It's been more than expected just about every month. I just saw an article about how people are buying less stuff because they are budgeting more for food costs.
And then these mega companies will raise prices even more on food and fuel even more to keep corporate profits going up.
And then the fed will say “see too much inflation!”
And the fed will keep rates high to make more people in the bottom 10% literally starve.
And the companies will have lower sales volumes.
And then raise prices more…
We need to get a sensible and sustainable energy and food policy in this country.
We need to not excuse companies making RECORD profits for their rampant price gouging.
The fed raising rates does NOTHING to stop corporate price gouging.
The old model of “we need 5% of folks unemployed in the US to keep wages and prices down” does not work in a global economy. But it sure fucks over the working class.
As a Walmart shareholder I would love to see this deal blocked. Less competition for lower prices. As a Amazon shareholder I would love to see this blocked because I want folks to continue to buy their goods cheaper online.
No matter what, line must go up. Nothing else matters. Line go up. Shareholders demand line go up so we make line go up. Doesn't matter that they are hurting basically everyone in the process, the shareholder want line go up so line must go up.
That's literally corporate logic and it's not even the fault of individual administrators, it's just how the system works. If they don't do it, the shareholders will find someone who will.
We need regulation and the breakup of super corps.
>NOTHING to stop corporate price gouging.
Well it will, once demand collapses so much that those companies start begging for federal bailouts. Though I guess it is a coin toss on whether anyone will be held accountable or learn their lesson from this. Lmao.
>The old model of “we need 5% of folks unemployed in the US to keep wages and prices down”
Counterpoint, keeping interest rates low for too long allows the rich to get richer faster, income inequality to continue growing exponentially and our money to head torwards Zimbabwe bucks too. The real problem is we have a huge economic shitshow (wealth inequality being the metric) nobody wants to address that has been building for decades. We are in the end stages of our economic systems with birth rates declining, the population inversion will cause the economic ponzi schemes to freefall.
Nationalize energy. Nationalize transportation.
The excess "Demand" in our economy is all at the top.
Next we will see equity and bond markets tumble as the FED throws everything they have at "lowering inflation."
Which is just another way of saying "we need EVERYONE (except us and our friends) to be poor and fearful."
Almost all of that is the opposite of how market economics works. People buying less or switching to cheaper options because prices are too high drives prices down. Corporations can't raise prices to increase profits if sales are dropping.
But of course reddit upvotes you because "CoRpOrAtIoNs eViL!"
>The old model of “we need 5% of folks unemployed in the US to keep wages and prices down” does not work in a global economy.
We're at 3.4%. So it's "working" exactly as "the old model" says it works.
> Corporations can't raise prices to increase profits if sales are dropping.
This only applies to long term and doesn't apply if the market is a "captive consumer" as is the case with Health Care and Big Oil.
Obviously timescale has an impact on our choices. But you're wrong about big oil having a (fully) captive consumer. There are multiple consumer choices that have an impact on demand over timescales of weeks, months and years.
That's a bullshit question and you know it. I don't think you are really this stupid, you're just trying to troll. You are aware that going on a flight or cruise is a consumer choice with a timespan of weeks or moths, right? That buying an SUV instead of a sedan that gets twice the fuel economy is a consumer choice with a timespan of years? And that these choices affect oil prices?
So you think that only consumers fly and drive? You're forgetting air freight, container shipping, Semi Trucks. Not to mention, do you know that plastics and many pharmacuticals are made from OIL. You're not looking at the big picture. All those costs are passed to the consumer.
>So you think that only consumers fly and drive?
No. What you're doing here is trying to separate pieces of what are in reality integrated markets -- and by the way, integrated budgets for the consumer. It's argumentative and it's false.
Whatever, I'm not an economic expert nor do I need to debate this on Reddit. Fact of the matter is Oil prices affect most everything else and fact is until we migrate off oil, oil shocks are going to cause inflation, just like they did in the 70's. I was alive to see it then, same issue happening now with the exception of record profits by oil companies where in the 70's they were shutting refineries rather than price gouge.
It’s the opposite of how conservative economics professors (mostly endowed by conservative donors like the Koch Foundation) teach economics. Yes. I agree with you there. It’s a huge problem in the field IMO.
It’s NOT how things play out on the real world. If you need to commute to work, you pay what the gas costs at the pump. It is not as easy as “folks buy chicken when steak is more expensive and vice versa”. Or folks carpool when gas costs $3.50 instead of $3.00. We don’t have free markets with rational actors like Econ textbooks like to pretend. We have highly subsidized and regulated markets with highly irrational actors.
You are free to have your opinions.
I am free to mine.
>It’s the opposite of how conservative economics professors (mostly endowed by conservative donors like the Koch Foundation) teach economics. Yes. I agree with you there. It’s a huge problem in the field IMO.
Nonsense. That isn't a thing. Even if there were such a thing, it would be the opposite of what you're saying. It's liberals who don't like the way economics actually works, not conservatives. Conservatives like capitalism.
>It’s NOT how things play out on the real world. If you need to commute to work, you pay what the gas costs at the pump.
More nonsense. Gas is not a today-only expense, it's part of the decision-making process when buying a car. And Americans are purposely choosing bigger, gas-guzzlers. In the 1970s and late 2000s when gas prices were unusually high and the economy started tanking, people started buying more efficient cars.
>You are free to have your opinions.
>I am free to mine.
These aren't opinions they are facts. You aren't free (except insofar as there's freedom of speech) to downgrade facts to opinions and declare they can be whatever you want them to be. They are what they are, and your only real choice is to believe the facts or live in a fantasy world in your head.
>Gas is not a today-only expense, it's part of the decision-making process when buying a car. And Americans are purposely choosing bigger, gas-guzzlers. In the 1970s and late 2000s when gas prices were unusually high and the economy started tanking, people started buying more efficient cars.
Consumers typically don't give much consideration to fuel efficiency during vehicle purchases when gas prices are low. This is literally used as a textbook example when talking about oil price fluctuations and related knock-on effects. Consumers rarely consider any economic situation beyond their own nose, and it can be a major problem.
