On Super Bowl Sunday, the White House released a short video in which a smiling President Biden, sitting next to a table filled with chips, cookies and sports drinks, criticized companies for reducing package sizes and servings of popular no-drink foods reduction in price.
“I’m fed up with what they call deflation,” Mr. Biden said.
The video lit up social media and excited a consumer advocate named Edgar Dworsky, who has studied “shrinkage” trends for more than a decade. He has briefed Mr. Biden’s financial aides twice, first in early 2023 and again just days before the video aired. The first update seemed to lead nowhere. The second clearly informed Mr. Biden’s new favorite economic argument — that companies used a rapid rise in prices to line their own pockets by keeping those prices high while giving less to consumers.
The products listed in the president’s video, such as Oreos and Wheat Thins, were all examples of the shrinking inflation that Mr. Dworsky had documented on the Consumer World website.
While inflation moderates, shoppers remain furious over the high price of groceries. Mr. Biden, who has seen his approval ratings suffer amid rising prices, has found a blame-shifting message he loves amid his re-election campaign: skewering companies for shrinking the size of candy bars, ice cream cans and more food. items, while raising prices or keeping them flat, even though the companies’ profit margins remain high.
The president has begun accusing companies of “ripping off” Americans with these tactics and is considering new executive actions to crack down on the practice, administration officials and other allies say, though they would not specify what steps he might take. He is also likely to criticize shrinking inflation during his State of the Union address next week.
Mr. Biden could also introduce new legislation that would seek to empower the Federal Trade Commission to more aggressively investigate and punish corporate price gouging, including grocery stories.
White House officials credit Sen. Bob Casey, D-Pennsylvania, with bending the president’s ear on the issue. Mr Casey’s office published a scathing report on shrinking inflation last year, estimating that about a tenth of recent price increases for snacks and toilet paper were due to companies reducing the number of biscuits in a bag or in a roll .
Mr Casey has made the issue a focus of his re-election campaign, blaming big companies for price hikes that have left consumers struggling to afford sufficient quantities of essential goods. “Some of it is really devastating,” he said in an interview. “You can’t wait a year to buy paper towels or to buy boneless chicken or to buy groceries or to buy Huggies diapers.”
Liberal senators and some progressive think tanks in Washington pushed Mr. Biden early in his term to blame corporate greed for the biggest rise in consumer prices in four decades. Sen. Elizabeth Warren, D-Mass., accused the companies of angering consumers as prices began to rise in 2021.
Some Democratic economists, including veterans of previous administrations such as Harvard’s Jason Furman, have rejected claims that rising prices are responsible for inflation. Mr. Biden only partially adopted the argument, selectively calling out meatpackers and oil companies, and talking at length about other drivers of inflation, including supply chains that have been crippled by the pandemic.
“It wasn’t as broad as some people would have liked,” said Bharat Ramamurti, Mr. Biden’s former economic adviser, who nevertheless fielded angry appeals from companies Mr. Biden called out in 2021 and 2022.
Since then, Mr. Ramamurti noted, polls have shown that Americans are angry at companies for raising prices — including on groceries. Part of Mr. Biden’s strategy to shrink inflation, Mr. Ramamurthy said, is “trying to meet the public where they are and talk about issues that are really top of mind.”
White House officials acknowledge the politics of the issue, but say other factors are also driving Mr. Biden’s rhetoric. Management economists have been struck by persistently high corporate profit margins, even as inflation cools. The cost of producing food has fallen much faster in the last year than the price of food on store shelves.
Mr. Biden has discussed food prices at length with voters. And, as he noted in his Super Bowl Sunday video, he’s an unabashed ice cream fanatic.
Progressives who pushed Mr. Biden to target companies earlier and more aggressively on price hikes have welcomed his new focus. Lindsay Owens, the executive director of the liberal think tank Groundwork Collaborative in Washington, said in an interview that Mr. Biden’s comments were well-timed to help voters understand why, even amid falling inflation, groceries and other core values remain stubbornly high.
“The supply chain part doesn’t resonate with people anymore,” he said. “The shelves are stocked. When you’re trying to explain the last mile, that’s an important piece.”
Mr. Dworsky said he was glad Mr. Biden realized the power of focusing on shrinking inflation.
“I found a good representative,” he said in an interview. “I can’t think of too many consumer education issues that have risen to this level.”
