Why Not Government Grocery Stores

 By now, most Americans know that the Democratic Party candidate for Mayor of New York has included a proposal for opening five municipally-owned stores—one in each borough—as part of his 2025 mayoral campaign.  Not surprisingly, the proposal meets with the approval of several of the more liberal Democrats, prompting Senator Elizabeth Warren to proclaim on CNBC, “It’s a new and fresh plan for New York City, but it’s been tried in other cities around the country and has had some real successes.”

That news surprised me, so I decided to look a little closer at the history of government-run grocery stores.  Spoiler Alert:  Senator Warren speaks with a forked tongue.

Though I searched, I cannot find any large American metropolitan area that has tried a government-run grocery store.  Government-run grocery stores in the United States have been attempted in various forms, primarily in small towns and rural areas, with mixed results. 

• Erie Market, (Erie, Kansas).  When the town’s only grocery store threatened to close in 2020, due to Covid restrictions, the town stepped in and purchased the store.  After four years of operating at a loss, the town leased the store to a private company.
• Baldwin Market, (Baldwin, Florida).  A city-owned grocery store operated for five years but closed in 2024.  Even though the store operated at a loss, the store faced declining patronage as customers found cheaper prices at private stores.
• Rise Community Market, (Cairo, Illinois).  As one of six stores the state opened up in food deserts (defined as a rural community of at least 500 residents, located more that 10 miles from a retail store), Rise is still open, though local residents complain of high prices and empty shelves.  Despite millions of dollars in subsidy, four of the state-run stores have closed. 
• St. Paul Supermarket, (St. Paul, Kansas).  The store, owned by the municipality, is considered a success due to strong community buy-in, motivated by the need to retain residents and attract new ones.  The store generates a profit slightly above the average for rural grocery stores, which has been attributed to local support and effective management.  Community engagement, local management, and the store’s role as a retention and recruitment strategy for the town are the keys to the store’s success.  However, its small scale (serving a population of ~600) limits its applicability to larger urban settings.

The only other grocery stores that I could find that might be considered state-run were tribal stores on Native Reservations and military commissaries on military bases.  Unless I missed something, that’s it.  Note that all of these stores were attempted in rural areas—none were located in urban settings.

In 2023, Chicago Mayor Brandon Johnson announced a plan for municipally-owned and operated grocery stores to fight urban food deserts (with “food desert” defined as an urban area more than a mile from a grocery store).  After completion of a feasibility study, the plan was abandoned.

Besides noting that no large urban city has successfully run a state-owned and operated grocery store, there are good economic reasons why such a store would be doomed to failure.  Government-run stores disrupt the natural price signals and competition that drive the greatest efficiency in private markets.  Unlike private grocers, who optimize supply chains and quickly respond to changing consumer demand, government entities often lack both the expertise and the incentives to operate efficiently, leading to higher costs and wasted resources. 

Let me put that another way:  Economists, like Milton Friedman or Friedrich Hayek, would argue that markets allocate resources better than centralized planning.   Government stores risk misallocating resources by prioritizing political goals over economic viability.  Misallocated resources lead to inefficiency, which leads to higher costs.

Government-owned stores also crowd out private investment.  The best way to eliminate a food desert is to provide incentives for private investment.  Subsidized stores can undercut prices, discouraging private investment in grocery retail, especially in underserved areas, in a business in which profit margins are already thin (1-3% in the industry).  A government-owned store, though poorly run and losing money, may still attract sufficient customers to deter a private store from opening.

Government-run stores inevitably limit consumer choice by offering fewer products or by stocking lower quality goods due to bureaucratic constraints or budget limitations.   (Remember back in 2012, when New York City wanted to ban soft drinks larger than 16 ounces?)  Private grocers, driven by profit motives, are incentivized to cater to diverse consumer preferences or to innovate new services.

While we lack US examples of urban government grocery stores, there are ample international examples:  Vietnam, Iran, Venezuela, and Cuba have all experimented with government grocery stores.  All promised lower prices by eliminating profits.  The bottom line, however, is that all either failed outright (Venezuela and Cuba) or depended on steadily increasing government financial support.

One last point about government-run grocery stores:  For years, big box discount stores like Sam’s have tried to open stores in all of the five boroughs of NYC.  Each time, the City has blocked such moves with prohibitive zoning or land use regulations.  In each case, the reason for blocking the new stores was to protect existing small businesses,  such as bodegas and neighborhood stores.  So, if Walmart tries to compete with them, it’s “predatory capitalism”, but if a government agency does it with taxpayer money, it’s “enlightened socialism”?

