What You Can Learn About Economics From The Big Mac

“A Roy-ale With Cheese®. What do they call a Big Mac©?” – Pulp Fiction

Picard doesn’t have an iPhone® he got unlimited Data with his Android©.

The last time I had a Double Quarter Pounder with Cheese™ from McDonalds© here in Modern Mayberry, it cost me $4.79. It was over a month ago, but I remember biting into the bun feeling the warm hamburger . . . warm? Dangit.

I looked down. It was raw. Ugh. I was done.

What our local McDonalds® misses in quality they make up for by taking longer than any other fast-food place in town. Why do we go there? The fries and the $1 drinks. Anything more complicated than that is like asking a puppy to land a P-51 Mustang. You know the puppy really wants to make you happy, but it’s really only good at looking cute and sleeping.

I think the employees at McDonalds© must like to sleep. A lot.

We have exactly five fast-food restaurants in town, and my theory is that there are have two excellent managers that make good food, promptly. We also have one manager that’s not great, but focuses on making the food tasty and the orders correct even though you might not get it in ten minutes. We have another that makes good ice cream, but the burgers taste like NHL® puck rejects. Then we have the last in line – the manager of McDonalds©.

I always wondered where McDonalds™ got fish shaped like that. The asquarium?

The Mrs. and I were going to stop at McDonalds® for fries and drinks at around 1 PM. There were six cars in line before the speaker at the drive-through. They weren’t moving.

We opted to go elsewhere but noticed that all six of the “wait here because your order surprised us” parking spaces were also full.

I asked The Mrs., “Do you think that every day the manager looks at his watch and says, ‘Dang, it’s busy at 11:30 AM. Again! Who could have predicted that? Why does this keep happening to us?’”

The Mrs. laughed. “Probably. I imagine he asks, ‘Don’t people know it’s our lunch break?’”

Yes, our McDonalds© is bad. Heck, one time I asked for two large fries and got about 300 small ones.

Also, this is really a cat, your honor.

But McDonalds® can be instructive. There are McDonalds© restaurants all over the world. We have exchange rates with other countries, but The Economist™ had a different idea to judge purchasing power around the world: The Big Mac™.

This is a little bit of genius. The ingredients of a Big Mac© are roughly the same no matter where you go, and the amount of labor required to produce a burger is pretty constant, so you can use that to judge what the real purchasing power of the dollar is versus other countries.

It’s a cool idea, and like most cool ideas, it started as a joke. But you can go here (LINK) and see that, as of January 12, 2021, the United States dollar was overvalued compared to most other currencies. That’s what happens when your currency is preferred for use in international trade. The Swiss Franc is generally the most overvalued: that’s what happens when people really trust you.

The Swiss may avoid inflating their currency, and they might be boring, but their flag is a plus.

Where is the Capital of Venezuela? In a Swiss bank account.

But the Big Mac® is useful for other things, too.

One of the problems of being in a pot of slowly boiling water is that you don’t really notice the temperature going up until it’s too uncomfortable to bear. One of my old standards was the $5 lunch. Before we moved to Alaska, spending more than $5 for a lunch at a fast food place was rare. Once we got to Alaska, we at least found a use for our spare kidneys: paying for lunch.

Just like a Big Mac™ is a Big Mac© all over the world, it’s a Big Mac® even going back into the past. So, we can judge purchasing power around the world, and through time. It’s like Back To The Future minus the Deloreans® and 88 gigaWatts.

Okay, what does a Big Mac™ tell us about inflation?

Plenty.

If you look at the following graph from Seeking Alpha®, you can see what a Big Mac™ should cost if the official, government Consumer Price Index (CPI) was telling the truth. In 2016, it would have cost about two bucks.

I once made a graph of my old girlfriends. It had an ex-axis and a why-axis.

Not even close to reality – by 2016 the Big Mac™ was closer to $5.06 according to The Economist’s™ data, which matches the graph. It’s $5.66 today, according to The Economist’s™ data, but cheaper at the Modern Mayberry McDonalds™ – I guess they save a lot of money by not turning the stoves on.

