WEBVTT

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They shrink the product, they hike the price,

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banked record profits and told you it was about

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inflation. Now this episode is about calling

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it what it actually is. Now, usually on this

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show, I like to have a good time. I like getting

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nostalgic, digging up some good old day kind

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of things. And when I say good old days, I'm

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talking about like 2005, you know, whatever,

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some hazy stretch of use to be better. That's

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usually where I like to go. Not today today.

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I'm angry and I want to tell you why Quick question

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for you though When did you last stand in the

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cereal aisle at the grocery store and actually

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feel that box not read it feel it Because I want

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you to think about how light it felt in your

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hand and how you probably told yourself, huh?

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Prices are just crazy right now. It moved on

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with your day. I'm not mocking you. I've been

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doing the same thing for like two years straight

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and I'm bout over it. My name is Tyler. Thanks

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for being here today. I'm talking about shrinkflation

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or as the economic people like to coin this new

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term greedflation. Two ugly words economics has

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given us. Thank you for that I guess. And, you

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know, about why calling any of this just inflation

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lets a whole lot of rich people off the hook.

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And I don't like letting the rich bastards off

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the hook. So, before I get any further, because

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I'm worked up on this one, opinions are mine,

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nobody else's. All of this is from my point of

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view. Now, here's my confession before we get

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any further. I am, by nature, I'm a guy who doesn't

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like confrontation. especially You know confrontation

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about money. I'll notice that bag feels lighter

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and I'm still gonna buy the bag every time I've

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bought the smaller Doritos bag at the same price

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a dozen times without You know saying award to

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anybody not my wife not my friends not the rest

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of my family And you know why? Because it it

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felt you know petty To complain about a bag of

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chips I'm here to tell you it's not petty because

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that's the whole con They're betting on you feeling

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like it is petty So, you know, let's lay out

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what actually happened Because this part isn't

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opinion. This is documented. This is happening

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Doritos You know Doritos? They went from nine

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and three quarter ounces to nine and a quarter

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ounce. Same price. That's about like five fewer

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chips a bag. And when a reporter asked PepsiCo

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about it, their spokesperson said, quote, we

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took a little bit out of the bag so we could

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give you the same price and you keep enjoying

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your chips. Like it's some kind of gift like

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shrinking the bag was a few was some kind of

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favor. Oh Thanks Doritos Give me my five chips

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back Now Gatorade they did the same thing 32

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ounces down to 28 and they didn't hide it did

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these guys didn't even try to hide it They redesigned

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the damn bottle to look some sort of I don't

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know Aerodynamics, so you wouldn't clock that

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you're paying the same amount of money for 4

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fewer ounces. General Mills. You know, the cereal

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company. The family size box. 19 .3 ounces down

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to 18 .1. No price change. When NPR asked about

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it, they said it was about reducing emissions.

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When they talked to their own investors, they

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called it And I'm not making this phrase up.

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I don't know what kind of buzzword soup this

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crap came from but it's they called it price

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pack architecture look it up different rooms

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different words the same thing shrink flation

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greed flation and shitification of physical products

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whatever you want to call it They pitch one thing

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differently to the investors versus what they

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tell the news Because they don't want you to

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know And here's the one that actually this is

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what got me going this is why I'm so worked up

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today because I had to record this episode when

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I read this one I was like all right. We're doing

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an episode on this Kimberly Clark If you don't

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know that name they basically make a lot of toilet

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paper and other Products out there. I'm not gonna

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go through the list, but their CEO Was talking

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about raising prices on toilet paper said out

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loud on the record quote if the price goes up

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on bad tissue Generally that doesn't mean you're

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going to use the bathroom less right That's the

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thinking you need this you're not gonna go anywhere

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They're gonna squeeze away Now the other part

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they don't want strung together with those shrinking

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bags While all of this was happening corporate

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profits. They weren't just fine They were record

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-breaking The groundwork collaborative went through

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the actual federal data and found corporate profits

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drove 53 percent of inflation in the back half

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of 2023 53 percent now compared that to the 40

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years before the pandemic where profits historically

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explained about 11 percent of inflation that's

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not a small shift that's a different game entirely

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I don't even care to imagine where it's gone

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since 2023 up to now 2026. I'm sure it hasn't

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gotten any better. Think about it though. Fourth

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quarter of 2023, corporate profits hit $2 .8

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trillion with a T. $2 .8 trillion. A record.

