this post was submitted on 07 Jul 2025
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While I'm with you on the economic theory, the past 5 years proved that theory out the window. Yes, there were shortages and logistical issues that caused price spikes, but many grocery items never came back down, or have been held at artificially higher prices since. S&D postulates that when there are a higher number of units on the market, prices will drop. But when you have the corporate consolidation that we've seen in America where there are fewer producers (especially in name brand goods, aka one producer) as well as fewer retailers, the models don't work as they would if we were in a pure free market where producers and retailers can enter the market at any time. As such, those fewer producers and retailers can hold prices artificially higher as their businesses are scaled out (nevermind that the likes of Kroger, the largest grocer in the country, has posted record profits in recent years, as have many entities that make up the core components of the CPI), and they can leverage market position to make entering the market untenable for an upstart.
And the problem with handouts is that they come from the govt, where the treasury prints money, thereby reducing the value of the existing money supply and increasing costs on goods as suppliers and retailers raise prices because of the increased money supply, aka modern inflation.
Yep that's why we need a wealth tax sothat the government doesn't go into more debt.