Skip to comments.Obamanomics And The Jewish Deli Dilemma
Posted on 02/24/2013 4:01:18 AM PST by Kaslin
Did you hear the big news from the world of small business? Jewish delis are closing in both Los Angeles, and New York City.
The trend has been a long time in the making, especially in New York City where Jewish deliss used to number in the thousands and now total less than one hundred. Yet the Los Angeles Times reported this news just this past week, and the details that the report included and the details that were ignored point to some far greater problems.
The article, written by Journalist Tiffany Hsu, notes that the decline of the L.A. area Jewish delis seems to be accelerating partly because of health concerns over the schmaltz-spread fare... This may very well be the case certainly American adults are inclined to being more health conscious with their dietary choices, rather than less, and food categories of all types that are perceived to be un-healthy are probably headed for a declined in consumption.
From there, the article suggests that skyrocketing food costs have driven some delis out of business. That may be true, too, but what has caused that to happen? The article suggests that mass exports of food to Japan is the culprit on the price spike. The story also blames the decline of LA-area Jewish delis on the recession, too much competition from other restaurant sectors, and the notion that younger consumers dont understand delis and comfort food.
It was only one small news story in the LA Times. But lets think through some of the ideas in this news story ideas reported as facts and consider what they mean from an economic standpoint. Consider, for example, the notion of too much competition. What exactly does this mean?
Obviously the more competitive a marketplace is, the more difficult it is for any particular business entity to survive and thrive. But how do we know when the level of competition is appropriate, and when it is too much?
Americans are accustomed to fierce competition in other arenas in sports, especially, and even in the arts and entertainment. Similarly, most of us would never say my favorite team didnt make it to the Super Bowl this year because there was too much competition in the NFL.
But when it comes to local small businesses, we often succumb to this vague, un-defined notion that there is this magical amount of competition thats just right, and if our favorite business cant compete, then therefore there is too much competition.
Yet in our free market economic system, we understand that competition is a good thing. If competition means that certain business entities or entire business categories decline because of the competition, then so be it. It is fairer and more just to allow businesses to rise and fall according to the market demands of consumers, rather than imposing artificial limits on the number of people who are to be permitted to participate in an industry.
But what are we to make of this idea that the delis failure is because consumers dont understand? If a consumer chooses to not understand any particular business, and therefore chooses not to patronize it, then that consumer has made their choice havent they? Were all better-off if, win or lose, we honor and respect the choices of consumers, rather than presuming that they are ignorant if they make a choice that we dont like.
And guess what the LA Times article about the delis completely ignored? The impact of government policy on small businesses. Nowhere did it reference the expansive and onerous mandates placed upon business via Obamacare, the impact on business owners of the Presidents payroll tax hike, or his income tax increases on rich people.
No, the LA Times apparently wasnt interested in how the Presidents income tax hikes have taken money away from what the I.R.S. designates as Subchapter S Corporations (sometimes abbreviated as S-corps), and how this has effectively taken money directly out of small corporations, many of which operate small businesses. Likewise, the article made no reference to the fact California voters approved an increase in state income tax rates for rich people (thus leading to even less revenue in Subchapter-S Corporations) on their ballot last November, nor did it acknowledge that California has for years been on a trajectory of higher and higher unemployment insurance and workers compensation mandates for businesses.
It is perhaps more comfortable to pretend that our current government policies are not problematic, and blame the struggling economy on too much competition and consumers who dont understand.
But how many more delis must fail, before we get honest and acknowledge that government is our problem?
So many 'youngers' simply do not understand nutrition. Raised by parents who fed them the convenience of fast, processed foods or dinner from a box, and by mis-guided FDA guidelines that fat in food is bad, they have simply not developed an appreciation for the real pleasure of real foods.
So they eat sugar, carbs, GM corn and trans-fats. PopTarts for breakfast, McDs for lunch and a nice box of Mac and Cheese for dinner. No wonder we have obesity and diabetes at record levels.
Kind of an idiotic article.
Government policies aren’t driving Jewish delis out of business, since such policies don’t have any specific aspects that target this category of restaurant vs. others.
IOW, if consumers are spending about as much money total at restaurants as last year, which is presumably true, then declining business at Jewish delis is the result of changing consumer preferences, not government policies, too much competition, or anything else.
I get very tired of these claims that taxation, etc. burdens small business and drives them out of business. Businesses primarily collect taxes, not pay them.
When a cost, such as a tax or regulation, goes up, a business raises prices to recoup the additional cost and maintain profit margins. Unless consumers refuse to pay the additional cost, or more often because competitive businesses are not subject to that cost for one reason or another, the business is unaffected.
Assume a state that had previously not had sales tax on groceries and puts it in. Suddenly the grocery’s cost goes up by 7%. Does it somehow absorb that cost or pay it out of profits? Of course not, it just goes onto the bill to the customer.
Unless people stop eating as much, which would be good for most of them, the grocery’s business and profits are unaffected. There are some marginal impacts, mostly to groceries near the state line, who will lose some business to stores across the border who still don’t charge sales tax. But they’re minor.
I’m still brooding about the lose of coffee shops in NYC - the kind that used to put up with Jackie Mason for hours on end. The Polish Tearoom seems to be the last of them...
