That Doesn’t Feel Like $150 Worth of Groceries(bariweiss.substack.com)
bariweiss.substack.com
That Doesn’t Feel Like $150 Worth of Groceries
https://bariweiss.substack.com/p/that-doesnt-feel-like-150-worth-of
27 comments
> That hasn’t stopped some of these people from trying to blame corporations for inflation. Senator Elizabeth Warren has insisted that big businesses—ranging from grocery chains to private equity firms—have made inflation worse by “jacking up prices.” President Biden’s spokeswoman, Jen Psaki, has referred to “the greed of meat conglomerates.”
> If greedy corporations could “jack up” prices whenever they wanted to, then they would do it all the time, over and over. But they don’t. That’s because, well, consumers have choices, and when things get too expensive, they stop buying those things. Suggesting otherwise is silly.
> The inverse of this paper thin argument for “corporate greed” suggests that, until recently, corporations were not greedy, that, since the early 1980s, when inflation was really bad, corporations haven’t been all that keen on making that much money. Perhaps the senior senator from Massachusetts should spend a little more time in the private sector.
In fact, this can and does happen all the time. We have anti-trust legislation to prevent companies from working together to fix prices, but sometimes it happens anyways, and lawsuits get filed and companies get fined. If there haven't been any prominent legal cases lately it's not necessarily an indication that price fixing has gone away; it may just be that enforcement is lax, or that the companies have found ways to collude that aren't technically illegal or aren't flagrant enough to provoke enforcement, or that one company has simply bought most or all of its competitors.
Also, it's noteworthy that the healthcare industry is explicitly exempted from U.S. antitrust laws.
> If greedy corporations could “jack up” prices whenever they wanted to, then they would do it all the time, over and over. But they don’t. That’s because, well, consumers have choices, and when things get too expensive, they stop buying those things. Suggesting otherwise is silly.
> The inverse of this paper thin argument for “corporate greed” suggests that, until recently, corporations were not greedy, that, since the early 1980s, when inflation was really bad, corporations haven’t been all that keen on making that much money. Perhaps the senior senator from Massachusetts should spend a little more time in the private sector.
In fact, this can and does happen all the time. We have anti-trust legislation to prevent companies from working together to fix prices, but sometimes it happens anyways, and lawsuits get filed and companies get fined. If there haven't been any prominent legal cases lately it's not necessarily an indication that price fixing has gone away; it may just be that enforcement is lax, or that the companies have found ways to collude that aren't technically illegal or aren't flagrant enough to provoke enforcement, or that one company has simply bought most or all of its competitors.
Also, it's noteworthy that the healthcare industry is explicitly exempted from U.S. antitrust laws.
Bari Weiss doesn’t seem to know basic economics. Are all consumer goods perfectly competitive markets? No. Is demand for consumer goods highly inelastic? Yes. Does the author account for collusion? No.
One can’t just say that consumers should find cheaper alternatives. Reality is not so simple. But after reading far too much of Bari Weiss’ writing, it seems clear that all she ever offers is surface level takes.
One can’t just say that consumers should find cheaper alternatives. Reality is not so simple. But after reading far too much of Bari Weiss’ writing, it seems clear that all she ever offers is surface level takes.
This was written by a guest author.
