What are you going to do when Food Lion in Cape Charles closes down? Not just ours, but in other rural areas, as well as low-income urban areas. The following is from Robert Sterling. He has worked in the food sector and understands supply chain logistics and retail chain distribution as well as anyone. Here’s a step-by-step summary of what would happen if Kamala Harris’ ‘economic plan’ were to take effect. These are fraudulent ideas, and they only stay afloat because the media allows them to. The key to is keep economists away from the picture. Price gouging is an intellectually low-bandwidth phrase directed a dim, sleepy minds. Kroger currently has a profit margin of 1.43%. This is BELOW their average over the last 24 years…if they are, in fact, “price gouging” they are comically bad at it:
1. The government announces that grocery retailers aren’t allowed to raise prices.
2. Grocery stores, which operate on 1-2% net margins, can’t survive if their suppliers raise prices. So the government announces that food producers (Kraft Heinz, ConAgra, Tyson, Hormel, et. al.) also aren’t allowed to raise prices.
3. Not all grocery stores are created equal. Stores in lower-income areas make less money than those in higher-income areas, as the former disproportionately sell lower-margin prepackaged foods (“center of the store”) instead of higher-margin fresh products like meat (“perimeter of the store”). Because stores in lower-income areas aren’t able to cover overhead (remember, even if their wholesale costs are fixed, their labor, utilities, insurance, and other operating expenses aren’t fixed… yet), grocery chains start to shut them down. Food deserts in rural areas and in low-income urban areas alike become worse.
4. Meanwhile, margins for food producers are also quickly eroding. Their primary costs (ingredients, energy, and labor) aren’t fixed, and their shrinking gross profits leave less cash flow available to cover overhead, maintain facilities, and reinvest in additional production capacity.
5. Grocery chains, which have finite shelf space, start to repurpose their stores (those they didn’t have to shut down, I should say) to sell more non-price-controlled items—everything from nutrition supplements to kitchenware to apparel—and less price-controlled food products. Your local Kroger or Safeway starts to look and feel more like a Walmart.
6. Food producers stop making products with lower margins. Grocery chain start competing with each other to secure inventory. Since they can’t compete by offering stronger prices (remember, producers aren’t allowed to raise prices here, and, even if they could, grocery chains no longer have the gross profit to bear price increases), they compete on things like payment terms.
7. Small grocery chains start to shut down entirely, or get sold to larger chains like Kroger. In addition to not being able to cover fixed costs, a major reason for this is because they can no longer reliably secure delivery of products, due to producers prioritizing sales to larger customers, which are able to leverage their stronger balance sheets to offer superior payment terms.
8. Smaller food producers—which typically sell via distributors, rather than directly to grocery chains—start to go out of business. Because these producers have an additional step their value chains, and because they have lower volumes over which to spread their fixed costs, their cost structure is inherently disadvantaged compared to major food producers. When grocery stores aren’t able to raise prices, cutting product costs becomes all the more important, and deprioritizing purchases from smaller producers is an easy way to do so.
9. As supply chains break down, lines start to form outside grocery stores every morning. Cities assign police officers to patrol store parking lots, and food producers draft contingency plans to assign armed escorts to delivery trucks.
10. The federal government announces a program to issue block grants for states to purchase and operate shuttered grocery stores. The USDA also seizes closed-down production facilities.
11. The government announces that prices for all key food costs—corn, wheat, cattle, energy, etc.—are also now fixed, to stop “profiteers” from gouging the now-government-operated food industry.
12. Shockingly, the government struggles to operate one of the most complex industries on the planet. The entire food supply chain starts imploding.
13. Communism, mass starvation, and the end of America quickly ensue.
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Karmela’s just released economic plan to together build what she calls an “opportunity” economy based on “THE GREEN NEW DEAL” with her dictatorial plans for first-of-its-kind federal controls on food and grocery “price gouging” by corporations, which proposal would give dictatorial authority to the Federal Trade Commission and state attorneys general to impose harsh penalties on companies for setting excessively high prices, has been termed “Marxist” and “lunatic behavior,” and rightfully so.
She will never be the President of The United States. She is not real bright.
I pray you are correct about her NOT becoming the next POTUS. She isn’t ‘real bright’, but those who support her are not “real bright’ either….
When Trump loses,
it will be because of his complete and utter lack of self control and an inability to focus on agenda and policy.
He will drag the Republican party right down with him.
Ms. Harris does not own the patent on stupid.
Too true!
Bright or not
The way things are going she may be the next President. The people who are listening to the Democrats out number the rest . Unfortunately Trump sucks at staying on point . He seems to think repeating what he is saying 3-4 times in a row when explaining a response is good . It’s not . The Democrats have a stronger attack plan and they use a ( Mohammed Allie) Robe A Dope technique . Keep them angry and swinging until tired out , then go for the KO . The Republicans are not well organized to reverse this .
“However [political parties] may now and then answer popular ends, they are likely in the course of time and things, to become potent engines, by which cunning, ambitious, and unprincipled men will be enabled to subvert the power of the people and to usurp for themselves the reins of government, destroying afterwards the very engines which have lifted them to unjust dominion.”
~ G. Washington
When Tyranny becomes Law
Rebellion Becomes Duty
-Thomas Jefferson-
I do not not want to engage in a politically oriented discussion–but it is evident that the national discussion from both parties focused on inflation and product pricing are not well thought through.
