How scared should we be of a new form of inflation, called "skimpflation"? : Planet Money We look at a hidden form of inflation affecting our economy — we're calling it "skimpflation." The Indicator tells a spooky tale about the inflation demon. | Subscribe to our weekly newsletter here.

Night of the living inflation

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We are hearing a lot about inflation these days. You know the story. Prices are going up on goods and services, from gas to cars to houses to lumber, et cetera. But Greg Rosalsky of the PLANET MONEY newsletter is here to tell you that you think you know what inflation looks like, but there's also a lot of hidden inflation going on. Hi, Greg.


CHILDS: So what is going on?

ROSALSKY: Skimpflation.

CHILDS: Skimpflation?

ROSALSKY: Yes, skimpflation.

CHILDS: Is this a real thing? I feel like I've never heard of it before.

ROSALSKY: I mean, we kind of made it up. I mean, it's, like, a real thing happening in the economy, but the word is made up.

CHILDS: So what does this new word that we're agreeing to use - what does it mean?

ROSALSKY: Well, even if you haven't really heard this term before, you've probably seen it in action in recent months. It seems like it's happening everywhere. It's a situation where we're paying the same or more for services, but they kind of suck compared to what they used to be.

CHILDS: OK, wait; can you give me, like, a practical example?

ROSALSKY: OK, so for example, a couple weekends ago, me and my girlfriend, we went to this restaurant. And there was, like, 70 customers there, and there were only two servers. And these poor servers were, like, running around, so stressed out. And also, it took, like, a really long time to get our meal. It took a really long time to get our drinks. And, you know, I felt for them, but I was like, wow, the service in this place has really gone downhill.

CHILDS: OK, so you could maybe just be aging and cranky, like maybe you were just hungry. But, like, this is happening elsewhere, right? Like, you didn't just experience this at a restaurant.

ROSALSKY: Yeah. I mean, this isn't just me with, like, one anecdote here. I mean, you could see this all over the economy. So for example, fast-food restaurants don't really seem to be that fast anymore. You go to, like, the napkin and condiment dispensers, and they're always empty.

CHILDS: Not the condiments.

ROSALSKY: The CEO of Domino's Pizza basically had to apologize because their pizzas are taking longer to deliver. Hotels aren't offering hot breakfasts. And then if you stay there for multiple days, they're not going to clean your hotel room every day. I mean, skimpflation is happening all over the place.

CHILDS: But what makes this a -flation? Like, how is this not just, like, oh, maximizing profits or cost cutting?

ROSALSKY: So inflation - it really boils down to you're getting less for your money. The value of your hard-earned dollars is not going as far as it used to. This is the same idea. I mean, you're probably paying the same amount for that Domino's Pizza or that hotel room, but you're getting a worse version. Companies are skimping on what they used to provide.

And this isn't to say that, you know, all businesses out there are bad and greedy. I mean, there are a lot of real issues right now in the economy. Costs are going up. It's hard for businesses to find workers. I mean, there is a pandemic that is still happening. So some businesses out there, especially small businesses, they might be skimping to survive.


CHILDS: Greg, this is all sounding a little scary.

ROSALSKY: Inflation is here forever. It's going to devour your paychecks. Be afraid. Be afraid of the inflation monster.


CHILDS: Hello, and welcome to PLANET MONEY. Are you afraid? Our friends at The Indicator have a special Halloween episode about just how scared of inflation we all should be. Coming up after the break.




STACEY VANEK SMITH, BYLINE: Welcome to The Indicator From Planet Money. I'm Stacey Vanek Smith. Tonight we bring you an economic horror story about a monster - a monster that can hide in plain sight. You don't even know it's there until it's too late. Settle in for a tale from the economic crypt.


VANEK SMITH: Imagine a young child asleep in their bed, dreaming sweetly, until a nightmare strikes.


UNIDENTIFIED REPORTER #1: No shortage of fears out there - supply chain issues, inflation.

UNIDENTIFIED REPORTER #2: Much higher-than-expected inflation reports...

UNIDENTIFIED REPORTER #3: Inflation surge accelerating...


UNIDENTIFIED REPORTER #5: Inflation for September...

UNIDENTIFIED REPORTER #6: And we see inflation becoming more widespread.

UNIDENTIFIED REPORTER #7: It's probably the single biggest threat (ph).

UNIDENTIFIED PERSON #1: (As child, crying).

ADRIAN MA, BYLINE: Hey. Hey, you OK, kid? What's going on in here?

UNIDENTIFIED PERSON #1: (As child) Uncle Adrian, I had a bad dream.

MA: Oh, it's OK. It's OK. What did you dream about?

UNIDENTIFIED PERSON #1: (As child) Inflation - it's coming for us again. It's going to make all of our money worthless.

MA: Oh, I told you what was going to happen if you watched all that Bloomberg all day, right?

