the freezer for maybe weeks, I don't know.
(20:38):
But the cupcakes, the sushi rolls, the fresh bagels and doughnuts,
those have such a narrow time window on them that
if you don't sell what you think you're going to sell,
then at the end of the day you might have
to throw it away. That's why the profit margins are very,
very narrow, and it's very competitive. So it's just inconceivable
(21:00):
that a state run grocery store, which means we're not
going to govern what the grocery store does by market prices.
We're going to govern it, govern it by bureaucratic decree.
How will they know, How will they know how to
price them? How will they know how to manage inventories?
They don't have profit and loss systems because we've taken
that out. They won't know, is the answer. And so
(21:22):
I think this will have a ripple effect in terms
of other types of investments by small businesses, destroying small businesses,
which is something that I would think Mom Donnie does
not want to do, and that's going to be a
natural consequence. And if I may, I want to talk
about this price scouching idea because I think, again, this
is very appealing to people. It's it's kind of a belief,
(21:47):
a common belief. Maybe that's a company like Walmart, which
has you know, kind of mask it a huge operation,
over one hundred thousand stores, I believe. I think they
operate in over twenty for countries something like this. It's
a massive operation. You know, they just have all this
extra profit lying around, and so what they do is,
(22:09):
you know that they can just afford to kind of
price gouge. And I think people use the term in
their mind price gouging happens whenever a price goes up.
But this is not what economics would tell us. Just
because a price goes up doesn't mean that the entrepreneur
or the firm is gouging someone. Prices are a reflection of scarcity.
(22:30):
So you might remember, you know, we were talking a
lot about egg prices over the last year, and the
reason that egg prices went up is because we had
a supply shock due to avian flu. So when all
of the chickens die, you're going to have a problem
producing eggs. And the only way to reconcile that in
the market is for the price to go up because
(22:52):
it has to meet demand and we have to slow consumption.
And that's again a very organic process. Nobody was in
charge saying Okay, the price needs to go from this
to this. So I think that will ultimately be the problem.
But again, I think this taps into an emotional sentiment
that people have, which is that big firms always have
monopoly power. Therefore they run around engaging and price gouging
(23:16):
all the time, and we need to stop them. And
one way to selp them perhaps is to have a
city run grocery store. But again, Walmart runs on a
one to three percent profit margin as well, so there's
very little room for error in fact, in the market.
Speaker 1 (23:30):
When all the chickens die. It sounds like an Academy
Award winning movie.
Speaker 2 (23:35):
Yes it does.
Speaker 1 (23:36):
I'll watch for it this holiday season. Our guest today
is Anne Rathbone, Bradley George and Sally Mayer, Fellow for
Economic Education and Vice president of Academic Affairs at the
Fund for American Studies and economic professor at the Institute
for World Politics. We talked today about Zoran Mamdani, the
(23:57):
leading candidate for New York City mayor. He also happens
to be a socialist and avowed one, and he has
made no secret of his socialism plans for New York City.
You know, The bottom line here to me and is
that it's the same over and over again with the socialist,
(24:19):
the communist, the Marxist movement, and the idea is trust us,
Trust us, we know what we're doing. We'll go up
against big capital and will win. Trust us. That's Isn't
that the campaign that you're hearing from? Zorn Mundani?
Speaker 2 (24:39):
I think that's absolutely the campaign, and I don't think
it's new to him. I think that most people American
politicians today who would claim the democratic socialist label, I
think they speak two ordinary people. They address their concerns
in a real way, I think again, as I've said before,
they're often very charismatic in doing so, and they focus
(25:01):
on the trust issue. Don't worry about the math, don't
worry about the logistics, don't worry about the budget. Just
trust me, because I care about you, and voters want
to feel cared about so I kind of, you know,
am sympathetic to how appealing this sounds. But again, that's
why we have to understand history, and we have to
(25:24):
understand economics, and we have to know that every time
socialism is tried, it will fail, and the reason it
will fail is because nobody we can trust them all
day long, but they don't know what to do. They
do not know how to plan an economy and let alone,
you know, not even a grocery store. And that's why
(25:46):
these city owned grocery stores continue to close and to
have all sorts of other problems. Empty shelves, right, they
can't restock in time. I think a way to show
the busness of markets is to ask people to think
about what happened in your grocery stores during COVID. COVID
(26:06):
was a global event, right, it affected everyone. At the
beginning of COVID.
Speaker 4 (26:13):
Everybody remembers this, right, it was you know, the toilet paper,
the toilet paper, but also we thought it was which
is still weird to me, but that's okay, Right, it was,
you know, two weeks to slow the spread, and we
just didn't We didn't know how long.
Speaker 2 (26:29):
We were going to be inside. We didn't know how
long we weren't going to be able to school all
the things. There's just so much that was just unknown
to most people. And I think we learned a lot
over the course of that. But I remember in the
early days, they suggested that one person in your household
should go to the grocery store, right, because I think
the idea was, we don't want people going outside and
(26:50):
mingling with other people. So in our household, my husband
did the grocery shopping, and he kind of became an
expert in grocery shopping because he realized that, well, Wegman's,
which is one grocery store in Nears, get their deliveries
on Tuesday or whatever, and this grocery store has this
policy about toilet paper, and so he would hop around
to grocery stores. And what was interesting is that I
(27:13):
remember one of my neighbors sending me a text message
at eleven PM and she said, I'm at the grocery
store and there's almost nothing in here. That is astounding
in the United States, right, JNS.
Speaker 1 (27:25):
That is the Soviet that is the Soviet Union. That's
what That's what Yeltson found, That's what Krushchev found.
Speaker 2 (27:31):
Yes, every day it was empty, so for it to
be full for them was remarkable. For us, it's the opposite.
Every day it's full, and we see that as unremarkable,
which we shouldn't. And then my neighbor is saying, oh
my gosh, there's nothing here. This is crazy, and it
was crazy, But you know what they did. They found
a way to restock it pretty quickly. Why what is
(27:54):
the difference. The difference is that grocery stores operate on
profit and loss, and they had to find a way
to get as much to fill those grocery stores during
COVID as they could. And without the capitalist system, the
market economy in the United States, we wouldn't have been
able to fill those grocery stores during a pandemic when
everybody was kind of panicking. We didn't know how long
(28:17):
we'd be inside. I remember people were stockpiling dry goods
at the beginning. I mean, we didn't need to do that,
but we didn't know. And so the grocery store was there,
and they found a way to get it restocked every day.