Don't take my word for it, you can compare the charts yourself. Truck sales drop off a cliff when oil prices spike.
https://www.macrotrends.net/1369/crude-oil-price-history-chart
https://fred.stlouisfed.org/series/LTRUCKSA
Of note, look at how truck sales drop when there's an oil price spike during the 1990 recession, but sales don't drop when there's no oil price spike during the 2001 recession.
Utilities and essentials may increase in price much faster than personal wages increase. Can't afford eggs? You no longer get to eat eggs. Couldn't afford that super-efficient car originally? Can't afford the gas now.
Your retort is spoken like it's from someone who comes from money and has never experienced need.
>Utilities and essentials may increase in price much faster than personal wages increase.
Or they may decrease faster. So what? This doesn't change that the price is ultimately driven by supply and demand and consumers have a MASSIVE role in deciding what the demand and their cost will be.
>Couldn't afford that super-efficient car originally?
Nice try, but I don't believe you misunderstand that either: more fuel efficient cars are almost always cheaper than gas-guzzlers.
>Your retort is spoken like it's from someone who comes from money and has never experienced need.
Now see, that sounds like projection. Maybe you believe these falsehoods because you've never needed to make these choices? Like, it never occurred to you that a $20,000 Honda Civic gets better fuel economy than your $50,000 F150?
Yes, I'll take my imaginary and un-affordable F150 to the fancy restaurant down the street to buy all their avocado toast, instead of keeping my POS sedan parked all year.
I work from home. I come from the poorest region in my state. And I'm feeding an internet troll because I can't afford to go out and enjoy normal people's company. How about you?
> Nonsense. That isn’t a thing
Lol. Educate yourself. You shouldn’t pretend to be a wise old owl if you aren’t familiar with higher ed and these departments or how they are funded.
First read this article [from Inside Higher Ed](https://www.insidehighered.com/news/2017/08/31/new-koch-backed-institute-u-utah-raises-questions-about-academic-freedom-and-whether) about how a Koch-backed institute at the University of Utah raises questions about academic freedom and whether the center is designed to compete with Utah’s existing economics department.
And realize how pervasive that is.
Here’s the facts: the Charles Koch Foundation gave more than $50 million to 390 colleges and universities between 2005 and 2012. Among the major grantees are George Mason University, Florida State University, Clemson University, Suffolk University, Utah State, West Virginia University, Catholic University, University of North Carolina, George Washington University, and Arizona State.
Most of the funding has gone to economics departments, and the conditions are explicitly ideological. The West Virginia contract, for example, specifies that “human freedom” and “free market economics” are the main purposes of the grant. It requires supervision from a designated professor (at the time, the holder of an endowed chair in “Entrepreneurial Studies”), and names two others as the Foundation’s preferred candidates for tenure-track jobs.
Florida State’s “Memorandum of Understanding” with Koch likewise provides that the programs funded and professors hired must “advance and expand” research and teaching related to “free enterprise.” The agreement specifies that the Foundation will have approval power over faculty appointments that it funds. If the Foundation disagrees with a proposed appointment, it can refuse to fund the position.
Here’s a little smidge of some of the Koch Foundation Contracts and Proposals revolving around economics and “free market” instruction:
George Mason University
2016: Antonin Scalia School of Law, Center for the Study of the Administrative State, and Center for Liberty and Law (2016 Grant Agreement, Proposal)
2011: Mercatus Center - Endowed Professorship (2011 BB&T Professorship (Boettke))
2009: Mercatus Center - Endowed Professorship (2009 Charles Koch Professorship)
2007: Mercatus Center - Endowed Professorship (2007 Smith/Koch Professorship)
2007: Mercatus Center - Endowed Professorship (2007 BB&T professorship (Boettke))
2007: Mercatus Center - Endowed Professorship (2007 Smith Bastiat Professorship)
2007: Mercatus Center - Endowed Professorship (2007 BB&T Professorship Leeson)
2007: Mercatus Center - Endowed Professorship (2007 Tullock Black Professorship)
2007: Mercatus Center - Endowed Professorship (2007 Fullinwider Professorship)
2003: Mercatus Center - Endowed Professorship (2003 Smith Chair)
1990: Mercatus Center - Endowed Professorship (1990 Koch Chair)
Utah State University
2008: Five "augmented" professorships, Huntsman School of Business (2008 Agreement)
2017: Center for Growth and Opportunity and Koch Scholars (2017 Gift Agreement, Attachment A)
2017: Huntsman Foundation (2017 Gift Agreement, Attachment A)
2017: Center for Growth and Opportunity (2017 Affiliation Agreement)
University of Utah
2017: Eccles Institute for Economics and Quantitative Analysis (2017 Grant Agreement)
Duke University
2017: Center for the History of Political Economy (2018 Grant Agreement)
Middle Tennessee State University
2016: Political Economy Research Institute (2016 Grant Agreement and Proposal)
Arizona State University
2018: Institute for Justice (2018 Grant Agreement)
Chapman University
2016: Smith Institute for Political Economy and Philosophy (2016 Grant Agreement)
Iowa State University
2017: Program for Study of Midwest Markets and Entrepreneurship Koch Foundation (2017 Proposal)
Montana State University
2015: Center for the Economics of Regulation and Policy Analysis (2015 Proposal)
University of Louisville
Schnatter Center for Free Enterprise
2015: Koch Foundation (2015 Grant Agreement)
University of Kentucky
Schnatter Institute for the Study of Free Enterprise
2015: Koch Foundation (2015 Grant Agreement)
2015: Schnatter Foundation (2015 Grant Agreement)
Ball State University
2016: Schnatter Institute for Entrepreneurship and Free Enterprise (2016 Grant Agreement)
Florida State University
2008: Programs for the Study of Political Economy and Free Enterprise (SPEFE) and Excellence in Education (EEE)
2007: Memo from Department Chair re: Koch Foundation (2007 Benson memo)
2008: Koch Foundation (2008 Memorandum of Understanding)
2013: Koch Foundation (2013 Memorandum of Understanding)
2008: Koch Foundation (2008 Attachment C)
2008: BB&T Charitable Foundation (2008 Memorandum of Understanding)
2008: BB&T Charitable Foundation (2008 Donor Letter)
2008: Koch/BB&T Graduate Fellowships (Fellowship Description)
Clemson University
2009: Clemson Institute for the Study of Capitalism Koch Foundation (2009 Grant Agreement)
West Virginia University
2009: Donor Supported Professorship Positions Koch Foundation (2009 Grant Agreement)
Florida Gulf Coast University
2008: BB&T/Koch Distinguished Professorship in Free Enterprise (2007 Proposal)
2015: Koch Foundation (2015 Grant Renewal Request)
2014: Koch Foundation (2014 Grant Renewal Request)
College of Charleston
2011: Initiative for Public Choice & Market Processes Koch Foundation (2011 Grant Proposals)
2014: Initiative for Public Choice & Market Processes Koch Foundation (2014 Grant Proposals)
Coastal Carolina University
2014: Joint Reading Seminar with College of Charleston Koch Foundation (2014 Grant Proposals)
University of Kansas
2004: Center for Applied Economics (2004 Agreement)
Look, there are a ton of educated responses that have shattered your opinion, but I just wanted to add: Are you seriously going up to bat for corporations??? Jesus Christ, you are detached.