I was actually surprised at the data. I guess I’ve been sitting in the boiling water too long, but I was expecting that the price would have gone up more in the last four years. I guess not.

But that’s one hallmark of economic difficulty – a period of deflation hits first. As astute comments at this very site have noted – it’s more than the quantity of money, it’s the velocity.

The Federal Reserve™ could print $2 trillion and give it to Jeff Bezos and cause zero inflation – as long as Jeff didn’t spend any of it on his goblin-like girlfriend (or anything else, for that matter). Or maybe he should spend money on her. She’s so goblin-like I worry she’ll raid my village to steal children.

When people get scared or don’t have any money, they’re not spending it. When the stimulus is popped into zero-interest business loans, well, it goes right into the business bank account. If I owned a business, I’d take all of the free money the bank could give me. Unfortunately, the banks are finally on to my “laser printer and green ink” scheme so I’ll just let the government do that for all of us.

Small businesses aren’t making money. Landlords not receiving rent aren’t out partying. And none of these people are paying taxes on income they didn’t make.

Just like me, the government can keep printing money until it runs out of ink, and force enough through the system to make it look like there’s a functioning economy. But too much stimulus eventually fails even though this year I used my stimulus check to buy baby chickens: money for nothing and the chicks for free.

What does Putin want by thanksgiving? Turkey.

However, for presidential politics, the very best time to have a recession is in the first year of the first term. Then, hopefully, the economy is in a full recovery by the time of the next election. Maybe. That’s the old calculation. As Herbert Stein said, “If something can’t go on forever, it won’t.” The ultimate failure of a currency made up of nothing but hope and ink is always preordained. It can’t go on forever.

The only question is when it won’t.

But we did learn that the Big Mac© is useful in more ways than one this week. In Modern Mayberry, though, it might be undercooked, so eating it wouldn’t be one of the uses. The Mrs. doesn’t believe me – “John, raw meat at McDonalds™ is rare.”

Author: John

Nobel-Prize Winning, MacArthur Genius Grant Near Recipient writing to you regularly about Fitness, Wealth, and Wisdom - How to be happy and how to be healthy. Oh, and rich.

41 thoughts on “What You Can Learn About Economics From The Big Mac”

  1. I had a Big Mac for the first time in decades on a recent road trip. (I’m a Wendy’s fan, and I would die before stopping at a Burger King). I was stunned at how much smaller the Big Mac was from what I remembered. Which was this:

    https://qph.fs.quoracdn.net/main-qimg-7332f13d6948f4de734d7680af41af3e.webp

    Yum, yum.

    https://www.kidsnews.com.au/health/mcdonalds-burger-and-fries-still-fresh-after-10-years/news-story/879758af14c9ae701004184e82c9c1d3

    But to your main point. Food inflation and especially shrinkflation. It’s a thing.

    https://www.bloomberg.com/news/articles/2021-03-01/inflation-2021-malnutrition-and-hunger-fears-rise-as-food-prices-soar-globally

    1. The first Big Mac I ever had was after a JV football game when I was starving.

      It was amazing. It was also cooked . . . .

  2. Linked on Gab, because Gab is fun, and you deserve more positive attention.

    1. I called a motorcycle shop yesterday, for a specific bike. The salesman went into a litany of Atlas Shrugged. We have no inventory. When we place orders, we have no idea when they may arrive. They don’t even try to offer a month when something could deliver. Some days, a random order will arrive (even if we didn’t order it). One day, 4 kids size bikes arrived & were sold in 1 day for $1,000 OVER list price. Good luck with your search.

      1. One time I landed on a totally random article and posted the first thing that came to mind, prompting subsequent commentors to ponder what brand of glue I was sniffing.

        It was awesome.

  3. First they shrunk the Big Mac, edging it ever closer to a White Castle belly-bomb while jacking up the price. Then they started serving it undercooked (The Ikea Big Mac Kit. Some assembly required.)

    What I’d like to know is how you undercook a burger with a questionable meat content that is a mere 1/8 of an inch thick. Seems like you could just stare at it hard for a few seconds to put a good sear on it. That is some serious burger-flippin’ incompetence right there.

