Day 1691
The Price Stayed the Same. Everything Else Got Worse.
Corporate greed, money printing, & why the incentives are making everything $hittier.
Last night my good buddy Keenan came over for dinner and brought a bottle of wine. Great guy, great conversation, and eventually we got onto the topic of why everything has become so damn expensive. Keenan brought up corporate greed, which is a pretty reasonable explanation when you walk into a grocery store and somehow spend $150 on what appears to be three bags of food and a carton of eggs. I countered that I think the trillions of dollars created over the past several years have a whole lot more to do with it.
And then we moved on to other things. No argument. No dramatic revelation. Nobody stood up from the dinner table and declared that the Federal Reserve must be abolished before dessert. Which, if you know me, is something I do believe.
I actually think there’s something important in that. Keenan is a smart guy, and I love him. Just because we see something differently doesn’t mean I need to convince him I’m right. There’s a trap we fall into where we learn something, get excited about it, and suddenly feel morally obligated to enlighten everyone within a 15-foot radius. Congratulations, you’ve read three books about monetary economics, and now nobody wants to invite you to Thanksgiving.
But the conversation stuck with me because I think Keenan was identifying something real. Businesses absolutely do greedy, dishonest, shortsighted things. I’ve seen it. You’ve seen it. Anyone who has purchased a bag of chips recently and discovered that 70% of the contents were oxygen has seen it. The question I keep coming back to, though, is why our economic system so often seems to reward the people making things worse.
As Charlie Munger famously put it, “Show me the incentive, and I’ll show you the outcome.” I think about that constantly, because if you want to understand why people behave the way they do, you should probably start by looking at what they’re rewarded for doing.
The Honest Guy Looks Like the A$$hole
I watched a video recently that illustrated this beautifully. Imagine two businessmen making the same food product. Both start with something delicious, nutritious, and made with ingredients you’d actually recognize without a chemistry degree. Both want to make a profit. Both have employees to pay, families to feed, and customers they hope will keep coming back.
Then their costs start rising. Ingredients cost more. Labor costs more. Shipping costs more. The electricity bill starts looking like a mortgage payment. Both men face a decision.
The first businessman decides he’s going to maintain the quality of his product. He likes what he makes, he believes in it, and he refuses to compromise. Unfortunately, that means he has to raise his prices. His product goes from $5 to $6, and customers understandably start wondering why the hell they’re paying more for the same thing.
The second businessman has another idea. He keeps his product at $5, but gradually replaces expensive ingredients with cheaper ones. Maybe there’s more sugar, more filler, cheaper oils, or simply less actual product in the package. Whatever corners he can cut without customers immediately noticing, he cuts. He might even slap a beautiful green label on the front that says NOW WITH MORE NATURAL GOODNESS, because apparently the marketing department has discovered comedy.
Guess which one looks greedy? The honest businessman has visibly raised his prices. The other guy appears to be doing consumers a favor by keeping his prices steady. Except one of them is actually giving you what he promised, while the other is quietly reducing what your money buys.
There’s a term for reducing package sizes while keeping prices steady: shrinkflation. When companies quietly degrade the quality of their products or services, people sometimes call it enshittification. I personally think that second term deserves a Nobel Prize in economics, preferably presented by a man holding a half-empty box of cereal.
Now, cheaper ingredients aren’t automatically bad, and there’s nothing wrong with creating a less expensive product for people who want one. The problem is when a business quietly changes what it’s selling while counting on customers not to notice. And the deeper problem is that we have created conditions where the person maintaining quality can be punished for being transparent, while the person cutting corners can be rewarded for hiding it.
That’s not me trying to say that every business is evil. It’s an argument that incentives matter, and the price tag doesn’t always tell you the full story.
Ayn Rand Understood Something About Money
There’s a scene in Ayn Rand’s Atlas Shrugged that I absolutely love. Francisco d’Anconia, a wealthy copper industrialist, finds himself at a wedding reception surrounded by members of the upper crust, including people whose relationship with actual productive work is questionable at best. Someone repeats the familiar accusation that money is the root of all evil.
Francisco responds by asking, “Have you ever asked what is the root of money?”
What follows is one of the most interesting philosophical defenses of money I’ve ever encountered. Rand’s argument, delivered through Francisco, is that money represents something profoundly human: our ability to produce value and voluntarily exchange it with one another.
Think about how beautiful that is. A farmer grows food. A carpenter builds a house. A mechanic fixes an engine. A programmer writes software. None of them has to personally produce everything they need to survive. They can specialize, become excellent at something, and exchange the fruits of their labor for the fruits of somebody else’s.
The farmer doesn’t need to learn how to build an iPhone, and Tim Cook doesn’t need to raise chickens in his backyard to have eggs for breakfast. Although I would lowkey watch a YouTube series of Tim Cook attempting to run a chicken farm.
