PRICE GOUGING
This cranky
old man is temporarily stepping out of blog retirement because I just need to
vent.
Most people
believe that our rate of inflation, the price of goods and labor, is rising at an
uncomfortable rate. No one likes
inflation, especially older citizen that make do on a fixed income.
What is the cause of this inflation and what should be done to reverse the trend?
(Actually, the trend has reversed a bit, but
reversed from really too GD high, to unpleasantly GD high.)
As one who
graduated with a degree in economics over 50 years ago sporting a high C-
average I admit to not having a clue to a solution.
I do have a
good idea as to what will not work.
I recently
saw an article where politicians are calling on an end to price gouging,
particularly with the cost of groceries.
The claim I read was,
“Notably, grocery prices have not fallen at the same rate as
inflation. This is caused by excessive price gouging by food and grocery
giants,"
Well that sounds reasonable, we just
need to end price gouging by evil corporations.
Clearly if the rate of inflation falls then food prices should also fall,
so there must be price gouging.
Nixon tried to stop price gouging way
back with his Wage and Price freezes.
Remember how well that worked.
I do.
Wages and prices were frozen and many items could not be purchased at all. Seems many entrepreneurs were not willing to sell things at a price where they would lose money.
Imagine that?
Funny how the law of supply and demand
works so well until demand exceeds supply. Well, it still works, but no one likes
it.
When the price of oil goes up,
politicians blame Big Oil and price gouging.
I wonder why when oil prices drop drastically Big Oil doesn’t get a big
thank you.
It’s because except in cases of monopolies
or collusion, economic laws beat price gouging all day long.
By the way, that politician’s comment,
“Notably, grocery prices have not fallen
at the same rate as inflation. This is caused by excessive price gouging by
food and grocery giants,"
Even with a high C- in economics I know
that if the rate of inflation falls from 10% to 5% it is unreasonable for
prices to fall 5%. It is reasonable to
assume that prices will still rise 5%!
DUH!
But politicians think we are stupid.
Come on smart people, find a solution to
inflation. But
start by not blaming price gouging.
And, to the politician who said,
“Notably, grocery prices have not fallen
at the same rate as inflation. This is caused by excessive price gouging by
food and grocery giants,"
Thank you, I now understand the meaning
of “Gas Lighting.”
End of vent, damn that feels
good!
