Babies and price gouging
Sure... they go together
Because I can read minds, I know you want a “quick” follow up to my previous newsletter - “A baby formula shortage sheds new light”. Sadly, it won’t be quick, but it is a follow up.
I really love politics, and I do not know why. It can be so negative and divisive which I really do not like. However, it can be so fascinating to watch human behavior and natural laws at work. How do citizens and government officials respond to a crisis and why? What decisions were good or bad?
Inflation, baby formula shortage, supply chain issues, culture wars, etc., are “man” made (wink, wink) issues. Why blame oneself when we can blame someone else and not just someone else, but a faceless idea or entity that cannot speak back like “Wall Street” or “the 1%” or “Illegal immigrants” or… you get it.
Right now, “inflation” is the big issue that the Biden Administration is trying to solve or throw the blame somewhere else. They are throwing darts to see what sticks which is what all administrations try to do. The Biden Administration is especially feeling the heat because his approval ratings are in free fall.
Biden Approval Rating = 39% approval, 56% disapprove
Yesterday, a NBC News poll showed Biden dipping again in his approval. The title of the article was a total spin -
“Support for abortion rights hits new high as midterm outlook is grim for Democrats”. Again, long titles are in. This is a great headline if the most important issue in America is abortion. But it is not.
Here is another article from The Hill, reporting on this NBC News poll -
“Biden job approval hits another low in new survey”. Poor Nancy Pelosi was sent out to the Sunday shows to distract from these numbers. Inflation might prove to be too big of a match for a titan, like Nancy. I actually think she is a brilliant legislator. I just don’t think she realizes she is now living in “No Country For Old (Wo)Men”. I am sure the Coen brothers would re-title this one today - “No Country For Humans Who are Chronologically Challenged”.
The biggest concern for Americans revealed in that poll is - Inflation. Again, Maslow’s hierarchy of needs - people need to feel secure in providing for themselves and their families first. If that is threatened, it does not matter what is happening around them. Therefore, the Biden Administration is struggling to find ways to alleviate inflation and/or blame others for it so they do not get crushed in the 2022 Midterms. The baby formula shortage is the most recent example.
It was discussed on the Sunday shows yesterday. There were more revelations from articles that the CDC has been done with the investigation, but there was no real good reason why the baby factory stayed close by the FDA. There was even one tweet early this morning that made me laugh because the person grew angrier with each tweet once he realized how much healthier the European formulas were and the non-sense of preventing them into our US market. His whole thread is really good and I recommend reading it. One thing is for sure. Do not start tweeting at 1:31 am.
This “follow up” looks at the CDC findings and the White House’s attempt to blame the baby formula shortage on capitalism instead of inflation. This is because inflation is synonymous with the President in power and his political party.
CDC talks in code
February 28, 2022
Recall after report of infant death of Cronobacter
The “Fast Facts” of the baby formula investigation are -
Illnesses: 4
Deaths: 2
States: 3 (Minnesota, Ohio, Texas)
April 15, 2022
NBC News “headline” - “Amid baby formula shortage, factory stays shut as investigators try to pinpoint source of bacteria that sickened infants”
Why is this important?
It identifies there is already a shortage of the corn syrup, vegetable oil filled baby formula ingredients.
CDC found no link between the formula powder and the deaths
But… the FDA continues to investigate and keep the factory closed
May 12, 2022
CDC closes its investigation into Abbott over the baby formula.
Code talk = there is no link between the deaths and the baby formula
This is not unique, but typical when you have multiple agencies involved. They do not talk or coordinate mainly because of “bigness”. Any big corporation or entity (government) is inefficient by nature. Despite how Michael Bay’s 3 hour music video, also called Transformers, depicts super large objects flying and moving swiftly between buildings causing enormous damage to large cities (once again, Dallas is spared) that would easily cause a Great Depression… massive objects move slowly. Think Titanic (the real one) or wind energy turbines (all of them).
Also, Transformers should not have beards. That is a bridge too far for me.
The Blame Game
Government is a massive object that moves slowly, especially in response to abrupt changes. But, government cannot be to blame because the solution needs to be more government. This is not a one party problem/solution. It is a power problem of any politician/party in charge. So, what is the solution the Biden Administration is putting forward for this baby formula shortage? Price gouging laws to fight oligopolies.
Yesterday, CBS, Margaret Brennan, interviewed the Secretary of Transportation1, Pete Buttigieg2. Buttigieg is, by far, the best communicator for the White House, in my opinion. I disagree with more than half of what he says. However, he is clear, concise and very poised. He has a great disposition and many have argued that he should have been Biden’s pick to be Vice President.