    Maybe its not a bad thing that the soaring minimum wage will be replacing a bunch of surly, indignant reparationalists and reconquistadors with more trustworthy machines. At least the robot won’t complain about having to wear the goofy hat, and you won’t have to wonder if it really washed its hands after using the restroom.

    1. Have you seen a Whopper Jr lately? It used to be a decent sized sammich but the last one I got was about the size of a half dollar.

      1. Can’t say that I have. My idea of ‘fast food’ is a fresh sandwich from a good old Lawn Guyland Italian deli. That, and diners are some of the few things I am really going to miss about living here when we finally escape New York.

    2. I owned a restaurant business 1979-89.

      An aside:
      I have little interest in restaurant meals.

      All the way back ‘back then’, restaurant suppliers touted the newest-best burger ‘sandwich’ simulated meat-type product:
      * a brown patty with painted ‘char’ marks
      I think of uncooked cow as some shade of red; this uncooked stuff came frozen from the warehouse with the appearance of ‘hot off the griddle’.
      No, thank you, I’m good.

      An aside:
      Any time I see the word ‘sandwich’ instead of ‘hamburger’ to describe a burger-style sandwich, I suspect some ‘law!’ requires this because the cow percentage falls below some arbitrary level… meaning the non-cow filler is above that arbitrary level.

      Although my final fast-food burger ‘sandwich’ was nearly two decades ago — a Carl’s Junior Six-Dollar I immediately returned for a refund because it stank of boiled cabbage, a result of the sixty-percent soy content — I stopped in a local-owned Eugene Oregon burger-joint called TOXIC WINGS AND FRIES [I am not making this up].

      An aside:
      I wanted to support TOXIC because they are an advertiser on the old time country-western radio station here in Eugene Oregon.
      That station is the only radioprogramming I can tolerate, and that would be maybe three minutes an hour of driving-time.
      The rest of my day is blessed silence.
      For a gear-head, the sound of an internal-combustion engine is preferable to just about any other noise… including and especially conversations with idjits.

      As I perused the TOXIC menu over the kosher, I was startled to see a toy-size ‘slider’ for us$5.
      Years ago out with chums, I remember seeing these on bar menus for six-eight bucks for a plate of a dozen.

      I conclude this tale by mentioning I walked away from TOXIC, grinning at the audacity of the bearded youngsters operating the place.

      The moral of the story:
      * how often do I not see the ‘frog-kettle temperatures’ because it is outside my area of interest?

      Notes:
      * KEED AM 1450 & FM 104.3. Eugene Classic Country Radio
      * https://www.toxicwings.com/

      1. Really good points – and you *must* write an autobiography! The bits that you’ve shared are awesome!

    3. I cooked my own burgers last night. Juicy. Thick.

      Cooked. 10x the taste, about the same cost for the fam as 2 Big Macs for six burgers.

  4. John – –

    I read about a McDonald’s in one of those liberal hellholes where $15 min wage is now required. The smart owner has installed a machine that recognizes your speech, confirms your order, signals a robot to cook and package and push the sandwich to the place where an over-paid human takes it in hand and pushes it on a robot supplied tray for you to pick up…. that is, after your credit card/Debit card is swiped.

    This, I believe, signals the future of fast food and the demise of entry level jobs for non-skilled youth and those eager to work retirement-fund needy seniors.

    Another of your written gems, economically speaking…. Thanks !!

    Your wry sense of humor-filled facts should be required reading in every high school. Or as Goldwater may have said, “Silliness in advance of education is a must to defeat the communists that lurk around every corner.”

    1. Thank you!

      Yes, it is a big deal – there is a point that a machine makes more sense than a person that may or may not show up.

  5. There is a solution to this problem, but it’s messy, and requires effort. That, and frogs that are suspicious of pots full of water.

  6. Here in my left coast village it’s $1.50 tacos and $7 dollar burritos from the local taco stand. Call in the order and hop in the Studebaker and drive the 2 miles to town, park right in front and grab the food and go.

      1. If you get one from a Mexican store or a roadside taco stand, then they are worth it! These aren’t your typical Taco bell burritos.