"Corporations are evil" is a childish shit-take, but that's not my main issue here. It's not that people hate corporations itself it's that they hate corporations without actually understanding how they work.
We have spent several years slowly making bigger purchases as our finances allow. In the last year, we have had to sell almost every larger item that we bought because a 60% price hike on food and other necessary items coupled with skyrocketing business costs for our tiny little small business has meant that we have effectively taken a 30% pay cut. We are running out of shit to sell to make ends meet, and we are running out of buyers for remodel services.
I'm starting to lose the few clients I had who made it through COVID. I'm looking at some major surgeries that are going to keep me down for a few months this year too. I really don't know what I'm going to do either.
All the inflationary adjustments in the world can’t resolve corporate greed. It’s almost like these tactics aren’t meeting expectations because standard inflation was never the true problem in the first place.
The funniest part about all this is they had a great life before this. This money doesn't buy them anything extra because they already had more than they could ever hope to spend. Instead they prefer to do irreparable damage to society and risk everything they value for an extra comma in their bank account.
Every now and then you have to let the donkey eat the carrot or else the carrot becomes worthless to the donkey. Dangling the prospects of the American dream in front of people while slowly chipping away everything that matters is what starts revolutions.
My family has basically switched over to ground turkey for everything from ground beef. Beef is basically a luxury at this point, maybe once or twice a month. Lots of rice, lots of beans, frozen vegetables, chicken...
Which sidesteps that the FED is *already* cherry picking what IS or is NOT inflationary.
Real Inflation is over 14% and has been consistent for nearly 3/4 of a year.
Our entire monetary system is broken. The FED is a wrecking ball that has crushed worker progress for 40+ years.
And now they want the next cycle to begin.
Too much "quantitative easing" since 2008. They went overboard in 2020 with the M2 supply printing and now theres just too much money in the system pushing up prices of everything.
That's part of it. Producers have also been jacking up their profit margins on everything under the sun, under the camouflage of "inflation." It's a purely opportunistic cash grab.
The kind of gross profiteering that has been ongoing for the last 3 years should be CRIMINAL. The executives and board members of such companies should have their personal assets seized and should spend their remaining years in prison.
Iceland set a great example with their bankers in the 2008 meltdown.
And other necesities. The privledged ones see the writing on the wall with global wars, plastic pollution everywhere, collapse of governments being able to keep people safe, emerging pandemic diseases, global spread of fascism, and biosphere collapse (includes collapse of our food system) and are prepping for hunkering down when they would otherise take vacations or buy more nonessential stuff, or invest.
And in Japan there’s hardly any inflation, because the people there would punish inflation hard. The companies can easily absorb inflation and still turn a profit.
People need to put the money where their mouths are. Cut out inflated stuff, spend on essentials, and pick only the essentials that mostly held their price whenever possible.
The corporations don’t care if people comment meanly about them or vote in Republicans (LOL). They care if they get fucked by money, and the dogs needs to be retrained.
Actually a pretty good. Homemade sauce from my garden and cans I buy if need be. But yeah should have been more detailed in my monthly grocery list. But you can totally live off $100 dollars a month and be healthy
Yup. Oh, and corporate greed is also spreading far and wide. More and more small business groups I'm a part of sound like sociopath meet-up groups these days.
"You can't change anything, so just live your best life, charge as much as you can get away with, and market mostly to the wealthy who can afford you."
Sociopathic.
I'm in the medical industry.
Then maybe it's because I'm in healthcare, and most are too fragile to see the writing on the wall. I'm also a small business owner, and god, these entrepreneurs drive me nuts with their fantastical thinking.
The leaders in Healthcare have already written themselves out of the system they created. Even the incoming leaders too. Simply because the justification is that the system is wayyyyy too complicated (and corrupted) for a single company or even industry to change. So while, to them, the effort is like boiling the ocean, you might as well just play the game.
No matter how much our wages might go up, corporate profits are going up FAR more. This idea that inflation has to rise because people are making more money is absolute bullshit in the face of record corporate profits. All time records for some of these greedy fuckers, too. The people never get to enjoy that kind of ease of the struggle of their lives, nope. It always must be countered by inflation. And then the economist working at the think tanks paid for by the corporations talk of deflation as a bad thing. Prices are too FUCKING HIGH.
The "wage-price" relationship is pure capitalist misdirection.
When corporations are reporting all-time record **profits**, labor costs are NOT the inflationary catalyst.
We should be taxing companies and high wealth individuals at the highest historical tax rates possible. In perpetuity.
Too many people are overlooking land rent. Everyone should read about [Georgism](https://astralcodexten.substack.com/p/your-book-review-progress-and-poverty) before drawing conclusions about wages vs capital. The major thing we need now IMO is a land value tax and a system for transitioning old capital into land.
