March 19, 2014

Inflating Food

Squeezing the middle class.

The Labor Department reported Tuesday that overall inflation in February was very low, with the one critical exception being food. The price of groceries increased 0.4% in February, and the most notable price hikes were on the staples – milk, eggs, poultry and beef. According to The Wall Street Journal, “Federal forecasters estimate retail food prices will rise as much as 3.5% this year, the biggest annual increase in three years.” Many observers blame drought in various parts of the U.S., but some blame must be laid on ethanol for driving up the price of corn, and thereby other foods as well. Even the effects of California’s drought can be blamed on bad policy, as water is diverted from crops to protect the tiny smelt fish. Yet the ones making these policies tell us they care about the middle class.

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