Lockport Union-Sun & Journal Online

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
  • Victimized by the 'marriage penalty'

    In a few short months, I'll pass the milestone that every little girl dreams of: the day she swears - before family and God, in sickness and in health, all in the name of love - that she's willing to pay a much higher tax rate.

    April 15, 2014

  • Allergies are the real midlife crisis

    One of the biggest mysteries is why the disease comes and goes, and then comes and goes again. People tend to experience intense allergies between the ages of 5 and 16, then get a couple of decades off before the symptoms return in the 30s, only to diminish around retirement age.

    April 15, 2014

  • treadmill-very-fast.jpg Tax deduction for a gym membership?

    April marks another tax season when millions of Americans will deduct expenses related to home ownership, children and education from their annual tax bill. These deductions exist because of their perceived value to society; they encourage behaviors that keep the wheels of the economy turning. So why shouldn't the tax code be revised to reward preventive health?

    April 15, 2014 1 Photo

  • bomb1 VIDEO: A year after marathon bombing, Boston remains strong

    The City of Boston came together Tuesday to honor those who were injured and lost their lives at the Boston Marathon on the one-year anniversary of the bombing. While the day was sure to be emotional, those affected by last year's race are showing they won't let the tragedy keep them down.

    April 15, 2014 1 Photo

  • Google acquires drone maker Titan Aerospace to spread Internet

    Google is adding drones to its fleets of robots and driverless cars.
    The Internet search company said it acquired Titan Aerospace, the maker of high-altitude, solar-powered satellites that provides customer access to data services around the world. Terms of the deal weren't disclosed.

    April 14, 2014

  • E-Cigarettes target youth with festivals, lawmakers say

    The findings, in a survey released Monday by members of Congress, should prod U.S. regulators to curb the industry, the lawmakers said. While e-cigarettes currently are unregulated, the Food and Drug Administration is working on a plan that would extend its tobacco oversight to the products.

    April 14, 2014

  • Search teams will send unmanned sub to look for missing Malaysian airliner

    Teams searching for a missing Malaysian airliner are planning for the first time to send an unmanned submarine into the depths of the Indian Ocean to look for wreckage, an Australian official leading the multi-nation search said Monday.

    April 14, 2014

  • Why Facebook is getting into the banking game

    Who would want to use Facebook as a bank? That's the question that immediately arises from news that the social network intends to get into the electronic money business.

    April 14, 2014

  • Screen shot 2014-04-11 at 4.49.09 PM.png Train, entertain your pets with these 3 smartphone apps

    While they may not have thumbs to use the phone, pets can benefit from smartphone apps designed specifically for them.

    April 11, 2014 1 Photo

  • Stepping forward: The real Colbert

    Letterman changed the late-night TV game between his run on NBC's "Late Night" and starting the "Late Show" franchise in 1993. And while it's tough to replace a pop-culture icon, Colbert, in terms of pedigree and sense of humor, makes the most sense.

    April 11, 2014

Featured Ads
Community Events
Photos


Twitter Updates
Follow us on twitter
Front page
AP Video
Seasonal Content
Hyperlocal Search
Premier Guide
Find a business

Walking Fingers
Maps, Menus, Store hours, Coupons, and more...
Premier Guide
AP Video
Seasonal Content
Helium debate
Helium
Section Teases

Seasonal Content
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.