ALEC in the Washington Times: Rising fuel costs lead to higher food prices, ‘shrinkflation’
President Biden’s decision to halt oil and gas leases on federal lands has led to impossibly high prices at the pump. While commuters looking to fill their cars face sticker shock at the pump, those prices pale in comparison to the cost of the essential fuel responsible for powering nearly every facet of America’s agriculture industry.
By Sean Salai – The Washington Times
Wednesday, May 25, 2022
What’s the opposite of a bargain? Consumers are finding out as they increasingly spend more to get less amid record-high inflation.
With rising diesel and gasoline prices increasing transportation costs (and decreasing profits), producers and retailers must raise their prices — or offer less of their goods at the same price, economists say. Think of an order of 10 chicken wings that has only eight wings. Or a quart of blueberries that measures only 1 pint.
“Sellers certainly don’t think consumers are dumb enough not to know that selling half the number of blueberries for the same price is an increase in the price of blueberries,” said economist Warren L. Coats, a former member of the International Monetary Fund. “But in a way, it helps facilitate the fact that at the higher price consumers will want to buy less.”
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On May 10, President Biden attributed high inflation to Russia’s war against Ukraine, corporate greed, the pandemic and the policies of “ultra-MAGA Republicans.”
“It’s not because of spending,” Mr. Biden said. “I think our policies help, not hurt.”
But Jonathan Williams, chief economist for the American Legislative Exchange Council network of conservative state legislators, said the administration’s green energy policies have kept American oil companies from producing the volume needed to keep prices low.
“President Biden’s decision to halt oil and gas leases on federal lands has led to impossibly high prices at the pump,” Mr. Williams said. “While commuters looking to fill their cars face sticker shock at the pump, those prices pale in comparison to the cost of the essential fuel responsible for powering nearly every facet of America’s agriculture industry.”
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