That doesn't happen in Cuba today. That does not happen
in Venezuela's day, and it did not happen during the
eighty years of central planning of the Soviet Union, you know,
and the trust us thing, that was the trope of
(28:39):
the Soviets as well. Just trust us, here's another five
year plan. We'll get it right this time. But you
can't trust something that is impossible that's the lesson here.
Speaker 1 (28:52):
Five year plans and new deals wrapped in golden chains,
the great stages of our time, greeden s, clearwater revival.
It is absolutely true, and we've seen it over and
over again. You mentioned covid You know, that's not too
long ago. People should have a fair understanding of that,
But they forget too soon. I think back in the
(29:12):
nineteen seventies when I was a kid, and the gas
lines that we saw in the United States because we
were dependent on other market forces. We are seeing the
same thing now in this battle in the shutdown. You
have Democrats who are dying on the hill of this
government shutdown, fighting for the expansion of COVID era benefits
(29:38):
that we simply as a debt ridden country, can't pay for.
And this should have been gone a while back. But
you know, that's the thing. We see this in all
kinds of different systems, and over and over again we
see the failure. The issue that I think I'm seeing
more and more. You know, The correlating line here is
(30:00):
that in New York, you know, people get, as you said,
tired of the high prices, whether it be grocery stores
or rent or whatever, and more and more. You have
Americans dependent on the dependency of the central planning of government.
That is something that has really become an issue with
(30:25):
the you know, the social safety Net, which was you know,
is designed to help people back up, not to keep
staying down. But that's what cynical politicians have done over
the last fifty plus years in this country. How how
do we get the message of the importance of everything
(30:47):
you just talked about, the marketplace, supply demand, capitalism at
its core to people who are so dependent on the government.
Speaker 2 (30:58):
I think this is the question, Frankly, and I think
it's an important question for people on the right and
people on the left, because what we've seen is just
exactly what you're talking about. I mean, one of your
examples was the how much the social Safety Net has grown,
and how that's you know, fiscally irresponsible because we can't
pay for it. But I think on the right and
(31:20):
the left, what we've seen, especially over the past you know,
seventy eighty years, is just a desire for big government.
We like to spend on different things, but this is untenable.
I think we're I think we are absolutely imposing debt
on future generations who have not are yet to be born.
(31:43):
So that I think there's a moral crisis that underpins
our spending crisis. And so your question is the question
how do we stop the dependency? The grocery store is
just one example of that. But you know, to your point,
the social safety net is supposed to be theoretically temporary, right,
if you are able bodied and you can work, then
(32:06):
the idea here is that you don't. It's temporary, You
don't stand it forever. How do we find a way
to help you through whatever it is you are dealing with?
Is it divorce, is it homelessness? Is it addiction? Is
it you've lost a job and you can't whatever it is? Right?
And we haven't done that. And I think that there's
(32:27):
really strong political incentives in terms of the social safety
net to not reform it, because, as you mentioned, that's
how you continue to get votes. So if you create
a category of people of voters who are dependent on you,
then the only way to sustain that is to keep
them dependent on you. And so it's a weird, very
(32:50):
perverse incentive, which is maybe the political goal is actually
for people not to be relieved of welfare assistance, but
to stay on it forever, because that's kind of a
guaranteed voting block. That's pretty pernicious, and I think it's
antithetical to a prosperous economy. It's also antithetical to the
human dignity and the human spirit. You know, people don't
(33:13):
want to depend on someone else for their entire lives.
I think it's dehumanizing. And so the problem with all
of this is that our assistance is generic by definition. Right,
The bureaucrats have to decide generic rules for a generic person,
and then they write checks, or they give food stamps
(33:34):
or a variety of things. But people aren't generic. And
I think if you look at the founding of our country,
the social safety net was administered by nonprofit organizations, by churches.
There was such a robust civil society in which the
social safety net was carried out very successfully. The question
(33:56):
is how you know? Kind of invoking Tokville here, right,
this is what he found, in some ways very remarkable
about the United States. And a robust civil society means
we don't go to the government first to solve our problems.
We go to each other. I think we need to
get that back. Unfortunately, I think this is a battle
of ideas before it's a battle of policy. I think
(34:16):
the ideas we have about who we are, what we
should do, and what our government should do for us
come before who we vote for in the voting booth,
and so I think we need to really have a
revolution of ideas that and then I think we can
change our policy. But you know, the big questions are,
how do we get there. I think we can get
there in the classroom. I think we can get there
(34:38):
by doing what we're doing right now, which is having
a genuine conversation about this is a tough problem and
what are ways that we can try to fix it,
and opening that conversation to as many people on the
right and left as possible.
Speaker 1 (34:51):
Well, the states have long been the laboratories of democracy,
and I think what Americans have seen from certain states
over the last couple of decades, in particular, I think
it's been eye opening and it's I think awakened Americans
(35:12):
to the perils of some of these experiments going on
in these labs. California comes to mind. We had a
stand in presidential candidate for the Democrat Party who came
smack dab out of the California idea and ideal, and
Americans rejected that wholesale. So I'm curious if my mom,
(35:39):
Donnie goes on to win and it looks like he's
on the path to do that, and he implements this
grocery store idea, you know, publicly owned, city owned grocery store,
and he you know, and it's not only that he's
looking at, you know, rent controls and trying to you know,
get control over that marketplace in New York and all
(36:01):
of these other things. But if he does what history
portends he will do, that is to fail remarkably, will
that turn the Americans who got all excited about the
new socialism? You think that we'll turn some minds.
Speaker 2 (36:23):
Unfortunately, I don't want New York City to experience that.
But I think, yes, I mean I think sometimes, you know,
I have two kids, so sometimes they have to touch
the hot stove to learn not to do it. Yeah,
And I think that that's what's going on here. I
think the intoxicating lore of free things wins in many
(36:44):
cases at the ballot box. Right free. He's talking about
free buses, free daycare, free groceries, all this type of
free stuff, but somebody always has to pay for it.
You don't have to have a PhD in economics or
finance either to know that. Right somebody to pay if
you want a doctor to be in the hospital to
take care of you, if somebody needs to pay a
salary or her salary, that's just the way it goes.
