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The Industrialization of Disappointment 😥 · The Overlap

0:00
Pick up a bottle of Tide that says 64 loads on the front.
0:03
In 2014, a bottle that said 64 loads held 100 ounces.
0:09
Then it held 92. In 2024,
0:13
it dropped to 84. In October of 2025,
0:17
it dropped again to 80 ounces.
0:19
The front of the bottle said 64 loads through every one of those cuts.
0:25
And the cap, the little plastic cup with the
0:29
fill lines molded into the side of it stayed exactly the same.
0:32
So how do you get 64 loads out of 80 ounces with a
0:37
cap built for 100? The company tells you,
0:40
it's printed on the back label now,
0:42
actually, and I'm going to read it to you word for word.
0:44
Fill the cap 80% of the way up the line.
0:49
Think about what a fill line's for.
0:52
It's the one measuring tool the company actually hands you.
0:56
You don't
0:56
own a graduated cylinder, you're standing at the washer at six in the morning,
1:00
and the line is how you know you use the right amount.
1:03
And when the bottle shrank, the answer was to leave the line where it
1:07
was and print instructions telling you the line is wrong.
1:12
Eyeball 80% of the line inside of a blue cup in a dim basement.
1:18
Good luck. The obvious explanation is inflation.
1:22
Everything got more expensive.
1:24
Companies passed it along, and a smaller bottle is a gentler way to do that than
1:30
a bigger price. Except the first cut,
1:33
100 ounces down to 92, happened in 2014,
1:36
years before the inflation everyone remembers.
1:39
So if a company that has sold the same soap for years keeps finding ways
1:45
to take things out of the bottle when there's no inflation to blame,
1:48
what exactly is it selling you?
1:51
And why is the same thing happening to your cake mix?
1:54
Your toilet paper and a refrigerator that costs thirty-five hundred dollars.
2:18
Hey there, welcome back to The Overlap.
2:20
This is The Overlap. I am Joshua.
2:23
And I'm Will.
2:24
And this episode is about why the stuff that you keep buying keeps getting worse
2:30
in ways you can't quite catch.
2:33
The soap and the cake mix and the fridge,
2:36
and why we think it's one business move wearing a lot of different labels.
2:40
By the end, you'll know what the federal government's own auditors found when they
2:45
measured in grocery stores, how much of it your bill actually was,
2:49
which is less than you'd guess.
2:52
Why switching from a Maytag to a KitchenAid might not move your money anywhere
2:56
at all, and why the law that would stop it keeps dying without a vote.
3:01
We're doing it now because that eighty ounce Tide bottle only hit shelves
3:05
a year ago. Austria's disclosure law took effect in April,
3:08
and almost nobody puts the cake mix story and the refrigerator story
3:13
in the same conversation.
3:15
Let me give the inflation explanation its best shot.
3:17
it's you know, it's a serious legitimate argument.
3:20
In twenty twenty one and twenty twenty two,
3:22
the cost of almost everything that goes into a product went up.
3:25
Shipping, packing, ingredients,
3:27
labor. A company in that spot has two honest choices.
3:31
It can raise the price on the shelf,
3:33
which customers hate, or it can keep the price and put a little less in the box.
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If you believe customers would rather keep the familiar price than see a bigger one,
3:42
the smaller box is the more considerate option.
3:44
That's a defensible position and for some products and some years it's probably what
3:47
happened.
3:48
And for Tide in 2014, it can't be what happened.
3:52
Breyers changed what was in it,
3:55
ice cream, in 2013. Betty Crocker cut its cake mix from 18.25 ounces
4:02
to 15.25 and then again to 13.25.
4:06
So 27% gone in total. And those cuts were spread out over years through
4:13
good stretches and bad stretches.
4:15
And if
4:16
there were mostly a response to,
4:17
you know, costs, the cuts would cluster where the costs were,
4:21
but they don't. They show up whenever someone figures out they can.
4:26
Which takes us back to an age old question in product marketing.
4:29
Picture a company that has already sold laundry soap to every household that's ever
4:33
gonna buy laundry soap. How does that company keep growing?
4:37
And the answer actually runs through the cake mix aisle and the appliance store
4:41
at the same time, which is why we're doing them in one episode.
4:44
Let's start with the situation the company's in,
4:46
because once you see that, a lot of things that look like separate annoyances start
4:49
to line up. Economists call what we have in the in the modern world a mature market.
4:55
Everybody who needs the product already has it.
4:58
Every American household that does laundry already buys detergent.
5:01
We hope. Nearly every kitchen already has a refrigerator.
5:05
nobody's out there discovering toilet paper.
5:07
Again, we hope. So the company can't grow by finding new customers,
5:11
at least not many.