Two ideas being offered are superficial in my opinion
–1. Government price fixing is discounting the dynamics of a free market economy and its long term benefits. That is not the role of government –and we have witnessed other government attempts to leave the free market model. Example–When Deng -in China-with Nixon support–embraced the free market. Many US companies set up shop in China to leverage their low labor costs at that time. Many benefits –China-rapid economic growth moving hundreds of millions out of poverty. U.S. maintaining lower product costs and improved economic performance which had led to many years of prosperity (not the only factor). Low labor cost value is now adjusting and China is moving back to more a government controlled model–and they are sliding economically.
–2. The free market must be adaptable and continue to respond to change–unlike most government policy systems. e.g. COVID led to breakdowns in supply chain performance and reduced the value of remote lower labor cost suppliers. Reshoring and Nearshoring is now alive and well. Now we have candidate proposals to to accelerate tariffs–breaking down benefits of the global marketplace. This drives up product cost and increases an isolationist mindset. Again the government’s attempt to “fix” a short term problem with a solution that we will pay a price for in the longer term by reducing business options of innovation and economic prosperity for all.
You spent all that time writing all those words. It can be explained in one word…GREED.
https://www.marketwatch.com/story/s-p-500-ceos-made-268-times-what-the-typical-worker-made-last-year-report-says-ceo-payflation-strikes-again-02fbe8a9
What is truly scary here and quite dangerous to our future as a people and as a nation from a citizenship point of view isn’t so much Democrat presidential contender Karmela Harris talking like a moronic, imbecilic fool with her just released economic plan to build what she calls an “opportunity” economy based on “THE GREEN NEW DEAL” with her dictatorial plans for first-of-its-kind federal controls on food and grocery “price gouging” by corporations, which proposal would give dictatorial authority to the Federal Trade Commission and state attorneys general to impose harsh penalties on companies for setting excessively high prices, which plan has been termed “Marxist” and “lunatic behavior,” and rightfully so, it is the fact that people in America, a FEDERAL REPUBLIC with a written CONSTITUTION that designates and differentiates the roles of state governments versus the national government with its limited powers, are accepting this phrase of hers without question or comment: “which proposal would give authority to state attorneys general to impose harsh penalties on companies for setting excessively high prices ….”
State attorneys general are STATE OFFICERS!
State attorneys general DO NOT take orders or their direction from the president of the United States, nor do they derive their authority to act from the president of the United States, and the president of the United States has absolutely no control whatsoever over State attorneys general, period, so that is a BLATANT NAKED UNCONSTITUTIONAL POWER GRAB there by Karmela Harris, who is setting herself up as a MARXIST DICTATOR here.
Consider the Virginia Attorney General, for example, which governmental position in the Commonwealth is created by Part B, titled Department of Law, of Subtitle I. Organization of State Government, of Title 2.2. of the Virginia Code, titled Administration of Government, where in § 2.2-500, titled Attorney General to be chief executive officer; duties generally, it is clearly stated as follows, and being a REAL HOT SHOT LAWYER and former state attorney general herself, Karmela Harris should know this cold, to wit:
The Attorney General shall be the chief executive officer of the Department of Law, and shall perform such duties as may be provided by law.
end quote
“As may be provided by law” refers to the laws of the Commonwealth, as can be seen in § 2.2-505, Official opinions of Attorney General, to wit:
A. The Attorney General shall give his advice and render official advisory opinions in writing only when requested in writing so to do by one of the following: the Governor; a member of the General Assembly; a judge of a court of record or a judge of a court not of record; the State Corporation Commission; an attorney for the Commonwealth; a county, city or town attorney in those localities in which such office has been created; a clerk of a court of record; a city or county sheriff; a city or county treasurer or similar officer; a commissioner of the revenue or similar officer; a chairman or secretary of an electoral board; or the head of a state department, division, bureau, institution or board.
B. Except in cases where an opinion is requested by the Governor or a member of the General Assembly, the Attorney General shall have no authority to render an official opinion unless the question dealt with is directly related to the discharge of the duties of the official requesting the opinion.
Any opinion request to the Attorney General by an attorney for the Commonwealth or county, city or town attorney shall itself be in the form of an opinion embodying a precise statement of all facts together with such attorney’s legal conclusions.
end quotes
NOWHERE does the Code of Virginia give the attorney general of the Commonwealth any statutory authority to impose harsh penalties on companies for setting excessively high prices, which phrase is unconstitutionally vague and highly subjective and political, nor does the Code of Virginia gi9ve authority to the Virginia attorney general to take direction from the president of the United States, and I am quite surprised that the people of the Commonwealth are accepting this blatant usurpation of power over the Commonwealth attorney general by Democrat Karmela Harris while blowing it off as politically oriented discussion they don’t want to engage in.
Excellent words Mr. Wilcox. Government price fixing schemes certainly are communist/socialist style programs. So is taking weapons away from law abiding citizens. Open borders/Free healthcare, food, housing and a VOTE or two of course.
The Dems seem to have gotten onboard with these shenanigans.
•20% (of the vote)
On the other hand it appears Trump has become a bit unglued. His Republican afficanados are oblivious to his spiral into this personification of Loud Mouth New Yorker God. They love it.
•20%
Dang, what the heck can Moderates do to restore our country. vote.
•20%
Idiot/Too Stupid to be an Idiot vote.
•20%
Folks persuaded to vote for Dems by left wing Main Stream Media,
•20%
(Social media is allowing nitwits, punks and “influencers” to contribute to the Idiot agenda.)
Being a Moderate these days is depressing.
Things look grim whichever way the election goes. And..Kamala wins in a squeaker.
And we all know that soon after… the Cheeks will meet the Blades
Democracy is a pathetic belief in the collective wisdom of individual ignorance.
Democracy is the theory that the common people know what they want, and deserve to get it good and hard.
– H.L. Mencken