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Sesame Workshop maintains Cookie is his own, er, monster. “As part of our ongoing effort to connect and engage with adult fans, we posted a playful tweet from Cookie Monster about his favorite subject: cookies,” the organization said in a statement to me. “The post was not intended to be political. Sesame Workshop is a nonprofit, nonpartisan organization.”
There are so many depressing things about this story that it’s hard to know where to begin. Here goes.
First, the idea that consumer product sizes might shrink to make price increases less obvious is not new. This phenomenon comes in cycles, often when companies face cost pressures. I covered consumer gripes about “stealth downsizing” back in 2011.
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Despite commentary sometimes suggesting that shrinkflation makes inflation even worse than officially reported, changes to product size are already accounted for in official inflation measures. For example, if the number of sheets per roll of toilet paper falls, the U.S. Bureau of Labor Statistics includes the rising price per sheet when calculating the consumer price index (CPI).
In fact, BLS tracks how often products are downsized — and upsized, for that matter. In a report last year on “shrinkflation,” the agency found that of the 100,000 goods and services tracked for CPI calculations, only a tiny slice were reported as downsized. Product downsizing was higher in 2015 and 2016.
The report included tallies through 2021 only, but BLS says it’s seeing about the same frequency of downsizing in CPI data today as in recent years.
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So why have shrinking package sizes become more salient? Though it’s always annoying to get less for the same price, it’s especially annoying when you’re hyperaware of rising costs. Americans are understandably furious that their purchasing power has declined, whether because cookies shrank or because the price of an existing cookie size increased, or both.
But lots of irritating things happen at supermarkets, and not all of them require federal intervention. For instance: Self-checkout machines get too angry if you don’t immediately put scanned items in the bagging area. People who bring 11 items into the “10 items or less lane” should be thrown out. Also, the signage should read “10 items or fewer.” And why is whichever line I choose always the slowest one?
At some point, these gripes start to sound like a bad ’90s stand-up routine. (“Have you seen cereal boxes lately?”) That’s basically what Cookie Monster tweeted — a goofy joke, about sweets, that for some reason some cynical politicians, well, politicized.
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In the case of shrinkflation, the government intervention lawmakers and Biden propose to fix it would make the problem worse. Forbidding companies from changing the prices and sizes of everyday products without government say-so is a form of price controls. (Casey’s bill is actually the second introduced in recent weeks that would implement price controls; the other is an old standby led by Massachusetts Sen. Elizabeth Warren.)
Price controls are not some brave new idea. Ask Argentines, residents of the former Soviet Union or Americans who recall the 1971 “Nixon shock.” With limited exceptions, these measures reliably cause lots of problems and distortions. They can cause shortages and reduce product quality (e.g., more sawdust in your cookie when flour prices rise). Making it hard to increase prices might even lead firms to set prices higher than they otherwise would. (Can you run temporary sales? What if prices rise post-sale?)
Additionally, enforcement of government-approved price levels would require enormous public resources better spent elsewhere.
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Ironically, grocery inflation has actually plummeted recently, no thanks to the lawmakers who’ve unsuccessfully pushed price controls for years. But I get it. It’s an election year, and politicians want to show they’re “doing something” about kitchen-table issues. If they must demagogue, though, I implore them to please leave this innocent, googly-eyed monster out of it.
As Cookie himself might say: Such indulgences are a “sometimes food.”
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Et tu, Cookie Monster?
Sesame Street’s lovable blue hedonist has somehow been roped into President Biden’s anti-greed agenda, including a misguided effort to bring price controls to U.S. supermarkets.
This week, the official social media account for the character expressed frustration with shrinking product sizes. “Me hate shrinkflation! Me cookies are getting smaller,” he tweeted.
Me hate shrinkflation! Me cookies are getting smaller. 😔
The post went viral, and within hours President Biden co-opted it into his anti-corporate-greed agenda. “C is for consumers getting ripped off,” the White House tweeted. “President Biden is calling on companies to put a stop to shrinkflation.”