5:12
And it can't grow much by selling more units because people only do so many loads
5:15
a week. And the people who own its stock still want the number to
5:18
go up every quarter because that's why you buy stock.
5:21
What's left is margin, the gap between what it costs to make the thing
5:25
and what you pay for it. There are roughly,
5:27
generally speaking, three ways to widen that gap.
5:30
The first, as we talked about,
5:31
is to raise the price. And that's the one buyers catch.
5:34
You notice when you pay more at the store,
5:36
right? When you you get your receipt back or the the
5:40
Yeah, assuming they still have an associate checking you out.
5:42
they tell you what the price is going to be the total,
5:45
and you're like, hey, whoa, that was way more than it was last week when
5:47
I bought the exact same things.
5:48
the Government Accountability Office or GAO,
5:52
which is the investigative and auditing arm of Congress,
5:54
put out a report in July of 2025,
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so last year. Number report number GAO dash two five dash one zero seven four five
6:03
one, if you want to look it up.
6:04
And one of its findings is that.
6:06
consumers respond two to five times more strongly to a price increase than
6:10
to a package getting smaller. A price hike gets noticed,
6:13
a smaller box mostly doesn't. The second way that a company can deal with this
6:18
situation is to cut their costs somewhere the customer never sees,
6:21
like getting cheaper shipping contracts or better contracts with a supplier.
6:25
That one's fine as far as it goes,
6:27
and nobody's complaining about it.
6:28
It's just hard to do that, especially when trucking is a mature market as well.
6:31
There's only so many places you can go and there's a bottom line
6:34
to how much truckers will accept.
6:35
for delivering your product. So the third way is to cut what the buyer gets.
6:39
And that's what we're focusing on today.
6:41
In a spot where the buyer has easy,
6:43
no easy way to measure it is the optimal way to do it,
6:45
right? The trick there is choosing where to cut.
6:48
You cut where the measuring tool belongs to the seller.
6:50
So take Charmin, for instance.
6:52
In March of 2022, the mega roll went from 264 sheets to 244.
6:58
And the super mega, which is crazy that there is such a thing,
7:01
went from 396 to 366.
7:05
The roll still looks like a roll.
7:06
You can't see 20 missing sheets from the aisle,
7:08
and nobody counts them at home.
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Because you're about more important business when you're using that product,
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apparently. the package tells you the count,
7:16
and the package is printed by the people who changed the count.
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Betty Crocker picked a cleverer spot.
7:21
The directions on the box match the box.
7:23
If you follow the back of a 13.25 ounce box,
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you get a cake.
7:28
What broke is every recipe written by somebody else that says one box
7:31
of yellow cake mix, like your grandmother's dump cake,
7:33
or the one then in the church cookbook.
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Those were written when one box meant eighteen point two five ounces
7:38
and nobody went back and changed them because they can't.
7:40
You can't go and buy like a a box and a a tenth
7:44
a box, you know, or like original size Betty Crocker boxes.
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So now
7:50
We're stuck with these recipes where the dish comes out tasting not not
7:55
the way it was meant to be cooked or tasted.
7:57
doesn't taste like a but it was meant to taste.
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so the unit of measure in this situation was a box,
8:03
in this case of cake mix. The company changed the box and the failure shows
8:08
up in your kitchen in a dish that's not what you hoped for,
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or and you blame yourself for it.
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Maybe I, you know, turn the heat up too high,
8:14
or maybe I let it cook too long or not long enough.
8:16
Put those next to the GAO's number two to five number,
8:19
and you can see why it's worth so much to a company.
8:21
A price increase costs two customers.
8:23
They may pick a cheaper option,
8:25
but a cut the consumer can't measure mostly doesn't change what people
8:28
how cheap people purchase. Betty Crocker took that door twice,
8:32
18.25 ounces to 15.25, and then again to 13.25 ounces.
8:37
And a company only goes back through a door like that that worked the first time.
8:42
Breyers did the same thing to a definition.
8:44
In 2013, some of its products dropped below the federal standard that says
8:50
ice cream has to be at least 10% milk fat.
8:53
And the label changed from ice cream to frozen dairy dessert.
8:58
Cream fell to the fourth ingredient behind corn syrup.
9:02
And it's printed right there on the carton.
9:04
You can take a look next time you're at the grocery store.
9:07
But the legal words.
9:09
are doing their job, right? They're counting on you to read frozen dairy dessert
9:14
as a fancy way of saying ice cream.
9:16
And most people do. And because none of this is a secret,
9:20
you can hear somebody say it out loud,
9:22
right? Andy Callahan, the CEO of Hostess,
9:26
the company behind the Twinkie,
9:27
was on the company's earning call for the fourth quarter of 2021,
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which was held on March 1, 2022.
