Back Door Inflation (July 16, 2007)

A half gallon of ice cream is now 1.75 quarts (or 7/16ths of a gallon).  A six pack of avocados is now “Contents: 5.”  However, the prices have not gone down correspondingly.  The “2 by 4” piece of dimensional lumber has not sported 2 inch by 4 inch dimensions for decades, but they are not called 1.5s by 3.5s.  The venerable 12 ounce beer is now 11 or 10.5 ounces (or some fraction of a liter) in some countries.  Imagine the reaction when Joseph Six Pack enters a store and discovers that a six-pack of beer contains only five 11 ounce beers.  There likely will continue to be six or four containers of some size because of design considerations.  The ad types will give it some manly spin.  However, the Interstate Commerce Clause or some penumbral provision in the United States Constitution may prohibit the sale of anything less than a 12 ounce beer in anything smaller than a pack of six.  Perhaps Bobby Bork will bring the law suit.

The government’s figures on inflation do not reflect things on the ground.  Or at the gas pump.  Or in the supermarket.  The government’s “core inflation” figure does not include energy or food prices.  The “core inflation” figure is only insightful if the populace does not drive or eat.  The public policy encouraging ethanol production, which requires large quantities of corn to produce, favors energy over food.  Food prices rise even more.  The trade-off may be desirable, yet it still comes at a cost.  At core, prices are rising higher and faster than the government statistics reflect.

The price of a “Support The Troops” decal is also going up.  The decals may get smaller.

Bumper sticker of the week:

Whip Inflation How?

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