As we recover from our annual dance of the gourmand, we may wonder whether we’ll ever finish the leftovers. And why they cost so much this year.

Inflation is both in our digestive tracts and in the news this week.

While the average American ate about 4,500 calories on Thursday, the belly-inflation news isn’t all bad. Lisa Moskovitz, founder of The NY Nutrition Group, says we burn about 1,600 calories a day and the excess 2,900 calories would pad us only a few ounces.

The other kind of inflation is all around us. The rate from October 2020 to October 2021 was 6.2%, and its root causes are many. Some won’t go away easily if at all, although the best guess is still that supply-chain inflation will end fairly soon. Other inflation won’t.

Father Kempster, my economics professor at Rockhurst College, pounded the law of supply and demand into our heads. On a graph, supply was above the diagonal line he drew, demand below. Along the line, price balances supply and demand. Above that point, price is so low producers can’t profit. Below that point, price is too high for buyers.

Each buyer has an equilibrium point for each purchase. Some willingly pay more, some don’t. At the $5 a pound I paid for my Thanksgiving bird, I was at my equilibrium point. But $5 was way too far to the right of equilibrium for the vast majority of turkey eaters.

We saw early in the pandemic that the very efficiency of which U.S. corporations are so proud handcuffed them when they had to adapt to changed markets. Heinz makes ketchup in tiny packets, for restaurants, and table-top bottles, for homes. When restaurants closed, Heinz couldn’t retool and make only bottles, so the price went up. Supply and demand.

Thanks to Milton Friedman, the economist who fathered the dictum “only shareholder profits matter,” America’s corporations hone in on short-term profit at the expense of long-term reinvestment. This isn’t going to change.

Heinz won’t invest, say, $1 million to make a factory flexible so it can move between filling packets and bottles. Not even if such flexibility would earn it $10 million or $20 million more over the next decade. Only shareholder profit in the next 90 days matters.

This will keep our manufacturers highly efficient but wholly unadaptive, so when they must shift, they can’t. The market isn’t supposed to work like that, so when Heinz needs to adapt and can’t, the price we pay for bottled ketchup will rise. Supply and demand.

As we get more environmentally aware, we’re likely to see the real cost of food built into food prices more than into our taxes. As it is, big agribusiness can walk away from some of the damage it causes, leaving taxpayers to pick up the tab.

Case study. More than 300 million chickens live on the Eastern Shore of Maryland. As a retired turkey farmer, I know well the main byproduct of poultry. Eastern Shore farmers plow it into the fields so heavily that it runs off into saltwater, fouling the fishing ground.

Last year, 86% of those chicken farms failed water pollution tests, yet the State of Maryland levied only $7,400 in fines, station WBAL reported. Half weren’t paid. To save the fishery, someone has to pony up a lot more than $7,400. Enter us, the taxpayers.

If enough people hue and cry, legislatures and environmental agencies may force food-industry polluters to pay the real cost of producing food. Then, we’d see even more food-price increases as farmers and processors build the costs of their damage into their prices.

In theory, taxes would fall as food makers pick up the (hidden) costs. Don’t count on it.

Friedman’s short-term thinking also inhabits government, probably always has. Next month we’ll see a jump of about 85% in our electricity bills. (Don’t blame CMP. Foul as that corporation is, it only delivers the electricity that someone else manufactures.)

That big increase might have been avoided if Augusta had seen beyond the end of its nose. That is, the next election. Maine’s prime source of fuel to run power plants is natural gas. Fracking has renewed gas production from old wells and lowered the wellhead price. (The argument over environmental cost is for another time.)

But no one with the power to do anything saw to it to make the pipe big enough to bring in all the natural gas we need to produce electricity. Planning and building pipelines takes longer than an election cycle, so forget about Augusta doing anything about it.

And now, two governors who did nothing to ensure our natural gas supply — both loved the idea of natural gas rather than coal or oil to make kilowatts — are running against each other so they can oversee Maine’s next four years of energy policy.

Instead, they’ll spend the campaign trading barbs. Not sure we can afford either of them.

Bob Neal learned about Thanksgiving turkey prices the hard way, raising turkeys for 30 years. His customers willingly found a higher equilibrium on the supply-demand graph.


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