Tuesday, July 20, 2010

Bloomberg Unfeasible

As Crain's is reporting, the Bloomberg administration is at its old raising fees tricks-this time its the Hunts Point Market, an economic engine for not only the Bronx, but for the entire city as well In addition, the city's other wholesale food markets would also be subject to higher fees: "The city's six wholesale food markets are raising a stink about a little known city commission made up of law enforcement officials who regulate them, claiming that the agency is overstepping its authority. The Business Integrity Commission, formed in 2001 to root out organized crime in the wholesale food markets and the carting industry, held a hearing late last month to discuss new proposed rules, including dramatically higher fees for business registration and employee identification cards."

Now we were in on all of this organized crime overkill when Rudy Giuliani first introduced it in the middle of the last decade-and we successfully debunked the typical Rudy over reach so that the scope of market oversight was more limited. It is all, in our view, not only a colossal waste of time, it is an unnecessary burden on the businesses-as well as on the retailers that rely on the market for their meat and produce: "The food merchants, however, say BIC is hurting their businesses by cracking down on small infractions and being overzealous. “BIC has a detrimental affect on us,” says Matthew D'Arrigo, co-owner of D'Arrigo Brothers Co. of New York, one of the produce vendors at the Hunts Point Food Distribution Center in the Bronx."

Just another example of how the Bloombergistas have expanded the regulatory regime at the expense of small business-as Kyle Smith documents so well in Sunday's NY Post (a redux of Steve Malanga's more comprehensive evaluation in the City Journal). This is the "fiscal conservative: that Reuters saw as being a legitimate independent candidate for president? As we have said ad nauseum, Mike only carries water for his Wall Street buddies when it comes to taxes and regulations-everyone else needs to pony up in Bloomberg's world.

That this is all being done in the current economic downturn is a further indication of how tone deaf the mayor is to  any concerns from the little guys: ":There is no disputing the fee increases. By September, merchants could be paying $4,000 to renew their licenses to operate in the markets—which they are required to do every two or three years—up from $250. Alan Buxbaum, owner of A. Stein Meat Products in the Brooklyn Wholesale Meat Market at Sunset Park, said the fee increases are coming at a time when the company's already slim profit margins are squeezed by the weak economy. “It's another financial burden,” he said."

But the demands of the Bloomberg administrative state supersede all other concerns-as the clueless and callous commissioner underscores: "The fee increases, however, do not even cover the full cost of BIC's investigations, said Mr. Mansfield. “Our core mission is to keep organized crime out of these businesses, so that they have a safe environment,” he said. The commissioner believes the businesses can absorb the extra costs. The average net sales of a merchant at the Hunts Point Meat market, he said, are $52 million a year. “The fees have gone up and the change appears significant, but the rules did not change,” said Mr. Mansfield, a former Executive Assistant District Attorney for Operations at the Queens District Attorney's Office. “This is no more significant than changing a sign on a business when there is a change of hands.”

Mansfield should feel right at home with this mayor who, when questioned about how the cigarette tax was costing bodegas over $250 million a year in lost sales, responded that it was, "a minor economic issue." For Mansfield it is as if he was cloned-and his comments are reminiscent of the old Vietnam observation that, "we had to destroy the village in order to save it."

But what the city is doing-as it always has done under this mayor-is to raise the cost of doing business; an expense that will be passed on down the food distribution chain to, ultimately, be borne by the citizens who shop at the local supermarkets and eat out in the city's restaurants. Just another example of fiscal conservatism in operation.