Lew, when inflation changes relative prices, there is price resistance among consumers who are used to the old menu of prices. All along the chain of production, the manufacturers then look for ways to increase sales. They cut down the sizes of servings and packages. They reduce quality. They employ additives. They put in fake ingredients as substitutes for the real thing. They cut down on cleanliness. Antibiotics in the food chain fits this pattern. And in industries that employ union labor whose working conditions are protected by government, employers substitute away to machines, or growth hormones in the case of cattle, or less experienced labor. Shame on the economics profession for not having studied these alterations in depth, but most economists, believing that inflation is neutral and doesn’t affect relative prices, never consider these kinds of effects. The bottom line is that Big Pharma is not the only thing responsible for increasingly poor food. Cattle prices have been very sensitive to overall inflation in a number of inflationary cycles. As high beef prices produced buyer-resistance, the industry altered its practices in order to battle the high relative prices. The FED’s inflation impacted the quality of the products in many industries.

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