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From: Chris Buckley <alan@sabir.com>
Newsgroups: rec.arts.sf.written
Subject: Re: Three Body Problem
Date: 19 Aug 2024 01:11:05 GMT
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On 2024-08-18, Scott Dorsey <kludge@panix.com> wrote:
> Chris Buckley  <alan@sabir.com> wrote:
>>How about a quote from 4 days ago?
>>https://www.washingtonpost.com/opinions/2024/08/15/kamala-harris-price-gouging-groceries/
>>    In a news release Wednesday, her campaign said the first 100 days
>>    of her presidency would include the “first-ever federal ban on
>>    price gouging on food and groceries — setting clear rules of the
>>    road to make clear that big corporations can’t unfairly exploit
>>    consumers to run up excessive corporate profits on food and
>>    groceries.”
>>
>>We know so little about Harris's policies; this is not a good first policy!
>
> There is very clear price gouging on retail food in poor neighborhoods, and
> it's a direct consequence of not having any competition in the market.  Go
> into a dollar store and check what things actually cost relative to the 
> grocery store in a rich neighborhood.  A price ban won't fix this problem,
> although there might be another government-lead solution possible.
>
> BUT.... honestly food in the US is incredibly cheap.  Far cheaper than it
> was back in the sixties, and much cheaper than it is in Europe.  We grow
> (dented) corn so cheaply that Mexico wants to put up protective tariffs,
> and when you can do something more cheaply than Mexico that's impressive.
> Admittedly overall food quality here is poor, but I don't see bringing 
> food prices in America down as a useful activity.  Now, if you bring 
> down housing costs or medical bills, THAT might be useful.
> --scott

Yes, retail food prices in poor neighborhoods are much higher than in
rich suburbs.  But it's clearly not price gouging, but the cost of
doing business in an urban, poor area. If it was only lack of competition,
you'd have supermarket chains fighting each other to open stores in
those areas. But instead you have cities desperately trying to keep
the supermarkets they have open, and offering deals to get supermarkets
to consider opening a new one. The existing supermarkets aren't making
enough money.

A few years back, I watched DC trying to woo Walmart to open a large
store (including supermarket) in an under-served area. It took many
years of negotiations, rule-changing, and property tax breaks to
finally get an agreement. It wasn't easy. It never opened - the next
city council came in and passed a law saying any extremely large
retail company (basically just Walmart) must pay a minimum wage of $5/hour
over the current minimum wage. Walmart said they had no chance of
making money, broke their leases, and left.

The extra cost of urban business is not only the obvious costs of land
cost, security/shoplifting, and property tax, but things like just
getting the food from warehouses to the store!  As you say, the
overall American cost of food is actually low now, partly because the
industry has solved the supply chain to the store issues, at least for
large suburban stores.  My supermarket can handle at least a dozen delivery
trucks at once, perhaps half of them 18-wheelers. You can't do that kind of
traffic in an urban environment serving pedestrian customers.

I don't know how to reduce the cost of urban supermarkets other than
directly giving subsidies. But any attempts to legislate the price of
groceries in those urban markets is going to make things worse.

Chris