Mike Faulkender, AFPI Chief Economist, joined Kudlow on Fox Business to discuss shrinkflation.

Mike Faulkender, AFPI Chief Economist, recently appeared on Fox Business's Kudlow to discuss the topic of shrinkflation. During the segment, host Larry Kudlow criticized President Joe Biden for blaming corporate greed and price gouging for inflation. Faulkender provided insight into the issue, explaining the impact of increased input costs on businesses and consumers.

Faulkender highlighted that companies face rising costs for raw materials, interest, regulatory compliance, and labor due to policies enacted during Biden's administration. He explained that businesses have two options when faced with higher input costs: they can either increase prices, potentially losing customers, or reduce the quantity of products, leading to shrinkflation. Faulkender argued that market forces, rather than government intervention, should determine the best approach.

The segment also mentioned President Biden's newly announced strike force to combat unfair pricing, involving the DOJ and FTC. Faulkender criticized the timing and effectiveness of such measures, noting that similar efforts in the past yielded no significant results. He stressed the need for deregulation, tax control, and reduced government spending to address inflation effectively.

Faulkender's insights shed light on the complexities of inflation and shrinkflation, emphasizing the importance of allowing market dynamics to play a central role in resolving these issues.