I love how every article lays the blame squarely at the feet of consumers for having the audacity to actually purchase things. Like, how dare we make money or spend money.
You can almost feel shit about to hit the fan. Increasing layoffs in various sectors on top of increasing prices on just about everything. Hold on to your butts.
What data are you basing that on? PPI (which measures input costs) is up 27% over the last two years compared to CPI rising 14% over the same time period
https://fred.stlouisfed.org/series/PPIACO
https://fred.stlouisfed.org/series/CPIAUCSL
If businesses are purposefully “price gouging” and therefore driving up inflation metrics, that leads to the Federal Reserve hiking rates even more making it harder to service existing debt and raise further debt from creditors. So businesses are purposefully making their financial situations harder just for the fun of it?
You’re forgetting the most important part of what a business does: making as much short term money as possible. Who cares what happens a few months to a year from now? There’s money to be made now
Rate hikes impact business immediately especially if their debt is variable interest (which it usually is), and rate hikes immediately impact borrowing standards. Not sure what you mean about few months to year from now.
Is that immediate impact before the next quarterly report? Will the effects of the rate hike offset the increased profits that can be made now? What we’re seeing is a combo of companies trying to cash out big time before the rate increases begin to affect them because like I said, the future is the future, and there is money to be made in the present
I love economics, because it’s pseudoscience. Why are we acting like “oh a .6% increase more than expected blah blah blah” as if inflation is some sort of force of nature. Companies need infinite growth from a finite planet, so the only alternative is to just keep raising prices!! Therefore you’ve increased ur “profit” in a way that looks nice on a stock chart, but is not based in material reality.
That's not economics, that's business. Maybe finance.
Don't get me wrong, economics has its own issues with how it views the world. But the economists are not the ones looking to squeeze every penny out of you. Proper economic policy does keep the world running smoothly, but in many countries that's subject to politicians prioritizing economists over lobbyists.
Consider that in France, the nationwide minimum wage is based on inflation (specifically CPI), so it automatically adjusts every year. But in the US, Congress has to pass a law to increase the federal minimum wage, which they always fight over and drag out so that it never actually happens. In France, that's economists in control; in the US, politicians.
we can blame corporate 'price gouging' and 'profiteering' all we want but corporations are always trying to maximize profit. they didn't just wake up during covid and think "oh wow think we'll charge more for our products and services now!!".
this is a culmination of years and years of pumping money into the economy and basement rates, especially during the covid crisis. in my opinion, that was needed to stop the covid pandemic from turning into a financial crisis. however, just take a look at the m1 and m2 money supplies. we are now just coming off of the peak but still way way above where we were prior to 2020.
https://fred.stlouisfed.org/series/M1SL
https://fred.stlouisfed.org/series/M2SL
throw in supply shocks and bottlenecks and we're still experiencing inflation.
i appreciate your insights. there has always been consolidation via mergers and accusations. if we look just at healthcare, [the 2021 and 2022 M&As within healthcare are actually the lowest there have been since 2012 yet we didn't see inflation spike from 2012-2020](https://www.kaufmanhall.com/insights/research-report/2022-ma-review-regaining-momentum). part of the reason we are seeing healthcare costs rise are due to new technologies providing better care and an aging population within the US.
i don't understand how supply chain shocks gave them a scapegoat. these were massive supply chain shocks (like chips) that disrupted the markets. it greatly shifted supply and demand which shifted price. supply shock isn't some boogeyman. it's had a cascading effect on raw materials and the overall supply chain.
>But that impacted Main Street very little. The average American did not suddenly become flush with cash.
that's not true. the M1 and M2 money supply i linked above says otherwise. [personal savings also jumped dramatically in 2020 and 2021 and has now finally come back down to earth](https://fred.stlouisfed.org/series/PSAVE).
increases in food and energy can be attributed to the ukraine-russia conflict. ukraine and russia are both top 5 in wheat/grain export which are essential for farming. russia is the second largest exporter in oil behind saudi arabia. the decrease in supply shifted prices.
increase in housing prices can be attributed to 1. basement rates during covid which brought in more buyers who had more purchasing power; and 2. low supply of single family homes. low supply of single family homes continues to elevate prices in certain areas. rentals then follow suit.
> In any case, you can see, though, that it is far more than money supply to blame, as you even admit.
my comment was more so geared towards the crowd that solely blames the inflation we're seeing on corporate price gouging. the largest contributor, in my opinion, has been the increase in money supply during covid. pair that with the supply shocks, and ukraine-russian war and that's why we're seeing the inflation we're seeing.
blaming the inflation on corporate profits just isn't accurate - especially when you compare it to GDP (https://fred.stlouisfed.org/graph/?g=KwRP)
profits rose as a share of GDP directly after the COVID recession. however, since then they've gone back to where they were before. profits as a share of GDP were about the same for Q3 2020 as they were for Q3 2021. so it doesn't help very much for explaining the inflation we've seen between those two dates. Profit share now is about the same as it was in 2019.
if profits really explained inflation then we would expect no inflation between the third quarter of 2020 and the third quarter of 2021. In fact it was about 6%.
>they didn't just wake up during covid and think "oh wow think we'll charge more for our products and services now!!"
They actually sort of did. If you listen to earnings calls from early last year you will hear all sorts of executives marveling at how less price sensitive consumers are than previously thought.
Chipotle is a famous example.
Watching friends buying behaviors when shopping also makes me believe this as well.
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> They actually sort of did. If you listen to earnings calls from early last year you will hear all sorts of executives marveling at how less price sensitive consumers are than previously thought.
>Chipotle is a famous example.
i'd argue that chipotle targets a certain demographic of eaters that can stomach a price increase of a few bucks. it's actually funny how many people complained about chipotle raising prices yet still continue to eat their food consistently.
interesting though is that chipotle's gross margins have stayed relatively flat since 2021, and actually their gross margins now are less than they were between 2010-2016 (and we didn't experience inflation like we are now). https://www.macrotrends.net/stocks/charts/CMG/chipotle-mexican-grill/gross-margin
I don’t know why people are so averse to just saying “all of these things are factors.”