(37:06):
So the hope is that if this happens to New
York City that they will learn very quickly that this
is not good for the city. It's not good for crime,
it's not good for income mobility, it's not good for
job creation. Moreover, if taxes are raised, I think people
will leave New York City, and that is going to
(37:27):
hurt the city more because they won't have a tax
base to fund these programs into the future. So it's
kind of could turn into be a big short term problem.
And so the hope is that the lesson has learned quickly,
you know. Unfortunately, I think it remains to be seen
what happens.
Speaker 1 (37:47):
Yes, yes it does, and will much will teach us
coming up in the next couple of years. We always
talk about these are crucial times or critical times. This
is a critical election in all of those sorts of things.
And you know, the more you say it, the more.
It sounds wrote and hyperbolic, but these are critical times
(38:07):
at the polls. New Yorkers are experiencing that now and
what they do ultimately today to decide their future. I
think we'll say a lot about not only New York,
but the rest of the country. So with all of
that said, final question for you, where do we go
(38:30):
from here? Knowing that it's not only New York. You know,
we have candidates in Minneapolis that are pushing socialism, we
have candidates in New Jersey pushing socialism. So the obviously
the trend line is here. They're catering to that poll
that we talked about of young people in particular looking
(38:53):
for this so called new direction. It's not new at all.
It's been tried and it's failed. But you know, we
fail to remember where does all of this, mom Donnie
in particular, suggest we are going as a country.
Speaker 2 (39:07):
Well, this is a good question. I think that there
is you know, if it happens and it's even temporarily
successful or doesn't kind of collapse immediately, I think that
there could be more that could be fanning the flames
of this movement. But I think that it won't take long,
(39:28):
and by long, I mean, you know, a couple of years,
eighteen months, something like this to show that this will
have devastating impacts. And I think that will be a
very important wake up call. I think the other thing
is it's fine to love socialism. Maybe when you're young,
maybe it's not fine, but I can understand it, right.
(39:49):
But once you start making a lot of money and
paying taxes, Americans really dislike taxes. And so I think,
you know, kind of the ABC's of this come together
pretty quickly, which is that if I want all this
government stuff, I'm going to have to have a very
high tax burden. And the more successful I am, the
higher that tax burden is going to become. And that
(40:12):
really causes people to kind of put the brakes on
and say, this is not really a great idea. So
I think that there's going to you know, it's the
long run will reveal the truth about socialism, as it
always does. I think in the short run, this is
a time for us to talk about ideas. I think
we need to speak winsomely and generously and graciously to
(40:36):
people who advocate for socialism. And I think it's easy
online and all this type of stuff to kind of
just really be vicious to one another. And I prefer,
you know, let's treat each other as human beings and
assume the best of intentions and then go from there
and figure out, Okay, how can we help low income people,
(40:58):
How can we help people who can't afford college, How
can we help people who can't afford groceries in their
cities and rent? As you said, And then I think
we need a campaign for economic freedom. I think we
need to be unabashed and unashamed that economic freedom is
the way, it's what has always made America great. It
is what is the only hope to continue to make
(41:19):
America great. And I think we need to call out
both sides when they advocate for policies that aren't inherently
antithetical to that economic freedom. And I think when we
do that, we earn a lot of trust to people
who have these real questions.
Speaker 1 (41:36):
I think you said it best at the Fund for
American Studies when you said the battle of ideas is
not over. It is being waged heavily in the United States,
Western Europe, all over the world. Economic freedom is on
the rise globally, but it is in decline in the
United States. That's very concerning, and it's going to record
(42:00):
fire a different mindset than we've had challenging these threats
to this republic, representative democracy, and the systems that we
have cherished and have been so successful for two hundred
fifty years. Thanks to my guest today, Anne Rathbone, Bradley George,
(42:23):
and Sally Mayer, Fellow for Economic Education, Vice president of
Academic Affairs at the Fund for American Studies, you've been
listening to another edition of The Federalist Radio Hour. I'm
Matt Kittle, Senior Elections correspondent at the Federalist. We'll be
back soon with more. Until then, stay lovers of freedom
and anxious for the Fray
And we are back with another edition of the Federalist
Radio Hour. I'm Matt Kittle, Senior Elections correspondent at the
Federalist and your experience Shirpa on today's quest for Knowledge.
As always, you can email the show at radio at
the Federalist dot com, follow us on x at FDR LST,
make sure to subscribe wherever you download your podcast, and
(00:40):
of course to the premium version of our website as well.
Our guest today is Anne Rathbone, Bradley George and Sally Mayer,
Fellow for Economic Education, vice president of Academic Affairs at
the Fund for American Studies and economic professor at the
Institute for World Politics. And thank you so much for
(01:01):
joining us in this edition of the Federalist Radio Hour.
Speaker 2 (01:04):
Matt, thank you for having me.
Speaker 1 (01:06):
Absolutely as we talk, New Yorkers are heading to the
polls and they're going to vote for a few different candidates,
but it seems the front runner, certainly is this Zoran
mom Donnie, the Socialist candidate for New York City mayor,
and he wants the Big Apple to go into the
(01:26):
grocery store business. Mom Donnie's proposed pilot program aims to
open five groceries, one in each borough, funded and operated
by the city, funded by the city and its taxpayers.
Of course, what could possibly go wrong? Man, what could
possibly go wrong?
Speaker 2 (01:48):
Well? Everything is that to doomsday of an answer? No,
not at all.
Speaker 1 (01:54):
You write a great op ed in the Washington Post
and you refer to we have some history here behind us.
The old Soviet Union can tell you all about that,
the failed experiment of state run you know, enterprises.
Speaker 2 (02:13):
Yes, we have a lot of history here, and I
think knowing the history and just really knowing some of
the basic principles of economics is really helpful in terms
of cutting through policy proposals that sound very good on paper.
So in some sense I can very much understand why
(02:37):
he would run on this platform, because there's nothing better
than free things, and politicians who promise free things, you know,
Santa Claus, if you will, that sounds really good to
voters in a city like New York, New York City,
where groceries are very expensive, it's very expensive to live,
it's expensive to commute. So there's real, you know, in
(02:59):
my call them pocketbook anxieties that are f by not
just member you know, as citizens of New York City,
across the country. But I think we have to have
kind of sound reason to understand whether the things that
sound good achieve good and that's where economics comes in. So,
as you mentioned, I mean, this is not a new idea.
