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The left doesn’t understand economics.

Looks like a NYC hallmark business has closed it’s doors:

The famous Stage Deli in Manhattan has closed. Visitors on Friday were greeted with a hand-written sign on the door that said “Thanks for 75 years!” The deli, on Seventh Avenue near 54th Street, got its start 75 years ago. It was known for overstuffed sandwiches named for celebrities. It was popular with Broadway audiences. Co-owner Paul Zolenge says the dining landmark had been struggling for some time. He told The New York Times that yet another rent increase was expected when the lease ended in a few months.

That last is my emphasis. The rent increase comes as a direct result of raising fed and local taxes, and it comes in an economy that has been in the tank for 4 years, and looks to be staying there for at least another 4 more years. Check out the comments and see how the libs all think the problem here was that this guy had to pay rent in the first place, or did not know how to run a business, despite the fact that this business was around for 75 years, and blame the business’ fail on the evils of capitalism. Genius!

Maybe someone can petition the WH to bail them out like the did GM and are thinking of doing to Hostess.

21 comments

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  1. richtaylor365 says:

    The rent increase comes as a direct result of raising fed and local taxes

    Maybe, or it could be that the owner of the property is doing what all property owners do, weigh current rents with what he thinks the property is worth.

    If we are gong to extol the virtues of capitalism (and deride the president for his abandonment of those virtues) then we have to admit that in the capitalist arena there will be winners and losers.

    In your post the owner admitted that his business has been struggling (as many others) for some time, is his business too big to fail and do we now want the government to come to the rescue and interfere with the business arrangements between the owner of the property and the tenant?

    Yes, it is sad when established businesses like this go under, and maybe he can come to some arrangement with the property owner wrt the rent. But if he is not fit enough to remain in business (and capitalism is all about the survival of the fittest), then he like so many others in the past, will go under.

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  2. AlexInCT says:

    Maybe, or it could be that the owner of the property is doing what all property owners do, weigh current rents with what he thinks the property is worth.

    I certainly considered that opion Rich, but the fact remains that the economy is depressed and there are not that many new businesses starting up these days. I can not say for certian that the property owner doesn’t have a deal to get some government office in there – they seem to be the only ones able to pay high rents without a problem – and thus decided a high rent is justifyable, but odds are against it. The coming Fed, stat of NY, and NYC tax increases however, are well documented facts. I am willing to bet there are quite a few other businesses in NY with the same problem as this one. Some will cut their losses rather than take the risk.

    If we are gong to extol the virtues of capitalism (and deride the president for his abandonment of those virtues) then we have to admit that in the capitalist arena there will be winners and losers.

    Just as long as we also point out that the practice of government jacking up costs through regulations, taxation, and other vehicles, practically always to load the game in favor of whom they feel should win and who should lose, while also looking out for its own growth, are inimical to capitalism. The problem here is one of government causing the loss, not capitalism.

    If this business closed its doors because of mismanagement or competition, I would not have bothered. But this business is closing because it can not afford to stay in business in todays depressed, and soon to get worse, economic climate, despite 75 years of success, ad it has not got much competition to worry about.

    No, the problem was one where a low margin business simply had the costs government forced on it exceed what it could justifyably make. And this owner is smart enough to know to cut his losses while he still has a shirt on his back.

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  3. TxAg94 says:

    Despite the deli struggling, how much of the “value” of the property was actually tied to the value of the business? A lot of times in these cases the person who owns the building space thinks it is his space that has value. In truth, unless this deli is surrounded by several other businesses that attract business from more than just locals, it was the deli that provided the value all along. You have seen this in malls a lot where they raise rents and drive away businesses. That results in empty spaces that attract no one and eventually drive away all tenants. It’s someone in the space selling something people want that is valuable, not the space itself most times.

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  4. insite says:

    politics aside, this is a travesty. the stage deli had, by a mile, the best cheesecake i have ever eaten in my life. my wife, on my better birthdays, would have one flown in from NYC. i am at a loss for words.

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  5. richtaylor365 says:

    Insite, I don’t know where you live but this place reminds me of Canters, an old Jewish deli that has been around longer then Stage. Not only food to die for, but I could live to be a hundred and I would still never forget the 3am meals at Canters after a night of partying, the celebs (musicians, actors, media types) that I ran into there, the stories I could tell, good times.

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  6. Kimpost says:

    CBGB’s also closed because of the rent. Could be just a case of old business models not being able to cope with (new) market based rents.

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  7. AlexInCT says:

    CBGB’s also closed because of the rent. Could be just a case of old business models not being able to cope with (new) market based rents.