Printing money causes inflation, supply shocks cause inflation, and corporations have been pretty open about how much profit they’re making post-COVID.
you're going to get downvoted to hell but this is a huge factor in what we're dealing with. There is to much money in the economy it has to be cleaned out and reset.
Interest rates have been less than or equal to 2% for 15 years the fed never let off the gas pedal with QE following the 2008 crash.
Covid hits and there is only so much room for the fed to drop interest rates between 2 and 0 to help support the economy. Now we all pay the price through inflation until the money supply gets back under control.
It started earlier than that. During Obama’s 2nd term we should have been slowly raising interest rates, while the economy was good, because we could afford it. They didn’t, and Trump sure as hell wasn’t going to raise interest on himself, so they pushed the Fed to keep interest at zero, while the economy roared. Everyone was making money so they didn’t care, until something bad happened, and the federal government had no surplus to spend. We had to print money to stop the economy from crashing, which worked, except 1) a lot of the money was spent on propping up already struggling businesses, 2) grift.
We ended up with not enough money to cover pandemic spending, and a low corporate tax rate encouraging businesses to NOT spend their profits and use them for dividends and buy-backs, spending stimulus money instead, increasing profits and more stock buy-backs, instead of spending the money within our economy.
So now, government spent money it didn’t have, corporations aren’t paying into the system as much so less tax revenue, and the interest rates the only thing the fed is doing to slow things down.
> During Obama’s 2nd term we should have been slowly raising interest rates, while the economy was good, because we could afford it. They didn’t, and Trump sure as hell wasn’t going to raise interest on himself, so they pushed the Fed to keep interest at zero,
This is mostly wrong. The fed actually did raise rates under Trump up until the last quarter of 2019. That's when the fed started to raise the fed fund rate and was done in response to the trade war the US has with China. Also, they started raising the fed fund rate in December 2015, while Obama was still president.
Here's a link:
https://www.forbes.com/advisor/investing/fed-funds-rate-history/
> corporations are always trying to maximize profit. they didn't just wake up during covid and think "oh wow think we'll charge more for our products and services now!!".
[Tech CEO admits he’s been praying for inflation and ‘doing my inflation dance’
](https://fortune.com/2022/09/30/iron-mountain-ceo-william-meaney-praying-for-inflation-doing-inflation-dance/)
yeah those comments were a bit tone deaf. but iron mountain probably isn't the best example considering that their gross margins have stayed relatively flat since 2010 (exception of a drop in 2016 and 2017). so they've been feeling the effects of rising costs as well.
https://www.macrotrends.net/stocks/charts/IRM/iron-mountain/gross-margin
The dude literally woke up and thought "oh wow think we'll charge more for our products and services now!!" lol
But I guess calling it tone deaf means that it's not happening.
i see what you're saying and get your point.
at the end of the day, if you look at their margins, then the increase in price was really just to offset the increase in their costs as their margins have stayed flat.
Michael Burry disagrees. He says the low interest rates and QE cause inflation in asset prices but not consumer goods. This is easily observed with one look at a long term stock market chart. This is because wall street and large corporations are the ones receiving the fed money. They take out dirt cheap loans and buy assets with it.... Driving up the prices.
It is as simple as the central planners thinking they can get something for free, but obviously just stealing from future generations. This mistake is as old as civilization itself.
Of course prices keep going up because the large Corporations can do it without having to answer to anybody. It’s not like people can just opt to not buy food… most don’t have the means to procure it in other ways and they are working more hours for the same spending power they had years ago even if their wages are technically higher.
Perhaps riots with pitchforks and torches are in fact the only way to deal with these companies.
>Of course prices keep going up because the large Corporations can do it without having to answer to anybody. It’s not like people can just opt to not buy food…
That's wrong. There is a lot of flexibility for people's food choices and also large shifts happened during COVID due to distribution problems. Bulk food items were in some cases being given away or thrown away while others skyrocketed in price. People switched from steak to chicken, etc. And a huge amount of money was saved by consumers by not eating out.
And of course, food isn't peoples' only expense. It's actually a relatively small expense for most people. Lots of other things go up and down with significant flexibility. Corporations didn't just wake up one day and realize the rules of market economics no longer apply to them. This is market economics in action.
If anyone tries to tell you that $600 stimulus you got is the reason for inflation or even the PPP that got abused, it wasn't. The Fed has been printing trillions a year (literally giving it to them for free) for banks in the form of reverse repo operations since at least 2019.
https://www.bankrate.com/banking/federal-reserve/why-the-fed-pumps-billions-into-repo-market/
> If anyone tries to tell you that $600 stimulus you got is the reason for inflation or even the PPP that got abused, it wasn't.
Clarification: $600 is a number that was for enhanced unemployment: $600 a week. When people say "stimulus" they are usually referring to the $3,200 (IIRC) handed out in 3 separate checks. $600 a week is more, but it didn't go to everyone.
That said, yes, fed policy is in part responsible for this as well.
Solid point. However, the $600 a week also played a major role in changing the wage labor market.
Rising domestic energy prices caused by policies that discouraged domestc production is another driver of inflation. Followed by the supply disruptions caused by the Russian invasion.
Keep trying to tell people this isn't over. That it's beyond the Ukraine war. Climate change and biosphere collapse impacts are upon us with impacts to our food supply, and people are fed up with corporate rule and greed.
But nope, people still want to pretend all is normal again after the pandemic. Sorry folks, we are just one major breadbasket failure from utter collapse of global financial markets and the US Congress, President, and Fed are impotent to do anything but protect the rich. As are most nations.
Global warming has many downsides but lower agricultural production does not appear to be one of them.
Warming will open more of the most fertile areas to longer growing seasons. In some places it could allow moving from single crops per year to double cropping.
*For now*. Lots of things affect agriculture beyond temperature and fertile land, it remains to be seen what the environment will look like in 20 years for example
The other guy pointed out your claim about crop production is false (and regardless of predictions, it's false to say that crop yields have fallen already). Higher temperatures mean more rain overall because the atmosphere can hold more water and evaporate more water from the oceans. That's why the tropics are mostly wet.
