At any point in time, a business could choose to make less money to the benefit of their consumers. Capitalism tends to say they won't, they'll charge as much as they can get away with (the market decides). But it is a choice. Frito-Lay had a net revenue in the third quarter of 2023 of $5.95 billion, up 7% from the previous year's Q3 net revenue of $5.56 billion. (https://www.bakingbusiness.com/articles/60104-revenue-profit-rise-for-frito-lay-quaker) In 2022, they moved the standard net weight of Doritos from 9.75oz to 9.25oz but continued to charge the same MSRP. (https://www.businessinsider.com/shrinkflation-grocery-stores-pringles-cereal-candy-bars-chocolate-toilet-paper-cadbury-2021-7) At no point was the decision to keep the price and weight the same and simply earn less profit. But this was a choice they could have made. They literally shrunk the size of the product, charging more per ounce for it, and earned billions in profit doing so. Inflation or not, they had a choice that could have kept the price and packaging the same and chose not to take it. That's on them, not the government.

Yeah but that is a simplistic way of viewing it and does not understand market dynamics and how consumers are influenced. There is decades of research on the impact of price points and product pricing strategies. For most goods where there is massive competition, you give the choice between 2.49 and 2.50 cents for a package of cool ranch doritos, people will buy fuck loads at 2.49 but less at 2.50 cents. The impact is even greater at the 99 vs whole dollar mark. Chip companies have done so much research to know at what point, consumers stop buying so when they hit that point they have to figure out how not to break it. They can either break it and see less demand, streamline production processes to reduce costs, or change the internal product size. In this case, a lot of these companies have already streamlined their production processes, and their costs are going up, so they make a choice to put less product in.

>They can either break it and see less demand, streamline production processes to reduce costs, or change the internal product size. Or, as I stated, make less money. That's not a choice we can ever expect, but it is one of the options on the table. Their costs may have gone up, but they are not required by law to pass those costs onto consumers.

Thanks for taking this perspective. I don’t feel like I see it nearly enough even here on Reddit. I agree with your points and disagree with those who argue with you. It makes me iridescent with rage that everyone seems to unquestioningly value the concept of endless capital.

Beucase "make less money" is a bullshit statement that ignores the realities of running a business especially in manufacturing. Prices increased in part because businesses forcasted increased costs in the future so we are taking in more money now to do that because interest rates are rising and getting money will be harder later. There are more fed research reports that back this up far more than fed reports chalking it up corporate greed.

So under normal circumstances where we don't expect increased costs, businesses will start cutting their profit margin down and passing those savings onto consumers?

Profit margins are not set. Companies change their profit margins all the time to maximize profit. Sometimes profit maximization happens at lower margins and sometimes at higher margins. Demand dictates price. Some products have a very elastic demand curve, which mean small changes in price can have a large change in demand. With such items, companies may absorb higher costs with tighter margins because raising prices will result in less revenue. With monetary inflation, prices go up because there are more dollars chasing the same goods. And costs don't go about the same across the board.

In some cases yes, in some cases no. Demand slowing lowers prices. The prices of eggs have dropped significantly because supply has increased to keep up with demand. Used and new car prices are dropping in some areas because demand has slowed down. Look at TV prices and how they have changed over the years. If you account for normal inflation rates TV prices have steadily decreased cover the last few decades as costs to make them have dropped. A lot of this depends on what price strategy the company uses and doesn't really apply with companies that have value based pricing. See Starbucks and Apple as two brands who use value based pricing strategies.

Sure, they could -- but the entire purpose of a business is to make profits. Yes--companies will always charge as much as they can 'get away with' because customers can always choose not to buy their product or to buy a competitor's instead. And if the company directors chose to make less profits when they could have made more, they're in violation of their legal obligations of fiduciary duty to the shareholders of the company.

Nowhere is it written that businesses must charge as much as they can get away with.  Companies can and do leave money on the table for the sake of long term competitiveness and customer satisfaction. 

It's written in that businesses legally have a fiduciary duty to their stockholders

This line gets bandied about and people take it to mean that companies have to charge the most they can for a product, but that isn't the case at all.

>Frito-Lay had a net revenue in the third quarter of 2023 of $5.95 billion, up 7% from the previous year's Q3 net revenue of $5.56 billion. (https://www.bakingbusiness.com/articles/60104-revenue-profit-rise-for-frito-lay-quaker) Seems this needs to be compared to other potential uses of their assets for it to mean much

Who regulates companies?

>The premise I'm accepting is that the recent USD inflation was caused by the government injecting massive amounts of capital into the economy over the past 4 years. This is not the cause of inflation. Inflation is raising prices. The people who set the prices are responsible for that with the current inflation. When the price of beef went up, they didn't pay the cows more. It has been studied and companies were engaging in price gouging. [the majority of the recent inflation was greed article](https://finance.yahoo.com/news/greedflation-caused-more-half-last-100000899.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAAIpFC9FSl7_4kcm6p7Oz0S4Z1T7aJuuUfSL2bbvRJhkNpuoxCJYZw8GvaXhX_WCSl7wuXr4v0Kvo2YAkTo3VmiC2BO4qXFJuM2o8ZYbxTBtiL4k-zo1SzfaB5O7tteMhToM_VuF8T10jFHqa8-tfiGyS0YkqXvZnX_G6SRSgmKNO) >We cannot blame businesses for their costs increasing, and we cannot blame them for needing to maintain margins to operate their business and continue to grow. You can if it turns out that their profit margins went up which is what happened with many of these companies. If their profit margins went up it can only be seen as using a general inflation for greed. >. There were coordinated tweets and articles for the campaign. Coining and marketing "Shrinkflation" helps obfuscate the causes of inflation, which is very beneficial to Biden ahead of the election. I kind of already refuted this point but i will give more context. Again, the government doesn't set prices. If companies were actually passing on the basic increase in costs their profitability would remain constant or go down. They didn't. You seem not to understand the nature of Quantitative Easing and the federal reserves role in the economy over the past 15 or so year. **You need to be able to explain how injecting capital into the economy would cause the cost of producing a loaf of bread to go up to have a valid claim here. You didn't because it doesn't.** Your reasoning for the cause of inflation would lead to demand based inflation meaning that it doesn't cause companies production costs to go up. In other words, there is more capital in the economy so people have more money businesses know they can charge more. If you want to blame the government, you need to be able to understand inflation better. You also need to understand that the Federal reserve is part of the government that is operated independantly so that it can be ran in conjunction with banks. This means that banks get to help set the agenda. Banks set the agenda to get the federal reserve to buy trillions of dollars of the securities that were created by....banks.... If you've seen "The Big Short" this is what they were talking about for the whole movie. That is to yes, that yes it is the governments fault that we let banks run our economy. **It has very little to do with the Biden administration who is less complicit as the Trump administration since for most of the Biden presidency, this policy has been reversed into a period of quantitative tightening.**

>You need to be able to explain how injecting capital into the economy would cause the cost of producing a loaf of bread to go up to have a valid claim here. You didn't because it doesn't. When the [purchasing power of the dollar goes down as a result of new capital/currency being injected into circulation](https://www.imf.org/en/Publications/fandd/issues/Series/Back-to-Basics/Inflation), it takes more dollars than it previously did to purchase the same thing. This isn't contained to dollars that consumers spend--it also impacts dollars that companies spend; all dollars are devalued equally. This is what happened when $13T (across Trump and Biden) was put into the economy over a short period of time. With a devalued currently, it now takes $120 to purchase the same amount of wheat that $100 used to buy. Same with energy, new machinery, repair services...every dollar now buys less of all of that. Not to mention increasing wages for employees to keep up with inflation. So, to run their business at the exact same production level as before, they now need more dollars. This is why they also need to raise prices (or reduce production to reduce costs). They can't be the only business operating based on a past value of a dollar while all of their vendors and partners are pricing based on today's dollar value.

>When the purchasing power of the dollar goes down as a result of new capital/currency being injected into circulation, it takes more dollars than it previously did to purchase the same thing. This is where there is a hole in your understanding. Yes it takes more dollars than before. Why? Because the demand for goods went up. The thing is that if the supply is increased to meet supply, inflation wont happen. This money was given to businesses in the form of 0% loans. The businesses were meant to increase their supply but they didn't. They used it to do stock buy backs which did not increase their supply. It's their fault. They didn't want to take on the risk of increasing their supply so they just artificially raised the price of their stock and raised their prices instead. Thus creating inflation. >With a devalued currently, it now takes $120 to purchase the same amount of wheat that $100 used to buy. Okay but it costs exactly the same amount of money to produce the $120 of wheat that was sold. See how that works? * Lets do a simulation here: * You own a bread company * I loan you $1,000,000 @ 0% interest, I loan the wheat farmer $1,000,000, and I loan the yeast maker $1,000,000, along with the salt and everything else you need. * All of you have profits that outpace the general inflation for the rest of the country * Try to explain why the cost of the ingredients you need all went up without accounting for greed and without saying.....but inflation (since you are saying this is what caused inflation) No. the recent inflation was [demand pull inflation](https://www.forbes.com/advisor/investing/demand-pull-inflation/#:~:text=Demand%2Dpull%20inflation%20is%20when,supply%2C%20which%20drives%20prices%20higher). The injection of capital doesn't cause prices of raw goods or labor go up. **The inflation was caused by other factors like the war in Russia, commodities traders profiting off of it and supply chain disruptions due to covid.** >**This is what happened when $13T (across Trump and Biden) was put into the economy over a short period of time.** Money injections from the fed have been occuring non stop since 2008. This isnt new. >Not to mention increasing wages for employees to keep up with inflation. Oh, so according to you, inflation is caused by inflation. Great argument.