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Earnings calls are where executives basically explain the quarter.
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to the people who own stock in the company,
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and they are public and usually transcribed.
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Here is what he said, and I'll read it word for word.
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Pricing, by definition, is a change model.
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It's temporary. Customers get used to it.
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When all prices go up, it helps.
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Let's hang on to that idea. because I think it really drives a lot
10:00
of what we're talking about today.
10:01
that basically the idea put another way is that if every shelf in
10:05
the store shrinks its products at once,
10:08
no single increase looks like a choice.
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I don't know that why this made me think about like when you go back
10:12
to your old elementary school or something,
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or go visit the home that you grew up in and it feels like everything's smaller,
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you know? because obviously you got bigger and your perspective's different.
10:21
But there's nothing to point to and say,
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well, the refrigerator looks smaller or the the couch looks smaller.
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It's everything shrinks at once.
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if the store looks like that when you go to it and you,
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you realize maybe the first time you go in after these things happen,
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you're like, well, something seems a little off,
10:34
but you can't quite put your finger on it.
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then basically you're just gonna have to I mean that at that point people adjust
10:40
to it, right? So the plan for these companies is that customers get used to it,
10:44
like you heard about. And the reality is that
10:48
customers do get used to it. They'll call and complain at first.
10:50
And then when nothing happens,
10:51
nothing changes, the price didn't go up.
10:53
So it's hard to justify going to a cheaper alternative if you think it's
10:56
not as good. so you just have to outlast that initial phase of people being upset
11:00
and you're good.
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To distill all that. essentially what he's saying here is that
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if everybody raises all of their prices at the same time,
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it's an easier time to raise your price.
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So that's why when we looked at,
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you know, we we singled out the cost of eggs during Trump's term,
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all the prices started going up at the same time.
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And that's essentially because,
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hey, look, eggs are you know what's getting the the important media bias there.
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So
11:30
Let's go ahead and raise our prices too,
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being the hope that if everyone increases their prices at the same time,
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everybody complains about it, but no single brand gets called out,
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like lately with Reese's not putting enough chocolate in their peanut butter cups,
11:45
those sorts of things. And it actually works on hardware too,
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which is the same story with a power cord,
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right? The buyer gets measured on the things he can check in the store
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and cut on the things he can't.
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In the grocery aisle, you can't check the sheet count or the ounces.
12:00
In the appliance store, you can't check for how long the thing's gonna last,
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whether anyone can fix it, or what it will do to you after you've actually paid
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for it. Start with whether anyone can fix it.
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In January 2023, three groups:
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the Public Interest Research Group,
12:18
P-I-R-G, which is a consumer advocacy nonprofit.
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iFixit, which publishes free repair guides, and Repair.org,
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a trade association for repair shops,
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surveyed 50 appliance manufacturers,
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and only seven of the 50 provide service manuals for their own products.
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The manual is basically how a technician or you know you on a Saturday knows what
12:44
part failed, how to get it out,
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what it's connected to, basic things,
12:49
wiring diagrams.
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So when 43 out of 50 of those manufacturers keep that information to themselves,
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a broken dryer stops being a part you could look up and becomes a service call from
13:01
whoever the maker authorizes. Or you get a new dryer.
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Then there's what it does to you after you've paid for it.
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Samsung sells a refrigerator line called Family Hub with a big touch screen
13:14
in the door.
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Priced from $1,800 to $3,500 for a refrigerator.
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In September of 2025, Samsung pushed an update over the internet that
13:25
put ads on that screen when the fridge was idle.
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They call that idle screen the cover screen.
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When that update first went out,
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you could dismiss individual ads one at a time,
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and that's it. A later update added a switch to turn them off,
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but
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Think about the order of events.
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You paid up to $3,500.
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You take your fridge home. And then from the company's side,
13:53
a feature got added to your kitchen that you didn't buy and you can't turn off.
13:57
In every case, the company is cutting something you were relying on
14:00
it to measure for you. The box was your unit.
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The fill line was your unit. Ice cream was the definition you trusted.
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The service manual is how you could figure out what was wrong.
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And the screen on your fridge is a thing you paid for that company paid paid
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for that the company still controls.
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The cut always lands in the place where you the buyer's only ruler belongs
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to the seller. And brand names work the same way.
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You think you're comparing companies when you compare brands,
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but Whirlpool owns Maytag, Amana,
14:27
Jenn-Air, and KitchenAid. Walk down an appliance aisle and you can
14:31
be choosing between five nameplates all from the same company.
14:33
In the dairy case, Danone owns Silk,
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So Delicious, Horizon, International Delight, and STōK.