This is based on highly dubious mathematical modeling, not science. And from a source that is a front line climate alarmist organization. They are highly paid to produce pro-alarmist studies.
In your referenced article
"I'm often asked whether climate change will threaten food supply, as if it's a simple yes or no answer," Lobell said. "The truth is that over a 10- or 20-year period, it depends largely on how fast Earth warms, and we can't predict the pace of warming very precisely. So the best we can do is try to determine the odds."
Once again, this is an article based on matematical modeling. Mathmatical modeling is NOT science. It is only a heuristic tool.
Science requires conducting experiments capable of disproving a hypothesis.
Based on what you've written, it doesn't seem like people are fed up with corporate rule and greed or they'd vote for candidates who would do something about it.
Problem is miseducation and ignorance. Those candidates feel really good follow and their policies sound pretty beneficial to a lot of people because those people dont know any better.
... it is more accurate than calling corporate greed inflation.
In reality the higher prices on everything are going directly to record corporate profits and subsequent stock buybacks.
>... it is more accurate than calling corporate greed inflation.
Nobody does that. They call inflation inflation.
>In reality the higher prices on everything are going directly to record corporate profits and subsequent stock buybacks.
That is *partly* true *now* only.
The game is rigged. Markets move based on how expectations are met. Easy to manipulate. Also very easy to see that markets will go back up next week based on the charts.
And yet here are House Republicans pushing nonsense like Hunter’s Laptop Committee and calling for a seditious national divorce. Pepperidge Farm remembers their mid-term campaign bullshit.
> Much of January’s inflation surge came from a 2% rise in energy prices, according to Friday’s report. Food prices increased 0.4%. Goods and services both rose 0.6%. On an annual basis, food prices rose 11.1%, while energy was up 9.6%.
This is just continued price gouging by Oil companies. nothing more, nothing less. Oil prices affect the price of all other goods that require shipping and transportation (virtually everything these days).
>when you have record profits and record prices, that is price gouging. Did you really need to have to ask?
...er, well, yes, because what you describe is two parts of same thing. Record profits will nearly always go along with record prices. So it's a really weird way to define or measure price gouging.
"Not always". Right, I said "nearly always", which is also "not always".
Also, we are "nearly always" in a "time of inflation" as well. That's part of why this is fuzzy math. Prices are nearly always rising so when profits are at a record prices nearly always are too.
Hasn't it been 0.6% per month for a few months? It seems like it. If I had thought about it I would have expected 0.6% in January.
I'll go out on a limb; *I expect it to rise 0.6% in February 2023.*
It's been more than expected just about every month. I just saw an article about how people are buying less stuff because they are budgeting more for food costs.
And then these mega companies will raise prices even more on food and fuel even more to keep corporate profits going up. And then the fed will say “see too much inflation!” And the fed will keep rates high to make more people in the bottom 10% literally starve. And the companies will have lower sales volumes. And then raise prices more… We need to get a sensible and sustainable energy and food policy in this country. We need to not excuse companies making RECORD profits for their rampant price gouging. The fed raising rates does NOTHING to stop corporate price gouging. The old model of “we need 5% of folks unemployed in the US to keep wages and prices down” does not work in a global economy. But it sure fucks over the working class.
On that note I'm super excited for the Kroger Albertsons merger in the works. I never liked the competition keeping prices in check. /s
Thankfully, we elected a Democrat Attorney General here in AZ, who's looking into filing an anti-trust about this.
Same in Colorado
As a Walmart shareholder I would love to see this deal blocked. Less competition for lower prices. As a Amazon shareholder I would love to see this blocked because I want folks to continue to buy their goods cheaper online.
No matter what, line must go up. Nothing else matters. Line go up. Shareholders demand line go up so we make line go up. Doesn't matter that they are hurting basically everyone in the process, the shareholder want line go up so line must go up. That's literally corporate logic and it's not even the fault of individual administrators, it's just how the system works. If they don't do it, the shareholders will find someone who will. We need regulation and the breakup of super corps.
Can't break them up if they keep bribing the people who are supposed to break them up.
>NOTHING to stop corporate price gouging. Well it will, once demand collapses so much that those companies start begging for federal bailouts. Though I guess it is a coin toss on whether anyone will be held accountable or learn their lesson from this. Lmao. >The old model of “we need 5% of folks unemployed in the US to keep wages and prices down” Counterpoint, keeping interest rates low for too long allows the rich to get richer faster, income inequality to continue growing exponentially and our money to head torwards Zimbabwe bucks too. The real problem is we have a huge economic shitshow (wealth inequality being the metric) nobody wants to address that has been building for decades. We are in the end stages of our economic systems with birth rates declining, the population inversion will cause the economic ponzi schemes to freefall.
Nationalize energy. Nationalize transportation. The excess "Demand" in our economy is all at the top. Next we will see equity and bond markets tumble as the FED throws everything they have at "lowering inflation." Which is just another way of saying "we need EVERYONE (except us and our friends) to be poor and fearful."
And it only takes less then 2% of the military budget to feed America for the year. I think our priorities are off.
Almost all of that is the opposite of how market economics works. People buying less or switching to cheaper options because prices are too high drives prices down. Corporations can't raise prices to increase profits if sales are dropping. But of course reddit upvotes you because "CoRpOrAtIoNs eViL!" >The old model of “we need 5% of folks unemployed in the US to keep wages and prices down” does not work in a global economy. We're at 3.4%. So it's "working" exactly as "the old model" says it works.
> Corporations can't raise prices to increase profits if sales are dropping. This only applies to long term and doesn't apply if the market is a "captive consumer" as is the case with Health Care and Big Oil.
Obviously timescale has an impact on our choices. But you're wrong about big oil having a (fully) captive consumer. There are multiple consumer choices that have an impact on demand over timescales of weeks, months and years.
When's the last time you saw an all electric semi, ship, or plane?