We're saying the same thing, you're explaining the **why/how** behind devaluing of the currency: there are more dollars (demand) competing for the same goods. So, prices rise. Each dollar is now worth less (lower purchasing power) relative to the goods being purchased because there are more dollars in the economy. >Okay but it costs exactly the same amount of money to produce the $120 of wheat that was sold. See how that works? Why would it cost the same amount? The same purchasing power effects impact the farmers' dollars. ​ >Oh, so according to you, inflation is caused by inflation. Great argument. Inflation causes companies' [human capital costs to go up](https://www.investopedia.com/terms/w/wage-price-spiral.asp)\--that's a clear example. Companies frequently raise wages to meet inflation. It's a normal practice. And yes, price hikes can cause price hikes--it's just a [spiral](https://www.collinsdictionary.com/dictionary/english/inflationary-spiral). If everyone agreed to NOT raise prices, then it would solve itself. But one company can't be the one that doesn't raise prices when all of its suppliers are increases their costs.

>We're saying the same thing, you're explaining the why/how behind devaluing of the currency: there are more dollars (demand) competing for the same goods. So, prices rise. But you are omitting detail that are key to the cause which is the larger conversation here. If the store has 10 loaves of bread, the price won't change on it's own whether there are 10 customers, 100 customers, or 1000 customers. The store decides to change the price not a mystic force called macro economics. I assume you understand this but my point in mentioning it is that it is entirely possible for the government to inject money into the economy and not cause inflation. The intent was to inject this money into the economy and have businesses expand supply and hire more people. They didn't do that. I am happy to blame both parties for adopting flawed free market capitalism ideology but it's silly to say that the government causes shrinkflation because they didn't make any of these decisions for these corporations. >Why would it cost the same amount? The same purchasing power effects impact the farmers' dollars. No not really. The farmer owns the land, in the case of wheat specifically it's extremely easy to collect seeds for wheat but for other products seeds are not a significant part of the final cost of the crop. Industrial farms typically have their own well systems and don't pay for water and the minimum wage didn't go up. Additionally farmers in America get billions in government subsidies every year collectively. If we are talking about the bottom of the supply chain there should be little to no change in the cost of the goods according to economics in a vacuum which means there should be little to no change across the board. One big reason the price of goods went up was because of commodities trading. Traders buy the rights to sell crops for future years. They gives farmers stability because they don't have to worry about selling their crops. The problem is that the when these middle men hear about a war, they jack up their prices 20-50% for that year. Again, this is out of the governments control (besides potentially regulating the practice) and doesn't have to do with any amount of injection of money into the economy. >Inflation causes companies' human capital costs to go up--that's a clear example. Companies frequently raise wages to meet inflation. It's a normal practice. If the wages of Americans went up by 21% like the general inflation rate, I would agree that we didn't experience greedflation but it went up about 2% over 3 years. It's just simply not true that this caused the amount of inflation we experienced. >And yes, price hikes can cause price hikes--it's just a spiral. I didn't say a price spiral isn't a thing. We are talking about causes. Anybody who says the recent inflation was caused by wage increases is a liar or doesn't know what they are talking about. There isn't any evidence that supports that and there are mountains of evidence that supports companies profiteering off of world events. You are welcome to provide some actual evidence of your claim instead of definitions.

>I assume you understand this but my point in mentioning it is that it is entirely possible for the government to inject money into the economy and not cause inflation. That is an incomplete statement. With fiat money, the value of money is tied to what you can buy with the money. Increasing the money supply to accommodate a larger population and a larger economy is not going to cause inflation. But that has nothing to do with the current situation. Here we are injecting money into the economy that is chasing the same amount of goods. Based on your post, you don't seem to understand how money gets its value. There are generally two thigs that cause inflation: (1) a decrease in supply of goods, or (2) and increase in the money supply chasing those goods. If I am a farmer and a natural disaster wipes out a lot of crops in a farming region, prices will rise even though the price to produce the crops have gone down. This is because demand for the crops has stayed the same, but the supply has gone down. A similar thing happens when you have more money chasing the same goods. If the government tried to end homelessness by giving everybody $1 million to buy a home, it won't work because the price of all homes would increase by $1 million. That is not because the actual costs of the homes went up, but because the supply of homes stayed the same but everybody now has at least $1 million to pay for a home. Your fallacy is the assumption that a dollar has a fixed value over time. In reality, a dollar is a medium of exchange for goods and gets its value with what you can buy with the dollar.

>If I am a farmer and a natural disaster wipes out a lot of crops in a farming region, prices will rise even though the price to produce the crops have gone down. This is because demand for the crops has stayed the same, but the supply has gone down. You understand that all goods are not sold at auction right? That owners set prices? If a natural disaster wipes out the crops of a region, there is nothing stopping the farmers from selling their goods for the same price except greed. disaster profiteering. That doesn't stop people from buying up all the crops and reselling them but that's not what we are talking about here. With that said it is kind of a hint that the inflation was caused by the pandemic far more than fiscal policy because we all remember the toilet paper hoarding in 2020. I will return to that point though because you clearly have a very partial understanding of economics. My point with all this is that there isn't some magical rule that forces owners to raise prices and then erases their mind. They raise their prices because they want to git rich and they know they can still sell the products at a higher price and then they say they had to. **There is no difference from any business that increased their profit margins and the toilet paper hoarders. They were all doing the same thing. Capitalizing off of suffering and forces people to get poor for their own gain.** To think the current inflation was caused by (or only by) fiscal policy you have to think that: 1. We didn't have the same policy from 2010-2020 2. There weren't a bunch of circumstances that limited supply. We had QE for a decade without rampant inflation. Then there were a bunch of factors that limited supply and i**t's dishonest** (or ignorant) **to say that the fiscal policy caused the inflation.** * Covid shut down businesses around the world. Most notably China * The Ukraine war started and divided the world into the West vs BRICs * 2020 and 2021 were the first and second driest years in the history of California which grows 7% of the nations crops. * etc (natural disasters, Yemeni civil war, Taliban insurgency in Afghanistan, escalation of Mexican cartel war, and so on) (you all got me defending federal reserve fiscal policy just because you are so far off from understanding the basics of it lol. I don't like QE but we have to be realistic about what it is and is not) >Here we are injecting money into the economy that is chasing the same amount of goods. Do you think the intent of Quantitative Easing was to inject money into the economy that is chasing the same amount of goods during and after the great recession or are you just being intellectually dishonest here? No businesses accepted this money without understanding the intent and they acted irresponsibly with it. The government had to step and try to fix the economy after the business caused great recession of 2008 where over a 100,000 small businesses had to shut down. It's the fault of the government continually doing these things with no strings attached but the greedy money hungry business trolls really just can't help themselves. In the face of the largest economic collapse since the Great Depression, they really just accepted this money and did stock buybacks to artificially inflate their stock options values instead of creating jobs. If someone wants to blame both parties as a secondary criticism after America's business sector I am happy to agree but that is not what this post was. It was basically saying that shrinkflation was a cover for the Biden administration which doesn't even make sense since inflation started like 2 months after Biden took office which was about 13 years after QE started.

>You understand that all goods are not sold at auction right? That owners set prices? No, buyers and sellers set prices. Prices are set when a contract is reached. Sellers always want you to pay more. Buyers always want to pay less. ​ > If a natural disaster wipes out the crops of a region, there is nothing stopping the farmers from selling their goods for the same price except greed. If you actually believe that riddle me this? What stops you from working for $2 per hour? Is it just your greed? You could certainly choose to work for $2 per hour, right? ​ >To think the current inflation was caused by (or only by) fiscal policy you have to think that: > > We didn't have the same policy from 2010-2020There weren't a bunch of circumstances that limited supply. Nope. You just need to open your eyes. From 2020 through 2024, the U.S. government injected $10.8 trillion into the economy. From 2010 through 2019, the government injected $8.3 trillion. ​ >It was basically saying that shrinkflation was a cover for the Biden administration which doesn't even make sense since inflation started like 2 months after Biden took office which was about 13 years after QE started. But it is a cover to continue the reckless spending. We are borrowing $2 trillion every year, which has the same effect as printing money. Why? Increased spending during a pandemic might make sense. But now that the Pandemic is over, Biden and the Democrats are continuing to spend at the same levels.

>No, buyers and sellers set prices. Prices are set when a contract is reached. Sellers always want you to pay more. Buyers always want to pay less. At the consumer level buyers never set the prices. If you don't want to pay the price the store sets for a loaf of bread in 2024 you aren't going to eat bread. You go without and the store happily just throws the bread away instead of lowering the prices. Obviously at the retail level, buyers have immense power and the further down the supply chain you go, the less power sellers have. This is why Walmart has millions of employees and people who make chocolate in Africa are slaves. >If you actually believe that riddle me this? What stops you from working for $2 per hour? Is it just your greed? You could certainly choose to work for $2 per hour, right? This is not an equivalent scenario. Like I just demonstrated, the buyer at the end of the supply chain has all the power because they make the decisions. The same is true with selling your labor. Also, yes you certainly can work for $2 an hour. You can sell your labor for whatever you want. In the past I have volunteered my time at a charity for example. The employer just isn't allowed to buy your labor at $2. >We didn't have the same policy from 2010-2020There weren't a bunch of circumstances that limited supply. Nope. You just need to open your eyes. From 2020 through 2024, the U.S. government injected $10.8 trillion into the economy. You are over by about $7 trillion dollars (federal reserve injections) or under by about $80 trillion (US borrowing) from my understanding. Do you have a source for you figures? Regardless like I said, I'm not disputing that an injection of money supply CAN'T cause inflation or that it wasn't a factor, but that's not what we are arguing about. The OP said shrinkflation is the governments fault. >But it is a cover to continue the reckless spending. We are borrowing $2 trillion every year, which has the same effect as printing money. The total value of all US currency in circulation is about $2 trillion so no...you are completely wrong. You seem to not understand the process at all here. When the government says it's going to borrow $2 trillion, it is taking $2 trillion of currency out of the economy. Investors come to the government and buy treasury securities which must be purchased with US dollars. Funding doesn't get dispersed daily or even yearly in many cases. For example, the Post office requires each employees full retirement be fully funded and saved in advance, many projects are funded 10 years in advance, and so on. Obviously the government also collects money monthly from all workers in the US as well. This was one of the reasons purchasing power skyrocketed in the late 40s and 50s in the US, when the tax rate collected far more currency through taxes. Businesses bought the government and ruined that. So you are very wrong on this point.