I thought it was a good interview. I did not watch the interview, but read the transcript. Brennan asked specific questions. Buttigieg delivered answers that were intelligible and understandable, even if you disagree with the points being made.
I found it very revealing because Secretary Buttigieg explains that the baby formula shortage is not because of -
Inflation (code - the White House is not to blame); OR
The supply chain (code - he is not to blame as the Secretary of Transportation)
The reason for the baby formula shortage is the baby formula companies “oligopoly”, (code - capitalism because it creates monopolies and concentration of markets). For brevity’s sake, I will refer to baby formula companies oligopoly as “babygopolies”.
So, the babygopolies get together to raise prices that causes inflation and a shortage of baby formula which simultaneously prevents the babygopolies from selling more formula and thus collecting money for their business. Babygopolies are the new faceless entity that the Biden Administration is fighting. I think I hear a faint Don Quixote battlecry (wink, wink).
Secretary Buttigieg doesn’t stop at bottles. President Biden has bigger plans as he explains to Margaret Brennan - “By the way, this is an issue the president has been talking about in area after area after area3 whether we’re talking about fertilizer, whether we’re talking about other things in our agriculture sector.”
Oh good! Everything is on the table now. So, what is the answer to fighting The White House’s personal El Guapos (clearly, I am throwing every movie at this newsletter)? More government through price gouging legislation.
Price gouging
“Price gouging” is the idea that prices are being raised during a crisis or shortage to exploit the situation for increased personal profits. It is a politically popular fight because when people see prices rise during a crisis, it just feels unfair. Therefore, “anti-gouging” laws exist in all states which is why a federal law would just further compound the problem.
But, reality bites with price gouging laws because it makes the shortage problem worse and prevents supply from coming back quicker. Think back to the Human-made toilet paper/clorox wipes frenzy around March of 2020. Stores could not keep their shelves stocked because of such a high demand for these products. It is normal human behavior to react with panic buying in a crisis. Stores also did not want to look bad for raising prices in a time of crisis. Therefore, no prices were raised in 2020 despite high consumer demand (i.e. price fixing). What happened? People bought in bulk which created a supply shortage.
Typical human reaction to rising prices -
People do not like paying higher prices
However… people are more judicious with how much they buy with higher prices
Therefore… they buy less of the product
Result… more products are able to be on the shelves
Empty shelves is a sign of price fixes = “anti-gouging laws”. Ask yourself, do you want to be like Venezuela or Singapore? Singapore has absolutely no natural resources yet… they are one of the wealthiest nation/states in the world. Rich Crazy Asians proves that. Venezuela is in the top 10 countries with the most natural resources that is “estimated at $14.3 trillion”. Yet… they cannot figure out how to keep toilet paper stocked on their shelves.
Prices matter more than resources because the right price brings the resource to you!
Enter Elizabeth Warren
This is a full court press right now. Margaret Brennan asks Buttigieg if President Biden is looking to Warren’s plan to help with the babygoloplies.
Senator Warren, Speaker Pelosi also says she’s putting forward a bill about price gouging by companies and banning unconsciously excessive pricing. This has been called dangerous and misguided nonsense by the Obama administration economic advisor Jason Furman. Do you agree it is nonsense?
I do. Thank you Jason! “Unconsciously excessive pricing”? That is very subjective which is why it is dangerous.
Buttigieg does a pretty good job of not agreeing, but also not disagreeing. However, he does say that the White House is giving guidance “to crack down on price gouging where we see it. If price gouging arises in the formula marget or the fuel market.”
It is much easier to go after oil titans than baby bottles. Resist the urge to want government to “do something” during inflation!
What to look forward to…
You can fly to Cuba now because the White House lifted the Trump restriction so you can see what real price gouging looks like.
You can watch the result of a very bizarre Republican Primary in Pennsylvania on Tuesday (May 17th)
You can watch the live UFO hearings on the Space.com website
You can watch the Mavs beat the Cavaliers in Game 1 of the Conference Finals on Wednesday
So many choices that covers so many interests.
I want to end with an 80s song that I loved until I listened to the lyrics today. I believe it fits well with the topic of this newsletter. It is “No One is to Blame” by Howard Jones.
“And you want her, and she wants you
We want everyone
And you want her and she wants you
No one, no one, no one ever is to blame
No one ever is to blame
No one ever is to blame”
What was I thinking?? If I liked this so much, why don’t I like Vice President Harris’s speeches?
Sincerely,
Me
Secretary of Transportation oversees the shipping and transportation of things coming in and out of the US which also includes our airports.
Here is some help pronouncing his name - “Boo - tuh - ji - j”
I think that phrase came from Kamala Harris’ speechwriter