There are currently over a thousand retail grocers in New York City, each of them competing for customers by offering different levels of services and prices.  The idea that the city, with limited purchasing power, with no experience in the market, and with  no profit incentive could really compete with lower prices sounds exactly like the kind of pie-in-the-sky idea a thirty-year-old candidate with no real work experience might propose.

Trains of Thought

This is a topic I wish I could discuss with Fred Dabney.  Fred was a Renaissance Man— somebody who knew just about everything about anything.  Fred’s been gone a while now, but I still miss going to the radio station where he worked the graveyard shift, playing jazz all night long.  We’d drink coffee while discussing the news coming off the teletype.  

If there was one topic that Fred was really an expert on, it was trains.  I like trains and probably know as much about them as the next historian, but I can’t tell you the difference between a 4-2-0 and a 4-6-0 steam locomotive.  Fred could talk about that for days.  (I’m lying—I do know the difference but could only talk about it for a couple of minutes.)  I wonder what Fred would say about Edward Hopper’s fascination with trains.

Yes—Edward Hopper, the American artist, whose paintings primarily explore themes of isolation, solitude, and the alienation of modern life.  His work often depicts stark urban and rural scenes—empty diners, gas stations, theaters, or lone figures in rooms—with everything bathed in dramatic light and shadow.  These settings evoke a sense of loneliness, quiet contemplation, or disconnection, that reflect the emotional undercurrents of early-to-mid-20th-century America.  The most famous of his works is Nighthawks (1942).

If you’ve ever stared at a Hopper painting and felt an odd sense of loneliness, introspection, or the creeping suspicion that the guy at the diner counter is thinking deeply about the futility of it all… congratulations.  You’ve been Hoppered.  But amidst his sunlit isolation and moody diners lies another, often overlooked motif: the train.

That’s right—Edward Hopper’s trains are more than just steel and steam and they are not merely background scenery or a means to get from here to there.  Instead, they are symbolic workhorses, quietly chugging away with emotional freight.  Whether nestled on a track behind a country house or slicing through a gloomy overcast landscape, Hopper’s trains whisper stories about time, distance, longing, and that deeply American itch to move—even if we're not sure where to.

Let’s begin with the basics.  Trains are literal vehicles, but in Hopper’s world, they are also emotional vehicles—rolling metaphors for departure, arrival, waiting, and wondering.  For a man obsessed with stillness, Hopper had a surprisingly kinetic undercurrent running through his work.  Trains, in this context, act as symbols of transition, offering movement in otherwise frozen moments.

Take Railroad Sunset (1929), in which a lone signal tower basks in a garish sunset, and the track extends out of sight to both sides of the painting. Paradoxically, the train, itself, is absent—conspicuously so—but the train is missing in many of Hopper’s “train” paintings.  The glowing sky suggests that the train is either coming or has just gone.  It’s a portrait of in-betweenness, of anticipation hanging in the air like steam from an engine that’s just passed.  Here, the tracks (and the train we can only imagine) become a symbol of a dividing line—between day and night, solitude and contact, home and elsewhere.

It’s impossible to talk about Hopper’s trains without addressing the American mythology of the railroad.  Trains helped tame the West, connected small towns, and served as backdrops for tearful goodbyes and hopeful hellos.  In the collective American psyche, they are almost spiritual. They represent progress—and its discontents.

In Chair Car (1965), Hopper paints the inside of a railway car with passengers scattered like chess pieces.  No one speaks.  Everyone stares out the window or into space, even though nothing can be seen out the windows.  The seats are plush, the lighting is warm, and yet—there’s a heaviness.   The passengers are traveling together, but they are also clearly traveling alone. Are these people going somewhere? Or are they merely enduring the ride?  Is the train even moving?

Hopper’s trains aren’t the heroic beasts of industrial triumph ushering in a new age. They’re more introspective.  They reflect a deeply personal American contradiction: the desire to roam versus the longing to belong.  The train offers escape, yes—but it also implies disconnection.  It moves, but it never promises arrival.

In Hopper’s universe, even train stations throb with symbolism.  Consider Approaching a City (1946).  The canvas shows the view from a train approaching an almost featureless tunnel beneath looming urban buildings.  The city feels impersonal and closed off, without a single person visible.  The viewer doesn’t get to see the other isolated people inside the train; we only see the train’s passage—the mechanical act of entry into something unknown.

The station—normally a place of hustle, ticket stubs, welcoming kisses and final embraces—is stripped of both motion and emotion.  Hopper often preferred to paint the moments before or after the train arrives. Waiting is a recurring mood.   It becomes a metaphor for human existence: we’re always waiting for something—love, clarity, purpose, or perhaps the next train out of town.