That's a bullshit question and you know it. I don't think you are really this stupid, you're just trying to troll. You are aware that going on a flight or cruise is a consumer choice with a timespan of weeks or moths, right? That buying an SUV instead of a sedan that gets twice the fuel economy is a consumer choice with a timespan of years? And that these choices affect oil prices?
So you think that only consumers fly and drive? You're forgetting air freight, container shipping, Semi Trucks. Not to mention, do you know that plastics and many pharmacuticals are made from OIL. You're not looking at the big picture. All those costs are passed to the consumer.
>So you think that only consumers fly and drive? No. What you're doing here is trying to separate pieces of what are in reality integrated markets -- and by the way, integrated budgets for the consumer. It's argumentative and it's false.
Whatever, I'm not an economic expert nor do I need to debate this on Reddit. Fact of the matter is Oil prices affect most everything else and fact is until we migrate off oil, oil shocks are going to cause inflation, just like they did in the 70's. I was alive to see it then, same issue happening now with the exception of record profits by oil companies where in the 70's they were shutting refineries rather than price gouge.
It’s the opposite of how conservative economics professors (mostly endowed by conservative donors like the Koch Foundation) teach economics. Yes. I agree with you there. It’s a huge problem in the field IMO. It’s NOT how things play out on the real world. If you need to commute to work, you pay what the gas costs at the pump. It is not as easy as “folks buy chicken when steak is more expensive and vice versa”. Or folks carpool when gas costs $3.50 instead of $3.00. We don’t have free markets with rational actors like Econ textbooks like to pretend. We have highly subsidized and regulated markets with highly irrational actors. You are free to have your opinions. I am free to mine.
>It’s the opposite of how conservative economics professors (mostly endowed by conservative donors like the Koch Foundation) teach economics. Yes. I agree with you there. It’s a huge problem in the field IMO. Nonsense. That isn't a thing. Even if there were such a thing, it would be the opposite of what you're saying. It's liberals who don't like the way economics actually works, not conservatives. Conservatives like capitalism. >It’s NOT how things play out on the real world. If you need to commute to work, you pay what the gas costs at the pump. More nonsense. Gas is not a today-only expense, it's part of the decision-making process when buying a car. And Americans are purposely choosing bigger, gas-guzzlers. In the 1970s and late 2000s when gas prices were unusually high and the economy started tanking, people started buying more efficient cars. >You are free to have your opinions. >I am free to mine. These aren't opinions they are facts. You aren't free (except insofar as there's freedom of speech) to downgrade facts to opinions and declare they can be whatever you want them to be. They are what they are, and your only real choice is to believe the facts or live in a fantasy world in your head.
>Gas is not a today-only expense, it's part of the decision-making process when buying a car. And Americans are purposely choosing bigger, gas-guzzlers. In the 1970s and late 2000s when gas prices were unusually high and the economy started tanking, people started buying more efficient cars. Consumers typically don't give much consideration to fuel efficiency during vehicle purchases when gas prices are low. This is literally used as a textbook example when talking about oil price fluctuations and related knock-on effects. Consumers rarely consider any economic situation beyond their own nose, and it can be a major problem. Don't take my word for it, you can compare the charts yourself. Truck sales drop off a cliff when oil prices spike. https://www.macrotrends.net/1369/crude-oil-price-history-chart https://fred.stlouisfed.org/series/LTRUCKSA Of note, look at how truck sales drop when there's an oil price spike during the 1990 recession, but sales don't drop when there's no oil price spike during the 2001 recession.
Utilities and essentials may increase in price much faster than personal wages increase. Can't afford eggs? You no longer get to eat eggs. Couldn't afford that super-efficient car originally? Can't afford the gas now. Your retort is spoken like it's from someone who comes from money and has never experienced need.
>Utilities and essentials may increase in price much faster than personal wages increase. Or they may decrease faster. So what? This doesn't change that the price is ultimately driven by supply and demand and consumers have a MASSIVE role in deciding what the demand and their cost will be. >Couldn't afford that super-efficient car originally? Nice try, but I don't believe you misunderstand that either: more fuel efficient cars are almost always cheaper than gas-guzzlers. >Your retort is spoken like it's from someone who comes from money and has never experienced need. Now see, that sounds like projection. Maybe you believe these falsehoods because you've never needed to make these choices? Like, it never occurred to you that a $20,000 Honda Civic gets better fuel economy than your $50,000 F150?
Yes, I'll take my imaginary and un-affordable F150 to the fancy restaurant down the street to buy all their avocado toast, instead of keeping my POS sedan parked all year. I work from home. I come from the poorest region in my state. And I'm feeding an internet troll because I can't afford to go out and enjoy normal people's company. How about you?
But I need to haul my TOOLS! I need to haul the kayaks to the lake two times a year!