(03:20):
The Soviet Union not only you know, ran state grocery stores,
but every kind of store, and so the results of
that were catastrophic in terms of prosperity, in terms of
well being, in terms of just standards of living and
being able to put food on the table every day.
And so I think the problem is maybe you know,
(03:40):
kind of gen Z and younger generations who I think
are the ones that are excited about these ideas, perhaps
they don't, you know, we haven't taught them the historical
lessons of the Soviet Union. What's happening in Venezuela today
is another example. But I also think maybe we haven't
taught them how to apply some very basic principles of
economics to understand that this is a feature and not
(04:02):
a bug. That's what I want people to know is
that it's not like, Okay, well in New York City
is a very prosperous city. It's one of the best
cities in the world. It's kind of an image, iconic
image of American capitalism. And so we're the good guys.
And so if the good guys decide we're going to
run city on grocery stores, then somehow we'll get good outcomes.
And that's just wrong. And so this will fail the
(04:25):
same way that it failed, you know, in the Soviet
Union for eighty years, and the way that it's failing
in Venezuela and Cuba today. It just doesn't work, and
I think we need to know that, so we don't
kind of dish out these these promises that are false.
They're false promises.
Speaker 1 (04:40):
This is a great line from your column again in
the Washington Post. The cruel joke of socialism is that
it always starts with free stuff and ends with no stuff.
Not only is there no free lunch, there is no lunch.
And again I draw back to the examples of Boris
(05:01):
Yeltsin and khrus Chef, one in the late eighties, the
others in the nineteen fifties, both visiting the United States,
both at supermarkets different cities in the United States, and
both marveling that these grocery stores had more products in
(05:24):
there than would be available to the leaders of the
Soviet Union. That's what New Yorkers are rolling the dice
on here, isn't it.
Speaker 2 (05:35):
That's correct, That's right, And I think the way you
put that is just it's such a powerful lesson. I mean,
in particular, drawing on Yeltsin's experience, this really had a
profound impact on him. And you have to think about
Yeltsin was an establishment communist, right like a Marxist foot
(05:56):
soldier in the political class. This is not a person
who it was like toying with capitalism or free markets.
And so coming to the United States and asking to
visit a grocery store. He visited Randall's grocery Store, which
is a chain I believe that still exists today. He
was in Clearwater, Texas. I believe they had just recently
(06:18):
been at the Johnson Space Center. And the word that
you used is so important, Marvel. That is a word
that Fa Hiek Nobel Prize economist and staunch defender of
capitalism against the socialists used to explain what happens in
market economies. And it's the idea that no one is
(06:39):
in charge, there's no grocery stores are that can figure
out how many even varieties of Apple's need to be
in the grocery store on November fourth, twenty twenty five.
Nobody kind of really knows that answer, right, especially not
ahead of time. And so I think that's what really
(07:02):
amazed Yeltsin And here's why I think it should amaze us,
but it doesn't. And it's, you know, we get we
are so wealthy in the United States that it's very
ordinary going to the grocery stores an ordinary experience. You
put it on your to do list, you're happy to
cross it off. I mean, I like grocery shopping, but
not everybody does, right. Some people even outsource this to
(07:24):
instacart or something like this, So it's just so mundane.
But when you don't have access to grocery stores again.
In nineteen eighty nine, yeltsin Is is the member of
the elite political class about to take over the country,
and he says he marvels at what he says, and
he actually says that it makes him both overwhelmed and depressed.
(07:45):
Overwhelmed because he just didn't realize that it was possible
that that amount of abundance could be available to ordinary people,
not political elites, not just wealthy people, but ordinary you know,
Mom's grocery shopping with Boris Sielson on Tuesday, right. This
amazed him and he says that he's depressed because, you know,
(08:10):
this was the quest, this was the promise of socialism.
It's always the promise that the stores will be full,
the shelves will be stopped, and there's no lunch, as
you mentioned, as I mentioned in my article, there's nothing.
People stand in line for hours, they can't get what
they want or what they need. They're forced to barter
on the street. I mean, nobody wants to grocery store
(08:32):
or grocery shop in that manner, but that's always the
predictable result.
Speaker 1 (08:36):
Yeah, well they should have taken into a costco that
would have read, oh yes, flipped his mind absolutely. I'll
tell you what makes me a bit overwhelmed and certainly
depressed is a poll that found sixty two percent of
Americans aged eighteen to twenty nine hold favorable views towards socialism.
(09:00):
And that has to speak to our educational system we in,
certainly in public education, I think we're failing to drive
home those lessons of long breadlines in the Soviet Union
and Soviet controlled countries what central control can do. And
(09:25):
I'm worried about this grand old republic, this grand old
experiment of ours.
Speaker 2 (09:31):
I share those concerns when you look at how far
we have come. Just thinking about again the grocery store
as the example, just what is in your average grocery
store today compared to when Yeltsin visited and then compare
that to nineteen fifty nine when Christ Jeff visited. So
it's just the bounty is just mesmerizing, but again to
(09:56):
us ordinary mundane, boring maybe, And so I think we
take that for granted and we think, Okay, I live
in a very expensive city. I want the politicians to
do something about that. And so socialism sounds like a
great idea. But you know, we're not going to have
the force, We're not going to have the famines, we're
not going to have the authoritarian violence. We won't have that.
(10:18):
We'll have kind of a kinder, gentler socialism, if you will.
And I think that's what you know, eighteen to twenty
nine year olds are, that's what they want. They don't
want a labor camps. They want things that are affordable.
