Ron Paul: Blame the Fed for ‘Shrinkflation’
Shrinkflation is a rational response to increased prices caused by the Federal Reserve’s dollar depreciation.
President Biden may have recently made history as the first president to discuss snack chips in the State of the Union message. He used snack chips to illustrate the phenomenon of shrinkflation. Shrinkflation occurs when businesses reduce the amount of goods sold in order to avoid raising prices. President Biden pointed out that businesses hope that, since both the price and the size of the package remain the same, most consumers will not notice they are getting fewer chips, cookies, or whatever other product has been affected by shrinkflation.
President Biden called on Congress to pass legislation, sponsored by so-called moderate Senator Bob Casey of Pennsylvania, to crack down on companies that reduce the amount of a good in a package. Biden and his congressional allies and media apologists think that this will stop shrinkflation. They think this because they believe shrinkflation is caused by corporate greed. In fact, shrinkflation is a rational response to increased prices caused by the Federal Reserve’s dollar depreciation.