        1. Gotcha – I’ve been at some small places in Colorado or New Mexico that fit that bill – but it’s been a couple of years since I’ve been out there . . . .

  7. 1) Re: I always wondered where McDonalds™ got fish shaped like that. The asquarium?
    Don’t be silly; they caught it with block tackle.

    I’m here all week. Tip the waitresses. Try the veal.

    2) I have the slowest McD’s drive-thru in the county as the one between me, and the freeway on-ramp closest to home.
    The next closest one is 5 miles away. I have driven 20 miles to work, gone to a different McD’s drive thru, and still gotten my food faster than I do waiting in the line at the one in question.
    a) I’m putting up “Same Day Service” signs on their menu on April 1st. The way they work, they’ll be gone by April 2nd.
    2038.
    FTR, they found the orange cone with the “Drive Thru Closed” sign last year after only 2 days. Yes, really.
    b) Re: Le Big Mac. If it didn’t have Thousand Island on it, no one would eat the Lettuce Explosion Puckburger.
    c) Any Foole Knows: if you want an actual burger from the Golden Arches, you get the Double Quarter Pounder With Cheese, which is the only thing on the menu that resembles something you’d serve at a backyard BBQ if you didn’t want to get waterboorded in your own pool by the guests.
    d) If you order that, you always get shunted into Secondary Waiting (also known as Bring Your Own Pillow and Blanket), because actually cooking a double actual burger patty takes another 5 minutes, so they only make them to order. It takes longer when they have to re-read the employee handbook to remember how to work the grill first, and longer still if it’s New Guy At The Register Training Day, which apparently is every day ending in “Y”, but only from 6AM-9AM, 11AM-1PM, and 4PM-7PM, and all day on Sundays and holidays.
    e) If time is no object, after you hand them the money, give the register chucklehead an extra ten cents, and watch the fun as he uses a shout out, buys a vowel, dials a friend, screams for the manager, and takes his shoes and socks off to try and calculate how much money to give you back on your bill for $9.85, when you gave him $10.10. My personal best is 4 minutes and 25 seconds. And no, I’m not kidding. I’ve seen me do it.
    f) The next time (which will be something in the low 20s, this decade) they get 2/3rds of the items in the bag wrong on a single-person one menu item order, I swear to Buddha I’m getting a radio that transmits on their headset frequencies, and sitting in my Mission:Impossible stepvan in their parking lot on a Saturday and randomly screwing up all their orders all day. I can only take so much, and really, doesn’t everyone secretly want and deserve a McFlurry and a cone with every meal?

    Bonus Note:
    EMTALA is the Government Idea© that Everyone Deserves Health Care, buy forcing emergency rooms to treat people whether they can pay or not.
    How’s that working out? Well, anybody notice how many community hospitals that used to be around before 1986 are gone, and how long the wait for anything is at the ER for a broken leg versus how long the wait is if you took Fluffy in to the vet for a check-up or a sore paw?
    But keeping this on point, imagine if Uncle Sugar passed EMTALA for food.
    1) How long would McDonald’s stay in business if they had to give free burger meals out to every illegal alien and homeless guy who demanded one?
    2) What would a burger meal cost 10, 20, and 30 years later?
    3) How’s the cost of your health insurance been behaving since EMTALA was passed in 1986? And how much does that Tylenol cost at the hospital?
    If you can figure out the answers, pat yourself on the back: you’re smarter than the last 9000 people elected to federal office since the mid-1980s, combined.

    And Big Gov wants to make health care Free For Everyone!©
    Paid for with MOAR! Imaginary Fiatbux!!
    What could possibly go wrong?

    Would you like fries with that?

    1. John all the inflation is in the stock market. Soon it will be transferred at the speed of light to the american people.

      Aesop good to see you out in the wilderness more lately. Health care, what’s not funny is that in 2010 they said 20 million were not insured so we get obummer care. Now I have heard 40 million not insured but nobody talks about that. If the senate passes the stimulus bill it will no longer matter we are eff’d in a much shorter time frame which may be a good thing.

