Summary:

This article talks about panflation (pan- everything, inflation- devaluation of goods), which is the inflation of everything under the sun. In the article, several types of inflations (not the usual monetary ones) are mentioned. For example, there is size inflation, where the labeled sizes are now getting larger and accommodating obese people. Because of this, people would not think that they are getting bigger, and would continue with their unhealthy diets as they are always able to fit into that size M shirt. Size inflation also helps companies to earn more, as consumers or more likely to spend if they are able to fit into smaller sizes. In addition to clothing size, food size is also getting larger. The smallest size for a Starbucks coffee is Tall, and the smallest size for a pizza is Regular. Because of these, people are less motivated to fight the flab. There is also the inflation in the travel industry. Everything in the industry, from hotels (the past highest standard, a 5-star hotel, is no longer the highest standard), to hotel rooms (deluxe is the new standard), to airplane class (instead of the usual economy class, there are many fancy names for it), are all being inflated. There is also grade inflation, where A-grades are being given out freely to students. This in turn affects the entire education system, as the brightest minds are seeing their grades being compressed, and employers are finding it harder to differentiate between students who are really smart and those who had their grades inflated to an A-grade. Finally, the last type of panflation is that of job title inflation. To make workers feel better about themselves, employers are giving out posh titles rather than increasing wages. This then distorts the entire market, as the job title is no longer representative of the work done by the individual. For example, a receptionist can be called the Director of First Impressions, and the ticket inspector can be called the Chief Revenue Protection Officer.

Commentary:
This article has definitely highlighted the effect (especially psychologically) of panflation on our lives. Having been through many of these types of panflation, the most relatable one for me would be that of grade inflation. Grade inflation has been prominent in our school, especially since our school can be considered to be a new one, and our diploma has not been recognized as a proper qualification outside of Singapore yet. With nothing to compare to, the NUS High School diploma was considered to be a qualification of its own class. However, with our peers in the polytechnics graduating with a full Grade Point Average (GPA) of 4.0 out of 4.0, and those in the junior colleges obtaining straight As for their A-levels, the NUS High School diploma was sure to be behind these, as we were averaging a 3.5 out of 5.0 GPA. Colleges and universities would, however view the NUS High School graduates similarly as the Junior Colleges and Polytechnic graduates. Thus, as we were at an disadvantage when

compared to them despite our more rigourous cirriculum, there was a need to inflate our grades such that we could be comparable to our peers not in NUS High School. Having been in the intermediate stage in this period of NUS High, I have seen my grades raise from grade Bs and Cs to A+s and As, and my GPA increasing from 3.7 to a 4.8. Although I feel that this grade inflation has resulted in grade compression of the smarter students in our cohort, having the average score increasing also makes me feel better as the motivation to work hard and not fall back down is much higher than before. The effect of grade inflation, however, might take its toll on the junior years. With many students getting a GPA of 5.0, it will be hard to judge in the future whether the students are truly deserving of that 5.0, and whether it truly reflects their ability. The grade distortion resulting from this would then undermine the creditability of our diploma. (Since many are getting straight As and 5.0s, wouldnt that then mean it would be easy to obtain that?) Hopefully my fears are unfounded, but with panflation being so prominent in every area of our lives, it is really like a virus, just like how the article describes it. Things will continue to upsize, and gradually, we will not realize it and stop it. Furthermore, with obesity worldwide increasing (with increasing affluence), more has to be done to stop this upsizing, and instead converting it into downsizing. Maybe then, the effects of panflation can be stopped, and sizes, grades and job titles will provide a true reflection of what they are.

The devaluation of everything

The perils of panflation

A virulent monster is dangerously out of control. Let us slay it together
Apr 7th 2012 | from the print edition

PRICE inflation remains relatively subdued in the rich world, even though central banks are busily printing money. But other types of inflation are rampant. This panflation needs to be recognised for the plague it has become.

Take the grossly underreported problem of size inflation, where clothes of any particular labelled size have steadily expanded over time. Estimates by The Economist suggest that the average British size 14 pair of womens trousers is now more than four inches wider at the waist than it was in the 1970s. In other words, todays size 14 is really what used to be labelled a size 18; a size 10 is really a size 14. (American sizing is different, but the trend is largely the same.) Fashion firms seem to think that women are more likely to spend if they can happily squeeze into a smaller label size. But when three out of four American adults and three out of five Britons are overweight, the danger is that size inflation reduces womens incentive to eat less. Meanwhile, food-portion inflation has also made it harder to fight the flab. Pizzas now come in regular, large and very large. Starbucks coffees are Tall, Grande, Venti or (soon) Trenta. Small seems to be a forbidden word. Inflation is also distorting the travel business. A five-star hotel used to mean the ultimate in luxury, but now six- and seven-star resorts are popping up as new hotels award themselves inflated ratings as a marketing tool. Deluxe rooms have been devalued, too: many hotels no longer have standard rooms, but instead offer a choice of deluxe" (the new standard), luxury, superior luxury or grand superior luxury. Likewise, most airlines no longer talk about economy class. British Airways instead offers World Traveller; Air France has Voyageur. Sardine class would be more honest. The value of frequent-flyer miles is also being eroded by inflation: it is increasingly hard to book free flights; they cost more miles, and redemption fees have increased. This was inevitable: airlines have been issuing so many miles (for spending on the ground as well as in the air) that the total stock is worth more than all the dollar notes and coins in circulation. Central bankers would shudder at such reckless inflationary policieswere they not themselves earning triple miles up in first class. Some other strains of inflation have more serious economic effects. One example is grade inflation, the tendency for comparable academic performance to be awarded higher grades over time. In Britain the proportion of A-level students given A grades has risen from 9% to 27% over the past 25 years. Yet other tests find that children are no cleverer than they were. A study by Durham University concluded that an A grade today is the equivalent of a C in the 1980s. In American universities almost 45% of graduates now get the top grade, compared with 15% in 1960. Grade inflation makes students feel better about themselves, but because the highest grade is fixed, it also causes grade compression, which distorts relative prices. This is unfair to the brightest, whose grades are devalued against those of average students. It also makes it harder for employers to identify the best applicants. Fight the flab Employers are themselves distorting the jobs market with job-title inflation, which has recently accelerated because a fancier-sounding title is cheaper than a pay rise. Firms are awash with an excess of chiefs and directors, such as Director of First Impressions (receptionist) and Chief Revenue Protection Officer (ticket inspector). This is not just a laughing matter. Job-title inflation has economic costs if it makes the jobs market more opaque and makes it harder to assess the going pay rate.

Inflation of all kinds devalues everything it infects. It obscures information and so distorts behaviour. A former German central banker, Karl Otto Phl, compared inflation to toothpaste: easy to squeeze out of the tube, almost impossible to put back in. The usual cure, monetary and fiscal tightening, will not work for panflation. Women will never squeeze back into their old clothes unless they reject size inflation. Instead, it is time for everybody to tighten belts (literally) and fight all sorts of inflationary flab.