They want to, you know, graduate from college and be
able to afford an apartment and get a job and
buy their groceries. And I think that's all very reasonable,
(10:41):
and I think we all should but I think we
do share those concerns. I think the the trick in
socialism is that again, like I said, it's the false promise,
but the promise to sounds so exciting that you're willing
to make a bet on it. And if you find
someone's charismatic that can, you know, kind of make it
(11:01):
sound like it's all benefit and no cost, then of
course why wouldn't you vote for it? It sounds like, well,
let's just give it a try. And he's only talking
about five grocery stores. As you said in your opening,
you know what could go wrong? Well, I actually think
a lot could go wrong. I think we could disrupt
the local economy. And I think what we have to
keep in mind, and younger generations have to keep in mind,
(11:22):
is that even governments face scarcity, they have budgets, and
so there's a limited amount of money in any city's budget,
and if they're going to direct money at one thing today,
it means there's less money to direct at other things today,
and so there's real opportunity costs in doing this. So
I think, not only do we have to look at
this fails because we're not going to be able to
(11:44):
keep the shelves stocked, We're going to have theft problems,
we're going to have endurance problems. Just how can we
keep it open? And because what's missing is the profit motive,
that's what makes this work in the market economy. And so,
you know, I think we need to keep talking to
younger people in the classroom. I spend a lot of
(12:05):
time in the classroom, and you know, we start when
I teach economics, I start with the human person. What
is our anthropology? Right? We face scarcity, we're limited, we
need each other, we have to find ways to cooperate,
we're self interested all these things. Well, if that's true
of you and me, then it's true of all these
people in an economy. So then we start talking about
the institutions. What kind of institutions do we need that
(12:28):
allow us to cooperate share our human capital in a
way that grows prosperity. Well, markets are a very powerful
way to do that. And so I think we need
to be very winsome in the way that we approach
the topic with younger generations and the way we teach it.
So rather than saying socialis is stupid, why don't you
get that, we should say I too care about you know,
(12:52):
a twenty two year old who just moved to the
city and needs to pay their bills and wants to
get a job, and let's figure out ways to actually
make their dollar go farther, give them some income mobility
so that they don't have these problems in the long run.
I think that's the way to transition it so that
we can open their minds to more market oriented approaches.
Speaker 3 (13:16):
Talking heads are preaching that you're entitled to your social security,
but are you The watch Dout on Wall Street podcast
with Chris Markowski every day Chris helps unpack the connection
between politics and the economy and how it affects your wallet.
Two Supreme Court decisions have said connors can cancel social
Security tomorrow and you can get nothing. You may want
to believe the social security myth, but you're not entitled
(13:37):
to it. Whether it's happening in DC or down on
Wall Street, it's affecting you financially.
Speaker 1 (13:40):
Be informed.
Speaker 3 (13:41):
Check out the watch dot on Wall Street podcast with
Chris Markowski on Apple, Spotify, or wherever you get your podcasts.
Speaker 1 (13:49):
Well, Zron Mandani certainly comes across to me at least
as the guy who steps into the big trouble in
River City, the flimflamb man, you know, trying to sell
something that's been tried and failed multiple times. And you
know you don't have to You don't have to go
to the Soviet Union in nineteen eighty nine or nineteen
(14:10):
fifty six. You can go right here to the United
States of America, where this experiment has been tried and failed.
As you noted in your piece in the Washington Post,
Kansas City's Sun Fresh government backed grocery store, which recently
closed due to high crime and low prob profitability despite
(14:34):
receiving significant public funding. That is an example here on
the ground that we've seen in real time. And shouldn't
that be an alarm for the folks in New York City.
Speaker 2 (14:47):
I would think so, and it should be because I mean,
and this is as you mentioned, this grocery store was
heavily subsidized. It lost something like nine hundred thousand dollars
last year before it closed. So this is again, all
those resources have opportunity costs tied to them. So if
we know that something is going to fail and we
(15:08):
put money into it anyway, then we're basically saying that
we don't want that money, right it's worth the loss,
And of course that's not the case, and so I
think we need to highlight these examples. As I mentioned earlier,
I think part of the problem is if you haven't
lived through it, maybe you know, maybe nobody's read about
the Kansas City example. And I think it's getting more
(15:29):
attention because Mom Donnie is proposing it in New York City,
and of course a lot of people pay attention to
pay attention to what's going on in New York City.
So I just think this idea is generally getting more traction,
and in a way, that's a good thing. This is
an opportunity for us to say this will never work.
It doesn't matter how charismatic the politician is. It doesn't
(15:52):
matter how nice they seem, how well intentioned they seem.
We have to do cost benefit analysis, and we have
to know that without market prices and the profit and
loss signals that only come about in a market economy,
entrepreneurs do not know what to do right. And I
think that that's a lesson that comes out of really
(16:14):
understanding economics. And I think this is kind of what
blew away the Soviet leaders because they were masters in
planning everything. They thought everything could be centrally planned. They
hired a lot of PhD economists. People don't always think
about that, right. These are people who are well versed
and educated in economics, but that doesn't mean that you're
qualified to set the prices of tomatoes. Nobody knows what
(16:37):
those should be because they can't be known prior to
the act of engaging in exchange. And so there's some
nuanced ideas in there. But I think it's possible for
us to use this moment to be a teachable moment
so that we don't keep trying this, because I think
there's going to be more disappointment down the road, and
(16:58):
attached to that disappointment is going to be, you know,
at a cost, a fiscal cost that the city will
have to bear. And so in eighteen months or two years,
when this fails, then what And I think we need
to ask those questions and point this out now so
that hopefully we can avoid it. I know in Chicago
the mayor was also tying with this, and then the
(17:20):
idea was just kind of done away with. And that's
the hope here. I think that's the best outcome we
could get at the moment.
Speaker 1 (17:26):
Yeah, because it certainly looks like mom Donnie is on
his way to become the next mayor of New York.
We talk about opportunity cost the real costs though to
the private sector. You know, Mom Donnie says, and he
has said over and over again, you know, we'll take
out price gouging. This won't impact the mom and pop
(17:48):
stores at all. You know, we won't dominate the market
place and control all the prices. The other mom and
pop stores, the other supermarkets in this they don't have
to worry about this at all. Again, history tells us
something different. What do you think will be the ultimate
impact if you have this city run grocery store taking
(18:11):
out you know, inherent competition, right.
Speaker 2 (18:16):
I think that there's no way around that. I think
if you look at the concerns voiced by Bodega owners originally,
that were real concerns. Which is I mean, think about
your typical small mom and pop type of market in
New York City. It's run by a family, that family
(18:36):
works all the time their kids, work in the storm,
and just countless stories like this, right, So that's that's
what you're going to put out of business. So I
think you can't say I'm for you know, kind of
I'm doing this for low income, middle class groups can't
afford high grocery store when when the active of your
(18:58):
policy proposals will actually put those very people out of business.
