Saturday, March 13, 2010

Gap police

If you've never heard of supply and demand, you are probably walking around with a cost-mark-up theory of prices. If you happen to wield political power and have the politician's instinct to grandstand, then rising prices are easily cast as a law enforcement issue (opportunity).

Today's LA Times reports on the Obama Adminstration's effort to investigate food prices. It's all here. But the punchline is simple:

The government is also trying to ferret out reasons for the sometimes vast gaps between what farmers are paid for the food they produce and the retail prices that shoppers pay at the grocery store. Time and again, federal officials underscored that the government was going to push for more transparency in the food sector's business practices.

There are probably "vast gaps" all over the place. I have even heard of people who enjoy gaps between their cost of living and their salary.