"Greedflation And Burgers And Girls Drinking Beer"
by John Wilder
"Greedflation. It’s an ugly word for several reasons. The first reason it’s ugly is because I generally support the free market as the best tool for setting prices. You see that at gasoline stations regularly – no station that charges a quarter more for a gallon of gasoline will be able to sell much gasoline. The price for a commodity like gasoline, in a relatively free market, sets itself. That’s nice, because the very price mechanism that sets the price also allows the gasoline to flow to the consumers that value it the most, which according to my research are groups of post-nuclear war barbarians who hang out in Australia.
Some people don’t get this. I recall having extended conversations when I was in my twenties with an elderly gentleman about gasoline prices. He was upset because after some price shock, the gasoline prices all jumped $0.50 the next day. “They didn’t pay that much for the gasoline!”
Well, no, they didn’t. But because the supply was thought to be limited, the gasoline was worth more. Besides, the merchant was going to have to refill that storage tank at a higher price, and nobody was going to buy his high-priced gas if he charged more than the market when the price invariably went down.
“Besides,” I asked, “If you had an ounce of gold that you bought for $50, would you sell it for that, or would you want the (then) current price of $500 an ounce?” Of course he said he’d want the $500. But he still couldn’t understand why gas prices went up. I wanted to establish that, because I’m going to tear into the larger corporations for lying about prices. That’s greedflation.
An example of this would be McDonald’s®. I’ll pick on them because, like illegal aliens, they’re everywhere and more numerous than they should be at this stage in the economy. McDonald’s™ built its reputation on food that was fast, tasty, and inexpensive – a place a dad could take the kids for a quick treat on the way back from the zoo on a Saturday afternoon.
At least in Modern Mayberry, McDonald’s© has ceased to be fast, and inexpensive. McDonald’s® prices are so high that a “meal deal” costs the better part of the price of a pound of ribeye. To me, that’s not a deal, or at least not a good one. And these prices have pushed people away – McDonald’s™ insinuated that these price hikes were due mainly to inflation and blamed the franchise owners for the ultimate pricing.
The result? McDonald’s® ended up with declining burger sales, but with record profits. In fact, between 2014 and 2024, their prices doubled. Most of the increase was before the pandemic and inflation. Everyone’s doing it, right? No, mainly McDonald’s® was McLovin’™ it.
The average increase in prices for other fast-food restaurants during that same time period was more in the 55%-ish percent, and more or less in a straight line. They were raising their prices much faster than inflation, but McDonald’s™ was leading the pack. The result: A lot of “inflation” is just corporations adjusting prices to the point of maximizing their profits. Sell fewer burgers and yet make more money? Why not! Especially if we can insinuate that it’s really all beyond our control. Perfect!
I actually don’t mind that they’re increasing prices to increase profits. I get that. I mean, if they could sell just one burger and make sixteen billion dollars in profit, they’d be all in. Oh, wait, Lockheed-Martin™ is already doing that with jet fighters. What I mind is the insinuation this is due to outside forces instead of a planned extraction of the greatest amount of profit that can be generated per sale. It’s a lie.
One of the components of the monthly “Misery Index” that I put together is tied to inflation. Inflation destroys the value of currency, and makes people feel, day by day, shabbier and poorer. However, to blame outside forces for your increased prices instead of saying, “Hey, we think this burger is worth it,” is execrable.
The Wilder household has responded by purchasing prepared foods outside of the house only rarely. Once a week – at most. Instead, we’re cooking at home. It’s likely healthier, and I can get exactly the right amount of chocolate sauce on my bacon cheeseburger. I think many Americans have reacted the same way. And for us, it’s made us less miserable, rather than more miserable, plus the food is better.
The problem, though, is that when big business reaches a size that it can extract all the wealth it wants on a whim and keep posting record profits year after year. That’s not competition, that’s a Wealth Pump as defined by Peter Turchin, and it is a prime factor in the creation of misery and the road to Civil War.
The initial example that I gave of gas stations all competing to get my dollar is the way the markets work best. There are a number of different sellers all trying to get me to come to their station, though they haven’t figured out that if they had hot girls in bikinis they could probably double their business.
And no, McDonald’s™ rarely forces people to eat there, so there still is competition from substitutes, like a ribeye. I have the choice of whether or not to go to McDonald’s™. Please, Golden Arches, raise your prices to your heart’s content! Just don’t lie about it, and just don’t expect consumers to hang around, though it seems to be working for you right now. And McDonald’s™ innovates, since I heard that they had a failed beef version of their McRib©. Who says they don’t learn from their McSteaks®?"
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