    2. Liked “c) Any Foole Knows: if you want an actual burger from the Golden Arches, you get the Double Quarter Pounder With Cheese.”… and that is what I do when going to McD’s.

      I haven’t ordered a Big Mac for a long time because of the shrinkflation. About 3-5 years ago, I would order the Grand Big Mac but then it disappeared.

  8. 1) Re: I always wondered where McDonalds™ got fish shaped like that. The asquarium?
    Don’t be silly; they caught it with block tackle.

    I’m here all week. tip the waitresses. Try the veal.

    2) I have the slowest McD’s drive-thru in the county as the one between me, and the freeway on-ramp closest to home.
    the next closest one is 5 miles away. I have driven 20 miles to work, gone to a different McD’s drive thru, and still gotten my food faster than I do waiting in the line at the one in question.
    a) I’m putting up “Same Day Service” signs on their menu on April 1st. The way they work, they’ll be gone by April 2nd.
    2038.
    FTR, they found the orange cone with the “Drive Thru Closed” sign last year after only 2 days. Yes, really.
    b) Re: Le Big Mac. If it didn’t have Thousand Island on it, no one would eat the Lettuce Explosion Puckburger.
    c) Any Foole Knows: if you want an actual burger from the Golden Arches, you get the Double Quarter Pounder With Cheese, which is the only thing on the menu that resembles something you’d serve at a backyard BBQ if you didn’t want to get waterboorded in your own pool by the guests.
    d) If you order that, you always get shunted into Secondary Waiting (also known as Bring Your Own Pillow and Blanket), because actually cooking a double actual burger patty takes another 5 minutes, so they only make them to order. It takes longer when they have to re-read the employee handbook to remember how to work the grill first, and longer still if it’s New Guy At The Register Training Day, which apparently is every day ending in “Y”, but only from 6AM-9AM, 11AM-1PM, and 4PM-7PM, and all day on Sundays and holidays.
    e) If time is no object, after you hand them the money, give the register jackhole an extra ten cents, and watch the fun as he uses a shout out, buys a vowel, dials a friend, screams for the manager, and takes his shoes and socks off to try and calculate how much money to give you back on your bill for $9.85, when you gave him $10.10. My personal best is 4 minutes and 25 seconds. And no, I’m not kidding. I’ve seen me do it.
    f) The next time (which will be something in the low 20s, this decade) they get 2/3rds of the items in the bag wrong on a single-person one menu item order, I swear to Buddha I’m getting a radio that transmits on their headset frequencies, and sitting in my Mission:Impossible stepvan in their parking lot on a Saturday and randomly screwing up all their orders all day. I can only take so much, and really, doesn’t everyone secretly want and deserve a McFlurry and a cone with every meal?

    Bonus Note:
    EMTALA is the Government Idea© that Everyone Deserves Health Care, buy forcing emergency rooms to treat people whether they can pay or not.
    How’s that working out? Well, anybody notice how many community hospitals that used to be around before 1986 are gone, and how long the wait for anything is at the ER for a broken leg versus how long the wait is if you took Fluffy in to the vet for a check-up or a sore paw?
    But keeping this on point, imagine if Uncle Sugar passed EMTALA for food.
    1) How long would McDonald’s stay in business if they had to give free burger meals out to every illegal alien and homeless guy who demanded one?
    2) What would a burger meal cost 10, 20, and 30 years later?
    3) How’s the cost of your health insurance been behaving since EMTALA was passed in 1986? And how much does that Tylenol cost at the hospital?
    If you can figure out the answers, pat yourself on the back: you’re smarter than the last 9000 people elected to federal office since the mid-1980s, combined.

    And Big Gov wants to make health care Free For Everyone!©
    Paid for with MOAR! Imaginary Fiatbux!!
    What could possibly go wrong?

    Would you like fries with that?