Well looks like a lot of the 18 -24 Jewish youths that voted for Obama have put their dads out of business.../s
Jewish delis are closing in both Los Angeles, and New York City.
“...younger consumers dont understand delis and comfort food.
I don’t see how my generation (66+) have lived so long on TASTY FOOD and actually enjoyed the trip and survived.
Sometimes I wake up at night (slobbering all over myself) and remember the dream I just had about eating a delicious Ruben sandwich at a Jewish deli. I’m not talking about a “chain” or large deli but about a small Ma & Pop deli.
Too bad we don’t have anything like that here in South Texas. I guess I’ll have to go up north again to experience the atmosphere while attacking the delicacy up there.
More people a getting interested in the local food option theese days which is a very good thing. It generally cost more but it is upfront pricing in that it isn't highly subsidized like corn an soy beans and it costs less from a health care standpoint because of its better nutritional value.
Controlling food is essential to controlling the people. And I believe that's what 's going on. It is the Gulag principle. We have the 2nd ammendment, but if we're too weak to pull the trigger, what use is it?
Actually the food prices and everything else are going up in the stores because of the high gas prices. We need to get rid of Ethanol or at least the one made from corn
I am curious why you think our choices are being restricted as to what we eat.
You can still eat a 1950s diet if you choose. What used to be called staples are still available at the store, though you have to look for them since their shelf space is WAY down. Just take the staples home and cook them up.
We have, as a people, chosen to go for fast, convenient options over inexpensive and healthy ones. That’s not a government plot to control us, it’s just our own poor choices. As a group, not individuals.
Food is often less expensive than ever before in history. You can buy 50 pounds of rice for <$20. You can easily eat for a month on 50 pounds of rice. Not particularly enjoyably, but it provides plenty of calories.
BTW, in the grocery yesterday I saw frozen peanut butter and jelly sandwiches. LOL
...guess what the LA Times article about the delis completely ignored? The impact of government policy on small businesses. Nowhere did it reference the expansive and onerous mandates placed upon business via Obamacare, the impact on business owners of the President's payroll tax hike, or his income tax increases on rich people. No, the LA Times apparently wasnt interested in how the President's income tax hikes have taken money away from what the I.R.S. designates as Subchapter S Corporations (sometimes abbreviated as S-corps), and how this has effectively taken money directly out of small corporations, many of which operate small businesses. Likewise, the article made no reference to the fact California voters approved an increase in state income tax rates for rich people (thus leading to even less revenue in Subchapter-S Corporations) on their ballot last November, nor did it acknowledge that California has for years been on a trajectory of higher and higher unemployment insurance and workers' compensation mandates for businesses.
After living in NY and NYC and in Europe and then in the South and beyond, my observation is that Americans do nopt care at all about good food.
In laws willl aften say, hey you New Yorkers, whenever you get together all you talk about is food.
True. And the obesity I find around those who eat just to eat and don’t know anything about good food, just quantity and fat an sugar, are the obese people, generally speaking, of course.
The fact that delis don’t exist in the South and beyond, says everything I need to know about appreciation for food.
I know a guy, gone now, who was a deli owner, whose son attended an Ivy league school and went on to become an amazing succes, as well.
Took care of his parents in their later years, as they took care of him in his younger years.
If delis go out of business, it’ll tell me more about confusion of family priorities and expectations of young people and vocational choices.
But delis are a staple of and a corner stone of soem micro cultures in this country.
German, Jewish, and Italian - see “Moonstruck”.
Like Buck says to Mularkey, in Band of Brothers, as he’s trying to create a stew, “what do you know about cooking? You’re Irish.”
Maybe not much, but we know about goood food and where to get it.
It is a thing often spoken about around here.
That is pathetic!
The acceptance of the premise that families can be raised and communities can thrive without mom being aroind (home) as a rule and not an exception, is the problem there.
Why buy from a deli when you can get it at Walmart or Ingles?
Last month, the Senate Budget Committee reports that in fiscal year 2011, between food stamps, housing support, child care, Medicaid and other benefits, the average U.S. household below the poverty line received $168.00 a day in government support. Whats the problem with that much support? Well, the median household income in America is just over $50,000, which averages out to $137.13 a day. To put it another way, being on welfare now pays the equivalent of $30.00 an hour for a 40-hour week, while the average job pays $25.00 an hour.
The last time I looked up the number, the farmgate price of the raw commodities amounted to fourteen cents on the dollar on the typical American's grocery bill. AND Americans are paying less than seven percent of disposable income on food prepared at home. About 40 percent of our food dollars are spent eating out, but the combined total is still less than ten percent of disposable income, the lowest figure in the world. These percentages have been trending downwards for years, except for the proportion of food eaten away from home, which has risen over time. Again, convenience, and food as a service.
Food is an incredible bargain.
The biggest cost driver in your grocery bill is labor. I have no problem with this; grocery stores are labor intensive, but they give me 24/7 access to an astonishing global food chain, and I am happy to pay for this. Plus, I have many alternatives if I want to eat cheaper, so the market functions. The second biggest cost factor in food is energy. Team Obama hasn't yet demanded that farmers run combines with windmills, but at the rate we're going, that'll come in the next four years.
If Americans DID care about good food, franchises like Old Country Buffet would never exist. I shudder when I think about the food at those places.