And so that that's inevitable because one of two things
will happen. Either these city run grocery stores will open
and they will have kind of something like competitive market prices,
meaning they'll just mimic the prices that we see in
other grocery stores, or they will say, let's offer lower prices. So,
(19:20):
you know, because that's the whole point, right, The whole
point is, and I want to get to the price
gouging comment in a moment, but his whole point, I
think is people can't afford groceries. Grocery prices are out
of control. The way to solve this is to have
a city run grocery store where I'm going to put
experts in charge of the prices and we're going to
give people deals. And the way we're going to do
this is because we own the land, and we're going
to subsidize all this stuff. So he makes it sound
(19:43):
compelling like this seems like a good idea. But if
you lower the prices, if they are not market prices,
but they are undercutting retail prices, then all of the
other people, especially the small mom and pops, they are
not going to be able to withstand that competition. Moreover,
grocery stores in general, and I'm talking about the massive
chains like Stop and Shop which is in the Northeast,
(20:05):
or you know Safe Way, Harris Teeter, all these types
of Walmarts. Walmart is the world's largest grocer. They run
on one to three percent margins.
Speaker 1 (20:15):
Yes, very very thin margins.
Speaker 2 (20:17):
Very thin, I mean. And the way I like to
talk to my students about this is, think about when
you walk into any grocery store, Safeway or something like this.
There's all this prepared food, which is wonderful, it's very convenient, right,
but there's also all this produce and stuff. So you
can imagine the ice cream. If they don't sell all
the ice cream tonight, it's no big deal. It can
sit in the freezer for maybe weeks, I don't know.
(20:38):
But the cupcakes, the sushi rolls, the fresh bagels and doughnuts,
those have such a narrow time window on them that
if you don't sell what you think you're going to sell,
then at the end of the day you might have
to throw it away. That's why the profit margins are very,
very narrow, and it's very competitive. So it's just inconceivable
(21:00):
that a state run grocery store, which means we're not
going to govern what the grocery store does by market prices.
We're going to govern it, govern it by bureaucratic decree.
How will they know, How will they know how to
price them? How will they know how to manage inventories?
They don't have profit and loss systems because we've taken
that out. They won't know, is the answer. And so
(21:22):
I think this will have a ripple effect in terms
of other types of investments by small businesses, destroying small businesses,
which is something that I would think Mom Donnie does
not want to do, and that's going to be a
natural consequence. And if I may, I want to talk
about this price scouching idea because I think, again, this
is very appealing to people. It's it's kind of a belief,
(21:47):
a common belief. Maybe that's a company like Walmart, which
has you know, kind of mask it a huge operation,
over one hundred thousand stores, I believe. I think they
operate in over twenty for countries something like this. It's
a massive operation. You know, they just have all this
extra profit lying around, and so what they do is,
(22:09):
you know that they can just afford to kind of
price gouge. And I think people use the term in
their mind price gouging happens whenever a price goes up.
But this is not what economics would tell us. Just
because a price goes up doesn't mean that the entrepreneur
or the firm is gouging someone. Prices are a reflection of scarcity.
(22:30):
So you might remember, you know, we were talking a
lot about egg prices over the last year, and the
reason that egg prices went up is because we had
a supply shock due to avian flu. So when all
of the chickens die, you're going to have a problem
producing eggs. And the only way to reconcile that in
the market is for the price to go up because
(22:52):
it has to meet demand and we have to slow consumption.
And that's again a very organic process. Nobody was in
charge saying Okay, the price needs to go from this
to this. So I think that will ultimately be the problem.
But again, I think this taps into an emotional sentiment
that people have, which is that big firms always have
monopoly power. Therefore they run around engaging and price gouging
(23:16):
all the time, and we need to stop them. And
one way to selp them perhaps is to have a
city run grocery store. But again, Walmart runs on a
one to three percent profit margin as well, so there's
very little room for error in fact, in the market.
Speaker 1 (23:30):
When all the chickens die. It sounds like an Academy
Award winning movie.
Speaker 2 (23:35):
Yes it does.
Speaker 1 (23:36):
I'll watch for it this holiday season. Our guest today
is Anne Rathbone, Bradley George and Sally Mayer, Fellow for
Economic Education and Vice president of Academic Affairs at the
Fund for American Studies and economic professor at the Institute
for World Politics. We talked today about Zoran Mamdani, the
(23:57):
leading candidate for New York City mayor. He also happens
to be a socialist and avowed one, and he has
made no secret of his socialism plans for New York City.
You know, The bottom line here to me and is
that it's the same over and over again with the socialist,
(24:19):
the communist, the Marxist movement, and the idea is trust us,
Trust us, we know what we're doing. We'll go up
against big capital and will win. Trust us. That's Isn't
that the campaign that you're hearing from? Zorn Mundani?
Speaker 2 (24:39):
I think that's absolutely the campaign, and I don't think
it's new to him. I think that most people American
politicians today who would claim the democratic socialist label, I
think they speak two ordinary people. They address their concerns
in a real way, I think again, as I've said before,
they're often very charismatic in doing so, and they focus
(25:01):
on the trust issue. Don't worry about the math, don't
worry about the logistics, don't worry about the budget. Just
trust me, because I care about you, and voters want
to feel cared about so I kind of, you know,
am sympathetic to how appealing this sounds. But again, that's
why we have to understand history, and we have to
(25:24):
understand economics, and we have to know that every time
socialism is tried, it will fail, and the reason it
will fail is because nobody we can trust them all
day long, but they don't know what to do. They
do not know how to plan an economy and let alone,
you know, not even a grocery store. And that's why
(25:46):
these city owned grocery stores continue to close and to
have all sorts of other problems. Empty shelves, right, they
can't restock in time. I think a way to show
the busness of markets is to ask people to think
about what happened in your grocery stores during COVID. COVID
(26:06):
was a global event, right, it affected everyone. At the
beginning of COVID.
Speaker 4 (26:13):
Everybody remembers this, right, it was you know, the toilet paper,
the toilet paper, but also we thought it was which
is still weird to me, but that's okay, Right, it was,
you know, two weeks to slow the spread, and we
just didn't We didn't know how long.
