Last week, we wrote that regulations, taxes, environmental compliance, and fear of lawsuits forces companies to put useless ingredients into their products. We said:

“For example, milk comes from the ingredients of: land, cows, ranch labor, dairy labor, dairy capital equipment, distribution labor, distribution capital, and consumable containers.”

There are eight necessary ingredients, without which milk cannot be produced.

But, today, the welfare, regulatory, and litigation state forces dairy producers to add numerous other ingredients such as paying for food stamps for unemployable people in the inner cities hundreds of miles away from the dairy farm, tracking tags, giant wheelchair accessible bathrooms, etc. We called these useless ingredients.

Everyone uses the word inflation, when prices go up. Milton Friedman famously said, “Inflation is always and everywhere a monetary phenomenon,” but we have just disproved the second half of his sentence, which is:

“…in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output.”

Au Contraire, Monsieur Friedman. Rising prices can be produced by forcing producers to add more useless ingredients!

They’re doing it to every industry. Not the Federal Reserve. It has nothing to do with the quantity of dollars. Yet everyone thinks the problem of rising prices is intrinsic to the dollar itself. If you participate in the gold or sound money communities online, you have seen many pictures of the eroding dollar, the shrinking number of goods in a shopping cart, nostalgic gas station signs advertising ˘20 a gallon, etc.

As an aside, inflation is a weak argument for the gold standard. We had quite a high rate in the 1970’s, but that was not (nearly) bad enough to make many people seriously propose to return to gold. Today’s much-tamer rate barely musters lip service even from the usual suspects. Wage earners care only that their wages go up as fast as prices—and when they don’t, they are mostly angry at their employers. Pensioners on fixed income care only about their annual cost of living adjustment (COLA), and if it doesn’t keep up, they get mad at the politicians who set it. The welfare classes care only that their EBT cards still work. And the one percenters are happy, because asset prices are rising much faster than consumer prices.

Has the price of a new Honda Accord has gone up a lot? In 2019, the base model starts at $23,720 without options. In 2018, it was $23,570. It has gone up by $150, or 0.6%. We have no idea what new useless ingredients have been added to the 2019 model.

In 2009, the car cost $20,905. Thus, the 10-year increase was $2,815, or 13.5%. We don’t know exactly what the 2019 Accord has, that the 2009 did not, though we note that it had a 4-cylinder engine producing 177 horsepower. The 2019 has 192 horsepower, or 8.5% more