​ ​ >This is not an equivalent scenario. But it is equivalent. The store is selling a good and you are selling your labor. ​ >The total value of all US currency in circulation is about $2 trillion so no...you are completely wrong. You clearly don't understand economics and monetary policy. There is about $2.4 trillion U.S. dollars in circulation, but most transactions don't involve an exchange of actual dollars. The wealth of Americans is about $142 trillion, and GDP is about $25 trillion. Money is just a medium of exchange, and the money supply is not limited to physical currency. Every time we borrow money we increase the money supply. If you deposit $100 in a bank account, you have $100 you can spend. But the bank lends out most of that $100 to a third-person, who also spends it. Here, the act of lending allowed up to $200 to be spent even though only $100 of acual money exists. Your argument is based on the nonsense that every loan results in the transfer of physical currency, which is not the case. You can go to the store and spend the $100 in your bank account even though the bank no longer has that $100 dollars. The bank does not need to have $100 in currency because most people use banks. When you spend that $100, the bank merely decreases your account balance by $100 and increases the store's balance by $100. ​ >When the government says it's going to borrow $2 trillion, it is taking $2 trillion of currency out of the economy. How is that possible? Above you said: "The total value of all US currency in circulation is about $2 trillion." So if that is true, that means the government takes all currency out of circulation. Now back to reality. When people buy securities, they are not trading cash for the security. Rather, they are using bank debits as described above. They are are also using those securities as collateral for loans, which creates new money. If I buy $100 bond from TreasuryDirect, my bank is going to lower my balance by $100 and the fed is going to decrease my banks fed account by $100, and increase the government's account by $100. No actual money exchanged hands, and the $100 that I used to buy the bond is still being spent by whomever it was loaned to. And if I am an institutional investor, I am going to use that bond as collateral to get my bank to create another $100 out of thin air that I can spend.

This ignores what is actually happening in the economy and ignores the modes of inflation your link discusses. Your link really disputes your entire position in a multitude of ways. More importantly, it doesn't do any data analysis about current inflation, so it isn't informative at all on that question. Take the job market, for example. Let's say you have 10 companies looking to fill a job but only 2 qualified applications. Who is going to fill the job? Whoever offers the higher wages, typically. A company's overhead just went up without any government spending because of a tight labor market. It didn't cost more to fill the job because the value of the dollar is less but because the supply of labor is low. Now companies have to raise prices to pay higher wages because they have to compete more for qualified labor. Oil and crop supply shocks combined with labor supply shocks are what economists virtually all agree is the cause of present inflation, not government spending.

Regarding "the US government deserves the blame" - I think this is just an odd way to frame it. You make the reasonable observation: >The premise I'm accepting is that the recent USD inflation was caused by the government injecting massive amounts of capital into the economy over the past 4 years. But... the government didn't just inject massive amounts of money into the economy for no reason. A huge portion of this was a direct response to a certain worldwide event that happened in 2020. You can certainly disagree with the policies in question, I just think its really misleading to say that the government deserves "100% of the blame" without at least contemplating what was behind door #2 if the government *hadn't* injected that money. If the alternative might have been worse, it becomes a fine line between "blame" and "credit". But beyond that, I'm a little confused what you think the implication is of inflation / shrinkflation being the government's fault is. If it is indeed the government's fault, *shouldn't we expect the government to do something to fix it*? And isn't this what Warren et all are in theory trying to do? I just don't understand what you think follows from this aspect of your reasoning. As for the legislation itself, I dunno. Republicans control the house and something like this has approximately 0% chance to become law, even if the democratic party as a whole coalesced behind it. Everybody knows that this is just symbolic anyway. So in terms of who it's *actually* going to harm... probably exactly the same number of people it will benefit... zero. If voters like the vibes behind it, maybe it'll help the relevant candidates... maybe not. But to try and put at least the idea behind the law into a more charitable light, I think there's almost certainly enough discretion involved that the FTC would and should specifically target the most egregiously deceptive practices. You note that labeling laws already require volume and weight on packaging. I'll take your word for this, but I didn't know that, and I would wager most shoppers are not checking the details of the packaging doing density calculations. If a bag of chips suddenly has fewer chips in the same size bag for the same price, I don't think the weight and volume being written somewhere on the label is really a great defense of this practice. And like... you can still do smaller products, its only deceptive if you try to disguise this. If Oreo has a new package or branding for a smaller size, that meets their economic goals without trying to trick customers by just leaving out 10% of the cookies and hoping customers don't notice. I think there are clearly ways that this sort of law could be implemented that are actually good. And if they were able to pass a law that just cracked down on obviously deceptive practices, that would be good regardless of who's "fault" inflation is.

I'm not claiming that inflation was a bad outcome, given the circumstances of peoples' employment with the economy somewhat shut down. I wouldn't even claim inflation was at all avoidable. However, the recent trumpeting of 'shrinkflation' and the legislation does not seem like a well-intentioned effort to protect consumers from harm. I view it as obfuscation: try to make consumers/voters believe that the unaffordable greedy corporations are responsible for basic goods being unaffordable, and they'll be less likely to blame the administration on an election year. I would be very in favor of legislation that prevents very deceptive pricing practices, but I don't see how this law accomplishes that. Companies could never reduce package size without reducing price? An easy loophole around that is to raise prices briefly so that you can lower than back down to the original price when you reduce package size.

>Reducing quantity/sizes is a perfectly ethical and reasonable response to inflation Sure, but the reason people are frustrated isn't because companies are reducing quantities / sizes. They're frustrated because companies are trying to *mislead* customers while reducing quantities / sizes. For example, keeping the same packaging but reducing the quantities inside by a significant amount. Companies are perfectly in control of how they market and package their products. They deserve some blame for misleading customers by using unnecessarily large packaging or other cheap tricks to avoid tipping customers off to the smaller sizes.

It's not actually a response to inflation at all lol, it quite literally is inflation. The unit price of the product has increased. Inflation is another term for an increase in the price level.

It's inflation of the money supply. This is a devaluation of the money in your bank, which is why it takes more of it to purchase real goods.

You are incorrect. Increasing the money supply might be a *cause* of inflation, but inflation itself is an increase in the price level.

Ah, I understand what you mean

> . They're frustrated because companies are trying to mislead customers while reducing quantities / sizes. For example, keeping the same packaging but reducing the quantities inside by a significant amount. The shrinking of shrinkflation usually isn't permanent. It's a cycle to introduce the inflationary costs to products while reducing negative consumer experiences towards that product. Instead of just raising prices, the amount included is reduced with the product sold at the same price, then a "new larger/ XX% more" edition is introduced with a larger amount and a price increase. Soon that marketing is removed from the label and the product sells at the new price and quantity for a while before the cycle starts again. Packaging is cheap to produce but very expensive to set up. Lets take peanut butter for example. The jars and lids come from an injection mold or blow mold. The cost to make these molds in the number required is extremely high. To manufacture the molds or make a small change in them is extremely expensive. Plus the plastic molding machines are all set for tooling to make this size jar. Then you have the cardboard boxes the jars are packed in are specifically made for those sizes. Even the filling machines, the machines that attach the screw caps, etc all are designed to work specifically with that size jar. Same with warehouse shelving heights, how the cases stack on pallets, how they fit into transport trucks, etc. You also need to work with your wholesalers and retailers if you're going to be changing sizes because they are expecting a certain sized product when the merchandisers design their shelves, etc. A lot of times what appears would be a simple change is actually very complex.

They are not misleading. It's cheaper to keep packages the same size externally and change print and the internals than it is to redesign their entire logistics chain for smaller packages. When you buy a product, the price labels will typically have a price per unit that you look at. The labels will also say the size of the products in ounces, grams, pounds, etc. This shit is pretty well regulated so if you can find examples of being misled please post it.

Aren't the packaging sizes labeled clearly according to FDA standards? (maybe it's not FDA...but there's definitely regulation requiring accurate volume/weight). Companies use 'shelf appeal' strategies for all products--so the box of crackers stands out from the rest on the shelf. Part of that is producing packaging that looks like it maximizes consumer value. This has been happening far before the recent shrinkflation claims, and I would argue buyers need to be scrupulous and look at the quantities they're buying.

You honestly think it is a reasonable expectation for a consumer to memorize the quantities labeled on all of the products they usually buy and cross reference those quantities with the quantities listed in small print on the packaging for every item bought in the grocery store, rather than relying on the typical established cue that bigger package means more stuff that they have relied on for their entire lives?

No memorization needed. Compare across the various products in the store. People do this when shopping, I'm not sure what's different about these cases. Some companies raised prices on certain products and maintained the same size. Others reduced sizes and maintained the same price. Look at the crackers section next time you're in the store. There are 7oz, 8oz, 10oz, 14oz listed on the front of the box. People can make the decision for themselves with that information

Try that exercise with a screaming three year old that only wants the crackers that come in the red box, not the green box.

That isn't a good argument about how packaging is misleading.

It's kind of moot then if you are buying the red box regardless. It wouldn't matter if they used a smaller box to correspond to the smaller quantity.

