I thought about this passage while reading David Henderson’s EconLog article. $1.50 Costco hot dogs just got even worseAnthony Davis and James Harrigan’s podcast “Words and numbers” talks about how much the prices of beer and hot dogs have gone up at ballparks. The $1 Karns hot dogs I used to get at Riverfront Stadium in Cincinnati remain only in my memory.
According to the poll data From Data for ProgressVoters from the left, right and center blame food manufacturers and retailers for raising prices to maximize profits. The closest phrase in the poll to “too much money chasing too few goods” is “President Joe Biden’s policies,” which could mean almost anything Biden has done. The Federal Reserve is noticeably absent from the list of suspects. It is unclear whether Data for Progress thought of including monetary policy in the poll.
Shrinkflation blame shifting John Maynard KeynesDiscussion of –It is not clear whether Lenin actually said this What Keynes attributes to him. inflation Not only do prices and monetary balances become difficult to interpret; rising gasoline and food prices matter so much to voters that populist politicians have reason to stomp their feet and pound the podium during election years that every visible force of political law is drawn to the side of destruction. Which gets the blood boiling and the soul stirring more: the lashing out at the executive vultures who are hurting the general public to maximize their profits, or the Quantity Theory of Money?
After all, Costco Selected They demanded that they stop serving sauerkraut and onions to hot dog customers. Selected Some anonymous fool in an office building Selected They do this to recommend price increases to the faceless managers and directors of giant agricultural corporations who are accountable only to their faceless shareholders. Which is easier? Believing that evil forces are at work, or believing that M*V = P*Y, the total expenditure, i.e. Money Supply The velocity of money, or the number of times each dollar is used, is equal to the price level multiplied by real output (Lawrence White explains this equation in his concise encyclopedia article on inflation:(When money is increasing but productivity isn’t growing exponentially, Costco essentially has no choice but to cut quality if it wants to keep prices fixed at $1.50. But try to explain how Costco and its suppliers function in a world with too much money and too few goods and most voters will stop listening faster than you can use the word “speed.”
Art Carden is a professor of economics and a health care real estate trust fellow at Samford University.