Speaker 2 (26:29):
We were going to be inside. We didn't know how
long we weren't going to be able to school all
the things. There's just so much that was just unknown
to most people. And I think we learned a lot
over the course of that. But I remember in the
early days, they suggested that one person in your household
should go to the grocery store, right, because I think
the idea was, we don't want people going outside and
(26:50):
mingling with other people. So in our household, my husband
did the grocery shopping, and he kind of became an
expert in grocery shopping because he realized that, well, Wegman's,
which is one grocery store in Nears, get their deliveries
on Tuesday or whatever, and this grocery store has this
policy about toilet paper, and so he would hop around
to grocery stores. And what was interesting is that I
(27:13):
remember one of my neighbors sending me a text message
at eleven PM and she said, I'm at the grocery
store and there's almost nothing in here. That is astounding
in the United States, right, JNS.
Speaker 1 (27:25):
That is the Soviet that is the Soviet Union. That's
what That's what Yeltson found, That's what Krushchev found.
Speaker 2 (27:31):
Yes, every day it was empty, so for it to
be full for them was remarkable. For us, it's the opposite.
Every day it's full, and we see that as unremarkable,
which we shouldn't. And then my neighbor is saying, oh
my gosh, there's nothing here. This is crazy, and it
was crazy, But you know what they did. They found
a way to restock it pretty quickly. Why what is
(27:54):
the difference. The difference is that grocery stores operate on
profit and loss, and they had to find a way
to get as much to fill those grocery stores during
COVID as they could. And without the capitalist system, the
market economy in the United States, we wouldn't have been
able to fill those grocery stores during a pandemic when
everybody was kind of panicking. We didn't know how long
(28:17):
we'd be inside. I remember people were stockpiling dry goods
at the beginning. I mean, we didn't need to do that,
but we didn't know. And so the grocery store was there,
and they found a way to get it restocked every day.
That doesn't happen in Cuba today. That does not happen
in Venezuela's day, and it did not happen during the
eighty years of central planning of the Soviet Union, you know,
and the trust us thing, that was the trope of
(28:39):
the Soviets as well. Just trust us, here's another five
year plan. We'll get it right this time. But you
can't trust something that is impossible that's the lesson here.
Speaker 1 (28:52):
Five year plans and new deals wrapped in golden chains,
the great stages of our time, greeden s, clearwater revival.
It is absolutely true, and we've seen it over and
over again. You mentioned covid You know, that's not too
long ago. People should have a fair understanding of that,
But they forget too soon. I think back in the
(29:12):
nineteen seventies when I was a kid, and the gas
lines that we saw in the United States because we
were dependent on other market forces. We are seeing the
same thing now in this battle in the shutdown. You
have Democrats who are dying on the hill of this
government shutdown, fighting for the expansion of COVID era benefits
(29:38):
that we simply as a debt ridden country, can't pay for.
And this should have been gone a while back. But
you know, that's the thing. We see this in all
kinds of different systems, and over and over again we
see the failure. The issue that I think I'm seeing
more and more. You know, The correlating line here is
(30:00):
that in New York, you know, people get, as you said,
tired of the high prices, whether it be grocery stores
or rent or whatever, and more and more. You have
Americans dependent on the dependency of the central planning of government.
That is something that has really become an issue with
(30:25):
the you know, the social safety Net, which was you know,
is designed to help people back up, not to keep
staying down. But that's what cynical politicians have done over
the last fifty plus years in this country. How how
do we get the message of the importance of everything
(30:47):
you just talked about, the marketplace, supply demand, capitalism at
its core to people who are so dependent on the government.
Speaker 2 (30:58):
I think this is the question, Frankly, and I think
it's an important question for people on the right and
people on the left, because what we've seen is just
exactly what you're talking about. I mean, one of your
examples was the how much the social Safety Net has grown,
and how that's you know, fiscally irresponsible because we can't
pay for it. But I think on the right and
(31:20):
the left, what we've seen, especially over the past you know,
seventy eighty years, is just a desire for big government.
We like to spend on different things, but this is untenable.
I think we're I think we are absolutely imposing debt
on future generations who have not are yet to be born.
(31:43):
So that I think there's a moral crisis that underpins
our spending crisis. And so your question is the question
how do we stop the dependency? The grocery store is
just one example of that. But you know, to your point,
the social safety net is supposed to be theoretically temporary, right,
if you are able bodied and you can work, then
(32:06):
the idea here is that you don't. It's temporary, You
don't stand it forever. How do we find a way
to help you through whatever it is you are dealing with?
Is it divorce, is it homelessness? Is it addiction? Is
it you've lost a job and you can't whatever it is? Right?
And we haven't done that. And I think that there's
(32:27):
really strong political incentives in terms of the social safety
net to not reform it, because, as you mentioned, that's
how you continue to get votes. So if you create
a category of people of voters who are dependent on you,
then the only way to sustain that is to keep
them dependent on you. And so it's a weird, very
(32:50):
perverse incentive, which is maybe the political goal is actually
for people not to be relieved of welfare assistance, but
to stay on it forever, because that's kind of a
guaranteed voting block. That's pretty pernicious, and I think it's
antithetical to a prosperous economy. It's also antithetical to the
human dignity and the human spirit. You know, people don't
(33:13):
want to depend on someone else for their entire lives.
I think it's dehumanizing. And so the problem with all
of this is that our assistance is generic by definition. Right,
The bureaucrats have to decide generic rules for a generic person,
and then they write checks, or they give food stamps
(33:34):
or a variety of things. But people aren't generic. And
I think if you look at the founding of our country,
the social safety net was administered by nonprofit organizations, by churches.
There was such a robust civil society in which the
social safety net was carried out very successfully. The question
(33:56):
is how you know? Kind of invoking Tokville here, right,
this is what he found, in some ways very remarkable
about the United States. And a robust civil society means
we don't go to the government first to solve our problems.
We go to each other. I think we need to
get that back. Unfortunately, I think this is a battle
of ideas before it's a battle of policy. I think
(34:16):
the ideas we have about who we are, what we
should do, and what our government should do for us
come before who we vote for in the voting booth,
and so I think we need to really have a
revolution of ideas that and then I think we can
change our policy. But you know, the big questions are,
how do we get there. I think we can get
there in the classroom. I think we can get there
(34:38):
by doing what we're doing right now, which is having
a genuine conversation about this is a tough problem and
what are ways that we can try to fix it,
and opening that conversation to as many people on the
right and left as possible.