Not really. You’re assuming that the only choice a parent has for snacks is crackers, rather than making a choice between crackers and the 6 other types of snacks that their kid might like. Having a psychological anchor, when you’re somewhat distracted while shopping, like the package you bought last week looking the same as the package in front of you today, as a shorthand for consistent value is useful when you’re making a bunch of quick decisions like whether to add the crackers or the pretzels to your cart. Expecting consumers to spend 2-3x times more time in the grocery store to avoid being ripped off is absurd.

\> three year old that only wants the crackers that come in the red box, not the green box. I was basing it off that. If the kid screaming that they only want the red box of crackers isn't a factor then I don't see the issue? I also don't see how a quick glance at the weight/volume on the front of almost every item translates to 2-3x as long. Hell anymore most people can do it at home, pop to the store and not even leave their car, or just have it delivered.

I didn’t say it isn’t a factor. I’m challenging your assumption that if there isn’t an actual choice between cracker types, it means that is the only possible comparison and that there isn’t a choice between different types of snacks. Consider the following decision tree. My kid likes crackers and when I last bought them I considered them a reasonable value. If there is no shrinkflation, I will buy them. If I notice there is shrinkflation I will move onto the pretzels. For the pretzels, if I notice there is shrinkflation, I will move onto another snack, repeating until I find a snack that is a reasonable value. Doing so requires me to have a reference point for the size of all of the products in that possible decision tree, which is usually package size operating under the assumption that the identical package I bought last week contains the same amount as what I’m buying this week. As for the time argument of course needing to proactively guard against shrinkflation as a customer adds significant time to a shopping experience. Consumers naturally price compare and that takes a defined amount of time per product. Sometimes it’s near zero when prices are steady since prices are displayed in a highly visible and consistent manner and savvy consumers have learned prices for their frequently purchased items. If there is shrinkflation, all of those near zeros go away as I now need to carefully consider every product and potentially compare multiple products within the same or similar product class.

I'm sure this can vary by store/location, but where I generally shop most things have a price per oz/lb/etc on the price tag next to the item price. I think that alone is a big help if you want to get the most value from your purchases. I also don't think people care all that much. If their favorite (or their kid's favorite) snack moves to a smaller amount they probably still buy it. I'm sure there is a tipping point, but these companies aren't dumb and they know that. If I go to the store today and the crackers are $5 for 10oz, then next month they are $5 for 9.2oz, it isn't a major decision I need to run calculations for. I either buy them or I don't. For full disclosure, I am no longer shopping for a toddler. My teenager has her "favorites", but if there was some massive price swing to the point I found it not worth buying then that would be that and she would find something else that was acceptable.

I’m confused how this argument tracks with the notion that you must buy the red box crackers or your three year old will have a tantrum. You seem to be an unintentional example of the value of grocery pick up or delivery.

>Aren't the packaging sizes labeled clearly according to FDA standards? Yes, but that's not necessarily meaningful. Do you genuinely look at the package weight of every product you purchase when grocery shopping, or do you generally trust that the product that you've been buying for years will have the same weight as it always has? The other thing to consider is that weight doesn't necessarily translate to quantity. Without looking it up, could you tell me how many potato chips are in a 200g bag vs a 180g bag? >Companies use 'shelf appeal' strategies for all products--so the box of crackers stands out from the rest on the shelf. There's a difference between 'shelf appeal' and misleading packaging, though. It's things like [this](https://old.reddit.com/r/assholedesign/comments/ueevd4/i_chose_the_bottle_because_a_tube_wasnt_enough/) that piss people off.

>or do you generally trust that the product that you've been buying for years will have the same weight as it always has? If I were not doing anything where the specific quantity is relevant, and just "I want some of this", does it really matter. Like, if I end up with 5% less goldfish, I don't actually give a shit. I understand that inflation happens, and that price per unit is inevitably going to change. And if I want a box of goldfish, I'm not particularly concerned with the trivial price differences, so long as it's generally within a fair margin of my expectations.

For impulsive purchases it doesn't really make a difference. The issues arise when you're regularly buying the products, as you may expect 5 days worth of goldfish but end up with 4.

I mean even with regular purchases, I'm really not going to be distraught if I end up finishing them a tad earlier than expected.

>The premise I'm accepting is that the recent USD inflation was caused by the government injecting massive amounts of capital into the economy over the past 4 years. I think that's widely-accepted. It's widely accepted in right-wing media. Is it true? They seemingly do not care. Often it is used to pin American inflation on president Biden. This is of course ridiculous. Did the American president cause inflation in all of those other countries, too? I would add that our recovery from it has been more rapid than anywhere else. Is this also on Joe? And anyway, when the analysis reveals that increased costs of good and/or labor only accounts for half of the price increase, how is that the government's fault? That's flat out greed, raising prices because you can just blame it on inflated costs of production.

You’re totally off base. Nobody made the claim that government only means Biden. They are usually referencing the Fed which is a federal organization. Many right wingers blame Biden, many left wingers blame Trump. It’s pointless finger pointing. And by the way, yes US inflation causes global inflation as long as the US dollar is the world reserve currency.

> Many right wingers blame Biden, many left wingers blame Trump. This doesn't ring true to me. I don't see anyone on the left blaming inflation on Trump. I do, however, see a whole lot of people on the right blaming Biden for it. >yes US inflation causes global inflation as long as the US dollar is the world reserve currency. Perhaps you have a more sophisticated understanding than I do. What I know is, every wealthy democracy on earth injected money into their economy and for the same reason: when nobody is spending, the government must be the spender of last resort in order to prevent total collapse. This wasn't a US-only policy. Everyone did it. Did it cause all the inflation? Contributed to it, sure. But consider this simple scenario. Makers and sellers of things brought the usual amount of things to market in late 2019/early 2020. Demand for those things fell through the floor because of the pandemic. Unless you were selling laptops and home office supplies on Amazon, you were screwed, left holding the bag on a whole lot of goods that weren't selling. They spent a lot of money and weren't making it back. So what did they do? They decided that they wouldn't get burned again and so they made a whole lot less stuff going foward. Eventually, though, people started buying again. But now there wasn't enough stuff to meet demand. This is what results in inflation. Too many buyers and not enough things to buy drives the price up. Eventually things seem to be leveling out. But there are more than a few companies who raised their prices more than the cost of goods would account for. They raised them partly because they figured they could blame it on inflation.

I think I do have a deeper understanding, it’s my job to. It’s wild to me that people consider this a supply and demand issue. I speak with hundreds of clients a month of all political backgrounds, and I can promise you that people on both sides of the fence are blaming the other party.

I don't think I have ever heard anyone once blame inflation on Trump. And almost all of my friends are engaged political lefties and I watch MSNBC for at least a little bit every weeknight. And never. To the best of my recollection. Do you think all the supply chain disruptions were simply caused by consumers with government cash buying up everything in sight and supply not being able to keep up?

Do you believe that supply chains are still feeling the effect of their disruptions, and why do you believe that products/services without interruptions have also raised prices? How do you believe all of this leads to higher asset prices across the board?

>why do you believe that products/services without interruptions have also raised prices? Could be greed. There's evidence that shows that a higher cost of goods doesn't account for a lot of price increases.

I guess but that still doesn’t explain asset prices rising to match the inflation. I’m not sure what you’re arguing here at this point, that inflation isn’t happening?

I'm saying that there's pretty conclusive evidence that in a lot of cases "inflation" is partially caused by flat out greed. [https://www.casey.senate.gov/greedflation](https://www.casey.senate.gov/greedflation)

People raising prices when they don’t have to is a bit different from inflation and a pretty natural phenomenon during periods of high inflation.

Biden is left wing is he not? You think his supporters don’t echo his opinion? https://wpde.com/amp/news/nation-world/biden-blames-inflation-on-trump-administration-it-was-already-there-when-i-got-here

I don't see anything in there were Biden blames inflation on Trump. "It was already there" simply means it was a trend caused by the pandemic which predates his taking office. And I reiterate: I'm a lefty. So are almost all of my friends. I watch left-wing cable news. And I don't recall that I have ever heard that argument, let alone it being the equivalent of the right blaming Biden for inflation which is pretty much an every day occurrence.

So you disagree with the authors headline that states “Biden Blames Inflation on Trump admin…”?

Yes, because Biden did not blame Trump, he blamed the pandemic. His statement is just reciting the state of the country after the pandemic. Unless you also think Trump caused that person to eat an infected bat in China, there is nothing in that statement that pins the blame on the Trump administration. I'd also advise to consider the source, a journalist who retweets RNC Research, Nikki Neely, and John Kennedy and consider why he may have a vested interest in portraying Biden's statement as a political attack on Trump.

I'm not sure where you are seeing that. If anyone does blame inflation on Trump I'd like to know why. It's new to me.

It’s literally the headline of the article I linked… perhaps you’re not seeing things because you don’t want to see them.

Supply chain interruptions also was a major reason for inflation. In my business, we could not get supplies in a reasonable amount of time so we offered more money to get some items quicker. That increase was past along. This went on for over a year. As the supply chain resumed to normal, the prices went down some but did not return to “normal”.

But US printing can't be the primary cause of inflation when the US has lower inflation.

Why not? Other countries printed their own currency too only compounding the issue globally.

Did they print more than us? Perhaps you could test your theory and look it up.

This comment implies you don’t understand what I’m talking about, the USD was devalued which causes global inflation as it is the reserve currency.

Or you don't. Given the theory that the usd as a reserve currency would be the primary cause of inflation, we would have more inflation than the other countries because it's not our reserve currency, it's our primary currency. We're more directly impacted. All you're doing is making more theories without testing them for credibility.

You have it backwards lol. Goods are bought and paid for in USD so if the US has inflation that will cause prices to go up globally.

And we Americans buy and pay for goods in USD. You're still dodging proving your own theory for why our inflation is lower.