My key takeaways:
1. The primary reason for the reduction in our purchasing power is not the supply-chain disruptions occasioned by government responses to the COVID pandemic, let alone Vladimir Putin’s invasion of Ukraine
2. It is actions taken by the federal government—including the Biden administration, the Trump administration, Congress and the Federal Reserve—that have landed us in our present inflationary mess
3. For 2 decades we have been told that middle class is well an alive, but it is just "squeezed", but at this point it is clear, that US middle class has been sold by the Congress to the highest bidder and is dying painful death
4. In 2011, the last time inflation was on the rise, the then-president of the New York Federal Reserve, William Dudley, ventured into a working-class neighborhood in Queens, New York, to give a speech explaining why inflation wasn’t a big deal
5. Finding that he wasn’t making an impact, Dudley famously picked up an iPad 2 and told his audience, “Today you can buy an iPad 2 that costs the same as an iPad 1 that is twice as powerful.” “I can’t eat an iPad!” someone in the audience shouted back
6. Overhanging all this was a Federal Reserve that, from 2009 to 2014, deployed what’s called quantitative easing—the purchase of preset amounts of government bonds and other financial assets to inject money into the economy—to boost economic activity
7. Making matters worse is the fact that the Bureau of Labor Statistics and the Federal Reserve, which measure inflation, have long relied on measurements that make it appear as if inflation is not as bad as it really is
8. As if to add insult to injury, “scarcity inflation,” which is due, in part, to disruptions to the supply chain, have compounded our inflationary woes
1. The primary reason for the reduction in our purchasing power is not the supply-chain disruptions occasioned by government responses to the COVID pandemic, let alone Vladimir Putin’s invasion of Ukraine
2. It is actions taken by the federal government—including the Biden administration, the Trump administration, Congress and the Federal Reserve—that have landed us in our present inflationary mess
3. For 2 decades we have been told that middle class is well an alive, but it is just "squeezed", but at this point it is clear, that US middle class has been sold by the Congress to the highest bidder and is dying painful death
4. In 2011, the last time inflation was on the rise, the then-president of the New York Federal Reserve, William Dudley, ventured into a working-class neighborhood in Queens, New York, to give a speech explaining why inflation wasn’t a big deal
5. Finding that he wasn’t making an impact, Dudley famously picked up an iPad 2 and told his audience, “Today you can buy an iPad 2 that costs the same as an iPad 1 that is twice as powerful.” “I can’t eat an iPad!” someone in the audience shouted back
6. Overhanging all this was a Federal Reserve that, from 2009 to 2014, deployed what’s called quantitative easing—the purchase of preset amounts of government bonds and other financial assets to inject money into the economy—to boost economic activity
7. Making matters worse is the fact that the Bureau of Labor Statistics and the Federal Reserve, which measure inflation, have long relied on measurements that make it appear as if inflation is not as bad as it really is
8. As if to add insult to injury, “scarcity inflation,” which is due, in part, to disruptions to the supply chain, have compounded our inflationary woes
This article starts by pointing out what everyone knows (inflation is currently higher than everyone wants), but then jumps into an incoherent diatribe claiming the federal government is lying about inflation, which implies there's some kind of large-scale conspiracy. That's... not even wrong.
The BLS computes multiple inflation statistics, many of which include food energy, and the methodology and data used for computing the statistics are not just 100% transparent, they are also well documented. Don't trust my word for it. Here's a link to a BLS page with links to the different kinds of inflation statistics they track: https://www.bls.gov/bls/inflation.htm
Moreover, it's remarkably easy to compare two or more of these inflation statistics over time. For example, here's a long-term comparison of inflation in cities with and without food and energy: https://fred.stlouisfed.org/graph/?g=8dGq# -- as anyone can see, over the long-run, the two statistics are pretty close, but the one including food and energy has pointier spikes. Which is why the BLS tracks both.
If I had to make a guess, I would say the individual who wrote this is highly educated in the humanities, but either (a) is poorly educated in the language of science, i.e., mathematics, and therefore unable to understand what he's writing about, or (b) is ideologically motivated, and as we all know, ideology is antithetical to the pursuit of truth.
The BLS computes multiple inflation statistics, many of which include food energy, and the methodology and data used for computing the statistics are not just 100% transparent, they are also well documented. Don't trust my word for it. Here's a link to a BLS page with links to the different kinds of inflation statistics they track: https://www.bls.gov/bls/inflation.htm
Moreover, it's remarkably easy to compare two or more of these inflation statistics over time. For example, here's a long-term comparison of inflation in cities with and without food and energy: https://fred.stlouisfed.org/graph/?g=8dGq# -- as anyone can see, over the long-run, the two statistics are pretty close, but the one including food and energy has pointier spikes. Which is why the BLS tracks both.
