A couple of weeks ago (I'm still trying to catch up on old podcasts), EconTalk featured an interview (more of a chat/banter, really) between host Russ Roberts and Mike Munger. Both are magnificently smart, witty and educated men – and, as always with Econtalk, the podcast is engaging, engrossing and... erm... some other eng- words that I can't think of right now.
They were talking about franchising – specifically as it relates to car dealerships in the United States. It made me wonder about the balance of power between manufacturers and retailers... and about the car dealerships in my own town, which seem to be doing fine selling pre-owned cars. About a half-hour in, Roberts and Munger talk about how the political power of the dealers created a restraint on GM and Ford that limited their ability to reduce the number of lines they had. Result: GM and Ford now have a limited selection of cars nobody wants to buy.
Oh, and then – as if it's the most natural direction the conversation could take – they start talking about the Arch Deluxe: the worst sandwich in history.
Don't you love economics?