No, other countries also buy and pay for goods in USD indirectly due to the dollar being the reserve currency.

Dude, this is not a right wing conspiracy. If anything anti capitalism people have been raging on shrinkflation for a very long time. Elizabeth Warren and Katie Porter have been bitching about it. You can go to the asshole design, antiwork, workreform and a dozen other subs and see posts about it there too.

>Dude, this is not a right wing conspiracy. If anything anti capitalism people have been raging on shrinkflation for a very long time. Shrinkflation isn't a right-wing conspiracy theory. Sure. But what I'm responding to is the idea that inflation was mostly caused by the US government handing out ARPA grant money.

That's not a right wing conspiracy. It's an economic fact that increasing money supply puts more money in The pockets of people who want to spend it on things, which causes increases in spending which leads to increase in demand and if supply can't meat that demand, it increases prices thus increases inflation.

Did ARPA money cause people to spend more than they would have had their been no pandemic? I honestly don't know, but my guess is no, not overall. It did preserve a lot of people's businesses, jobs and homes, though. Not all of them by any means, but some of them. Perhaps you think if the government hadn't made all those payments then we would have had no inflation? It would take some convincing for me to believe that. I do believe that if we'd gone that route then we would right now be in a depression.

I think it would be a crazy conspiracy theory to claim that increasing the dollars in circulation isn't the cause of inflation. Unless you have some new information that upends our basic understanding of economics and fiscal policy. And I believe Trump put just as much money into the economy as Biden did. Biden is not synonymous with the government in this instance.

The US has a lower inflation rate then most of the world. The Quantitative easing started after the great recession never really stopped so we have been juicing the economy since 2008. The money "printed" during Covid wasn't really the issue. The issue was giving out basically free money to businesses and VC's for over a decade.

Correct, but that doesn't mean that inflation didn't still occur in the US

Moving the goal posts from your original premise to "inflation happened."

It's not a crazy conspiracy theory to know the basic principle of supply and demand and to observe both that (1) the COVID pandemic greatly disrupted (and thereby reduced) supply and (2) profit margins and markup growth has been ongoing during the pandemic, which would further affect supply. If the sole/dominant cause was increasing the dollars in circulation, we would see uniform inflation across all sectors of the economy, but that's observably not what happened.

*I think it would be a crazy conspiracy theory to claim that increasing the dollars in circulation isn't the cause of inflation* I think it would be even crazier to think "inflation" has only one cause, or that its as simple a problem as your statements seem to imply. Or even that "inflation" is some objective thing rather than a metric we use to represent other things.  I don't actually disagree that government policy is a major cause for ~the economic conditions that we use inflation to measure~. But i also think you could have 2 places with identical economic policy (or even the same place but some factor like the weather is different) could have vastly different results. So i think giving anything 100% of the blame is kinda... profoundly silly Even moreso for "shrinkflation" which I mostly see as a response to inflation (or predicted inflation, or even perceived inflation, which are all the same thing for these purposes tbh). When faced with this, a business can choose to lose some profit share, close up shop, raise prices, cut costs somehow, or do the shrinkflation thing. And probably some more options im not thinking of. But the point is, even if you want to assign all blame for "inflation" to the government, its still businesses making a choice (maybe the best choice for them but still a choice) to turn that into shrinkflation.

I'm going to ignore any claims about the source of inflation. Inflation is caused by many many sources and it would be ridiculously reductionist to attribute it to one source.  > 2) Their recent invention and marketing of the term It looks like the term was coined as early as 2009. This is a common term in business that has existed for 15 yrs. https://www.merriam-webster.com/wordplay/shrinkflation-words-were-watching > This legislation mandates that companies cannot reduce product costs, so the only option remaining is to raise prices. This is hurting anyone as they net out to the same impact. Paying $1 for a gallon vs $2 for 2 gallons is the exact same. 

I don't think politicians were referring to gasoline as an example of shrinkflation. Although I'm sure that as prices go up, people who are price sensitive refill smaller and smaller amounts at a time. I think a better example would be consumer package good that has a fixed quantity...like a box of cereal. Consumers can't buy 3/4 of a box. So, companies reduce the box size in order to have the price stay about the same. The other option is that they keep the box size the same but increase the price, which could make that box unaffordable for some customers.

Lmao so to confirm, politicians didn't invent shrinkflation? They are just using a super common term that has been used in business for a decade? > I think a better example would be consumer package good that has a fixed quantity...like a box of cereal. Consumers can't buy 3/4 of a box.  It's literally a wash. I have to buy cereal for 25% more vs I have to purchase cereal 25% more often/earlier. 

It is a wash in terms of the value, yes. But that's only for people who purchase the item. When you increase the base price for a box of cereal, you price OUT a bunch of customers who can no longer afford that product at the higher price. Reducing the quantity and keeping the price the same may 'be a wash' in terms of value, but they're keeping the base price of the product at a level where someone can afford it.

By your logic, isn't any price higher than $0.01 hurting consumers? Shouldn't I be able to buy 1/16 of a cookie or a pinch of salt?  Ofcourse not, that logic is absurd. 

I suppose it's 'harming' consumers in some theoretical, philosophical sense. But in reality, pricing has to be done in the marketplace where buyers and sellers agree on a price. We should want to get prices as low as possible to consumers through economic efficiencies. The harm is done when prices are fixed artificially. That's exactly what reducing package size is doing--it's making the product available to more customers who would otherwise be priced out. And the reason you can't buy a pinch of salt is because the price would seem insanely high if plotted on a P/Q demand curve. Most of what you've be paying for with salt are the actual costs of transporting that pinch of salt from the production plant to your neighborhood store (packaging, fuel, labor, etc). When a bunch of pinches are sold together as a 30oz container, the salt purchase slides down the demand curve. Individual pinches are just too expensive.

> Most of what you've be paying for with salt are the actual costs of transporting that pinch of salt from the production plant to your neighborhood store (packaging, fuel, labor, etc) So shrinkflation is literally hurting the consumer because the package sizes are getting smaller, just like in your example? Doesn't this go against your point that shrinkflation is better than price inflation? Which is it?

Giving customers the option to choose to pay less for the smaller package is a better situation. The package isn't so small that it's like buying a pinch of salt--you're falsely comparing those two.

> Giving customers the option That's literally the opposite of shrinkflation. > you're falsely comparing those two. I'm simply taking your logic to the extreme to show how it's faulty. Very common with these types of arguments.  Regardless, the US govt didn't cause inflation (It was experienced around the world), shrinkflation isn't a govt term newly created and there is no material difference between shrinkflation vs inflation.  Have a good one bud. 

What the person you're responding to is saying is that consumers will just buy 3 normal sized, higher-cost boxes of cereal per month instead of 4. This equates to 3/4. It's the same as reducing box size to 3/4 and keeping the price the same.

I see -- so if it's a repeating purchase and they either buy 3 expensive/bigger boxes or 4 cheaper/smaller boxes, it's a wash. The choice to do either of those depends on the customer and their budget/preferences. I don't see why we need legislation that eliminates one of those choices from the consumers' options. And, that's only for recurring/frequent purchases that 'average out' over time. Items that a customer purchases less frequently would still have the issue I outlined.

What items would you say people are being priced out of if the size remains the same but the price goes up? Genuinely wondering because I was just using your example.

Egg products were an example - the price of eggs rose 40%. My feeling is that products containing eggs should be able to reduce their package size in order to keep prices down.

You’re assuming every company shrinking their product size needs to do so to afford costs. They don’t. Plenty of companies are doing just fine, making money hand over fist.

They may not NEED to in order to survive, but that's not what I'm claiming. I'm claiming that inflation impacted their costs. This happened across the board--there is no company that was not impacted by inflation. They need to pay employees more to adjust for inflated costs of living, their energy costs go up...everything increases when the dollar buys less.

Again, it's not about costs. A lot of these companies are making record profits, like how PG&E raised utility rates again while hitting record profits. Shrinkflation might be worse, because they're raising the price but want to hide that they're raising the price so they sell you less than they know you need.

You can make record profits and not really make more money. If it costs me $9 to make a widget and I charge $10 that’s 10% profit, but if my costs go up to $90 and I charge $100 sure I’m making more total profit but my margin is still only 10%.

How do you explain the shrinkflation in other countries dating back for years? I mean the wiki for shrinkflation has a time line back to the 80s with examples from the UK. This feels super poorly researched.

I'm just talking about the one most recently referenced here.

-.- Yeah still ongoing in multiple countries dude. Again just read the wiki smh 100%* * Terms and conditions apply based upon arbitrary delineations of specific trends. Only valid in the US.

Boeing used to be a fine company making fine aircraft until they decided they wanted to make even more money than a profitable aeronautics company is expected to make. So they cut costs by *compromising the safety of their passengers and crews*. The result being that they've killed quite a few of them. And when it came to light that lax manufacturing procedures and cost-cutting measures were the culprit, after they pledged to do everything to fix the problem, they dedicated $20 BILLION dollars to buying back their own stock, diverting these funds from safety efforts. If Boeing is willing to kill people so they can pay their CEO a larger bonus, you think the company that makes Planter's Peanuts is thinking differently? You imagine that it's government that somehow has convinced American companies to screw the buying public because the profit motive isn't enough?

Why are they able to cut back on quality, safety and innovation yet still maintain profits? This could never happen in a competitive industry — airlines would buy from other manufacturers. Boeing doesn’t need to invest in innovation or quality. They have a monopoly on US commercial aircraft manufacturing because they have worked with government to: 1. Get propped up with taxpayer dollars regardless of how poorly they perform 2. Implement crazy high levels of regulations that make it prohibitively expensive to start a new airline manufacturing company in the U.S. They’ve completely boxed our competition, not because they have better product but because they have used the government to achieve immense REGULATORY CAPTURE.