  9. If you put some Frankenfood outside the animals won’t touch it and it doesn’t age.
    The same ingredients in all things will be the globalist collective serf UBI utopia.
    The same food, cars, clothes, thoughts, wages, hovels, opinions, in all places.
    Inflation? Nixon had his revenge taking us off the gold standard.
    You can see how the dollar has shrunk dramatically since then.
    Locally laundry detergent is $5-6 and not for the family size, a roast is now $20, a really good steak is almost a luxury at around $25, gas is $2.75 for 87 in late winter, I quit smoking in the 1990’s but a pack of name brand smokes is $5 now, It was $1.25 in the late 90’s.
    In the 1970’s parents had the best mcmansion in the family while working full time as a trucker and teacher until pappy returned to the Army after a few years in civilian life.
    No way those occupations could get a two story house with four bedrooms and an in ground pool today.
    Remember the G. Gordon Liddy commercial where he is holding the postage stamp sized dollar?
    That’s inflation in one convenient easy to understand graphic.
    Two thumbs up for having the guts to put that synthetic dross lab created food in your system.
    After watching the Supersize Me documentary it was no more fast food ever.

    1. I haven’t watched that – I’ll have to give it a look.

      Yup – the signals are all there.

  10. In 1993, the cost of a Big Mac Value meal was $3.21 (I sold so many I still remember it going from $3.19 to $3.21 all these years later). Go compare the cost now, and see where inflation is really at.

  11. Agree on the pricing and economics points made. Another part is the quality of the ingredients in the standard Big Mac. While I have eaten fast food in New Zealand (where I currently live) about 10 times in 10 years (more on that in a minute) the quality can be different in different countries. Example with New Zealand using only the meat: Unless it has changed since the last time I looked a few years ago (definitely possible), McDonald’s over here uses only New Zealand raised beef. NZ beef is all free range grass fed (although the cheaper meat such as McDonald’s would use) is finished off with grain. Growth hormones are not allowed and prophylactic antibiotics aren’t either. There is also plenty of grain grown here so likely the cattle are fed that which means it is non GMO. Concentrated Animal Feed lots are not used for cattle. In other words, the beef used in the Big Mac in NZ is the equivalent of much more expensive beef than the McDonald’s uses in the U.S. (Again, all this is subject to change as NZ gradually succumbs to the globalist pressures which I have seen in the last 10 years). Wil be moving back to the U.S. later this year and we are already identifying where we can get quality food from that is less likely to be GMO, pesticide laden, etc. Plan to be in north Georgia rural.

    On fast food: Try to avoid it. As other comments have said in different words, much better quality by just making your own. Fast food is slow poison (and maybe not so slow by the likes of what you have observed in your town).

    P.S. – I worked at a McDonald’s in the Summer of 1980 in Springfiled, IL so have some experience with their food prep (at least from back then!) Serving a raw burger would be impossible if they were following the very standard processes.

    1. Good luck on that move! Sounds like your stuff will make it through the Panama Canal.

      Not only isn’t fast food as good as I can make at home, it’s more expensive.

      Yeah – this was a once in forever for us. I haven’t been back since.

  12. Two rock-and-roll ditties come to mind: WELCOME TO THE JUNGLE, and IT’S THE END OF THE WORLD AS WE KNOW IT AND I FEEL FINE. As far as fast food goes, you are better off nutritionally and financially with a PB&J sandwich on whole grain bread and a piece of fruit. Get your ass out of bed a little earlier and make your own lunch or make it the night before.
    I have been doing that for years(I’m 73 and still work two part-time jobs). If you follow a few simple ideas, you starve the corporate Leviathan, take better nutritional care of your body, and have money left over to cover the gasoline prices which are going through the roof. Or, instead of gasoline; buy other needful things. Stay vigilant. Bleib ubrig.

  13. Two rock-and-roll ditties come to mind: WELCOME TO THE JUNGLE, and IT’S THE END OF THE WORLD AS WE KNOW IT AND I FEEL FINE. As far as fast food goes, you are better off nutritionally and financially with a PB&J sandwich on whole grain bread and a piece of fruit. Get your ass out of bed a little earlier and make your own lunch or make it the night before.
    I have been doing that for years(I’m 73 and still work two part-time jobs). If you follow a few simple ideas, you starve the corporate Leviathan, take better nutritional care of your body, and have money left over to cover the gasoline prices which are going through the roof. Bleib ubrig.

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