    That is exactly what it is Kimpost. But the big factor the left wants to ignore is that the “market based rent” is going up, and doing so considerably, because of tax policies at the federal, state, and city level, and then during a massive period of economic uncertainty the LSM refuses to call the recession it is.

    Tax hikes don’t only impact the rental company, just like increased taxes doesn’t impact corporations: it gets passed down to the consumer through the chain, untill it lands with the consumer. If any point in that chain breaks the whole thing breaks, and everyone loses.

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  8. stogy says:

    The rent increase comes as a direct result of raising fed and local taxes

    Alex, the NYT article on this story cites a poor business environment, a rubbish season on broadway and the tripling of retail rents in the neighborhood. But you have decided it’s the taxes. No-one mentioned taxes but you. So did taxes also triple, you have any evidence for this, or are you just pulling this out of your rear end like usual?

    I guess this means that since we parted ways a year or more ago you still haven’t managed to overcome your sad case of Bush Obama Derangement Syndrome, I see. Pity. It’s wearing thin – your impressive ability to make the same point over and over again in post after post notwithstanding.

    And while we are on the topic of derangement, your Dan Pipes rewriting in the Palestine Question was truly spectacular, btw. Beyond all of your previous efforts!

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  9. AlexInCT says:

    Alex, the NYT article on this story cites a poor business environment, a rubbish season on broadway and the tripling of retail rents in the neighborhood.

    Like the DNC propagandists at the NYT would admit the problem is with the taxation, when it would hurt their narrative. Besides, it looks like you are agains experiencing from reading comprehension issues. Note that I pointed out that the tax hikes came on top of a terrible economic situation. Here let me help you out again:

    From my piece: and it comes in an economy that has been in the tank for 4 years, and looks to be staying there for at least another 4 more years.

    The fact the the NYT chose not to ignore the tax issues, speaks more about the intentions of the NYT than of mine, BTW. Only idiots think there are no consequences to higher taxes, and those idiots to a fault are leftists.

    But you have decided it’s the taxes. No-one mentioned taxes but you. So did taxes also triple, you have any evidence for this, or are you just pulling this out of your rear end like usual?

    Actually, I am not alone in that. Read the comments. Many by people that know what is coming and are impacted by it. The fact that leftists like you would like to pretend higer taxes have no consequences and are looking for other things to blame this place closing its doors on, are not going to change reality: higher taxes mean higher business costs.

    I guess this means that since we parted ways a year or more ago you still haven’t managed to overcome your sad case of Bush Obama Derangement Syndrome, I see.

    Weak. Even for you. At least you have not called me a racist yet for pointing out that tax increases nanny staters like you love are bad for businesses. BTW, I have another post up showing how small business owners are seeing a bleak future, and that this decline in confidence is tied directly to whom won the election. Maybe you can post there that I am making that up because of ODS too. Everyone knows the economy is doing great. The NYT says so! :)

    It’s wearing thin – your impressive ability to make the same point over and over again in post after post notwithstanding.

    Not suprised that you still want to pretend up is down and down is up, Stogy. Your leftist faith is strong.

    And while we are on the topic of derangement, your Dan Pipes rewriting in the Palestine Question was truly spectacular, btw. Beyond all of your previous efforts!

    What do you mean? Me pointing out that what Pipes is saying isn’t what you want to pretend it is? You are the moron that tried to make the ludicrous statement Israel was never a Jewish state until 5 years ago when the evil Jews did that for some nefarious reason. I showed you the country was formed as a Jewish state in ’48 and that the only people that had a problem knowing that where Jew hating conspiracists like you.

    You then responded and linked some selective Pipe’s quotes about Olmert finally drawing a line in the sand about Israel never abandoning the concept that it was a Jewish state, and tried to pretend that was the first time Israel asserted it was a Jewish state. You are welcome to pretend I am the one pulling shit out of their ass, but methinks the only people that will agree with you are those that share your aversion to the existence of the Jewish state and thus like these stupid lies because it gives them a reason to pretend the problem is Israel.

    Try again.

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  10. CM says:

    BTW, I have another post up showing how small business owners are seeing a bleak future, and that this decline in confidence is tied directly to whom won the election.

    Except it doesn’t. At all.
    In both cases you just inserted your own ‘facts’ so you could reach a conclusion you’d already decided on.

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  11. stogy says:

    The fact that leftists like you would like to pretend higer taxes have no consequences and are looking for other things to blame this place closing its doors on, are not going to change reality: higher taxes mean higher business costs.

    Where’s your evidence for this? I continually read this claim that lower taxes always equal a better business environment. But I am going to call you on it. Put up your evidence.

