There are two ways for a business to make up for the massive inflation we are experiencing. They can raise the price of the goods—or they can shrink the amount of the goods.
As many of you know I love to go grocery shopping—yes I buy ice cream. I have been buying Stater Bros. ice cream for several years, the container is 1.75 quarts. The price is usually $2.99 or $3.49. Now the brand has changed container design, the price is the same, but the container now has only 1.5 quarts of ice cream.
You will note that several brands of pasta that are bought in one pound boxes, those boxes only have twelve ounces of pasta—for the same price you paid for the pound box.
““Consumers check the price every time they buy, but they don’t check the net weight,” consumer advocate Edgar Dworsky told the Post. “When the price of raw materials, like coffee beans or paper pulp goes up, manufacturers are faced with a choice: Do we raise the price knowing consumers will see it and grumble about it? Or do we give them a little bit less and accomplish the same thing? Often it’s easier to do the latter.”
These are real world examples of shrinkflation. And, this is a tax on all of us.
‘Shrinkflation’: A Terrifying Omen For America Under Biden
By Tyler O’Neil, PJ Media, 6/3/21
No, “shrinkflation” is not a reference to what happens when a virile man gets in cold water. Instead, it refers to the sneaky way businesses hide the fact that prices are rising as the dollar loses its strength. Customers may blame companies, but businesses have little choice but to pass on some of the cost to consumers. The real fault traces back to President Joe Biden and his strategy of printing money to shovel it to Democratic interest groups.
“Consumers are paying more for a growing range of household staples in ways that don’t show up on receipts — thinner rolls, lighter bags, smaller cans — as companies look to offset rising labor and materials costs without scaring off customers,” The Washington Post reported. “It’s a form of retail camouflage known as ‘shrinkflation,’ and economists and consumer advocates who track packaging expect it to become more pronounced as inflation ratchets up, taking hold of such everyday items such as paper towels, potato chips and diapers.”
“Consumers check the price every time they buy, but they don’t check the net weight,” consumer advocate Edgar Dworsky told the Post. “When the price of raw materials, like coffee beans or paper pulp goes up, manufacturers are faced with a choice: Do we raise the price knowing consumers will see it and grumble about it? Or do we give them a little bit less and accomplish the same thing? Often it’s easier to do the latter.”
This hidden version of inflation seems extremely likely, considering the fact that the core personal consumption expenditures index — which Federal Reserve officials consider the best indicator of inflation — rose 3.1 percent in April, above the 2.9 percent economists predicted. The Fed considers 2 percent to be healthy, although it will allow the price index to grow in the interest of promoting full employment. Unfortunately, unemployment remained above 6 percent in April despite economists predicting that it would dip below 6 percent.
This persistent unemployment should not surprise Americans who are familiar with the Democrats’ $1.9 trillion blue pork bill masquerading as a “COVID-19 relief” stimulus. Only 8.6 percent of the funding went directly to combatting the pandemic, while hundreds of billions went to blue-state bailouts. The bill also sent $1,400 checks to individuals, and extended the $400/week “enhanced” unemployment benefits.
Thanks to this “enhanced” unemployment, many workers make more money without a job than they did when they had one. Rather than reconsidering this perverse incentive not to work, Biden and his fellow Democrats further entrenched it.
Biden’s other policies would also make the economic situation worse. The president has called for Congress to spend trillions more in social programs that his tax plans cannot hope to fund. Essentially printing money decreases trust in the U.S. dollar and sparks inflation.
As PJ Media’s David Goldman wrote, “inflation is an insidious tax that robs the poor and the middle class. It favors the U.S. government, the world’s biggest debtor, because the government expects to pay back its creditors in Monopoly money. It crushes the real earnings of the vast majority of American households and destroys their savings. That’s what the Democratics are up to. And that’s what might bring them down–just as 12% inflation brought down Jimmy Carter in 1980.”
Biden is bribing the American people into voting themselves more money, and his proposed “infrastructure” bill is packed full of bribes to Democratic constituencies. Even Obama’s Treasury Secretary Larry Summers warned that inflation indicators are flashing a red alarm — and that was last month.
The specter of inflation comes as Americans are struggling with a sharp deceleration in personal income, which declined 13.1 percent (after it surged 20.9 percent in March during the latest round of stimulus checks).
The COVID-19 stimulus bills have effectively put almost the entire U.S. population on the dole. Americans feel the difference between life with government checks and life without them, even though there is no foundation beneath that government spending.
While President Donald Trump began the COVID-19 stimulus checks, he did so at a time when government lockdowns had gutted the U.S. economy and the government arguably had a duty to help make Americans whole. Now, the government needs to step back and let the economy recover, but Biden is trying to do the opposite.
Carter-style stagflation may destroy the Democratic Party under Biden, and Republicans need to make sure that Americans understand why this is happening. Tragically, this inflation also means that America is in for a painful few years.