Money makes this cooperation possible at enormous scale. It allows strangers who may never meet, speak the same language, or agree on anything politically to help one another through voluntary exchange. I give you something you want, you give me something I want, and both of us walk away better off.
There’s something genuinely moral about that. I don’t need to take from you to improve my life. I can create something valuable enough that you willingly trade with me.
That’s the distinction more people need to understand. Making money by creating value is not the same thing as making money by acquiring power over other people.
One enriches society through production and trade. The other can enrich a select few by changing the rules in their favor.
The Problem Isn’t That People Want More
I don’t think greed suddenly appeared in 2020. Human beings have wanted more wealth, more comfort, more status, and more security for approximately as long as we’ve been human beings. I would not be surprised to learn that the first caveman who discovered fire immediately started wondering whether he could charge the neighboring cave a berry subscription fee.
Greed can lead people to cheat, lie, exploit, and behave horribly. But the desire to improve one’s circumstances can also motivate someone to start a business, invent a better product, work longer hours, or take a risk that benefits thousands of strangers. The difference often comes down to what the system rewards.
In a competitive market with meaningful consumer choice, the path to getting rich can be making something so useful that millions of people voluntarily pay you for it. You build a better product, deliver a better experience, or solve a problem nobody else has figured out. Your customers benefit, you benefit, and hopefully your employees benefit too.
But now imagine another path to getting rich. Instead of building a better product, you hire lobbyists. You secure a subsidy. You convince regulators to create barriers your smaller competitors can’t afford to navigate. You get favorable financing, government guarantees, or a bailout when your brilliant business strategy turns out to be less brilliant than advertised.
Why spend ten years building something people love when you can spend ten months getting a politician to make your competition illegal?
That’s cronyism. And while people sometimes call it capitalism, the two deserve to be distinguished. One relies on customers choosing to give you their money. The other relies, at least in part, on political power determining who gets special treatment.
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Of course, markets can fail too. Companies can deceive customers, dominate industries, and abuse their positions without any government assistance. Not every regulation is corrupt, and not every public intervention is a giveaway to someone’s golfing buddy. But when the government grants privileges to favored businesses, we shouldn’t pretend the resulting profits are proof those businesses created more value.
And when the same people who helped design those privileges turn around and lecture the public about corporate greed, I think we’re allowed to ask a few questions.
What Happens When the Money Itself Keeps Changing?
Here’s where I think we get to a much bigger issue. Since January 1959, the U.S. M2 money supply has grown from approximately $287 billion to $23.4 trillion as of September 2026. That’s roughly 6.7% compounded annually over nearly 68 years. Between February 2020 and April 2022 alone, it expanded from approximately $15.5 trillion to $21.8 trillion.
Those numbers are enormous. And no, that doesn’t mean consumer prices rise by 6.7% every year. Money supply growth and price inflation aren’t identical. Economic output, the demand for money, lending activity, and how quickly money circulates all matter. The pandemic inflation surge also involved supply chain disruptions, energy shocks, changes in consumer demand, and business pricing decisions.
But I find it remarkable how casually we accept a monetary system in which the supply of money can expand by trillions of dollars, while the average person is left trying to figure out why their paycheck doesn’t seem to stretch as far as it used to.
Imagine playing Monopoly with your family, except halfway through the game your uncle announces that he’s going to add another $50,000 to the bank because the economy needs stimulating. And wouldn’t you know it, Uncle Dave also owns Boardwalk and Park Place.
Everybody is still technically playing Monopoly. But I wouldn’t exactly describe it as a level playing field.
Our actual monetary system is obviously more complicated than Monopoly. Money and credit are created through banking activity as well as central bank policy, and whenever monetary expansion is announced, there’s no shortage of politicians and financial commentators ready to explain why it’s absolutely necessary. Sometimes monetary intervention can serve legitimate purposes during financial crises, but I think the legacy media too often repeat the official justification without adequately questioning who benefits and who ultimately pays the price. The distributional consequences matter. People with access to cheap credit, financial assets, and favorable financing can experience a very different economy from the family whose principal assets are a paycheck and a savings account.
The wealthy can borrow against appreciating assets. The business owner can adjust prices. The financially connected can sometimes get a seat at the table when policy is being written. Meanwhile, the average family is looking at the grocery receipt wondering how a week’s worth of food costs more than their parents once spent on a car payment.
And remember our two businessmen? This is where the problem becomes especially interesting. When costs rise, the producer who maintains quality may have to charge more, while the producer who quietly cuts quality can preserve the appearance of affordability. Inflation doesn’t automatically cause dishonesty, but it can make those trade-offs more painful and more tempting.