If I had to make a guess, I would say the individual who wrote this is highly educated in the humanities, but either (a) is poorly educated in the language of science, i.e., mathematics, and therefore unable to understand what he's writing about, or (b) is ideologically motivated, and as we all know, ideology is antithetical to the pursuit of truth.
This article seems to be arguing against the Covid relief bills, suggesting that they are the primary cause of inflation. Maybe they are.
But the article does not consider the counterfactual: what situation would we be in without the Covid relief bills? Inflation might be lower, but also there would be more homeless, more bankruptcy, more unemployed.
When you shut down the economy for two years, there's no good option.
But the article does not consider the counterfactual: what situation would we be in without the Covid relief bills? Inflation might be lower, but also there would be more homeless, more bankruptcy, more unemployed.
When you shut down the economy for two years, there's no good option.
Inflation might be lower,
>but also there would be more homeless,
Would there? You don't know that with spending less money on basics, people would be freed up and less tight on charitable care for the homeless, or at least more individually involved, which brings accountability to orgs providing homeless services.
> more bankruptcy,
Bankruptcy is a good thing. When you finish bankruptcy proceedings you are absolved of debt and your life immediately gets less stressful. The risk should 100% be on the lender, they are the ones who tried to get free money. Perhaps we should not have so many bad loans and a correction is due.
> more unemployed.
Maybe this wouldn't be such a bad thing. It's not hard to argue that as a society we are overworked. Would it be so bad if more people could have natural access to 4-day workweeks, if fathers or mothers could afford to stay at home and care for the kids while their spouse or whatever, polycule coop, goes off to bring home the bacon?
Your assertion encodes some assumptions, which ultimately, are responsible for the degraded relative quality of life in the lower classes of western nations (to include "socialist" countries which also have seen rising wage gaps in spite of their social programmes -- but they all have in common adherence to contemporary macro theory)
>but also there would be more homeless,
Would there? You don't know that with spending less money on basics, people would be freed up and less tight on charitable care for the homeless, or at least more individually involved, which brings accountability to orgs providing homeless services.
> more bankruptcy,
Bankruptcy is a good thing. When you finish bankruptcy proceedings you are absolved of debt and your life immediately gets less stressful. The risk should 100% be on the lender, they are the ones who tried to get free money. Perhaps we should not have so many bad loans and a correction is due.
> more unemployed.
Maybe this wouldn't be such a bad thing. It's not hard to argue that as a society we are overworked. Would it be so bad if more people could have natural access to 4-day workweeks, if fathers or mothers could afford to stay at home and care for the kids while their spouse or whatever, polycule coop, goes off to bring home the bacon?
Your assertion encodes some assumptions, which ultimately, are responsible for the degraded relative quality of life in the lower classes of western nations (to include "socialist" countries which also have seen rising wage gaps in spite of their social programmes -- but they all have in common adherence to contemporary macro theory)
Your arguments seem comically out-of-touch and perhaps even offered in bad faith.
Some people are overworked, but that doesn't mean that mass unemployment will help: it just means that some people will remain overworked and others will sink into poverty.
You are conflating, I assume intentionally, the legal proceeding bankruptcy, with the colloquial term bankruptcy meaning simply having zero liquidity. For most working people, the latter is definitely not a good state to be in.
Your first assertion is the least coherent. Are you seriously saying that when people have less money, they're inclined to spend more on charity? Give me a break.
Some people are overworked, but that doesn't mean that mass unemployment will help: it just means that some people will remain overworked and others will sink into poverty.
You are conflating, I assume intentionally, the legal proceeding bankruptcy, with the colloquial term bankruptcy meaning simply having zero liquidity. For most working people, the latter is definitely not a good state to be in.
Your first assertion is the least coherent. Are you seriously saying that when people have less money, they're inclined to spend more on charity? Give me a break.
