The President Complains about Chip Bags

“The chip bags have more air in them now! Back in my day, they filled those things to the brim!” Joe Biden didn’t say those words, but that was the impression he gave with a new video posted on social media today.

(These words he actually did say: “If you’re anything like me, you like to be surrounded by a snack or two while watching the big game.” He’s just a regular guy, who likes to be “surrounded by” snacks. That’s definitely how normal people talk about food.)

Biden was complaining about shrinkflation, a practice that some companies use to raise prices. A price is a ratio, with the number of dollars in the numerator and the amount of the good in the denominator. For example, $1 for one gallon of water. One way to raise the price is to increase the numerator, let’s say to $2 for one gallon. But it can be mathematically equivalent to keep the numerator the same and decrease the denominator instead. That would mean $1 for a half gallon of water. Either way, if you want a gallon of water, you have to pay $2.

Companies are rarely that flagrant with shrinkflation, instead shaving a tiny amount off and keeping the price the same. It’s one way companies keep up with the market. It’s perfectly legal, so long as they update their packaging and honestly report the contents. Nowhere does Biden allege that any companies are breaking the law.

Yet the president of the United States has decided it would be a good use of his time to harass food companies about their prices despite also claiming that he has inflation under control.

“Sports-drinks bottles are smaller, bag of chips has fewer chips, but they’re still charging us just as much,” the president said. The video shows an image of products including Gatorade and Doritos, both of which have undergone shrinkflation in recent years. But the changes in their amounts were made in 2022, when inflation was much higher than it is today. CNN had a story about ice-cream shrinkflation, which Biden also complains about, back in 2021.

It’s peculiar for the president to be recycling news stories from two or more years ago and, in doing so, draw attention to his own poor record on inflation. Companies don’t want to bother their customers with shrinkflation. Sometimes they have to, though, in response to poor monetary and fiscal policy that spurs inflation.

The Federal Reserve pursued an expansionary monetary policy for much too long during the Covid pandemic, which was out of Biden’s control. But he piled on with the American Rescue Plan Act, which included nearly $2 trillion of completely unnecessary government spending that even left-leaning economists warned would be inflationary. And as the federal government continues to run massive budget deficits, the Fed will continue to feel pressure to monetize the new debt by increasing the money supply further in the future.

Naturally, some companies redesigned their packaging to reduce the quantity of their products and cut costs. That’s what we should expect them to do in response to poor government policy that spurred inflation. For the president to now attack them for doing that, years after the fact, is bizarre.

By going after chip bags specifically, Biden is tapping into an old consumer complaint that has been debunked numerous times over the years. Chip bags are inflated not with air but with nitrogen, which helps protect the chips from breaking in transit and helps preserve their freshness.

Chip bags are measured by weight, not by volume. Nitrogen is essentially weightless, so putting more nitrogen in the bag does not allow chip companies to reduce the amount of chips. When companies reduce the amount of chips, they do so straightforwardly, by changing the weight listed on the bags.

The Food and Drug Administration already regulates “slack fill,” the proper term for the empty space in packaging. This being America, there have been numerous class-action lawsuits against food companies for slack fill. To avoid such lawsuits, companies err on the side of filling bags slightly above their listed weights. When the lawsuits are brought, they almost never go to trial, because courts (sensibly) don’t want to be in the business of defining what the “right” size of packaging should be for a product. Slack-fill lawsuits are usually more of a make-work program for trial attorneys than they are genuine consumer complaints.

Inflation isn’t a corporate conspiracy. It’s the product of poor monetary and fiscal policy. Biden says he’s beating inflation, but apparently he wants to make it an issue again, so it’s worth reminding him of the facts.