The sitcom Arrested Development once demonstrated the ignorance of its comically out-of-touch family by having matriarch Lucille Bluth ask, “It’s one banana, Michael. How much could it cost—ten dollars?”
Her son retorts: “You’ve never actually set foot in a supermarket, have you?”
It’s a question many elected officials should answer. Politicians around the world have long been criticized for not knowing the cost of everyday staples that many constituents closely, and painfully, track.
A follow-up question: if you don’t know what a gallon of milk costs, why should you be in charge of setting milk prices?
Regulators in both parties see grocery prices as a problem to fix—and themselves as the answer. The New York City mayor is proposing government-run grocery stores, Democratic U.S. Senators have introduced legislation pushing for immense Federal Trade Commission power over prices, and the president has blamed “corporate greed” for price increases that came in the wake of his own cost-raising tariffs.
To be sure, consumers are facing higher costs. Supply chain disruptions from the wars in Ukraine and Iran, the higher cost of imported goods under increased tariffs, and other external shocks all play a role in an item’s price. Despite it all, grocery store profit margins have remained slim. If there’s a cost problem, it’s not greed.
So, what’s the right price for a banana? No one knows. Economists call this the “knowledge problem,” the information required to set the right price for an item— preferences, available resources, local circumstances—is dispersed among millions of individuals and can’t be centralized.
Our modern elected officials should step inside a supermarket with a willingness to learn about the economic realities at play. How much could it cost—a little humility?