Multiple Democratic senators exploited the viral tweet, too, declaring support for legislation that would ban companies from reducing product size without commensurately cutting prices. The bill, introduced by Sen. Bob Casey (D-Pa.), is supported by Biden as well, according to a fact sheet sent to reporters.
Unsurprisingly, many noticed that Cookie Monster’s shrinkflation tweet published mere days before Biden’s State of the Union address. Sure makes Cookie Monster look like a Democratic, ahem, puppet. (I’ll show myself out.)
Sesame Workshop maintains Cookie is his own, er, monster. “As part of our ongoing effort to connect and engage with adult fans, we posted a playful tweet from Cookie Monster about his favorite subject: cookies,” the organization said in a statement to me. “The post was not intended to be political. Sesame Workshop is a nonprofit, nonpartisan organization.”
There are so many depressing things about this story that it’s hard to know where to begin. Here goes.
First, the idea that consumer product sizes might shrink to make price increases less obvious is not new. This phenomenon comes in cycles, often when companies face cost pressures. I covered consumer gripes about “stealth downsizing” back in 2011.
Despite commentary sometimes suggesting that shrinkflation makes inflation even worse than officially reported, changes to product size are already accounted for in official inflation measures. For example, if the number of sheets per roll of toilet paper falls, the U.S. Bureau of Labor Statistics includes the rising price per sheet when calculating the consumer price index (CPI).
In fact, BLS tracks how often products are downsized — and upsized, for that matter. In a report last year on “shrinkflation,” the agency found that of the 100,000 goods and services tracked for CPI calculations, only a tiny slice were reported as downsized. Product downsizing was higher in 2015 and 2016.
The report included tallies through 2021 only, but BLS says it’s seeing about the same frequency of downsizing in CPI data today as in recent years.
So why have shrinking package sizes become more salient? Though it’s always annoying to get less for the same price, it’s especially annoying when you’re hyperaware of rising costs. Americans are understandably furious that their purchasing power has declined, whether because cookies shrank or because the price of an existing cookie size increased, or both.
But lots of irritating things happen at supermarkets, and not all of them require federal intervention. For instance: Self-checkout machines get too angry if you don’t immediately put scanned items in the bagging area. People who bring 11 items into the “10 items or less lane” should be thrown out. Also, the signage should read “10 items or fewer.” And why is whichever line I choose always the slowest one?
At some point, these gripes start to sound like a bad ’90s stand-up routine. (“Have you seen cereal boxes lately?”) That’s basically what Cookie Monster tweeted — a goofy joke, about sweets, that for some reason some cynical politicians, well, politicized.
In the case of shrinkflation, the government intervention lawmakers and Biden propose to fix it would make the problem worse. Forbidding companies from changing the prices and sizes of everyday products without government say-so is a form of price controls. (Casey’s bill is actually the second introduced in recent weeks that would implement price controls; the other is an old standby led by Massachusetts Sen. Elizabeth Warren.)
Price controls are not some brave new idea. Ask Argentines, residents of the former Soviet Union or Americans who recall the 1971 “Nixon shock.” With limited exceptions, these measures reliably cause lots of problems and distortions. They can cause shortages and reduce product quality (e.g., more sawdust in your cookie when flour prices rise). Making it hard to increase prices might even lead firms to set prices higher than they otherwise would. (Can you run temporary sales? What if prices rise post-sale?)
Additionally, enforcement of government-approved price levels would require enormous public resources better spent elsewhere.
Ironically, grocery inflation has actually plummeted recently, no thanks to the lawmakers who’ve unsuccessfully pushed price controls for years. But I get it. It’s an election year, and politicians want to show they’re “doing something” about kitchen-table issues. If they must demagogue, though, I implore them to please leave this innocent, googly-eyed monster out of it.
As Cookie himself might say: Such indulgences are a “sometimes food.”
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