Free Markets Prove Better

Last year there was a proposal to set pricing limits on food. Here’s the thing, I don’t know if you’ve ever seen a grocery buyer negotiate pricing but it’s down to the 100th of a cent at times. Why? Scale. If you’r off on a purchase of a million+ watermellons that 100th of a cent can erode margins by a lot.

There is no evidence of price gouging
Putting aside my own problems with the grocery industry and simply addressing the market dynamics of this situation, groceries are a highly competitive market and there’s no key evidence of anything related to price gouging. Kraft, as an example, has lower profitability this year.

Free Markets Lower Prices
I was talking to my son yesterday about a plastic part of a trimmer that we purchased yesterday for $9. He thought it was expensive until I explained that it was produced by oil drilled out of the ground and refined into something that could cool and harden to hold shape, then someone created a design of a tool and a mold for the thing, produced it in a factory, shipped it to a store, and sold it. This is not including all the other work such as marketing, etc.
Like that situation, groceries are a highly competitive free market and the number one result in that is competing of prices down as close to $0 as possible. As an example, Strawberries are actually down in price to pre-covid levels.

Why does stuff cost more?
Yeah, about that. There’s a chart on the pic of this post. It shows the growth of all the cash in the system. Notice the jump at 2020? Went from 16 Trillion to almost 22 Trillion. Yeah, I know we’re tired of hearing about covid, still the results are continuing to work their way through the system.

Legally imposing a limitation on prices has never fixed a systemic issue.
In fact, it’s historically backfired and there’s no evidentiary reason to conclude that it will resolve the inflationary issues we’re seeing in the system at the moment. There is only one way to bring prices down and it’s not limiting inflation so much as innovation that is deflationary in nature. That type of innovation has not happened with any significant oversight that caused reduction in margins which would limit any kind of investment into R&D.

We need to stop the silly game of thinking someone else will rescue us instead of simply getting to work and solving the problems in front of us. Ok. Rant done.