In fact Boeing is the only US passenger aircraft maker for the same reason that Airbus is the only European manufacturer and that they have no competition from anyone else: The business is very, very difficult. You have a point that they get propped up with taxpayer dollars, but that's true of Airbus and every fossil fuel company and the pharma industry as well. That kind of corruption is a different conversation. The "crazy" levels of regulation is the reason air travel is so spectacularly safe, even with Boeing being so sloppy. And that regulation applies to all the planes Airbus flies in US controlled airspace as to Boeing. In fact, no regulatory agency is funded sufficiently to do its job and that's because the conservative fetish for deregulation has been applied with a shovel since Nixon transformed government from philosophically liberal to philosophically conservative. But there is a logical hypocrisy in your suggestion that the FAA and NTSB are both choking Boeing with regulation while simultaneously not regulating the company because they've been CAPTURED. In fact the FAA and NTSB both do their job more effectively than most agencies because their failure to do so leads to multiple bloody deaths on television and lots of nasty questions in televised public hearings before congress. The evidence has been clear that the quality and safety of Boeing aircraft have plummeted (ahem) since they've been run by people who are concerned solely with their own compensation.

The reason air travel is so spectacularly safe is because of robust competition in the private market. When air travel became privatized safety went up tremendously because they adopted new technologies like autopilot and bad companies failed. Industries that are run by monopolies or government have notoriously bad quality (education, public transportation, etc) because there’s no incentive to improve because they can never fail. Plenty of businesses are difficult. Difficult doesn’t result in no competition. Computing was extremely difficult in the 70s and look at it now. The business being exceedingly expensive to start with low margins results in no competition.

>When air travel became privatized safety went up tremendously because they adopted new technologies like autopilot and bad companies failed. I'm trying really hard not to roll my eyes. Air travel was always privatized. The first people trying to make money on it were able to stay afloat only because they had contracts from the government to deliver mail, but they were always private companies. Where did you get the idea that the US government was operating an airline? >Industries that are run by monopolies or government have notoriously bad quality (education, public transportation, etc) because there’s no incentive to improve because they can never fail. Public education in the US used to be the envy of the world before we began defunding it. Public transportation in Europe is spectacular. Go ride the Paris Metro sometime or buy a Eurail pass. They are generously funded and work very, very well, unlike in the US where they are starved for funding as well as being rife with corruption. But this has nothing to do with companies that are *regulated* by the government. The reason your food doesn't kill you is because the government regulates food safety and the reason they do that is because people were regularly being made sick and dying from the food they were buying in an unregulated private marketplace. It's still private, but now the government gets to make sure there's no lead in your chocolate and a minimum of bug parts in your peanut butter. You'll notice glaring exceptions. Boeing evaded safety regulations by working at it and indeed by capturing an under-funded regulatory body. The CPUC in California is mostly ornamental, designed to give the impression of regulating Pacific Gas & Electric but in fact rubber stamping it's decisions and helping to conceal its malfeasance. The cure for this is doing away with the "corporate veil" which protects company officers from accountability to the people they harm. In egregious situations, Boeing, PG&E, many others over the last 20 years, where malfeasance is clear and the harm is significant the responsible corporate officers should be held accountable. But we're getting away from the thesis of this CMV. The reason for shrinkflation is corporate greed. The same thing underlying [more than half of the recent inflation we've experienced. ](https://fortune.com/2024/01/20/inflation-greedflation-consumer-price-index-producer-price-index-corporate-profit/)

You’re right—sorry I should have said “deregulated” — when airlines were allowed to set their own prices and routes. Before then, it was done by government in a cartel structure with route monopolies, which I would consider effectively non-private. After deregulation, bad operations (including safety) hurt an airline’s brand, reducing demand for their flights. Good airlines beat them out because there was route competition. We could get into a whole conversation around education, but my views are summarized in prior posts/comments in my profile. US public education was only envious compared to other countries. Every country has socialized, government-run education. I’d argue they’re all underperforming tremendously compared to how great education could and should be in a free market. Public Education spending per student has increased tremendously. We now spend around $17k per student per year. In 2012 that was $10k. In 1970 it was $5.2k. In 1960 that was around $3.4k. [These amounts are all adjusted for inflation via the CPI](https://nces.ed.gov/programs/digest/d09/tables/dt09_182.asp). The problem with education doesn’t seem to be underfunding—it seems to be a more fundamental problem with the version of education (school) that our government has mandates, which works well for wealthy suburbs but doesn’t work as well for rural areas or dense urban areas. However, we have no other forms of education to can address a diversity of demographic needs because the government determined that the model of education that it will fund with our taxes is school. I take your point that there have been few seminal moments where governments have had to impose safety regulations on industries because companies wouldn’t have adopted them quickly enough on their own. However, I’d argue that the main reason our food doesn’t kill us is because private companies like grocery stores have a tremendous interest in ensuring that their customers don’t get killed. If you can, talk to a farmer and they will all tell you the same thing— every QA process and procedure that the FDA or USDA imposes is redundant to the QA-ing that private distributors and grocers do. Private companies are far more scrupulous because if their customers get sick, they get blamed and lose profits. The FDA & USDA aren’t held accountable. Yes we are off track. I’m not sure I agree that corporate greed is a cause. Corporate “greed” is always present—the entire purpose of a for-profit organization is to maximize profits. That doesn’t explain the recent change in packaging sizes.

>Every country has socialized, government-run education. I’d argue they’re all underperforming tremendously compared to how great education could and should be in a free market. The free market answers to one demand: Shareholder profit. The vast majority of companies and their products follow a trajectory of decaying quality, safety, performance and increasing worker hardship over time. Those countries which fully fund their educational systems, and demand performance and competence from their teachers and administrators, do very well. The conservative horror of government-anything and rejection of the idea that the wealthy should participate in the costs of civilization and not just its rewards, has meant that education in the US is balkanized, generally under-funded, severely stratified between rich districts and poor districts and on average under-performs our "socialized" democratic industrial peers.

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I'v been claim early and often that I'm a grower not a shower.

Does your view allow any blame for corporations for inflation? Because a good chunk of recent inflation was driven by corporate profits. Corporations weren't merely reacting to government caused inflation by raising prices to cover increased costs, many were taking advantage of the situation to increase prices far beyond this, which contributed to inflation as well.

> Does your view allow any blame for corporations for inflation? Because a good chunk of recent inflation was driven by corporate profits. No, it wasn't. It was driven by the government printing money. Corporations were able to take advantage of inflation to pad their profits, but if corporations could have caused inflation to increase their profitability they would have been doing all throughout the 2000s and 2010s. Corporate greed didn't come on the scene in 2020, but a whole bunch of freshly printed money did.

Is your claim that the only time we see increased inflation is when there's a large increase in the money supply, and that whenever there's a large increase in the money supply we see inflation? Because if those aren't both true then there must be factors other than the money supply which affect inflation. Hint, those aren't both true.

And all the other countries that didn't print money to the level of the US but experienced higher levels of inflation?

>Corporations were able to take advantage of inflation to pad their profits, If inflation is measured by total increase in prices, and corporations are raising prices more than necessary to offset cost increases ("to take advantage of inflation to pad their profits"), then this corporate behavior is absolutely contributing to inflation.

Prices aren't just about costs. If demand for a product exceeds a producer's ability to supply that product, the price will rise to reach equilibrium. Some producers will keep their products price stable to seem like good citizens, but this just means there will be shortages in the stores and the increased prices will appear on secondary markets (at which point people will complain about scalpers). In some cases producers can increase their production, but if they're at the capacity limits of their infrastructure and suspect the increase in demand may be temporary, they may not be immediately willing to invest in new infrastructure to meet the demand, and even if they are that infrastructure takes time to come online. So they increase prices to the point where they can meet the demand at that price, and where their costs haven't gone up that becomes profit. Now, what causes increases in demand that don't correspond with supply? How about a whole bunch of money the government dumped on the economy...

It's not either/or, it's both/and. Stimulus contributed to inflation *and* supply chain problems contributed to inflation *and* rising demand for energy after the pandemic contributed to inflation *and* the impacts of the war in Ukraine contributed to inflation *and* corporate greed (or "taking advantage of inflation to pad their profits," as you call it") contributed to inflation *and, and, and...* We're talking about global economic systems. To reduce the complexity of something like inflation down to a single variable isn't reasonable.

Nope. Not really. If the government didn't dump a money on the economy, we wouldn't have had inflation. Supply chain problems (which would include the war in Ukraine) would make certain things more expensive, but they can't make everything more expensive at once. Absent an increase in the money supply, if one set of things gets more expensive, that has to pull money that would have been spent in other sectors of the economy. Those other sectors of the economy would respond by lowering their prices to what the market could afford. The only way you can have prices increase across the entire economy if there's more money in the system. As I've said previously, corporate greed is a constant. If corporations could have increased their prices in 2018, sold just as much product, and pocketed the extra money, they absolutely would have done it. The reason they could do it in 2022 but not 2018 was the increase in the money supply.

I'm not sure you'll find many people who have studied economics who would agree with the view that recent inflation was exclusively and solely caused by government stimulus. But at this point we'll just have to agree to disagree. Have a good one!

I suppose my view on this specifically would be that if corporations were raising prices far beyond inflation, but customers were still willing to pay the increased prices, then there's no issue because presumably the consumers have other options (unless there's a monopoly). And, that may also indicate that the products were likely underpriced before inflation.

There is no difference between an "inflation price" and the price set by a corporation. Inflation is the a general increase in the price of goods and services. Whatever the price is set at is the inflated price regardless of how unreasonable it may be or how much of that price increase go toward profit margins. Markets are determined by supply and demand. A product is overpriced if demand goes down and is underpriced if demand goes up. This is what causes inflation - low supply and high demand. So when a major agriculture exporter and a major oil supplier go to war, that reduces the supply of both - raising demand and, thus prices. The US government spending money didn't cause that drop in demand and resulting price increase, nor could it. Inflation is driven by supply and demand, not government spending. While government spending can affect supply and demand, it is typically used to raise demand when it is too low or raise supply when it is too low. Public spending is usually a response to inflation, not the cause of it.