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The brand name STōK,
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STōK, it's coffee.
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okay, thanks. the brand name is the last way most of us judge quality
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and the seller prints that too.
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Okay, so so here's the company side,
14:51
right? The way their own trade group makes their side.
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The Consumer Brands Association speaks for the people who make the boxes.
15:00
So when Senator Bob Casey put up a bill against this in 2024,
15:06
that association's president, David Chavern,
15:09
said the FTC, the Federal Trade Commission,
15:12
already has the authority to go after deceptive practices.
15:17
And that companies are transparent about both price and size.
15:21
On the package itself, he has a point.
15:24
A company can sell whatever size of box it wants,
15:27
right? The weight is printed on the package in ounces.
15:30
The sheet count is on every Charmin package.
15:34
Frozen dairy dessert is on the Breyers carton in letters.
15:38
You can read without your glasses.
15:40
Nobody lied. If you care about ounces,
15:44
read the ounces.
15:45
Adults are allowed to make choices with information that's sitting right
15:49
in front of them. And the industry's point about price goes like this.
15:54
If customers punish a price increase hard and barely notice a smaller box,
16:00
then shrinking the box is giving people what they prefer.
16:03
That breaks on the Tide cap. The information is right in front of you,
16:08
works for the ounces. For the fill line,
16:11
the information right in front of you is the line.
16:15
The line is now wrong on purpose.
16:18
The correction is a sentence on the back telling you to ignore 20% of it,
16:23
just like toothpaste. Toothpaste has a allotted amount that you should dispense with
16:28
every turn. But your dentist has a very different recommendation
16:33
for how much toothpaste you should put on your toothbrush.
16:36
So the correction is a sentence on the back telling you to ignore 20% of it.
16:41
And the second part, the downsizing.
16:43
is what people prefer, breaks on the same GAO number Will gave you earlier.
16:48
If you if you chose to look that up and you're following along with bated breath,
16:51
people respond two to five times more to price than to size.
16:58
That number is usually quoted as consumers prefer downsizing.
17:03
What it actually measures is that consumers notice price and mostly don't notice
17:09
size.
17:10
A preference would mean people picked the smaller box with both options
17:14
in front of them. And the GAO number says most of them never really saw the choice.
17:19
And the CEO said it himself consumers get used to it.
17:23
And that's the business plan, read aloud on a call with the investors
17:27
of that company about a company that sells snack cakes.
17:32
And calling a smaller box of preference related relative to a higher price.
17:37
It's like saying, Do have a preference between getting hung or hanged
17:40
or standing in front of a firing squad,
17:42
right? you could say that most people choose the firing squad,
17:45
but it's not really a preference.
17:47
So but all in all,
17:50
the whole thing is an amazing thing to say about snack cakes,
17:52
right? It's more like he's describing a vaccine schedule.
17:56
Right. Quote pricing by definition is a change model.
17:59
Why don't they put that on a Twinkie wrapper,
18:01
right? Right under the ingredients.
18:03
Contains wheat, soy, and a change model.
18:07
But in fairness to Hostess, the Twinkie hasn't shrunk in this story,
18:10
as far as anything we have says.
18:12
We're not aware of any shrinkage there.
18:14
I was, however, disappointed to find out that the Twinkie will not last through
18:18
the apocalypse and like it doesn't have an infinite shelf life.
18:21
Nor should it.
18:23
Fair enough. but you know, this this might they might actually be
18:27
the most honest company in the episode,
18:28
which is saying a lot. Like that's the bar now.
18:31
Congratulations, Twinkie.
18:33
Way to stay the same size, you you beautiful piece of cream and whatever that other
18:39
stuff is. Plastic. Yeah.
18:39
Plastic. It's just mostly plastic,
18:41
let's be honest.
18:42
The Tide label, though, right?
18:44
Think about it, right? Click keep like I I I run this scenario through my head,
18:49
right? Where they're in this meeting and somebody says,
18:52
Well, the cap is too big now. Of course,
18:55
for some reason, my corporate meeting accent or or
18:58
Invoice, yeah.
18:59
vo voice voice messing around is always an admin from the 1920s.
19:03
Yeah. Now see here, this box is too big.
19:06
exactly.
19:07
And everyone says retooling the cap costs money.
19:10
What if we just tell them to underfill it?
19:12
And of course, everybody nods
19:13
And keep the money.
19:14
and stands up and claps. And then a person in legal writes 80% of the
19:18
way up the line with a hyphen,
19:21
which is the most lawyer thing I think I've ever seen.
19:24
And it goes out to every laundry room in the country.
19:27
Good job, Peterson. next next bottle says fill to the line and then pour some
19:31
of it back. Bottle after that just says use your best judgment and good luck.