UNIDENTIFIED PERSON #1: (As child) But what about inflation, Uncle Adrian? What about everything getting super-duper expensive?

MA: Look. Sometimes prices go up. But the U.S. has this thing called the Federal Reserve, which is one of the biggest and strongest banks in the whole land. And one of its main jobs is to fight inflation. So if inflation ever rears its head, the Fed just turns up the interest rates, and it slinks back to where it came from.


MA: But really, there is no such thing as an inflation monster.


MA: OK. Are you ready to go back to sleep?

UNIDENTIFIED PERSON #1: (As child) Yeah. Yeah, OK.

MA: All right (kissing).

UNIDENTIFIED PERSON #1: (As child, sniffling).

MA: Goodnight.

UNIDENTIFIED PERSON #1: (As child) Goodnight, Uncle Adrian. There's no such thing as the inflation monster. There's no such thing...


UNIDENTIFIED PERSON #1: (As child) What is that? What's that noise?

UNIDENTIFIED PERSON #2: (As demon) No such thing as an inflation monster.

UNIDENTIFIED PERSON #1: (As child) Monster (crying).

UNIDENTIFIED PERSON #2: (As demon, laughter) Actually, kid, I'm a demon.

UNIDENTIFIED PERSON #1: (As child) Don't demons usually have horns and teeth and a body? You're just a glowing, floating cloud of gas.

UNIDENTIFIED PERSON #2: (As demon) Yeah, I'm the kind of demon that isn't so tangible. I'm an inflation demon.

UNIDENTIFIED PERSON #1: (As child) What do you want?

UNIDENTIFIED PERSON #2: (As demon) I'm here to tell you that inflation is not only real. It's something to be very, very afraid of.

UNIDENTIFIED PERSON #1: (As child) But Uncle Adrian says...

UNIDENTIFIED PERSON #2: (As demon) But Uncle Adrian says - Uncle Adrian's too young to know what he's talking about. He's never experienced the effects of widespread hyperinflation.

UNIDENTIFIED PERSON #1: (As child) Hyperinflation - what's that?

UNIDENTIFIED PERSON #2: (As demon, laughter) Glad you asked. Let's take a little trip back in time.


UNIDENTIFIED PERSON #1: (As child) Where are we?

UNIDENTIFIED PERSON #2: (As demon) Willkommen, bienvenue, we're in Germany's capital, Berlin. It's November 1923. The economy here tanked after World War I. Social unrest was everywhere, but things were about to get even worse.

UNIDENTIFIED PERSON #1: (As child, shivering) Oh, it's so cold here.

UNIDENTIFIED PERSON #2: (As demon) Aw, why don't you go warm yourself up by the fire over there?

UNIDENTIFIED PERSON #1: (As child) Yeah, OK.

UNIDENTIFIED PERSON #3: (As character) Hey. Hey, kid - you there.


UNIDENTIFIED PERSON #3: (As character) Hand me that stack of paper right there.

UNIDENTIFIED PERSON #1: (As child) Yeah, sure. Sure. Wait a second. Is this money?

UNIDENTIFIED PERSON #3: (As character) Ha, it used to be. It says a hundred billion marks on it. But these bills are worth more as kindling than they are as currency.

UNIDENTIFIED PERSON #1: (As child) What happened?

UNIDENTIFIED PERSON #3: (As character) After the great war, our government began printing paper money to pay reparations to the countries it invaded. It printed so much money that the price of everything grows astronomically. Last month, the inflation rate was almost 30,000%.

UNIDENTIFIED PERSON #1: (As child) That's banananas (ph). So what do you do when you need to buy clothes or food?

UNIDENTIFIED PERSON #3: (As character) You could do what I do. Find a big suitcase to carry all that paper.

UNIDENTIFIED PERSON #1: (As child) Well...

UNIDENTIFIED PERSON #3: (As character) Speaking of it, I have to buy bread for the family. Auf Wiedersehen, kid.

UNIDENTIFIED PERSON #1: (As child) You - you did this.

UNIDENTIFIED PERSON #2: (As demon) What can I say? I'm good. In a number of months, even days, I grow, and I grow. I touch every part of the economy, and people's life savings become worthless.

UNIDENTIFIED PERSON #1: (As child) But this is a long time ago in a totally different country. It couldn't happen at home. No.

UNIDENTIFIED PERSON #2: (As demon, laughter).

UNIDENTIFIED PERSON #1: (As child) No, Uncle Adrian says that...

UNIDENTIFIED PERSON #2: (As demon) Just wait till you see where we're going next, kid.


UNIDENTIFIED PERSON #2: (As demon) All right, kid, we're back in the present day.

UNIDENTIFIED PERSON #1: (As child) Hey. Hey, I know this place. This is my neighborhood grocery store.

UNIDENTIFIED PERSON #2: (As demon) Shh, shh, shh (ph). Let's eavesdrop on these two with the shopping cart.