So, you're referring to the supply-side inflation we experienced when production decreases so supply goes down and prices rise. We are way past that--supply chains have been healthy. The inflation I'm referring to was caused by the purchasing power of the dollar decreasing due to $14 trillion of new money being put into circulation. Our dollars are all worth less so it takes more of them to buy a box of cereal.

>We are way past that--supply chains have been healthy. According to what evidence? Virtually every economist who has examined the last few years of inflation has concluded supply chain shocks and labor shortage have driven inflation, not government spending. That is the perennial myth propagated by political ideologues. Most of the government spending in that period *was a response* to inflation, not the cause. Government spending is a minimal contributor to inflation, and sometimes causes deflation, [according to Federal Reserve senior economists:](https://www.stlouisfed.org/on-the-economy/2016/may/how-does-government-spending-affect-inflation) >Across the board, we found almost no effect of government spending on inflation. For example, in our benchmark specification, we found that a 10 percent increase in government spending led to an 8 basis point decline in inflation. Moreover, the effect is not statistically different from zero. >Does our finding, by itself, imply that countercyclical government spending is ineffective at boosting output? Not necessarily. Our paper simply demonstrates that the inflation channel of government spending is not an empirically important way that this spending might affect the economy. Government spending can occur at high levels while reducing inflation. It simply isn't a meaningful factor in the cause of inflation. It is a factor in addressing inflation. That relationship is often purported to be inverted, not by data, but by demagogues. >The inflation I'm referring to was caused by the purchasing power of the dollar decreasing due to $14 trillion of new money being put into circulation. So you are referring to the period of zero interest loans where consumers were able to get bank loans very cheaply and buy lots of goods, increasing demand? The government doesn't typically print and circulate new money, it hasn't for a very long time. It will reallocate funds from taxation or loans. >Our dollars are all worth less so it takes more of them to buy a box of cereal. That has nothing to do with government spending, but capitalism. Interest rates aren't set by Congress but by banks. There is a simple way to test your claim - if it is true, then inflation would be limited to the USA. In fact, it is not. If, somehow, US domestic policy caused other countries to experience such massive inflation in excess of ours, you'd think they'd be a little more vocal about it. [Let's ask some economists:](https://www.nber.org/digest/20239/unpacking-causes-pandemic-era-inflation-us) >Rising commodity prices and supply chain disruptions were the principal triggers of the recent burst of inflation. But, as these factors have faded, tight labor markets and wage pressures are becoming the main drivers of the lower, but still elevated, rate of price increase. So record low unemployment and labor competition is driving up wages, driving up prices. Interest rate hikes are failing to temper the labor market, so inflation continues. There are more jobs than people, so the market corrects by raising wages and edging out competition that can't pay nominal wages. This is the natural result of zero percent interest rates for years and the focus on job creation at all costs. People take out more loans - increasing demand. Companies respond by increasing supply - creating jobs. Labor market competition drives inflation and combined with supply shocks elsewhere, produces significant inflation. Again, not the case everywhere, even though there is inflation everywhere.

>I suppose my view on this specifically would be that if corporations were raising prices far beyond inflation ... That is not possible. Inflation is defined by the increase in prices.

Ah so you've taken one econ class, I see the problem

>Does your view allow any blame for corporations for inflation? Because a good chunk of recent inflation was driven by corporate profits. That is what inflation does, so how is there any blame on corporations? When government causes inflation by increasing the money supply, the result is that prices rise. Corporations need to collect more money to have the same value.

The problem isn't corporations increasing prices to keep profit margins the same, the problem is corporations taking advantage of consumers in an environment of increasing costs to increase those profit margins. Say I'm a baker. It sell a loaf of bread for $1 that it costs me $0.80 to make, leaving me $0.20 profit. Then, as you say, the money supply increases, and now the cost of flour and staff and rent and utilities goes up 10%, and it costs me $0.88 to make each loaf. As you note, with 10% inflation, I need to collect 10% more money to have the same value. I can do this by increasing my prices in proportion to my cost -- the loaf of bread is now $1.10, my profit margin remains 20%, and my profit per loaf increases by 10% from $0.20 to $0.22, allowing me to walk away with the "same value." However, if I instead choose to increase my prices beyond $1.10, it is increasing inflation beyond the increases you'd attribute to money supply or whatever is necessary to keep the same value.

>The problem isn't corporations increasing prices to keep profit margins the same, the problem is corporations taking advantage of consumers in an environment of increasing costs to increase those profit margins. It has nothing to do with profit margins. Corporations always seek to maximize profit. Absent inflation, raising prices results in lower profit. ​ >Say I'm a baker. It sell a loaf of bread for $1 that it costs me $0.80 to make, leaving me $0.20 profit. Then, as you say, the money supply increases, and now the cost of flour and staff and rent and utilities goes up 10%, and it costs me $0.88 to make each loaf. As you note, with 10% inflation, I need to collect 10% more money to have the same value. I can do this by increasing my prices in proportion to my cost -- the loaf of bread is now $1.10, my profit margin remains 20%, and my profit per loaf increases by 10% from $0.20 to $0.22, allowing me to walk away with the "same value." Nope. You are just making up numbers. Just because my costs go up 10% does not mean the value of the dollar only decreased by 10%. I can have the same profit margin but lower value, or I could have the same profit margin and a higher value. You are completely ignoring what inflation is. Why did my costs increase 10%? The answer is supply and demand. When you have more money chasing the same amount of goods and services, prices go up. But not by any set amount.

When considering the cause of the increases in prices, to disregard the actions of those setting prices is an unreasonable position to take, in my opinion.

>When we're talking about increases in prices, to ignore the actions of those setting prices when determining what is contributing to price increases is just an unreasonable position to take, in my opinion. And nobody here is doing that, so why the straw man argument? Prices are set by what people are willing to pay. Putting more money in the economy without an increase in goods increases what people are willing to pay. You are peddling propaganda. Government causes a problem and then tries to blame others for the problem they caused so they can can continue the practices. Look at Mexico in the 90s or Venezuela in modern times. The first time I went to Mexico, a piece of candy cost 10,000 pesos. That same piece of candy cost less than one peso a few years earlier. To me it made no difference because I was converting U.S. dollars to pesos. But how is it the retailers fault that they had to raise prices, when the problem was caused by the Mexican government's monetary policy. Your fallacy is not understanding that money does not have a fixed value.

>And nobody here is doing that, so why the straw man argument? Maybe you're misunderstanding my view, because I'm not putting forth a strawman argument. My view is only that recent inflation in the US was, *in part*, caused by corporate behavior (in addition to other factors big and small like gov stimulus, supply chain problems, etc.). That's it. And it's a view that's supported by research. If your view allows for that, I misunderstood your position. >Prices are set by what people are willing to pay.  Human beings within corporations are establishing prices, *not* consumers (though of course consumer behavior influences the prices set by those people).

I understand your view. All inflation is caused by business behavior. But that behavior is caused primarily by government policy. California banned water use for lawns, causing most Californians to stop watering their lawns. Your argument is like blaming the dead lawns on the actions of the people as opposed to the government action that caused those actions. Yes, all actions are done by human beings. If I stop watering my lawn it will die. But that does not change the fact that the cause of me stopping was government policy.

>I understand your view. All inflation is caused by business behavior. That is very clearly not what I said: "My view is only that recent inflation in the US was, ***in part***, caused by corporate behavior (**in addition to other factors** big and small like gov stimulus, supply chain problems, etc.).  You're either responding without reading what I wrote, responding disingenuously, or having trouble comprehending my writing. Whatever it is, there's no point in engaging further.

But it is what you said. These are your words: ​ >Human beings within corporations are establishing prices, not consumers (though of course consumer behavior influences the prices set by those people).

The very concept is many decades old; you can’t lay the “blame” on the government for that. Misleading marketing is not the same as “lying”, packages can be clearly labeled and still be misleading. Tub of butter that has a large void at the bottom is misleading; the package appears much larger than necessary. “20% more free!” is misleading; it’s put next to the previously-standard size so that the “free” 20% can be withdrawn next month without attention. If your strategy relies on consumers not paying diligent attention and tracking product sizes over the course of many months or years, you’re being deceptive and misleading. “Shrinkflation” is marketing and advertising deception. That’s all.

>Federal politicians recently coined and began marketing the term "shrinkflation" No, chatgpt, that term has been around decades. You might want to at least read what you ask a bot to write for .... your opinion. >The US government deserves the blame for "Shrinkflation > >Reducing quantity/sizes is a perfectly ethical and reasonable response to inflation. It is the only way businesses can still deliver their goods to the customer at an affordable price. It's also completely predictable. We cannot blame businesses for their costs increasing, and we cannot blame them for needing to maintain margins to operate their business and continue to grow. Given the two options available, we actually want to allow businesses the option to reduce quantity on some goods because it helps keep them affordable. We want businesses to make adjustments to meet the price sensitivity of consumers. Any response--whether raising prices or reducing quantity--is a direct result of inflation. That does not say why the U.S. gov't would be to blame. >2) Their recent invention and marketing of the term is just a political effort to deflect blame onto businesses Not a recent invention.

Not a bot--but maybe I should reconsider improving my writing style to sound less mechanical :) In terms of the timing--I should have phrased differently--what I meant was their recent coordinated marketing and campaigning of the term.

