Good news from Biden advisor: Grocery prices are only rising if you count beef, pork, and poultry

Lucky for the White House that human beings don’t need protein to survive.

Maybe Biden can slip some grocery-store alternatives to the big three into his COVID speech tomorrow. “Beans have protein, you know. Eggs too. They’re still cheap. And tuna.”

Biden 2024: Let them eat beans.

Quinoa. Also inexpensive and high in protein. Very bland, admittedly, but the poors can always throw some hot sauce on it or whatever to spice it up.

A food industry expert told Fortune last month that he expects the rise in prices at the supermarket to continue for the next two years, which should make Democrats shudder. What’s driving it? According to the USDA, it’s a combination of “strong domestic and international demand, high feed costs, and supply chain disruptions. Winter storms and drought impacted meat prices this spring, and processing facility closures due to cybersecurity attacks impacted beef and other meat production in May.” There’s also systemic upward pressure on prices from economy-wide inflation.

There may be “hidden” inflation too, if not at the grocery store than elsewhere. Jonathan Last flagged this interesting Alan Cole post today on how businesses cope with rising prices. One way, of course, is to pass higher costs on to customers. But a second way that’s less noticed is to hold prices steady while making goods or services shoddier. That’s hidden inflation, and it’s around:

Consider, for example, the reduction in college quality. If you look at the Oberlin College Fall 2020 Reopening FAQ, you get a sense of how much the product quality degraded due to COVID-19. Some students (juniors) would be off-campus to de-densify the campus. Courses would be a confusing mix of remote, hybrid, and in-person learning. The college assured students they’d figure out how to make this work for lab classes in the sciences. But overall, it went as you’d expect: not great. The students forced off campus found this miserable, isolating, and boring.

The FAQ did have a flair for the comedic, though. Its final section is a series of questions about whether students will receive any discounts for remote learning or lost amenities. The answer is always “no.”

Of course this took fewer workers to run, but it only did so by slashing features from the product.

You see it in things like hotels too, notes Cole, where room rates might hold steady but rooms are cleaned less often. How much hidden inflation will we end up coping with at the grocery store as manufacturers try to hold rising prices down with lower quality food?

Democrats are watching inflation, and the latest COVID wave, and the Afghanistan fiasco. And they’re starting to sweat:

Democrats are already beginning to calculate the potential cost to the party in 2022. Over drinks on the sidelines of a recent meeting of the Democratic Governors Association in Aspen, Colo., party donors and operatives privately took stock of the damage that Afghanistan and the resurging coronavirus pandemic might hold for the party’s prospects in the midterm elections next year. The assessment was bleak…

“When Biden was elected, it was supposed to be, ‘Oh, the adults are back in the room to take charge,’” one strategist who was in Aspen said. “It turns out, we can’t do anything. Any Democratic strategist who thinks this is not going to impact the midterms or impact Biden being reelected, clearly they don’t know what the f— they’re talking about.”…

“He sold himself on competence,” Maslin said. “I think in six months, people are not going to be attacking the policy [of withdrawal]. … But the fact that it jumped him so fast, the fact that he said it will never be like Vietnam, you’ll never see the helicopters, and it all happened, and it all happened in two weeks, I think that obviously raises questions about the very thing that he’s supposed to be best at.”

They’re starting to sweat a lot:

I’ll leave you with a little more from today’s White House presser on inflation in food prices. The dark theory none too subtly advanced here is that meat processors are boosting prices unnecessarily, capitalizing on the reality of economy-wide inflation to justify making a killing.

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David Strom 12:01 PM on October 07, 2022