UNIDENTIFIED PERSON #4: (As character) All right, what about everything else on the list, though? Do you have it all?

UNIDENTIFIED PERSON #5: (As character) I got the pork chops, but look at this price. This is at least a couple dollars more than the last time we got it, and a lot of this stuff in our cart looks more expensive than I remember.

UNIDENTIFIED PERSON #4: (As character) That or everything is shrinking - like, look at this cereal. This box is way smaller than it used...

UNIDENTIFIED PERSON #1: (As child) Oh, oh, no. Is it...

UNIDENTIFIED PERSON #2: (As demon) That's right - inflation. It's already happening. While your government has been pumping money into the economy, inflation has been steadily increasing the price of goods. Thanks to me, the dollar's value has eroded. And as people realize that, they'll spend their money even quicker before it loses even more value. They'll demand higher wages, which will make businesses raise their prices, and that will trigger more inflation. The cycle goes on and on and on and on until all of your money is worthless (laughter).

UNIDENTIFIED PERSON #1: (As child) No, my money (crying).

CHILDS: (As character) All right. All right. All right. Don't listen to him, kid.

UNIDENTIFIED PERSON #2: (As demon) Oh, great, it's the feds.

CHILDS: (As character) I'm with the Federal Reserve. We got an alert about some paranormal inflationary activity around here. Listen, kid. Inflation is real - fine. But you don't have to be that afraid of it. The rising prices we're seeing can be explained by this very weird pandemic economy we're in. People are spending a lot, but global supply chains are all gummed up. All that stuff will probably change once we get the virus under control.

UNIDENTIFIED PERSON #1: (As child) So this inflation is...

CHILDS: (As character) It's temporary. We call that transitory.

UNIDENTIFIED PERSON #1: (As child) Transitory.

CHILDS: (As character) And here's something to remember. Thinking inflation is going to happen makes it more likely to happen. In a way, whether inflation gets really bad is sort of up to us.

UNIDENTIFIED PERSON #1: (As child) Is it? It's even up to me.

CHILDS: (As character) That's right, kid - you, me, our demon friend here.

UNIDENTIFIED PERSON #2: (As demon) Transitory demon friend.

CHILDS: (As character) All kinds of things can contribute to inflation, but a key ingredient is our own feelings about the future. That part is all in your head, kid.

UNIDENTIFIED PERSON #1: (As child) It's in your head.

UNIDENTIFIED PERSON #2: (As demon) Yeah.

CHILDS: (As character) It's in your head.

UNIDENTIFIED PERSON #2: (As demon) No, no, no, no, no.

UNIDENTIFIED PERSON #1: (As child) It's in your head.

CHILDS: (As character) It's all in your head.

UNIDENTIFIED PERSON #2: (As demon) No, no, no, I'm deflating.

UNIDENTIFIED PERSON #1: (As child) It's in your head. It's all in your head. It's all in your head. It's all in your head. It's all in your...

MA: Hey. Hey, kid, are you OK?

UNIDENTIFIED PERSON #1: (As child) Uncle Adrian.

MA: You were mumbling in your sleep. Was it another nightmare about inflation?

UNIDENTIFIED PERSON #1: (As child) I had this dream. I met inflation. It was a demon and made of gas, and I went to Germany and to the grocery store. And the Federal Reserve was there.

MA: OK, OK, maybe we should call the doctor.

UNIDENTIFIED PERSON #1: (As child) No. No, listen. Inflation is happening. It's caused by consumer spending and supply bottlenecks and the economy reopening. But I'm not afraid of it anymore.

MA: You're not.

UNIDENTIFIED PERSON #1: (As child) No. I mean, inflation can get really bad if everyone believes it will. But that just means it's partly in our heads, Uncle Adrian.

MA: Wow. I mean, that's a really good point. But you should probably get some rest now, eh?


MA: OK, kiddo. Lights out.

UNIDENTIFIED PERSON #1: (As child) Good night, Uncle Adrian.

MA: Night.

UNIDENTIFIED PERSON #2: (As demon) Sleep tight. See you soon (laughter).


VANEK SMITH: This nightmare was dreamt up by Adrian Ma. It was brought to life by Brittany Cronin, with sinister sound design by Brendan Baker from Phenomephon, with hauntings from Robert Smith, Kenny Malone, Bettina Peck (ph), Brittany Cronin, Jamila Huxtable and Mary Childs. Taylor Washington summoned the facts, while Greg Rosalsky and Alex Goldmark haunted the halls. Kate Concannon and Viet Le are the show's evil eyes and ears. Till next time, this is The Indicator. I'm Stacey...

I'm not saying Stacey A-boo (ph). That is not happening.


VANEK SMITH: The PLANET MONEY episode was brought to life by Emma Peaslee and edited by Jess Jiang.


VANEK SMITH: Spawned by NPR.


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