A Tale of Two Carts

The NY Post discovers another example of how the vaunted Bloomberg managerial expertise is, well. more myth than reality. This time it's the fact that permits for food carts are being auctioned off for big bucks: "The hot dog you just bought from a food cart may have been sold by a dead man. The city is investigating a racket where scammers pretend to be vendors who have died or left the country. The crooks pay $200 renewal fees for the lucrative permits -- which should have been returned to the city -- in the name of the vendors. And then they either operate the carts themselves or lease the permits for thousands of dollars."

Now we were under the impression that food carts were subject to strict regulation-courtesy of the mob crackdown during the Giuliani era. Now, under the uber-manager Bloomberg, however, corruption runs freely; undeterred by any oversight: "The hot dog you just bought from a food cart may have been sold by a dead man. The city is investigating a racket where scammers pretend to be vendors who have died or left the country. The crooks pay $200 renewal fees for the lucrative permits -- which should have been returned to the city -- in the name of the vendors. And then they either operate the carts themselves or lease the permits for thousands of dollars."

And make no mistake, this scam means big bucks: "In Long Island City, Queens, a man who gave his name as Mario and described himself as a broker was selling a brand-new food cart -- with attached permit -- for $26,000, "cash only." The permit, Mario said, could be renewed every two years for $10,000. But the papers would remain under the name of the original holder, whom he declined to identify. At a West Side garage, a four-year-old gyro cart with a permit was going for $46,000. A "broker," who declined to give his name, said: "Everything is in cash. Paid in full." His fee to renew the permit was also $10,000."

What this all underscores-aside from managerial cluelessness-is that when a genuine supply and demand equation exists, there is real competition for getting a cart permit-unlike the silly situation where the city is trying to promote green carts in poor neighborhoods. What's the clamor in that case? Well, the city is struggling to find enough veggie vendors to fill the 1,000 permit quota that the city council had set when it passed the misguided enabling legislation.

Where actual demand for a product exists, retailers move in quickly to fill the void. The central planners always feel that they can accomplish the allocation of goods better than the market. And they are always wrong.