Speaker 1 (34:51):
Well, the states have long been the laboratories of democracy,
and I think what Americans have seen from certain states
over the last couple of decades, in particular, I think
it's been eye opening and it's I think awakened Americans
(35:12):
to the perils of some of these experiments going on
in these labs. California comes to mind. We had a
stand in presidential candidate for the Democrat Party who came
smack dab out of the California idea and ideal, and
Americans rejected that wholesale. So I'm curious if my mom,
(35:39):
Donnie goes on to win and it looks like he's
on the path to do that, and he implements this
grocery store idea, you know, publicly owned, city owned grocery store,
and he you know, and it's not only that he's
looking at, you know, rent controls and trying to you know,
get control over that marketplace in New York and all
(36:01):
of these other things. But if he does what history
portends he will do, that is to fail remarkably, will
that turn the Americans who got all excited about the
new socialism? You think that we'll turn some minds.
Speaker 2 (36:23):
Unfortunately, I don't want New York City to experience that.
But I think, yes, I mean I think sometimes, you know,
I have two kids, so sometimes they have to touch
the hot stove to learn not to do it. Yeah,
And I think that that's what's going on here. I
think the intoxicating lore of free things wins in many
(36:44):
cases at the ballot box. Right free. He's talking about
free buses, free daycare, free groceries, all this type of
free stuff, but somebody always has to pay for it.
You don't have to have a PhD in economics or
finance either to know that. Right somebody to pay if
you want a doctor to be in the hospital to
take care of you, if somebody needs to pay a
salary or her salary, that's just the way it goes.
(37:06):
So the hope is that if this happens to New
York City that they will learn very quickly that this
is not good for the city. It's not good for crime,
it's not good for income mobility, it's not good for
job creation. Moreover, if taxes are raised, I think people
will leave New York City, and that is going to
(37:27):
hurt the city more because they won't have a tax
base to fund these programs into the future. So it's
kind of could turn into be a big short term problem.
And so the hope is that the lesson has learned quickly,
you know. Unfortunately, I think it remains to be seen
what happens.
Speaker 1 (37:47):
Yes, yes it does, and will much will teach us
coming up in the next couple of years. We always
talk about these are crucial times or critical times. This
is a critical election in all of those sorts of things.
And you know, the more you say it, the more.
It sounds wrote and hyperbolic, but these are critical times
(38:07):
at the polls. New Yorkers are experiencing that now and
what they do ultimately today to decide their future. I
think we'll say a lot about not only New York,
but the rest of the country. So with all of
that said, final question for you, where do we go
(38:30):
from here? Knowing that it's not only New York. You know,
we have candidates in Minneapolis that are pushing socialism, we
have candidates in New Jersey pushing socialism. So the obviously
the trend line is here. They're catering to that poll
that we talked about of young people in particular looking
(38:53):
for this so called new direction. It's not new at all.
It's been tried and it's failed. But you know, we
fail to remember where does all of this, mom Donnie
in particular, suggest we are going as a country.
Speaker 2 (39:07):
Well, this is a good question. I think that there
is you know, if it happens and it's even temporarily
successful or doesn't kind of collapse immediately, I think that
there could be more that could be fanning the flames
of this movement. But I think that it won't take long,
(39:28):
and by long, I mean, you know, a couple of years,
eighteen months, something like this to show that this will
have devastating impacts. And I think that will be a
very important wake up call. I think the other thing
is it's fine to love socialism. Maybe when you're young,
maybe it's not fine, but I can understand it, right.
(39:49):
But once you start making a lot of money and
paying taxes, Americans really dislike taxes. And so I think,
you know, kind of the ABC's of this come together
pretty quickly, which is that if I want all this
government stuff, I'm going to have to have a very
high tax burden. And the more successful I am, the
higher that tax burden is going to become. And that
(40:12):
really causes people to kind of put the brakes on
and say, this is not really a great idea. So
I think that there's going to you know, it's the
long run will reveal the truth about socialism, as it
always does. I think in the short run, this is
a time for us to talk about ideas. I think
we need to speak winsomely and generously and graciously to
(40:36):
people who advocate for socialism. And I think it's easy
online and all this type of stuff to kind of
just really be vicious to one another. And I prefer,
you know, let's treat each other as human beings and
assume the best of intentions and then go from there
and figure out, Okay, how can we help low income people,
(40:58):
How can we help people who can't afford college, How
can we help people who can't afford groceries in their
cities and rent? As you said, And then I think
we need a campaign for economic freedom. I think we
need to be unabashed and unashamed that economic freedom is
the way, it's what has always made America great. It
is what is the only hope to continue to make
(41:19):
America great. And I think we need to call out
both sides when they advocate for policies that aren't inherently
antithetical to that economic freedom. And I think when we
do that, we earn a lot of trust to people
who have these real questions.
Speaker 1 (41:36):
I think you said it best at the Fund for
American Studies when you said the battle of ideas is
not over. It is being waged heavily in the United States,
Western Europe, all over the world. Economic freedom is on
the rise globally, but it is in decline in the
United States. That's very concerning, and it's going to record
(42:00):
fire a different mindset than we've had challenging these threats
to this republic, representative democracy, and the systems that we
have cherished and have been so successful for two hundred
fifty years. Thanks to my guest today, Anne Rathbone, Bradley George,
(42:23):
and Sally Mayer, Fellow for Economic Education, Vice president of
Academic Affairs at the Fund for American Studies, you've been
listening to another edition of The Federalist Radio Hour. I'm
Matt Kittle, Senior Elections correspondent at the Federalist. We'll be
back soon with more. Until then, stay lovers of freedom
and anxious for the Fray
Popular Podcasts
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com
Are You A Charlotte?
In 1997, actress Kristin Davis’ life was forever changed when she took on the role of Charlotte York in Sex and the City. As we watched Carrie, Samantha, Miranda and Charlotte navigate relationships in NYC, the show helped push once unacceptable conversation topics out of the shadows and altered the narrative around women and sex. We all saw ourselves in them as they searched for fulfillment in life, sex and friendships. Now, Kristin Davis wants to connect with you, the fans, and share untold stories and all the behind the scenes. Together, with Kristin and special guests, what will begin with Sex and the City will evolve into talks about themes that are still so relevant today. "Are you a Charlotte?" is much more than just rewatching this beloved show, it brings the past and the present together as we talk with heart, humor and of course some optimism.
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.