The Duncan Banner

Community News Network

December 18, 2013

Is Whole Foods inflation or growth?

WASHINGTON — Stephanie Strom's New York Times article about how Whole Foods is finding success in markets like Boise that are a bit outside the stereotypical yuppie corridors reminds me of a wonky point-one important reason to think central banks should focus on nominal income and nominal GDP rather than inflation is that "inflation" is harder and harder to define the more you move to an advanced service economy.



For example:

              

Two years ago, when Whole Foods announced that it wanted to expand to 1,000 stores from a little more than 300 and open in places where it was assumed that consumers had never heard of kale and wouldn't dream of spending $6 for a pound of humanely raised pork, some investors scoffed. Its traditional grocery store competitors snickered at the strategy. And even those on Wall Street enamored with the chain's success expressed doubts that its forays inland into smaller, less urban markets would succeed. . . . Anne Madsen had come hoping to find baby artichokes for a recipe she wanted to try. She was not disappointed. "I do shop at regular groceries, but I like organic products and often am looking for things that are a bit unusual," Ms. Madsen said.

          


On a conceptual level, there's a huge economic difference between people buying more expensive pork because the more expensive pork is better and people buying more expensive pork because the price of pork is rising. But the question of whether or not humanely raised organic pork is "really" better than factory farmed pork does not strike me as especially something the Bureau of Labor Statistics is well-equipped to answer. From one vantage point, rising interest in local sourcing, organic production methods, and other snazzy fads is just a negative supply shock to the economy - people are turning their backs on efficient production methods. And naturally if that happens you'll see a rising price level, and stagnant living standards. But if you think these fads are popular because they're better, then it's a sign of rising living standards.

You can try to sort of recursively define this in the sense of "if people are shopping there it must be better." But that's not right. When I lived on the same block as a Safeway, I very occasionally shopped at Whole Foods. Now that I live two blocks from a Whole Foods, I shop there much more often and my grocery costs have risen. I'm paying more, and the product is arguably higher quality, but I'm not paying for the quality - I'm paying because I'm lazy.

There is a lot more organic food being eaten in 2013 than there was 25 years ago. Has that improved or lives or just been a waste of time and money? I don't think there's an unequivocal answer to that kind of question, which is a reason for policymakers to put more weight on broad nominal variables and less weight on the statistical calculation of the price level.

 

1
Text Only
Community News Network
  • How spy agencies keep their 'toys' from law enforcement

    A little over a decade ago, federal prosecutors used keystroke logging software to steal the encryption password of an alleged New Jersey mobster, Nicodemo Scarfo Jr., so they could get evidence from his computer to be used at his trial.

    July 25, 2014

  • Russia's war on McDonald's takes aim at the Filet-o-Fish

    Russia said earlier this week that it had no intention of answering Western sanctions by making it harder for Western companies to conduct business in Russia.
    But all bets are off, apparently, when you threaten the Russian waistline.

    July 25, 2014

  • cleaning supplies Don't judge mothers with messy homes

    I was building shelves in my garage when a neighbor girl, one of my 4-year-old daughter's friends, approached me and said, "I just saw in your house. It's pretty dirty. Norah's mommy needs to clean more."

    July 25, 2014 1 Photo

  • Arizona's prolonged lethal injection is fourth in U.S. this year

    Arizona's execution of double-murderer Joseph Wood marked the fourth time this year that a state failed to dispatch a convict efficiently, according to the Constitution Project, a bipartisan legal group.3

    July 24, 2014

  • Police Brutality screen shot. Technology plays key part in battling police brutality (VIDEO)

    Allegations of police brutality are nothing new -- as long as there has been law enforcement, citizens have registered claims that some officers cross the line. But in the last few years, the claims of excessive force are being corroborated with new technology from cell phone cameras, police dash-cams and surveillance videos. 

    July 24, 2014 1 Photo

  • Facebook continues moneymaking trend

    Facebook seems to have figured out - for now at least - the holy grail for all media right now: how to make money selling mobile ads.

    July 24, 2014

  • Has the ipad lost its swag?

    July 24, 2014

  • 072214 Diamond Llama 1.jpg Llama on the loose corralled in Missouri town

    A llama on the lam cruised Main Street Tuesday before it mistook a resident’s fenced backyard for a place to grab a meal and freshen up.

    July 22, 2014 2 Photos

  • Hospitals let patients schedule ER visits

    Three times within a week, 34-year-old Michael Granillo went to the emergency room at Northridge Hospital Medical Center in Los Angeles because of intense back pain. Each time, Granillo, who didn't have insurance, stayed for less than an hour before leaving without being seen by a doctor.

    July 21, 2014

  • Starved Pennsylvania 7-year-old weighed only 25 pounds

    A 7-year-old Pennsylvania boy authorities described as being so underweight he looked like a human skeleton has been released from the hospital.

    July 21, 2014

Poll

Should the date for The World's Largest Garage Sale be changed from the third weekend in July to sometime in October to take advantage of cooler weather like we had this past weekend?

No. It's better in the summer cause kids are out of school.
Yes. More shoppers would come during nice fall weather.
Either time is fine.

     View Results
Parade
Magazine

Click HERE to read all your Parade favorites including Hollywood Wire, Celebrity interviews and photo galleries, Food recipes and cooking tips, Games and lots more.