Prices going down requires negative inflation...
Nope, know exactly what you’re getting at with this but it’s wrong. My initial inclination is that this may be a bad faith comment, but incase you don’t understand why deflation is not necessary to reduce the price of eggs let me elaborate a bit.
Economists know deflation is awful, and significantly more harmful than inflation. It sends a signal loop to consumers to tighten their purse strings and not stimulate their economy.
If you wanted to lower prices across an entire macroeconomic sector then yes, that would require either inorganic pricing and subsidies, or organic deflation.
To decrease the cost of a singular good such as eggs there are several types of investment and production ramp ups you can undergo to lower their price via shifting their aggregate demand and supply curve to a lower price point equilibrium through the introduction of additional supply.
Hence, egg prices can be lowered without requiring deflation.
But we both know the real problem behind the egg crisis was never partisan anyways, it was H5N1, but now, that problem is going to be compounded massively by us effectively cutting off good faith trading with the large majority of the world.
I’ve seen the statistics on % of net exports for Canada and Mexico from the US versus the inverse and at face value it seems like this deal stands to massively disproportionately impact those two nations, until we realize that the goods being tariffed and no longer purchased can still be sent to their other viable trade partner, and while their overall costs will obviously increase to some degree, the net opportunity cost is mitigated quite a bit by being able to sell those same exports at a similar price, and having the only real economic impact be the implicit costs in setting up those new trade agreements, and the presumed small delta in price.
America as a whole may be well insulated by their wide breadth of countries looking to import to us and engage in trade, but after having recently completely cleared out all of our goodwill (I am using this term in the literal sense, as in the intangible asset that would be assigned a finite value in real life instances such as business acquisitions), if we can’t source our products from a viable alternative, we now take on the full brunt of those losses, rather than merely the slim margin between our previous and new net profit.
When you have a $40 whiskey bottle that you have to sell to a different trade partner for $35, it hurts in the short term, but it hurts much less than not being able to sell your $30 bottle for anything.
If there’s any typos or anything it’s probably because I typed this out on mobile. 🤷♂️
This post was edited by Jacobbc2 on Mar 7 2025 02:52am