> You are conflating, I assume intentionally, the legal proceeding bankruptcy
Wrong. The macroeconomic "fear" of disinflation is that people will not be able to make interest payments and default on their debt. This will cascade because those debt issuers also have debts of their own, and there will be an unwinding. Sometimes a good old jubilee is what you want.
Wrong. The macroeconomic "fear" of disinflation is that people will not be able to make interest payments and default on their debt. This will cascade because those debt issuers also have debts of their own, and there will be an unwinding. Sometimes a good old jubilee is what you want.
I don’t think the argument is “COVID relief bills vs no COVID relief bills.”
I think the argument is between “bad COVID relief bills and good COVID relief bills.”
Of course we’ll never know the contrafactuals, but I think it was possible to have more precise interventions that would have helped with COVID without boosting inflation.
The example I saw first hand is that many of my college friends got $600 stimulus checks then $600 more then $1400 even though they just switched to virtual classes and weren’t affected. I think the intent was to just get cash out quickly to people who needed the money and didn’t have any means tests. But as a result many people got cash who didn’t need it, and likely people who needed more didn’t get it.
As a result of these thousands of dollars to the maybe two dozen college kids I knew, they just bought more stuff. Comically, magic the gathering card prices shot up because people just bought “luxury” items with the extra cash.
My observation is likely not generalizable but seems like it happened a lot.
So my thought is that it’s ok to criticize policy that lead to the inflation we’re experiencing now. Critical examination of causes should help us get out of this current problem and, hopefully, help us prevent future ones.
But pretending there was a false dichotomy of “do nothing” and “do shitty” will just have us neglect reality and stay vulnerable.
I think the argument is between “bad COVID relief bills and good COVID relief bills.”
Of course we’ll never know the contrafactuals, but I think it was possible to have more precise interventions that would have helped with COVID without boosting inflation.
The example I saw first hand is that many of my college friends got $600 stimulus checks then $600 more then $1400 even though they just switched to virtual classes and weren’t affected. I think the intent was to just get cash out quickly to people who needed the money and didn’t have any means tests. But as a result many people got cash who didn’t need it, and likely people who needed more didn’t get it.
As a result of these thousands of dollars to the maybe two dozen college kids I knew, they just bought more stuff. Comically, magic the gathering card prices shot up because people just bought “luxury” items with the extra cash.
My observation is likely not generalizable but seems like it happened a lot.
So my thought is that it’s ok to criticize policy that lead to the inflation we’re experiencing now. Critical examination of causes should help us get out of this current problem and, hopefully, help us prevent future ones.
But pretending there was a false dichotomy of “do nothing” and “do shitty” will just have us neglect reality and stay vulnerable.
You may be right. But I didn't see any compelling counterproposals to the bills that were eventually passed. In fact, even with the benefit of hindsight, I still don't see any serious arguments about what those bills should have been, with the intent to improve the current situation.
so crazy that houses are not considered consumables. they absolutely are! does anyone believe that by living in a house we are granted an automatically self-repairing house? if not: it's a consumable, just one that is consumed, in the general case, over more than just a few minutes. there are other factors that contribute to its "consumption" other than it falling apart, being used, and otherwise needing repair. the march of technology, for example, contributes yet another factor to its decline in relatively value, at a perhaps increasingly fast rate
The cost of maintenance of a structure is far less relevant than the value of the land underneath it.
Contemplate letting your house rot, fester, and fall then tell us that such deterioration is immaterial to the value of your holding relative to other, well-maintained properties.
I'm quite sure you're misunderstanding the purpose of this conversation and thread. When people talk about housing prices spiking, and that not being included in inflation, they're pretty much exclusively talking about _land_. To the extent that the structure itself gets more expensive, that's captured in increases in maintenance and construction costs, both of which are captured in inflation measures.
It's utterly beyond me how you could interpret my comment as anything close to "you shouldn't maintain structures". Please make an effort to fully understand a comment in the context of the broader conversation before posting gibberish.