19:34
Right. Eventually that cap is a suggestion,
19:38
right? The cap becomes a vibe.
19:40
Right. But part of the defense survives though,
19:42
which is if the claim is that this is how corporations got rich off
19:45
the last few years of inflation,
19:47
the numbers don't really back it.
19:48
The same GAO report measured how much of the price increase in
19:52
the consumer price index, the government's main inflation measure,
19:56
came from downsizing. From December twenty nineteen to December twenty twenty four,
20:00
prices in the index went up thirty-four point five percent.
20:03
Downsizing added about point zero six percentage points of that,
20:07
which is a rounding error.
20:09
And the bigger version of the story,
20:11
sometimes called greedflation,
20:12
is shakier than people want it to be.
20:15
In January 2023, three economists at the Federal Reserve Bank of Kansas City,
20:20
Glover, Mustre-del-Río, and von Ende-Becker,
20:23
published a paper finding that in 2021,
20:26
company markups, meaning price cut prices over costs,
20:29
rose 3.4% at a time when inflation,
20:32
measured by PCE, which is the personal consumption expenditures index.
20:37
The Fed prefers ran 5.8%. They said that markups could account for more than half
20:42
of inflation that year. When the same team followed up on in May of 2023,
20:46
they found the effect faded through 2022.
20:49
Then in May of 2024, economists at the San Francisco Fed,
20:54
sorry, Leduc, Li, and Liu looked at markups across the whole economy
20:58
and found them essentially flat.
20:59
The spikes were in a couple of places,
21:01
autos and petroleum.
21:03
So if you were hoping to find a giant coordinated grab in the fin
21:05
in the national numbers, the national numbers say no.
21:08
And I'll take that, right? I don't I don't have a a a great answer to it.
21:12
Like 0.06 points is is pretty small,
21:15
right? The best measure anybody ha has says that shrinking packages
21:20
did not really drive inflation of the last five years.
21:23
And the economy wide markup story didn't hold up past 2021.
21:28
So if somebody tells me like shrinkflation is why groceries got expensive,
21:32
unfortunately the numbers essentially say they're wrong.
21:36
And I
21:38
would not try to be that actually guy.
21:40
if if I could at all avoid it.
21:43
But what it doesn't settle really is the thing that this episode is about,
21:48
right? The Tide cuts started in 2014.
21:51
Breyers was 2013. The move doesn't need inflation to work,
21:56
it just works better with inflation as a cover,
21:59
which is essentially what Callahan said.
22:02
So let's stay with the line of who carries this burden because 0.06 points makes
22:06
it sound like nobody does, and that's a number involving the whole economy.
22:10
It's an average across everything in the index,
22:12
including all the things that never shrank.
22:14
The same GAO report looked category by category,
22:17
and inside specific aisles, the picture is different.
22:20
In household paper products, which is toilet paper and paper towels,
22:23
downsizing added three percentage points to the price increase over those five
22:27
years. In cereal, it added 1.6.
22:30
Then the GAO looked at the individual items that were actually downsized
22:34
and asked how much the price went up per unit,
22:36
per ounce, per sheet, per whatever the product is sold by.
22:40
The range ran from 11.6% from paper towels to 32.4% for coffee.
22:46
So for coffee they got smaller,
22:47
each ounce cost 32.4% more and the price on the shelf might not have moved at all.
22:52
The GAO also found that lower income households responded more strongly
22:56
to these changes. They're the ones watching every price and switching brands,
23:00
which makes sense. If your budget has no slack in it,
23:02
you pay attention to it. But it also means the people working hardest
23:06
to measure what they're getting are the people this move is built to slip past.
23:10
The family that buys the store brand coffee and watches the sticker price
23:13
is exactly the same family that gets the 32% per ounce increase without
23:18
the sticker ever changing.
23:19
I wish I could tell you who one of those families is.
23:22
Nothing we have names one, but the GAO measured prices across the whole country.
23:26
It didn't interview a mother in Toledo about her coffee.
23:28
and nothing we have shows any US rule requiring the companies doing
23:31
the downsizing to tell anybody which products they shrink,
23:34
by how much or when. The disclosure laws we know about are all in Europe.
23:38
So the person who pays the most has no name on the record.
23:41
And the company that shows you the full list of or the company that could show
23:45
you the full list of what they cut is under no obligation to do so.
23:49
Then there's the appliance version and it lands on a different person.
23:52
You buy the fridge once. You don't get to notice the change and buy
23:56
a different one next week the way you can with,
23:58
cereal or or dryer sheets. If your dryer dies and you bought
24:04
one of the 43 out of 50 makers who don't hand out their service mount manuals,
24:09
the part might be cheap. And you might never know that because
24:12
the document that tells you which part is held by the manufacturer.
