One of the truths about the modern economy is that it encourages the sorts of deception the old economy considered fraud. This story from CNBC in “shrinkflation” is a good example. The very short version is retailers are shrinking their products while keeping the price the same. This games the inflation numbers. A candy bar may remain $1.25, but it is 80% of its original size. The bag of sugar at the market went from five pounds to two kilos, which is roughly 4.5 pounds.

That last trick is common with beverages. A fifth of liquor is now sold as 500ML. A fifth is roughly 25 ounces, while 500ML is 17 ounces. They will mess with the shape of the bottle so it tricks the eye. This may sound like a small thing, but consider this. The tax on alcohol is roughly $23 per gallon. That means the booze maker saves $1.30 on taxes, plus the cost of tax collection and the cost of manufacturing his product. Multiply that over a million bottles and you have real money.

Since most people don’t alter their eating habits all that much, they tend to notice that the food bill is slowly going up. If it was showing up on the price of product, people would notice it. When it happens this way, it is hard to detect. That’s the fundamental dishonesty at work. We live in a time when lying about everything is so common, no one notices. Ours is a dishonestly culture. Not only is lying tolerated, it is celebrated as the very pinnacle of business ethics.

This is not a new phenomenon. The old economy used to have examples of how this sort of dishonestly was self-defeating. The example that used to be used to teach was the pickle maker who hired a new plant manager. Soon, the plant was much more profitable so the owner went to see how it was done. The manager told him how he increased profits by removing one pickle from each jar. That means every ten jars netted him one free jar of pickles he could sell.

The owner fired his manager. The reason was the manager was not just cheating the customers, he was cheating the owner. The “savings” were eventually going to cost the owner business. In other words, they were not savings, they were accrued costs. Somewhere down the line that accrual would reverse out and someone would have to pay, most likely the owner. This is the most basic form of intergenerational theft. That’s spending tomorrow’s profits today. It creates a liability that has to be paid tomorrow.

The fact that the food makers are lying to us is not surprising. The standard has been set by public officials who lie so much it is impossible to know the truth. They lie on spec, as the gangsters say. Politicians have always lied, but it became the centerpiece of their morality in the Clinton years. Aggressively trying to fool the public was normalized in that period. As a result, no one can trust anything said in public. These everyone free to emulate the ruling class and lie about everything.

That last bit is not always obvious either. In a world where there is no truth, you can easily miss what’s happening. In the last election, Herman Cain was driven from the field because he liked getting freaky with co-workers. The people shrieking in outrage, however, spent the 1990’s defending a man who was a serial rapist and was impeached for shoving cigars into fat interns. The same people who lionized Hillary Clinton for sticking by her man, mocked Cain’s old lady or doing the same.

The Founders understood this and worked to shape public institutions that were weak, so they would not warp the culture. They also worked to make it tough for one religion to dominate the rest. The theory being that if no one could hope to have control of the public institutions, they would work to prevent others from it and the result would be a preservation of republican government. They never anticipated what was going to come from the radical reformers we call Progressives.

It is comforting to think that there is a limit to this. You can only shrink the food so far, before the containers are empty.. You can only hide the money creating and debt spiral for so long. Mathematics says there are limits and once those limits are reached, the game is up. It may be comforting to think there are still enough citizens willing to fight to keep the country, but that’s probably a fantasy.

The overwhelming majority want the custodial state and will fight anyone who tries to stop them. No matter how much and how often the Left lies to them, they will trust the Left before they trust themselves. That means the only way through this dynamic of institutional dishonestly is some form of crisis. When the liars are no longer able to keep the lights on, the public will turn to a truth teller. That truth teller will be an autocrat who promises to restore order and dispose of the radicals.


5 thoughts on “Shrinkage

  1. The reason they coupon and change prices is to attract more customers. I won’t buy cereal at 5 bucks a box so I buy the brand on sale for three. Other prople will pay five. They make money at five dollars and at three dollars but they get more volume with the sales. Nothing nefarious.

  2. Many retailers now tout “savings” off some MSRP but those MSRPs are bogey prices. Who, in their right mind, pays $5.99 for a “half-gallon (oops, now downsized to 1.5 quarts) of Breyer’s.
    Here’s an a related retailer angle: Ralph’s (Kroger) coupon system publishes only “cents off” coupons which do not mention the net price…ie “cents off” a bogey price. This prevents shoppers from making online price comparisons.
    Also, grocery retailers have manipulated consumers into joining a “Ralph’s Club” to get a lower price — a lower price than shown on the shelf marker which is, again, a bogey price. Imagine my disappointment upon learning that “Ralph’s Club”, like the Hair Club for Men, is not a real club.

  3. The next iteration will have to be the introduction of the “Galloon of Milk”, the “Doozen of Eggs” (11 per carton), the “24 oonce Sir Loyn” (what happened to all the mules?), and the “Fillay of flownder”.

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