Then we look around, see prices rising and products getting worse, and conclude that the whole problem is greedy corporations. The diagnosis is incomplete. We should be questioning corporate behavior, but we should also be questioning the monetary and political incentives under which corporations operate.
Bitcoin Doesn’t Fix Human Nature. That’s Not the Point.
This is where Bitcoin enters the picture for me.
I’m not going to sit here and tell you Bitcoin is going to eliminate greed, make every corporation honest, or suddenly turn politicians into selfless public servants. If that were possible, I’d be mining blocks while walking on water, and unfortunately I’ve yet to figure out the second part.
What Bitcoin does offer is a different foundation for money. Since its launch in 2009, Bitcoin has operated with a publicly verifiable issuance schedule designed to produce a maximum supply of just under 21 million bitcoin. Its rules are enforced by a decentralized network of participants rather than a central bank committee. Changing those rules is technically possible, but no single politician, banker, or developer can simply decree that everyone’s Bitcoin should be diluted.
That’s a positive change in the relationship between individuals and money, if you ask me.
Bitcoin doesn’t guarantee that your purchasing power will remain stable. Its market price is volatile, sometimes brutally so. It doesn’t eliminate fraud, and it doesn’t prevent theft, coercion, or terrible decisions. Self-custody also comes with real responsibility because losing your keys can mean losing your money.
But when properly self-custodied, Bitcoin gives people a way to hold and transfer a monetary asset without relying on a bank to maintain their balance or a government to preserve its issuance rules. You can verify the supply yourself. You can choose to hold your own keys. And no one can create additional bitcoin under the existing consensus rules just because an election is coming up or a favored institution needs rescuing.
I think the implications of that will be profound and positive for humanity. If you can’t increase the supply of money whenever circumstances become uncomfortable, you have to reckon more directly with scarcity, opportunity costs, and the consequences of your decisions. If people have stronger control over their savings, they may be better positioned to plan for the future. And when monetary rules are more predictable, there’s at least the possibility of encouraging more long-term thinking and cooperation.
None of that is guaranteed. Bitcoin doesn’t magically create equal wealth, equal opportunity, or honest businesses. But I believe a monetary system with predictable rules and meaningful individual ownership gives us a better starting point.
Ultimately, I want people competing to create something valuable, not competing to see who can get closest to the money printer. I want the guy making good food to be rewarded for making good food. I want the entrepreneur taking risks and building something beautiful to become ridiculously wealthy if millions of people love what he’s created. I want families to be able to save the fruits of their labor with confidence in the rules governing their money.
And I want the guy quietly replacing the food in my food with cheaper and cheaper garbage to face some actual competition. Preferably from someone who knows what a tomato tastes like.
Let’s Make the Pie Bigger
I keep coming back to something Francisco understood: money is supposed to help human beings cooperate.
When we exchange value voluntarily, we have an opportunity to make one another wealthier. That’s a positive-sum game. You don’t need to lose for me to win, and I don’t need to become poorer for you to prosper. We can build businesses, grow food, invent technologies, raise families, create art, and make the world a more abundant place.
That’s what I think a healthy economy should encourage. Not a world where everybody has exactly the same amount of money, because people have different talents, ambitions, needs, and priorities. But a world where the rules are predictable, property is respected, and the best path to prosperity is serving other human beings.
And if you want to become filthy rich doing that, God bless you. Build something incredible. Make a billion dollars. Make ten billion. Just don’t ask the government to kneecap your competition while you do it.
I don’t fault Keenan for thinking corporate greed is the problem. There’s plenty of it, and some companies deserve every bit of criticism they receive. But I think we miss something fundamental when we stop at the greed and never investigate the incentives producing the behavior.
The next time a company raises its prices, maybe ask why. And the next time another company proudly announces that it’s still the cheapest option, maybe take a closer look at what you’re actually getting. Maybe they’ve figured out how to make a better product for less money. Or maybe they’ve spent the past decade quietly replacing quality ingredients with cheaper substitutes, shrinking the portions, and cutting every corner they can find. Sometimes the cheapest product is the cheapest precisely because they’ve been making it worse for years. The highest price doesn’t always mean the worst deal, and the lowest price doesn’t always mean you’re getting a bargain. Sometimes you’re just paying less to get a whole lot less.
As for Keenan, I hope we have many more dinners together. I hope he keeps bringing wine, we keep challenging each other’s thinking, and neither of us ever feels the need to win every conversation. I have no interest in turning friendship into a debate club where the loser has to wash the dishes.
I’d rather live in a world where we can disagree about economics over a good bottle of wine, where people are free to build wealth by creating things others genuinely value, and where the money we use to measure that value isn’t subject to somebody else’s whims.
And if nothing else, I’d like to buy a bag of chips that’s actually full of chips. I don’t think that’s too much to ask!
11/7/26
Conor Jay Chepenik