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The FTC did their own investigation into grocery

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pricing and found that retailer profit margins

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hit 7 % over cost in 2023, above even the previous

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peak. Their own chair said dominant firms Use

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this moment to come out ahead at the expense

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of the people they serve You and me That's the

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FTC saying that not some guy on a podcast. That's

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the FTC's own wording Meanwhile think about your

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paycheck Real wages were down 25 straight months

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Now, as you can imagine, CEO pay in that same

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stretch hit 290 times what a typical worker makes.

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In 1965, that ratio was 21 to 1. 21 to 1 used

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to be considered generous. So no. This was not

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inflation happening to companies the same as

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it was happening to you this was some companies

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using inflation as a cover as an excuse and a

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Lot of that extra money went straight to the

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top not sideways to cover those higher cost Now

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if that first ten minutes of this didn't you

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make didn't bug you This this will probably get

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your blood boiling a little bit And I want to

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say this slow because I want it to be heard I

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want it to land There were bills Actual bills

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in Congress One of them called the shrink flation

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prevention act would have made the FTC treat

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this shrink and hide game as a deceptive practice.

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The Price -Galging Prevention Act, the other

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one, would have gone after exactly what the FTC's

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own report described. Guess what happened? No,

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go ahead, guess. Both of them died. They weren't

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voted down, died, set in a committee, never even

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got a hearing, never got a vote, while The food

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and beverage industry spent close to 30 million

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dollars in a single year Lobbying the same people

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who were supposed to be writing the rules Now

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I want to be fair here because I really do try

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to be Not every Economist agrees on how much

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of this is pure greed versus real Cost catching

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up late in the game or whatever the San Francisco

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Fed pushed back on the greed -flation framing.

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Some of this is genuinely complicated, but even

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the researchers who are skeptical don't dispute

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the markup spikes in the, you know, certain specific

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sectors in that prices stayed high long after

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the cost that supposedly caused them came back

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down. Now nobody's disputing that part nobody

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So a few things I keep coming back to where I

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land one Let's be real Stop calling it inflation

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in your head because The word does a lot of work

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letting everybody off the hook Inflation is what

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happens to everybody equally Now what happened

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here? is some companies raised prices faster

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than cost, ranked the product on top of it, and

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kept the difference. They gained you. They're

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pocketing that extra money. We need to call it

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what it is. When you talk about it, words matter

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here. More than people think. All right, another

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one. The people who could have done something

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about it mostly didn't Not because they lacked

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the spine or the Cajones or the tools The FTC

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wrote the report Congress had the bills It just

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didn't happen And there's a lot of lobbying money

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and more than a few members of Congress trading

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stock in these same industries sitting right

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there in the middle of that story. Something

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like 86 % of Americans across party lines. We

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don't agree on much anymore, but we agreed on

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this. Think Congress shouldn't be allowed to

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trade stock in industries that they regulate.

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86 % Now that's about as close to some sort of

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universal agreement as this country gets on anything

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and it still hasn't happened Last one I promise

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last one and this is one that actually That's

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actually about you and me Not the economy You're

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allowed to be loud about this. You're allowed

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to post the receipt. You're allowed to email

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whoever represents you and say, I know what you

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did and what you didn't do here. You're allowed

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to stop feeling embarrassed about noticing the

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bag is lighter. That instinct, I mean they're

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counting on. The one where you think it's beneath

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you to complain about a bag of chips That instinct

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that's what they're counting on that you won't

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complain that you won't raise a stink about this

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that you won't call your representatives that

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you won't go online and post the receipts That's

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what they're selling you along with that smaller

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bag Stop buying that part I I don't got a neat

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little bow to put on this one I'm I'm not gonna

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give you three easy tips to somehow beat corporate

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greed Mainly because well there aren't three

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easy tips But I am telling you You know what

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I'm telling you is uh well basically Your anger

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It's correct what you're feeling that's correct.

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You're not being dramatic about it You're not

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being petty about it. I Think a lot more people

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should speak up You did the math you know what's

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going on Even if it just even if you're trying

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to Tell yourself, you know, maybe I'm imagining

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this That instinct that gut feeling that something

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is wrong Listen to it And that's the show If

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you want to keep up with it subscribe wherever

00:16:21.500 --> 00:16:24.320
you're listening if that's YouTube Apple podcast

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Spotify You can find everything else that Tyler

00:16:27.779 --> 00:16:31.159
Woodward dot me And if you want to buy me a cup

00:16:31.159 --> 00:16:41.960
of coffee Don't really know how to end it. I

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don't have a clean little sign off and today

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I'm I just kind of want to leave it messy because

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Well, the thing that I'm pissed off about is

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I guess a little messy too, so That seems fitting,

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right? So I'll catch you guys next week