24:18
That bill falls heaviest on whoever can least afford a surprise because they're
24:22
the ones who'd most like to fix it themselves.
24:25
Me being one of those people. I I had a dryer that I had got in 1992 that
24:31
I just I just systematically changed out.
24:33
It was like the the the ship of what is it?
24:36
ship of
24:36
Theseus, yes.
24:37
Theseus, yes. The entire dryer was different.
24:40
The only thing that was the same was the outside of it,
24:42
right? But
24:44
The Samsung buyer paid between $1,800 and $3,500 for a refrigerator.
24:50
I'm never going to be in the market for a refrigerator with
24:54
an advertising department or an advertising budget.
24:57
Right? But somebody saved up for that,
24:59
right? That family hub and the thing they saved for changed after they took it home.
25:05
After being at the risk of being that guy.
25:07
when a refrigerator costs more than my first car,
25:10
I have got concerns.
25:13
Right.
25:14
but you know, I want to push on the appliance part a little bit though,
25:16
because having read ahead, I know you're about to throw something in the pile that
25:20
I don't think belongs there.
25:22
KitchenAid.
25:23
Exactly. The stand mixer has a gear in it,
25:25
the worm follower gear. Don't ask me what that causes to happen,
25:29
I know exactly what it looks like in my head though.
25:29
but it's a gear. Yeah.
25:31
Like I can picture it when you say it because I have changed that specific gear.
25:36
Right, those plastic gears. basically,
25:37
yeah, it's it's made of nylon instead of metal.
25:39
And when it strips, people find out it's plastic and assume that that's
25:42
the company corner cutting. It isn't new though.
25:45
The nylon gear actually dates back to the Hobart era.
25:47
if they're it's there on purpose and it's a fuse.
25:50
When you overload the mixer with a dough that's too stiff,
25:53
the gear is designed to fail first so that the motor doesn't.
25:55
The motor's the expensive part and the gear is the cheap part that sacrifices
25:58
itself.
25:59
Right. And that that one bothers me more than I think
26:02
Okay.
26:02
I'd like, because from the outside,
26:05
I I can't really tell the difference,
26:07
right? The a cheap part that fails looks exactly like a cheap part that fails
26:13
on purpose to protect the expensive one.
26:15
If if I'd just been like handed that gear with no history,
26:19
I'd have put it in this episode as like exhibit A,
26:22
here we go, and and you know, exposure.
26:24
But every other thing I said, I just said about appliances though.
26:28
I have to admit, I'm judging from the outside too.
26:30
And from the outside, I can't really tell which is which,
26:33
but no refrigerator I've had has the ice maker been able to keep up with
26:37
the amount of ice that I use on a regular basis.
26:40
Which is your argument in a way,
26:41
but it cuts both directions. If the buyer can't measure quality,
26:44
the buyer can't measure good design either.
26:45
Some of what people are angry about is the gear,
26:48
and some of it isn't. Samsung putting ads on the door of a $3,500 fridge after
26:52
the sale isn't a fuse, but if we're going to say the cut lands where buyer can't
26:56
see, we have to admit we can't always see it either.
26:58
The other place this lands is on the idea that you can just switch.
27:01
The standard answer to to a company that treats you badly is to take your money
27:05
elsewhere.
27:06
so you're done with Whirlpool and you buy a Maytag or an Amana or a Jenn-
27:09
Air or a KitchenAid. Whirlpool owns all of them.
27:12
You're done with Horizon, so you switch to Silk or So Delicious.
27:16
Danone owns all of those,
27:19
plus International Delight and STōK.
27:20
The money goes to the same place and the company books the sale either way.
27:24
Right. So if we go back all the way back to the Tide bottle,
27:29
right, eighty percent of the way up the line in the cold open,
27:34
that really reads like a a petty little soap soap trick,
27:38
right? It it turns out to be an honest sentence.
27:41
Every other cut we talked about hides in a measurement you trust,
27:45
right? The box for the cake mix has a bag inside of it.
27:48
All they have to do is change the amount that goes into that bag
27:51
and they actually don't even need to change the the the
27:53
actual box itself. They don't even have to retool it.
27:57
They say it's for freshness or whatever.
27:59
I don't know. Anyway, I I digress.
28:02
But the box for the cake mix, the the word on the ice cream carton,
28:07
the role, the brand, the screen,
28:09
on the Tide bottle, they literally just couldn't hide it because the
28:12
cap is a physical object in your hand.
28:14
So they legally had to put it in writing.
28:17
That sentence is the company confirming in print on its own product that
28:21
the measuring tool it gave you is no longer true and that fixing it is your job now.