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  12. stogy says:

    You are the moron that tried to make the ludicrous statement Israel was never a Jewish state until 5 years ago when the evil Jews did that for some nefarious reason.

    Alex, I said the demand for recognition of Israel as a Jewish state is a recent development. I said it over and over again. I don’t think Jews are evil. Pipes said “Starting about 2007, a new focus has emerged, of winning acceptance of Israel as a sovereign Jewish state”. That says what I said it said.

    You then said:

    I showed you the country was formed as a Jewish state in ’48

    You did, and I agreed with you. But that wasn’t my claim.

    and that the only people that had a problem knowing that where Jew hating conspiracists like you.

    Take a pill, will you?

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  13. grady says:

    Where’s your evidence for this? I continually read this claim that lower taxes always equal a better business environment

    You can’t seriously be asking this. Lower taxes will help any business due to lower costs. It is just that simple. Lower rent, utility costs or lower material costs will all make it easier for a business to survive. You need some sort of evidence beyond basic math?

    I don’t know if higher taxes is what is making the deli go under, but higher taxes cannot help. In this respect Alex is right. Higher levels of taxes will hurt a business and it’s opportunities. If the owner of the property knows he can get 20% higher rent from a retail tennant, then great, he has that right to increase the lease rate at the end of the deli’s lease period. If it’s higher rent, higher cost of cheese and higher taxes, then maybe the deli just can’t operate in that town/area/state.

    If this space is immediately rented to another who has a good run of business in that location, then we know the rent and taxes are not too expensive. Maybe just too expensive for a deli.

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  14. stogy says:

    You can’t seriously be asking this. Lower taxes will help any business due to lower costs.

    You might be right. I know it sounds like a stupid question, and that the answer should be self-evident, but I am actually serious. I am asking the question because it is an often repeated claim that almost never gets examined.

    Why not? The main economic argument for tax cuts is simple enough. In the short term, they put money in people’s pockets. Longer term, people will presumably work harder if they keep more of the next dollar they earn. They will work more hours or expand their small business. This argument dominates the political debate.

    But tax cuts have other effects that receive less attention — and that can slow economic growth. Somebody who cares about hitting a specific income target, like $1 million, might work less hard after receiving a tax cut. And all else equal, tax cuts increase the deficit, as Mr. Bush’s did, which creates other economic problems.

    When the top marginal rate was 70 percent or higher, as it was from 1940 to 1980, tax cuts really could make a big difference, notes Donald Marron, director of the highly regarded Tax Policy Center and another former Bush administration official. When the top rate is 35 percent, as it is today, a tax cut packs much less economic punch.

    “At the level of taxes we’ve been at the last couple decades and the magnitude of the changes we’ve had, it’s hard to make the argument that tax rates have a big effect on economic growth,” Mr. Marron said. Similarly, a new report from the nonpartisan Congressional Research Service found that, over the past 65 years, changes in the top tax rate “do not appear correlated with economic growth.

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  15. AlexInCT says:

    I am asking the question because it is an often repeated claim that almost never gets examined.

    I call bullshit on this fella. Like you he won’t see the facts for what they, are even if he were to be beaten to a pulp with a clue bat. It’s ideological.

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  16. CM says:

    Good luck stogy. You can’t expect to get anywhere with citing “the nonpartisan Congressional Research Service”, as they are funded by tax dollars. Which means apparently they’ll distort their findings in favour of larger government. Apparantly just saying “bullshit” and continuing to make claims that aren’t in evidence wins the argument. Pretty cool set up huh.

    Anywa, as grady points out – the proof will be in the pudding. If another business moves in, they’re presumably ok to pay the rent and the higher taxes.

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  17. stogy says:

    Thanks CM. I wasn’t aware of who they were.

    Anywa, as grady points out – the proof will be in the pudding. If another business moves in, they’re presumably ok to pay the rent and the higher taxes.

    It’s a good point.

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  18. CM says:

    The CBO are the ones the right agree are non-partisan (the GOP takes their economic information from them too) so long as they tell them what they want to hear. Otherwise it can be dismissed as politically-motivated bias.

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  19. AlexInCT says:

    The CBO are the ones the right agree are non-partisan (the GOP takes their economic information from them too) so long as they tell them what they want to hear.

    Maybe republicans do. Me, based on the CBO’s track record and accuracy in previous verifiable forecasts, mind you, think they are just as accurate as any bum off the street would be making future predictions. I take all their numbers that are future projections with a heavy dose of skepticism, and that’s because it is warranted.