Even The Camel’s Hump (1931), which features no train at all, but merely a glimpse of rail line in a rural setting, carries the ghost of movement. Hopper once said he was interested in the “sad desolation of a railroad track.”  That track, curving off into nowhere, becomes the physical embodiment of uncertainty.  The setting for this painting is in Massachusetts, near Hopper’s studio.  Did the abandoned tracks symbolize isolation to the artist?

A recurring theme in Hopper’s paintings is the view from the window—and nowhere is this more poignant than when one is seated on a train.  The window becomes a moving frame, slicing the world into a series of digestible vignettes.  The train window is both a portal and a barrier: it allows the viewer to see out, but not to engage.  This is peak Hopper—engaged detachment.

In Compartment C, Car 293 (1938), a young woman sits reading, oblivious to her surroundings.  She is the embodiment of the solitary traveler.  Outside the window, the world slips past unacknowledged.  It’s a quiet meditation on interior life amid exterior motion.  That the compartment is labeled and numbered—"Car 293"—hints at the industrial impersonality of modern travel.  And yet, inside, it’s deeply human, even if isolated.

Let’s not ignore the fact that many of Hopper’s train-centric works feature solitary women—reading, gazing, traveling.  In a time when women's mobility was becoming more socially acceptable, trains offered independence.  These female figures often look lost in thought, but they also exude a kind of quiet autonomy.  Hopper doesn’t portray them as helpless waifs or glamorous adventuresses, instead, they’re ordinary women in extraordinary states of self-possession.  The train offers a space for personal freedom, though it carries a heave dose of isolation.

In many Hopper paintings, time stands still.   But the presence of trains—whether visible or just implied—serves as a reminder that time is always passing.  The train tracks lead somewhere.  The people are en route to some place.  The signal tower is lit for something expected.

There’s a gentle irony to this: Hopper, the painter of frozen moments, uses the symbol of the train—a machine of relentless motion—to underscore stillness.  The train is always coming or going, even if we never see it.  It’s the heartbeat beneath the surface of his quiet worlds.

Ultimately, Hopper’s trains aren’t about transportation—they’re about transformation.  They represent the soul in transit, the mind on a journey, the heart caught between departure and destination.  They’re symbols of possibility and loss, of progress and estrangement, of the uniquely human condition of being neither here nor there, but somewhere in between.

And let’s face it: there’s a bit of wistful romance to the whole thing.  Who hasn’t watched a train slip past and thought, “Where is it going?  Should I be on it?  Would that solve anything—or just change the view from the window?”

Edward Hopper’s trains are subtle but powerful. They carry with them more than people—they carry questions.  Are we moving toward something, or away from it?  Are we passengers in our own lives?  Will the conductor ever explain the delay?

So, the next time you see a train in a Hopper painting, don’t just admire the brushwork.  Lean in.  Listen for the low clickety-clacking rumble of thought.  It may be whispering something you’ve felt but never put into words.

And if all this seems like a huge load of symbolism to load onto just a few tracks and a quiet car, remember—Hopper’s real subject was never actually the train.  It was always us.

Why the CBO is Frequently Wrong

 During the hectic, unreal days of Watergate, Congress decided it needed a trusty sidekick to wrangle the federal budget.  Thus, the Congressional Budget Office (CBO) was born on July 12, via the Congressional Budget and Impoundment Control Act.  Why? Well, President Nixon was playing fast and loose with funds, "impounding" money Congress had earmarked, causing a Capitol Hill kerfuffle…Congress wanted its wallet back!

The “how” was simple: lawmakers crafted a nonpartisan agency to give them the straight dope on budgets and economic forecasts, that was to be free from executive spin.  Modeled after California’s budget wizards, the CBO became Congress’s go-to for number-crunching. 

The CBO’s mission?  To arm Congress with clear, unbiased data for smarter spending decisions, without whispering policy advice. It’s like a financial crystal ball, helping lawmakers navigate the fiscal fog with confidence.  And so, the CBO was supposed to be a nonpartisan Capitol Hill hero, quietly crunching numbers to keep the budget battles light and bright while giving the voters the truth about pending legislation—without political spin.

Unfortunately, it hasn’t always worked out that way.

The CBO tries very hard to be nonpartisan, and there is no better proof that it generally is than the fact that each political party in turn has complained long and loudly about bias whenever its ox is gored but staunchly defends the office when the CBO’s projections ding the opposing party.  Even if we assume the CBO operates without appreciable bias—as I believe it does —that still doesn’t mean that its estimates are to be believed.

The problem is this:  from its inception, the CBO has created financial models based on static forecasting (sometimes called, “static scoring”).  So, what is “static forecasting”?  Let me give you a real-world example:

Back in 1990, Congress passed a luxury tax on high-dollar items that typically were only bought by the wealthy:  large yachts costing over $100,000, private jets, and very expensive cars.  Congress wanted to raise tax revenue without increasing taxes on either the middle class or the poor.  The bill, the Excise Tax on Luxury Goods was part of the Omnibus Revenue Reconciliation Act of 1990.  The CBO estimated that the tax on yachts alone would bring additional tax revenue of over $120 million.