28:26
Nobody else makes the box, the cap,
28:29
the label, the brand name, whoever,
28:31
you know, makes the the measuring tool can move the line.
28:35
Which is why my answer to this problem is the law.
28:37
I practice law as you know. And this kind of problem is the kind
28:41
of problem that national consumer laws are built for.
28:44
The seller owns the ruler, you make a rule about the ruler,
28:48
and it works. Hungary excuse me,
28:51
Hungary required disclosure of downsized products starting in February twenty twenty
28:56
four. France did it in July of twenty twenty four,
28:59
and Austria's law took effect in April first of this year,
29:02
twenty twenty six.
29:03
Remember the GAO number. People respond two to five times more to
29:06
a price change than a size change.
29:08
A required notice turns the size change back into something that people notice.
29:12
And the margin from the move depended on nobody noticing.
29:15
Disclosure takes that away without telling anybody what size box to actually sell.
29:19
Then I guess here is my question,
29:22
right? As a guy who just buys the soap,
29:24
why don't we have it? Right?
29:27
Somebody already wrote it. On February 28th,
29:30
2024, Senator Bob Casey, a Pennsylvania Democrat,
29:34
introduced the Shrinkflation Prevention Act with Elizabeth Warren,
29:38
Tammy Baldwin, Jacky Rosen, and Cory Booker.
29:41
All of those names I'm very familiar with,
29:44
except Jacky Rosen. I would have had,
29:48
I don't know,
29:49
The FTC treat shrinkflation as a like a deception practice.
29:54
And then it would have let state attorneys actually generally sue in this
30:01
in this scenario, right? It it got hearings,
30:03
but it never actually went to a vote.
30:04
In the Senate, the Democrats controlled at the time,
30:07
the House version died the same way.
30:10
In September of 2025, Lou Correa,
30:13
a California Democrat, tried again in the House.
30:16
And his bill even had an easy out built in.
30:19
Print the old size and the new size on the front of the package,
30:23
and you're covered. It went to the Energy and Commerce Committee in
30:29
a house that Republicans control,
30:31
and nothing really has happened to it since.
30:33
And the FTC, the agency,
30:37
the industry said already had the authority that it needed,
30:41
has never defined.
30:43
downsizing as deceptive. The GAO
30:46
Remind me which branch
30:47
of the government it the FTC is under?
30:49
That'd be would that be executive?
30:50
I I don't d do you know off the top of your head?
30:52
I if you if you ask anybody in the government
30:52
I think it would be the executive,
30:54
right? Which is under the president.
30:56
Just just throwing that out there.
30:58
right now, they're all under the president.
31:00
Right, yeah.
31:01
Or at least that's how it feels.
31:03
Indeed. Sorry, I just I throw that out there.
31:04
But the
31:06
no, it's fine. The FTC, right,
31:08
the agency that's supposed to have the authority never defined it as deceptive,
31:14
right? So the GAO actually said so in that report that we've been quoting anyway.
31:18
Meanwhile, the people who make the boxes pay for a seat at the table.
31:24
a watchdog report in 2021 counted about sixty million dollars in lobbying
31:30
by the Consumer Brands Association since 2008.
31:33
Which made it one of the biggest spenders in food.
31:36
General Mills
31:37
So one thing that didn't
31:38
shrink is their their lobbying efforts,
31:40
huh?
31:41
We're right. i if you'd have just taken that 60 million and spread it
31:44
out over the product, you wouldn't have had to change the size or the price.
31:47
Can we be honest
31:48
Right.
31:49
about it here? Right. So $60 million in lobbying.
31:54
And of course, General Mills, which I'm sure you've all heard of.
31:57
You've they're they're they own Betty Crocker and a bunch of other cereal
32:00
and various other things, reported that 236,553.
32:06
Dollars of what it paid the association in 2025 went to lobbying.
32:10
On the appliance side, there's the Association of Home Appliance Manufacturers,
32:17
whose members make more than 95% of the home appliances shipped in this country.
32:22
It helped write the letters manufacturers sent against Illinois' repair bill
32:28
in 2018. In New Hampshire in 2019.
32:33
Its representative told a committee that independent repair could get children hurt.
32:38
In twenty twenty three,
32:40
Wow.
32:40
it testified against Minnesota's repair bill,
32:43
and Whirlpool pays its dues.
32:46
I can't show you a receipt that says a vote was bought,
32:49
right? And nobody will would file that and and attorneys would tell them definitely
32:54
not to file that. But what I can show you is is the move,
32:58
right? That because people have said it out loud.
33:02
Callahan said it about prices.
33:04
When when all prices go up, it helps.
33:06
And the consumers get used to it.