It's utterly beyond me how you could interpret my comment as anything close to "you shouldn't maintain structures". Please make an effort to fully understand a comment in the context of the broader conversation before posting gibberish.
Houses may be consumables but the land that they sit on certainly isn't
yes it is...? how is it any different? it can be consumed.
It's not a consumable because you can't duplicate a piece of land at a specific location. House prices go up because they are located on land that is becoming more desirable.
I dont understand how that is relevant to something being a consumable. A consumable means it can be consumed. mine a resource or use the soil, etc ., ... and you're using it up.
Land and houses are intrinsically linked. You cannot consume a house without also consuming the land it sits on. Therefore you can't realistically call a house a consumable.
what on earth are you talking about lol
"It is actions taken by the federal government—including the Biden administration, the Trump administration, Congress and the Federal Reserve—that have landed us in our present inflationary mess."
In other words, it is the fault of the American voter, right and left, for voting for leaders who haven't greatly cared about inflation because the voters haven't. Now both sides care a bit more, and both are prescribing solutions that ... just happen to equal a shopping list of their favorite policies, with or without inflation. Want to know who caused inflation? There's likely a portrait of the villain in your closest mirror.
In other words, it is the fault of the American voter, right and left, for voting for leaders who haven't greatly cared about inflation because the voters haven't. Now both sides care a bit more, and both are prescribing solutions that ... just happen to equal a shopping list of their favorite policies, with or without inflation. Want to know who caused inflation? There's likely a portrait of the villain in your closest mirror.
Our only choices are right or left, so if both are at fault then is it really our choice? On that note, what does it matter there is only 1 bad choice vs 2 bad choices?
Whoever is in charge is preserving this two-party system. We need a better way for minority candidates to get representation in congress, but also a voting system which allows a 3rd party to win.
Whoever is in charge is preserving this two-party system. We need a better way for minority candidates to get representation in congress, but also a voting system which allows a 3rd party to win.
From an outside perspective, American system looks more like "right" and "extreme-right", disguised as choice over small-ish policies.
Sadly that's an extreme them-or-us system that's being slowly exported pretty much everywhere else.
I think it’s fair to blame the policymakers, politicians and bureaucrats that made those specific decisions. Otherwise, where does it end? Perhaps it’s the fault of the parents who raised those voters. Voters are ultimately responsible, but I think they can hold the representatives they elected accountable for their decisions.
Some examples.
We learned the lack of producers of meat at the local level, and 4 major meat producers, 2 owned by china. Allowing mobile butchers and mom/pop meat processing centers helped in some states.
Trucking industry at ports in california showed a bunch of issues, union jobs at cranes, non overlapping shifts, limited warehouse space, limited cargo container space, lines to get cargo containers, long lines and lack of roads into and out of ports and depots.
The dumping of perishable goods made for wholesale that cant be turned into retail consumer goods. The lack of consumer sized containers.
Just in time delivery meaning many ingredients stopped entire production lines.
Price hikes by middle men in the meat industry actually did a price hike on beef, while paying farmers less. Many states already have lawsuits and investigations into the price gouging on beef.
Gas prices due to state gas taxes, limited oil supply, trucking insurance, driver retirement, while allowing mexican trucks on the road who pay less in operational costs. I read the average age of a truck driver is retirement age already. And truck driver union is one of the largest unions out. Then you put CARB EPA controls on trucks, and truckers have to buy NEW TRUCKS to deliver goods in california. Most people dont have 150k-200k to drop on a new truck, so they just avoid california.
State licenses, permits, inspections, pushing artificial limits on cottage foods and small/urban farmers. Or even bans on products, such as raw milk or unpasteurized ciders.
Taxes on inventory, double taxing on ingredients, triple taxing on the producer/shipper/wholesale cycle. Taxes add up, and someone has to pay.
Theres so much more, thats causing all these problems, and inflation/covid/greed/taxes/regulations/supply chain is really starting to show with insanely high prices.