Biden Takes Aim at Grocery Chains Over Food Prices
President Biden has begun to accuse stores of overcharging shoppers, as food costs remain a burden for consumers and a political problem for the president.
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More in the news: government official complains about matters within their jurisdiction.
You have to be some kind of moron to think it would be a good idea for the president to start dictating prices to grocery chains. Unfortunately Lemmy is largely populated by idiots and delusional fools, so I expect this observation to be unpopular.
You have to be some kind of moron
idiots and delusional fools
Do not respond to my comments again with personal attacks. If you do this again, or respond before fixing this comment, I will unfortunately have to report you to the community moderators.
Until you fix it, your comment is not worth addressing.
Ad hominem aside, TheSanSabaSongbird's basic point, that price controls are an economically illiterate idea, is right. Prices are an economy's way of signalling scarcity, so messing with that signal prevents the underlying problem from being solved. Inflation has to be tackled through monetary and fiscal policy; the alternative approach, micromanaging prices, is how you get to the economy of Argentina.
Products don't become more scarce when fewer competitors exist in the market, but it nevertheless causes prices to rise. Not all price changes are signals for increased production and the market is rarely the ideal frictionless exchange that can respond to rising prices as presented in intro economics books.
That is a big over simplification of how prices work. As another commenter pointed out, lack competition and a high barrier to entry can cause elevated prices even in the absence of scarcity. Price controls are found all over the economy and do not have the effects you allude to.
Price fixing works if you're coming at it from two directions. Set the price for consumers and subsidize the producers. Setting the price for consumers ensures middle men aren't taking absurd and unearned profits. Subsidizing will increase supply sufficiently that the artificially lowered price is not relevant. This ensures black markets don't arise selling those goods at a markup.
Tying inflation to monetary policy is not useful. The primary lever of monetary policy is debt lent by the federal reserve to banks. Cheap debt causes an inflation in the prices of housing, socks, and other investments. It does not have a large effect on the consumption of eggs or milk. There's no reason people's consumption, and thus the supply of groceries, should be impacted by cheap debt.
The initial burst of inflation was caused by supply shocks due our fragile global shipping infrastructure, fuel prices, productivity decrease due to COVID-19, and other related issues. Subsequent inflation was companies raising prices because consumers would know inflation was happening and be less likely to shop around, greedflation in other words.
Read a history book sometime. It's been done in the past.
I'm not sure why you'd advocate for it if you've actually read the history, it's a terrible idea that has failed spectacularly in the past
mate half the food you eat is subsidized.
Talking about price controls which are not the same thing at all. Read about the Nixon shock, for example.
Yeah, the relief doesn't go to agribusiness and might stand a chance of benefiting individual humans, so both parties agree it's always bad and they'll never do it.
Just because you say it, doesn't make it true.
Sure, instead it's true based on a simple observation that the president isn't using executive power to set an upper limit (price control) on the cost of groceries. A subsidy might reduce the starting price of something but a grocery store can still charge whatever they want for it. Which I'm pretty sure is the whole point of this thread?
I know about a ton of food subsidies that we're pretty useful, dunno about groceries though.
Any source?
I'm not talking about subsidies, I'm talking about the "president dictating prices", i.e., price controls. Richard Nixon tried this in 1971, it was a failure and it set the stage for the stagflation of that decade.
Ranchers stopped shipping their cattle to market, farmers drowned their chickens, and consumers emptied the shelves of supermarkets.
https://www.pbs.org/wgbh/commandingheights/shared/minitext/ess_nixongold.html