Tuesday, March 04, 2008


D'oh! I mean, DOUGH!

Wheat is selling at record prices, with a bushel fetching $25 last week on the Minneapolis Commodities Exchange (up from the $3 to $7 band in which it traded last year). Over the past two weeks, the cost of a 50-lb bag of flour in New York City rose from $16 to $26. It was $9 in 2006. The U.S. Department of Agriculture is forecasting that wheat prices will remain high throughout the year.

The nation's major pizza chains are warning that major price increases are inevitable because of rising cost of wheat -- which goes in pizza dough, you know. In New York City, some pizza restaurateurs are warning that they may be forced to raise prices as much as 50 percent to keep up with rising wholesale prices.

How come I can't find a poll in which a quarter of Americans blame the Bush Administration for the rising cost of wheat? (A Gallup poll conducted in 2006 indicated that 25 percent of the general public blamed President Bush for high gas prices.)

When should we expect congressional hearings seeking to expose nefarious price-gouging schemes initiated by Big Pizza?

When will B. Hussein Obama and Hillary Rodham (Clinton) propose price controls on wheat so that Americans can exercise their fundamental right to cheap pizza?

All kidding aside, the spike in prices for wheat is due to exploding worldwide demand and poor crop yields. Americans who consume foodstuffs derived from wheat may not know it (no, hell, they don't know it), but they are receiving a valuable tutorial in basic economics: growing demand, coupled with diminished supply, will always lead to an increase in the cost of goods and services.

Adam Smith was right. Pass it on.

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