The President’s Policies Continue to Fuel Inflation

Natural State families continue to feel the pain of rising prices for transportation, food and everyday items. It’s no surprise that hardworking individuals are struggling to make ends meet. According to the latest economic data inflation cost Arkansans $770 in February. Consumer prices continue to tick up and we’re all making difficult decisions with our shrinking budgets.

These hardships are the result of President Biden’s reckless policies that have increased federal spending and made economic recovery more difficult.

Food price inflation, which includes food purchased at the grocery store and in restaurants, has increased by 21 percent since January 2021. These historic highs have diminished our purchasing power.

Instead of accepting responsibility for his agenda exacerbating this crisis, the president is quick to pass the buck.

His administration has taken to routinely faulting businesses. First, it attempted to downplay the impact of food and grocery price inflation on the financial well-being of American families and then claimed any hardship was instead a product of concentration in the meat and poultry processing industry. That inadequate excuse failed to account for labor shortages on meat and poultry companies.

The president continued the blame game in this year’s State of the Union address when he attributed the problem to food companies adopting a practice called shrinkflation. While it’s true the downsizing of a product’s size or quantity while keeping the nominal price unchanged has occurred, faulting it as the main driver of the increased prices we’re paying to feed our families is a gross exaggeration.

The administration’s own economists at the Bureau of Labor Statistics (BLS) have determined shrinkflation is not a significant culprit behind stubbornly high grocery prices. “While consumers may notice shrinkflation at the grocery store, it has a very small impact [on] the overall inflation picture they face,” according to the agency.

As part of the process of collecting accurate data needed to estimate the rate of inflation, BLS not only monitors product prices, but it tracks product sizes. This allows the bureau’s economists to ensure changes to weight and volume associated with shrinkflation are correctly reflected in the monthly inflation numbers.

We know farmers are not to blame. The inflationary pressure consumers are experiencing for food does not directly translate one-to-one into higher farm-level prices or farm income. In the face of record-high food prices, farmers received on average only 7.9 cents of each dollar spent on food in 2022.

Many links in the supply chain get food from American farmers to the kitchen table, but neither farmers nor food processors through higher commodity prices, concentration or shrinkflation are to blame for sky-high food costs. Instead, too much federal spending by the administration overheated an economy still recovering from pandemic supply chain disruptions. Russia’s invasion of Ukraine further disturbed global energy and food supplies. Higher labor costs, higher energy and higher transportation expenses have all sent the costs of food service, food processing and food distribution steeply upward. Those are the real economics of food price inflation.

In the week following the State of the Union address, the newest inflation numbers were released showing prices continue to rise. It’s time the president admits Bidenomics has been the primary roadblock to affordable living and works across the aisle to pursue policies that actually lower prices.