And then, on the 6th Sunday of the year, which was also the Sunday of the Super Bowl, Joe did raise his mighty fist and command the prices to fall; and they fell.
For he was the president, and this is how thou dost manage an economy. But alas, it was only a dream. Joe awakened to a world of 18% cumulative inflation, 33% food inflation, and shrinking product sizes.
Even his most powerful urging could not tame the inflationary monster he, himself had created.
President Biden recently told companies to stop shrinking their products. His words were as effective as they were when he demanded gas stations lower their prices two years ago, or when he ordered companies to fight inflation by cutting costs but not cutting salaries.
He seems to have no understanding of economics at all and doesn’t realize that the macroeconomy does not obey his commands. But it would if the US had a centrally planned communist system, as many in government are pushing for.
Gas prices at the pumps surged due to the increase in oil costs, stemming from reduced supply following the shutdown of the Keystone Pipeline by President Biden.
Additionally, his inability to persuade OPEC to ramp up production ensured prices would remain high. This spike in oil prices had a ripple effect, leading to higher product prices across the board. Plastics are made of oil, and all products have to be transported using oil.
Adding to the price increases were the mandates in certain blue states and cities, which compelled companies to raise their minimum wage.
As labor expenses typically constitute 30% to 40% of costs for many retail and consumer firms, wage hikes necessitated corresponding increases in product prices.
As for Joe telling companies to cut costs, companies are constantly cutting costs, always looking for the cheapest and most efficient ways to produce products and reduce prices. Remember in the 70s when a color TV cost a month’s wages?
The shrinkage Joe is referring to is called shrinkflation. The U.S. has been plagued by an inflation crisis since Biden shut down the economy and then injected about $2 trillion of stimulus spending back in 2021.
When the government increases the money supply, the value of the dollar decreases, and more dollars are needed to purchase goods. That is why, under President Biden, we reached a 40-year high of 9% inflation.
Companies couldn’t simply lower their prices, as Joe ordered them to, because they faced higher prices for raw materials, components, and wholesale goods.
Simultaneously, the law of supply and demand dictates that when prices rise, demand decreases. Companies knew that if they raised their prices too much, people would stop buying. So, they compromised. T
hey raised prices somewhat and reduced the size of the product to save money. Therefore, if a company raises the price by 9% and cuts the size by 10%, that is really more like a 20% inflation.
The first and most noticeable effect of shrinkflation is that product sizes and portions decrease. Next is reduced service. Companies may scale back the level or quality of services provided to customers.
This could include slower response times, fewer customer service representatives, or less personalized assistance.
This trend has led to the rise of self-checkout systems, where customers are required to handle transactions themselves due to the additional cost of employing more staff, which would inevitably raise already-too-high grocery bills.
Fast food restaurants now often feature ordering kiosks, and some sit-down restaurants require patrons to swipe their credit cards themselves at the table.
Another example is the transition to digital menus, which saves companies printing fees and reduces the need for additional staff to bring physical menus to customers.
Companies may substitute cheaper ingredients or materials to maintain profit margins. Quality also gets cut. You will find fewer chunks of beef in your beef stew, or you may have to pay for condiments.
There are also packaging changes. Some stores are not even offering bags anymore. Companies may redesign packaging to give the appearance of the same quantity of product while actually containing less. This can be subtle and may go unnoticed by consumers.
And something we all love is increased fees and hidden costs. Companies may stop offering free shipping or delivery. They charge a surcharge for credit card or cash purchases or if you do not order off the app.
There is the mandatory tipping now, with the default set at 20% or more. When you fly, you pay for your seat selection, as if seat number 23F is some special honor worth $19.99. You used to get free checked luggage on the plane.
Now you have to pay for the bags. And not only do you have to self-check in, but you also have to print your own boarding pass, print the label, and attach it yourself.
This is all before you get on a flight with no movies, no food, and no beverages with two unattractive stewardesses rather than five former models.
Of course, every aspect of Bidenomics is allegedly designed to help the working poor. But instead, it just makes everyone poorer. Employees are also hit by shrinkflation.
First, the wage hikes and unions result in job cuts. But the loss of compensation to employees does not show up in Biden’s unemployment numbers. Where the company used to give two free uniforms, now, maybe they only give one, or the employees have to pay for the uniforms.
Maybe employees had free meals before but now have to pay for them. Or they lose their ten-minute break, have their hours cut, overtime is frozen, or they lose their benefits.
The proof that this is happening in Joe Biden’s economy is that, according to the Bureau of Labor Statistics, average total compensation is falling.
Among the benefits that are being cut, the most are health benefits. And free healthcare has been a consistent mantra for the Democrats, who have taken so many steps toward making healthcare unavailable to many workers.
This story originally appeared on TheGateWayPundit
