Elizabeth Warren needs to look at the numbers
Senator Warren blames giant grocery stores for high food prices. She should look at the data. In the last year, food prices have fallen behind the inflation rate.
Here’s Elizabeth Warren on grocery stores and high prices:
What happens when only a handful of giant grocery store chains like @Kroger dominate an industry? They can force high food prices onto Americans while raking in record profits. We need to strengthen our antitrust laws to break up giant corporations and lower prices. pic.twitter.com/DMa9Z7adFr— Elizabeth Warren (@SenWarren) January 7, 2022
Elizabeth Warren should look at the data. According to the latest CPI numbers by the Bureau of Labor Statistics, the 12-month inflation last November was 6.8-percent. The rise in the price of food was 6.1-percent. That is, the greedy grocery stores with so much monopoly power are unable to keep up with the inflation rate.
The only food item that matches the inflation rate is lettuce, increasing its price by 6.9-percent. Furthermore, some food prices went down. For instance (Table 2):
- Eggs: -2.7-percent
- Potatoes: -2.5-percent
- Tomatoes: -1.2-percent
- Canned fruits: -1.4-percent
If we look at the time series of the CPI inflation and the rise in food prices, we see that food prices started to rise in March 2020 due to the lockdown orders that triggered a high demand by consumers not knowing what would happen to the grocery stores. If anything, food prices first faced a policy shock in early 2020, and the following year followed the inflation trend. As the second graph shows, the percent change in food prices aligns with the CPI inflation, except for a brief period at the beginning of the pandemic.
It seems that Elizabeth Warren is more concerned about her political agenda than sound economic analysis. Sometimes ideology can become a blindfold.