Technical difficulties? Or Mark just not making it to the gym?
Well, until Mark's absence is explained, here's some interesting links/images. Over brunch a couple weeks ago, I joking said to Mark that I like to measure inflation with the cost of Little Debby's.
Mark pointed out that food was not a good indicator of inflation, for two reasons:
1. Food subsidies.
2. the food industry's aversion to raise prices.
I'll agree with him on the subsidies. But the food industry only has two options to prevent raising prices: cutting profit margins and repackaging. They can only cut the profit margin so much, and repackaging typically means shrinking the amount you get in a standard unit. For example, take a look at your peanut butter jar next time it's empty. You'll notice it has a divot in the bottom. Peanut butter jars didn't always have that divot. They added it. So it looks the same as the old 16 oz jar, but suddenly you're only getting 14.5 oz and paying the same price.
However, repacking doesn't mean the food price has stayed steady- you're paying more per ounce than you were before, even if you're paying the same amount per unit.
So my claim about little debbies- kind of right, kind of wrong. Prices have gone up, and portions of the snack cake have gone down. However, due to subsidies, it has not kept pace with inflation.
Recently, I found some interesting articles that illustrate this- and maybe explains why American have become such fatties.
Until we hear from Mark, please enjoy these pictures/articles about food prices.
http://economix.blogs.nytimes.com/2009/05/20/whats-wrong-with-this-chart/
Both found via the Consumerist.