33:08
Steve Bannon said it about politics to the writer Michael Lewis in 2018.
33:15
Quote, the real opposition is the media,
33:17
and the way to deal with them is to flood the zone with shit.
33:20
End quote.
33:21
And the administration runs it in court.
33:24
225 executive orders in the first year,
33:27
judges blocking some of them within weeks,
33:29
and a Supreme Court that in 2025 limited how far a single judge's block can reach.
33:35
Do it now. Let the court sort it out later.
33:38
And by the time anybody does anything,
33:40
everybody's kind of used to it.
33:41
20 missing sheets is not going to make the news.
33:44
Three bills and zero votes never makes the news either.
33:50
The fix being slow is how this whole thing actually works and plays out.
33:55
Classic slow play. That's what I've been missing since while I sit here saying
34:00
the law fixes it. The law is the slow lane and they're counting on it.
34:03
My wife does most of the shopping in our house,
34:05
thank goodness. And she was telling me the boxes were getting smaller long before
34:09
I read a word of this. And I took it as small talk.
34:11
Person in the aisle saw it first.
34:13
Every committee on that list was behind her.
34:15
I'll believe the law sorry, I still believe the law fixes it.
34:19
it fixes it when it answers to the person in the aisle instead of
34:21
the people paying for a seat at the table.
34:23
Well, look, Hungary, France, and Austria passed the same kind of law that
34:28
Bob Casey wrote, right? The difference was who their governments answered
34:33
to on the day of the vote. Ours had three chances,
34:37
and and not once did it actually ever take.
34:39
The government is supposed to be us.
34:42
And until the people in the aisle make it act like it,
34:46
the line on the cap stays exactly where it is.
34:49
If take one thing to work tomorrow,
34:50
take Callahan's sentence. Consumers get used to it.
34:53
A CEO said that to investors on a public call about prices going up.
34:57
Every cut in this episode depends on you doing exactly that.
35:00
The cap, the cake mix, the sheet count,
35:03
the ads on the thirty-five hundred dollar fridge,
35:04
and three bills that die without ever seeing a vote.
35:07
Getting used to it is the part they need from you,
35:10
and you can say no to that part for free.
35:12
I think the the dumbest thing of all of this is still in the cap,
35:15
though, right? A company changed
35:17
Mm-hmm.
35:17
the size of the bottle, kept the exact same cup,
35:20
and decided that the cheapest fix was to just teach every household
35:23
in America to eyeball about 80% of a line.
35:26
So they made up, they made up the measuring device without ever changing it.
35:32
And then the industry told Congress the rules were fine,
35:36
and and Congress just kind of agreed by never actually doing anything about it.
35:40
So I I mean I I'm I'm assuming by the end of next year
35:46
at least one I don't know, maybe California might have
35:51
a shrinkflation disclosure law enforced beyond France,
35:54
Hungary and Austria. What do you think?
35:55
Sounds like a very California thing to do.
35:57
Although it seems
35:58
Yeah.
35:58
like everybody should be upset about this.
35:59
it's doesn't matter where you are.
36:01
That's the thing. And we should all be we should all
36:04
be annoyed by it at the very least.
36:06
I think of of various recipes over the years that my my grandmother gave
36:10
me for various things. you take you can make a a cleaner out of anything with
36:14
a little bit of vinegar, lemon juice,
36:16
water, and a shaved bar of naphtha soap.
36:20
You know, and and if you look at the naphtha soap,
36:23
it's also changed in size and changed in price.
36:26
So I I mean, we have little things like this that we think,
36:29
well, you know, grandma's old recipe doesn't work on these newfound.
36:33
seed oils, on clothes or whatever,
36:34
but the truth might just be that the the naphtha bar bar is smaller.
36:39
True. Well,
36:41
So I I mean I don't know.
36:43
regardless of which of those things it is,
36:45
and it's probably all of them,
36:46
we appreciate you listeners for spending your time with us today.
36:49
go look at the the the cap on your detergent bottle.
36:52
then be kind to each other, help out where you can,
36:54
and you can find everything we do at FOF dot foundation.
36:58
And that's it.
36:58
Just FOF dot foundation, no .com,
37:01
no anything else, and you will find us online.
37:05
Make sure to check out you know,
37:07
our Apple podcasts if that's where you listen to us at,
37:10
or and give us five stars there.
37:11
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37:13
thank you for listening to us on Spotify.
37:15
We actually have way more listeners on Apple Podcasts,
37:18
but thank you for listening to us on Spotify.
37:19
That that means a lot to us. And I guess that being said,
37:23
we'll see you next week. Yeah.
37:24
Let's hope so. We're all still here.
37:25
And like we always say, bye.
37:26
Bye. Bye.