    CM is just bitter because he thought he had cleverly used some future CBO projections to pretend the trillion dollar plus annual deficits I pointed out would keep happening for the foreseeable future were incorrect because of some CBO projections that say otherwise, only to have me demolish his idiotic attempt to pretend these tax and spenders were going to cut that deficit spending in any meaningful way, with the CBO’s own horribly faulty projections from previous years, to boot.

    The 2009 CBO future projections were so far off what reality ended up being as to be laughable. And the projections were wrong for purely political and partisan reasons. There was zero reason to think the new projections, which did more of the same magic deficit reductions in the near future – by assuming such ludicrous things as 4.5% economic growth, massive new revenue streams that don’t exist and are often based on triple counting numbers, and even cuts we all know won’t happen based on Team Blue’s own current stance, while at the same time ignoring the cost of the massive entitlement growth and the additional costs from Obamacare – were anything but wrong.

    The discrepancy was so absurd that nobody that pretended the CBO projections should this time be taken seriously would themselves be taken seriously. So now he is whining like a little bitch because there was no defense to make against the fact that this new taxation won’t come close to addressing the spending problem we currently and for the foreseeable future have over the next decade, go away.

    Quote the CBO all you want but quote them on numbers that aren’t projections. If you quote projections, especially when it comes to deficit spending reduction or the costs of Obamacare, be prepare to be laughed at.

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  20. CM says:

    Maybe republicans do. Me, based on the CBO’s track record and accuracy in previous verifiable forecasts, mind you, think they are just as accurate as any bum off the street would be making future predictions.

    So who has done better and where is that analysis? The CBO are required to provide forecasts. If you’ve pinpointed exactly where they went wrong, you should let us and them know, so they can do better. You seem to think you know. So why not share it?

    CM is just bitter because he thought he had cleverly used some future CBO projections to pretend the trillion dollar plus annual deficits I pointed out would keep happening for the foreseeable future were incorrect because of some CBO projections that say otherwise, only to have me demolish his idiotic attempt to pretend these tax and spenders were going to cut that deficit spending in any meaningful way, with the CBO’s own horribly faulty projections from previous years, to boot.

    You did no such thing. I simply corrected your belief and insistence that the US is projected to continue to have that level of deficit. You may not believe it, but that’s hardly relevant. The CBO has the analysis and sets out the underlying assumptions, whereas you just have writing “bullshit” on the internet. Whenever you’re asked to support your “bullshit” you simply launch into personal tirades, making shit up and spewing accusations of Marxism and rape everywhere like an unhinged person.

    The 2009 CBO future projections were so far off what reality ended up being as to be laughable.

    No doubt, because the depth of the recession wasn’t even remotely known. By anyone. Nobody has a crystal ball. You can only do the best you can do with what you’ve got. Again, which analysis was better? Where is it? If it was so obvious, there must have been multiple alternative analyses at the time which was shown to be far more accurate after-the-fact? Where are they Alex?

    And the projections were wrong for purely political and partisan reasons.

    Here we go. What did I tell you stogy – EVERYTHING can be explained by political bias. And it’s apparently enough to just make the claim, no need to back it up.

    There was zero reason to think the new projections, which did more of the same magic deficit reductions in the near future – by assuming such ludicrous things as 4.5% economic growth,

    Clearly there was fairly good reason, which is why the CBO forecast it.

    massive new revenue streams that don’t exist

    It follows that if you’re picking growth, you’re factoring in higher tax revenue.

    and are often based on triple counting numbers,

    Where did the CBO triple-counted numbers? Come on, provide the specifics.

    The discrepancy was so absurd that nobody that pretended the CBO projections should this time be taken seriously would themselves be taken seriously.

    The CBO are taken seriously, other than by people at the fringes. That’s why they’re considered to be non-partisan. That you don’t take them seriously is of no relevance. But again, if the “discrepancy was so absurd” then where is the better analysis?

    So now he is whining like a little bitch because there was no defense to make against the fact that this new taxation won’t come close to addressing the spending problem we currently and for the foreseeable future have over the next decade, go away.

    There’s that tactic of making shit up again.

    Quote the CBO all you want but quote them on numbers that aren’t projections. If you quote projections, especially when it comes to deficit spending reduction or the costs of Obamacare, be prepare to be laughed at.

    We should prefer your own projections, based on your objective non-policial analysis?
    Yeah I don’t think so.

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  21. stogy says:

    Here we go. What did I tell you stogy – EVERYTHING can be explained by political bias. And it’s apparently enough to just make the claim, no need to back it up.

    Sorry, CM. I’m with Alex. Alex is never wrong. Haven’t you noticed?

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