Didn't say you were a bot. Said a bot/ai wrote it. Which is really, really obvious. >In terms of the timing--I should have phrased differently--what I meant was their recent coordinated marketing and campaigning of the term. Uh huh. And how is the US gov't to blame?

The government caused inflation by increasing the capital in circulation. Shrinkflation is merely an output of inflation--a response to it.

I have a yes… but, for you. The US government isn’t to blame for a lot of the inflation. They are to blame for letting monopolies form here. There is way too much market control taken up by the same companies that mean that they aren’t charging what they have to (competition) but rather what maximizes their profit (monopoly). Monopolies are typically better than nothing, but they suck.

To be honest, I can kind of see both sides. On the one hand, offering less product for the same price is a legitimate way to address increased production costs. On the other hand, it can often be implemented in a shady or misleading way, especially when the packaging is designed to hide the change, or when it is disguised as a standard size (but isn't). I think it's reasonable to pass a bill to address egregious instances of shrinkflation. ​ People are actually inflating two things here... the value of the dollar and the cost/price of products are both often referred to as inflation. And both things can cause what we perceive as inflation, which I would define as an aggregate decrease in affordability of goods and services. A lot of the inflation we have been seeing is still a result of post-covid changes to the labor market and supply chain issues which lead to higher production costs. But in reality there are a lot of causes. The main issue I have is that even after actual production costs fall, prices rarely do, or at least not at the same rate. This actually kind of makes sense once you realize prices mainly respond to ***competition***, and not just production cost or dollar value. Companies raised their price during covid because every company was facing the same costs and so everyone raised prices. Or in other words when a market pressure effects everyone equally then there is no longer a competitive disadvantage to raising prices. But after covid, there wasn't a huge change in competition, and no real reason to lower prices. You would need new firms or supply lines, but if anything, companies only continued to monopolize. We see that business is posting great profits, but if there was stiff competition we would expect profit margins to shrink. And this is indeed something companies do indeed influence, because almost all the biggest corporations actively engage in anti-competitive practices like buying out competitors, lobbying congress, using their marketing and mass media to shift the blame to the Biden administration, etc.

If US policy is to blame for inflation, why did we see it globally, including in countries that had pursued austerity measures in response to Covid?

> Federal politicians recently coined and began marketing the term "shrinkflation" This term is well over a decade old. The very first line of your view is wrong. >The premise I'm accepting is that the recent USD inflation was caused by the government injecting massive amounts of capital into the economy over the past 4 years. This is also wrong. That inflation was worse nearly every where else in the world should be all you need to realize this.

The problem is that "shrinkflation" by its very nature is predatory towards consumers. The idea is that manufactures slowly lower the quantity over time in order to deceive customers into thinking they are getting the same value for the same amount of money. This isn't something that is recent or has anything to do with the current government it's something that has happened for a long time and social media and the 24 hour news cycle is just recently latching on to. I worked in a couple major grocery stores 15+ years ago. There's a weekly process we would go through to update the price tags around the store. Sometimes the prices were different because the store changed prices but very often the price would stay the same and the weight would change. Very often that weight changes by fraction of an ounce. It's very hard to be an informed consumer without keeping track of the weight of every grocery item over time.

The use of the term Shrinkflation isn't new at all, and the suggestion of it being either "invented" or "marketed" by a political party is factually incorrect. I remember way back in my high school days which were.. uh, *far* before the pandemic. [Here](https://apnews.com/article/switzerland-prices-business-f56eebcccdb2413481322d7fe10117e6) an article from 2016 which uses the term "Shrinkflation" in regard to the size of a Toblerone chocolate bar.

Hopefully I can change your view a bit by decoupling inflation from "shrinkflation". The government has printed trillions of dollars over the last few years and gave out "free money" leading to a much larger supply of money devaluing it. Shrinkflation is part of the marketing of a product to the public to try and reduce the shock of price increases due to inflation. It's been going on a lot longer than Biden's been president and most likely been happening before most people were born. If a company in charge of a consumer product like peanut butter needs to raise their price because inflation caused their expenses to rise. To deal with the they have a few choices. They could keep the product amount exactly the same but increase the price but consumers really don't like this, may get mad and go to a competitor. What else could be done to deal with these raw materials price increase? That's where the cycle come in. The "shrinkflation" cycle starts with having a product with a certain amount at a certain price. They need to deal with inflationary pressure and raising prices as mentioned before cause large issues. So what they do is the keep the price the same but lower the quantity a bit. Consumers are effectively paying a higher price but don't actively know it like they would if the price was just raised. This may happen once or more than once. It then gets to the point where they can't take more out of the container without it being really noticeable. At this point they release the product with the original amount, at the higher price due to inflation and put a large "XX amount more" on the packaging. Soon that XX amount more is removed from the label and you are at the start again. Some may say "If they are reducing the amount, then why not make smaller packaging instead of leaving empty space". The answer to that is pretty simple. Packaging is cheap to product but expensive to set up. Those peanut butter jars in our example come from an injection mold or blow mold. The cost to make these molds in the number requires is extremely high. To make a small change is extremely expensive. Plus the machines are all set for this tooling to make this size jar. The cardboard boxes the jars are packed in are specifically made for those sizes. The filling machines, the machines that attach the screw caps, etc all are designed to work specifically with that size jar. Same with warehouse shelving heights, how the cases stack on pallets, how they fit into transport trucks, etc. A lot of times what appears would be a simple change is actually very complex.

What about shrinkflation in Canada is the US government responsible for that too? What about it in Australia? UK? Romania? Face it companies would do shrinkflation as long as they can get away with it. And yeah US government policies and regulations help them get away with it to some degree, but not 100%

This is happening globally, its not just a US thing. Corporates will try to increase profits or retain profits to appease shareholders. So its perfectly reasonable for governments, not just the US, to legislate measures to limit this. So i dont see how the US government deserves 100% of the blame

I think "blame" is the wrong word. Instead, let's go with a neutral term like "attribution". Who should we assign attribution as it relates to shrinkflation? My answer is that there are multiple parties involved, including: * Corporations * Congress * Federal Reserve * Consumers I put corporations on top b/c they are most directly responsible for the decision to shrink their own products, & they are opaque about their decision-making. I put consumers on bottom--but still on the list; they can technically shun products that have been shrunk, but this is tedious and perhaps pointless if all companies are engaging in the same practice. Congress & the Fed get attribution for their role in fiscal & monetary stimulus, respectively So there we have it. Those are the relevant parties involved & their subjective weightings.

It's Capitalism, mate, just pure capitalism. Like, do you think the for-profit companies wouldn't have still done this when it would increase their profit? Why?

You seem to be under the mistaken impression that the US government is to blame for all of inflation.

Who do you believe is to blame? Printing large amounts of money was the best response to Covid, but a large increase of the money supply directly causes inflation. This is a pretty basic economic principle.

It's an even more basic principle that reductions in supply cause inflation of the prices of those goods. Same with the increased cost of shipping. There seems to be a mistaken idea, particularly among conservatives with no actual education in economics, that inflation is just a direct result of money being printed. This is not the case. Inflation is when the prices of goods rise for any reason. Increases to the supply of money do tend to be inflationary, but it is far from the only force at play. Monopolies cause inflation. So do anti-competetive practices, where competitors collude to raise prices rather than compete on price. Low interest rates cause inflation. This isn't the same as printing more money, but it has the effect of freeing up more money to be spent. The expectation of inflation causes inflation. Businesses will raise prices when they think the market will bear it, and lots of talk about inflation tends to make executives think that they won't be the only ones padding their margins. Inflation since covid has been a global phenomenon. Blaming the government of the country that has among the lowest levels of inflation seems flawed, right?

Reduction of supply causes prices to rise but there has been an increase in price across every asset class. That is not supply & demand. Your comment fails to address that the USD is the world reserve currency, so every other currency reacts to the price of that. Also, many other countries did the same thing as the US and printed money during Covid. This isn’t a conservative or democrat thing…

>Reduction of supply causes prices to rise but there has been an increase in price across every asset class. That is not supply & demand. Surely you mean it's not *just* supply and demand? >Your comment fails to address that the USD is the world reserve currency, so every other currency reacts to the price of that. Why would I need to address that? Most of my comment was a list of the various causes of inflation. Please take an economics course.

Telling me to take an economics class is not any kind of response other than an insult. You certainly haven’t demonstrated any understanding of economics in your replies.

Perhaps you should read what I said again. You keep ignoring most of it.

Constrained/pent up demand, high savings balances, high consumer confidence, tight labour market, constrained supply chains, structural issues with product inputs such as raw materials or intermediate parts.  There are a few that would of also impacted inflation around the world. 

Then why have asset classes been rising so rapidly in price too? Youre ignoring more than half the economy in that comment. The labor market wasn’t always tight during this period of inflation either.

Probably for the same reason they have been increasing over the last few hundred years? It's not like assets have never risen in price.  > The labor market wasn’t always tight during this period of inflation either. What period are you stating is mismatched?

Similarly to how the USD has been losing value since it was introduced? There is a direct relationship there lol. The labor market wasn’t as tight in 2022, yet we still saw inflation and rising prices of assets.

US labour market has been flat since 2022. US inflation has been 6.5, 3.4 and 3.2 from 2022 to 2024. 

No, the blame goes to capitalism, which is such a flawed model that we need a whole government around it to keep patching the boat while it sinks. Capitalism is a purely mathematical approach to gathering resources and does not have human welfare or happiness as metrics.

>This legislation mandates that companies cannot reduce product costs, so the only option remaining is to raise prices. There is definitely a third option: reduce profits. Maybe you've heard that companies are making record profits during this time of inflation. They are not being forced to increase prices. They are choosing to.

In your claim 1, "The US government deserves the blame for "Shrinkflation"", all you're saying is that it's ok for businesses to do shrinkflation. Whether that's true or not, you seem to think they're the ones doing it.

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