Of Memestocks and Milk Bags
It's that time again. Today on the show, we open up our hearts and our phone lines to hear the economic quandaries that are keeping you up at night.
We provide an answer to the following burning questions:
Q: I've been hearing stories about people buying the GameStop stock and I was just thinking when stocks go up, what happens with that money as far as the company is concerned? Do they make money off of that?
A: Planet Money's newest host Erika Beras answered this question by looking at AMC, which became a memestock earlier this year. Companies like AMC can use becoming a memestock to keep raising money — but only as long as shares stay high. AMC is even giving out free popcorn to keep its shareholders happy. So it is possible for a company to make money as a memestock, but it's unclear whether becoming a memestock is a good long term deal.
Q: Why does Canada sell milk in bags?
A: When Pierre Trudeax led Canada's conversion to the metric system in the 1970s. Canada had to switch every container and package in the country from gallons or pounds to liters or kilograms. Milk producers opted to switch to plastic bags to avoid the expensive task of molding new cartons or jugs. And it's only in Eastern Canada. In Western Canada, bags are not popular.
Q: Is there a way to see inflation without raising prices?
A: Normally when we think about inflation, we think about the price of products increasing. But there's another type of inflation that isn't when the price inflates — it's when the size of the product deflates, but the price stays the same. And it's called Shrinkflation. You may notice smaller containers of ice cream and cereal at the store, but the same bill at the checkout counter.
Q: What gadgets and services do rich people have today that might become less expensive and more accessible in the future?
A: This question involves a classic theory in marketing and communications called "the diffusion of innovation." Think of cell phones, flat screen TVs and cars. Expensive new technologies can take a while to take off, and only a handful of people with disposable income can afford to try them. But after a while the technology becomes more efficient, prices drop, and eventually the majority of everyday consumers can adopt it. Consumer tech analyst Carolina Milanesi said private space travel, which is currently being pursued by some billionaires, could eventually be attainable for the general public. In the meantime, Carolina said fast broadband internet for everyone may be one of the most significant technological diffusions of the next couple decades.
Thank you to every listener who wrote to us. We read all of your messages, so keep the tips and questions coming.
Music: "Time Heals," "Graceful As She Is," and "Thank You And Good Night."
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