At the time, American shipyards sold thousands of yachts annually, so the CBO just estimated that 10% of the existing revenue would be paid to the government annually.  Of course, nothing like that happened.

The global yacht business was competitive and when American-made yachts suddenly went up in price, customers immediately changed their buying behavior.  Since they were just rich and not stupid, consumers bought used yachts (which were not subject to the new tax) or they went overseas—particularly to Europe—to purchase their luxury boats.   New yacht sales in the United States dropped by more than 70%, causing many small and medium boat builders—especially in Florida, Maine, and the Pacific Northwest—to close or drastically downsize.  An estimated 7,600 to 9,000 jobs were lost in the yacht-building industry alone, with ancillary industries (marinas, suppliers, etc.) losing many thousands more.

Well, at least the government brought in more revenue, right?

Nope!  The total amount collected on the sale of yachts in the first year was $12.7 million—a figure less than the government spent enforcing and collecting the new tax.  The Government Accounting Office (GAO) said this was primarily because the IRS had to track complex sales of high-end goods and pursue evasions, such as shell companies buying boats offshore.

It won’t surprise you that these dismal results were duplicated on all the luxury goods that were mentioned in the new law.  Whether it was jewelry, expensive furs, private jets, or the latest Ferrari, the rich altered their purchase patterns in ways not predicted by static modeling.  A Congressman summed up the failure, “We intended to tax the millionaires, but we actually ended up punishing the middle-class boat builders.” 

Congress eventually repealed the law, but not before the disruption had long-lasting effects.  Some economists argue that the yacht industry still has not completely recovered, thirty-five years later!

Since static forecasting does not take into account the behavioral response of the taxpayers to new taxation, what is really needed is dynamic forecasting.

Static models are simpler: raise taxes, get more money.  But dynamic models say: “Wait—people might work less, invest differently, or shift money offshore!”

Dynamic modeling tries to account for how people, businesses, and markets adapt—sometimes in weird, unexpected ways.  It’s like trying to predict not just how the pool table balls move after the break, but also how the table might warp mid-game, or your pet cat might jump up on the table and attack the ball.

Why doesn’t the CBO just always use dynamic models?  Because they’re wildly complex.  To do it right, you need to make hundreds of assumptions—about interest rates, about labor markets, about consumer psychology, about unicorn migration patterns (okay, maybe not about that last one, but you get the picture).  And if Congress doesn’t like the answer?  Suddenly your assumptions are under fire and your budget is cut. 

So, the CBO sticks mostly to static scoring—not because they think it’s perfect, but because it’s safer, more transparent, and less politically explosive.  After all, nobody in the CBO wants to explain to a Senate committee on live television that the entire economic forecast turned into crap because millions of Americans suddenly went out and bought pet rocks.

We could—but we won’t—change the way the CBO makes economic forecasts.

Imagine the Congressional Budget Office (CBO) as a weather forecaster for the federal budget.  If Congress passes a tax cut, for example, the CBO could use dynamic scoring to say, “Here’s what might happen—if everything goes great, if things go as usual, or if the economy trips on a rake.”

Instead of a static forecast of the tax cut, they give three dynamic forecast scenarios:

·      High projection: Everyone starts businesses, hires like crazy, and the GDP soars.  Tax revenues fall at first, but the booming economy makes up for it.  Unicorns dance, it rains in Death Valley, and the Seattle Mariners win the World Series.  It’s the “rosy scenario.”

·      Medium projection: The tax cut boosts spending and work a bit, but not dramatically.  The economy grows, but mostly as expected.  This is the Goldilocks forecast—not too hot, not too cold.  Both proponents and opponents of the tax cut claim to be correct.

·      Low projection: People pocket the extra cash, but don’t do much with it.  The economy doesn’t pick up, and tax revenues drop more than hoped.  Cue the budget shortfall and awkward committee hearings while the talking heads with perfect hair speak confidently on television about the failure of “trickle-down economics.”

Dynamic scoring would let the CBO show how real people might react to policy changes—rather than just assuming that everyone keeps behaving the same as always.  Unfortunately, predicting human behavior is a tricky business, which is one reason the CBO avoids dynamic scoring.  The other reason—and the main reason—is that Congress doesn’t want to be in the position of explaining economics to voters who want simpler answers.  Lawmakers prefer a clean, single “score”—even if it’s less nuanced.

Or to put that more succinctly, Congress wants answers that can fit on a bumper sticker.  Even if they are wrong.