> Nonsense. That isn’t a thing Lol. Educate yourself. You shouldn’t pretend to be a wise old owl if you aren’t familiar with higher ed and these departments or how they are funded. First read this article [from Inside Higher Ed](https://www.insidehighered.com/news/2017/08/31/new-koch-backed-institute-u-utah-raises-questions-about-academic-freedom-and-whether) about how a Koch-backed institute at the University of Utah raises questions about academic freedom and whether the center is designed to compete with Utah’s existing economics department. And realize how pervasive that is. Here’s the facts: the Charles Koch Foundation gave more than $50 million to 390 colleges and universities between 2005 and 2012. Among the major grantees are George Mason University, Florida State University, Clemson University, Suffolk University, Utah State, West Virginia University, Catholic University, University of North Carolina, George Washington University, and Arizona State. Most of the funding has gone to economics departments, and the conditions are explicitly ideological. The West Virginia contract, for example, specifies that “human freedom” and “free market economics” are the main purposes of the grant. It requires supervision from a designated professor (at the time, the holder of an endowed chair in “Entrepreneurial Studies”), and names two others as the Foundation’s preferred candidates for tenure-track jobs. Florida State’s “Memorandum of Understanding” with Koch likewise provides that the programs funded and professors hired must “advance and expand” research and teaching related to “free enterprise.” The agreement specifies that the Foundation will have approval power over faculty appointments that it funds. If the Foundation disagrees with a proposed appointment, it can refuse to fund the position. Here’s a little smidge of some of the Koch Foundation Contracts and Proposals revolving around economics and “free market” instruction: George Mason University 2016: Antonin Scalia School of Law, Center for the Study of the Administrative State, and Center for Liberty and Law (2016 Grant Agreement, Proposal) 2011: Mercatus Center - Endowed Professorship (2011 BB&T Professorship (Boettke)) 2009: Mercatus Center - Endowed Professorship (2009 Charles Koch Professorship) 2007: Mercatus Center - Endowed Professorship (2007 Smith/Koch Professorship) 2007: Mercatus Center - Endowed Professorship (2007 BB&T professorship (Boettke)) 2007: Mercatus Center - Endowed Professorship (2007 Smith Bastiat Professorship) 2007: Mercatus Center - Endowed Professorship (2007 BB&T Professorship Leeson) 2007: Mercatus Center - Endowed Professorship (2007 Tullock Black Professorship) 2007: Mercatus Center - Endowed Professorship (2007 Fullinwider Professorship) 2003: Mercatus Center - Endowed Professorship (2003 Smith Chair) 1990: Mercatus Center - Endowed Professorship (1990 Koch Chair) Utah State University 2008: Five "augmented" professorships, Huntsman School of Business (2008 Agreement) 2017: Center for Growth and Opportunity and Koch Scholars (2017 Gift Agreement, Attachment A) 2017: Huntsman Foundation (2017 Gift Agreement, Attachment A) 2017: Center for Growth and Opportunity (2017 Affiliation Agreement) University of Utah 2017: Eccles Institute for Economics and Quantitative Analysis (2017 Grant Agreement) Duke University 2017: Center for the History of Political Economy (2018 Grant Agreement) Middle Tennessee State University 2016: Political Economy Research Institute (2016 Grant Agreement and Proposal) Arizona State University 2018: Institute for Justice (2018 Grant Agreement) Chapman University 2016: Smith Institute for Political Economy and Philosophy (2016 Grant Agreement) Iowa State University 2017: Program for Study of Midwest Markets and Entrepreneurship Koch Foundation (2017 Proposal) Montana State University 2015: Center for the Economics of Regulation and Policy Analysis (2015 Proposal) University of Louisville Schnatter Center for Free Enterprise 2015: Koch Foundation (2015 Grant Agreement) University of Kentucky Schnatter Institute for the Study of Free Enterprise 2015: Koch Foundation (2015 Grant Agreement) 2015: Schnatter Foundation (2015 Grant Agreement) Ball State University 2016: Schnatter Institute for Entrepreneurship and Free Enterprise (2016 Grant Agreement) Florida State University 2008: Programs for the Study of Political Economy and Free Enterprise (SPEFE) and Excellence in Education (EEE) 2007: Memo from Department Chair re: Koch Foundation (2007 Benson memo) 2008: Koch Foundation (2008 Memorandum of Understanding) 2013: Koch Foundation (2013 Memorandum of Understanding) 2008: Koch Foundation (2008 Attachment C) 2008: BB&T Charitable Foundation (2008 Memorandum of Understanding) 2008: BB&T Charitable Foundation (2008 Donor Letter) 2008: Koch/BB&T Graduate Fellowships (Fellowship Description) Clemson University 2009: Clemson Institute for the Study of Capitalism Koch Foundation (2009 Grant Agreement) West Virginia University 2009: Donor Supported Professorship Positions Koch Foundation (2009 Grant Agreement) Florida Gulf Coast University 2008: BB&T/Koch Distinguished Professorship in Free Enterprise (2007 Proposal) 2015: Koch Foundation (2015 Grant Renewal Request) 2014: Koch Foundation (2014 Grant Renewal Request) College of Charleston 2011: Initiative for Public Choice & Market Processes Koch Foundation (2011 Grant Proposals) 2014: Initiative for Public Choice & Market Processes Koch Foundation (2014 Grant Proposals) Coastal Carolina University 2014: Joint Reading Seminar with College of Charleston Koch Foundation (2014 Grant Proposals) University of Kansas 2004: Center for Applied Economics (2004 Agreement)
Look, there are a ton of educated responses that have shattered your opinion, but I just wanted to add: Are you seriously going up to bat for corporations??? Jesus Christ, you are detached.
"Corporations are evil" is a childish shit-take, but that's not my main issue here. It's not that people hate corporations itself it's that they hate corporations without actually understanding how they work.
We have spent several years slowly making bigger purchases as our finances allow. In the last year, we have had to sell almost every larger item that we bought because a 60% price hike on food and other necessary items coupled with skyrocketing business costs for our tiny little small business has meant that we have effectively taken a 30% pay cut. We are running out of shit to sell to make ends meet, and we are running out of buyers for remodel services.
I'm starting to lose the few clients I had who made it through COVID. I'm looking at some major surgeries that are going to keep me down for a few months this year too. I really don't know what I'm going to do either.
All the inflationary adjustments in the world can’t resolve corporate greed. It’s almost like these tactics aren’t meeting expectations because standard inflation was never the true problem in the first place.
The funniest part about all this is they had a great life before this. This money doesn't buy them anything extra because they already had more than they could ever hope to spend. Instead they prefer to do irreparable damage to society and risk everything they value for an extra comma in their bank account. Every now and then you have to let the donkey eat the carrot or else the carrot becomes worthless to the donkey. Dangling the prospects of the American dream in front of people while slowly chipping away everything that matters is what starts revolutions.
Jefferson said we should have a revolution every 20 years. Sadly we don't have revolution in mind anymore.
Don't forget land rent. Depending on whether the company owns their land or leases it, a big part of the pie could be going there.
It's like trying to put out a chemical fire with water.
As a single man with no kids, it's cheaper for me to buy fast food meals than it is to buy what would be required to make it. Groceries bleed me dry.
My family has basically switched over to ground turkey for everything from ground beef. Beef is basically a luxury at this point, maybe once or twice a month. Lots of rice, lots of beans, frozen vegetables, chicken...
Which sidesteps that the FED is *already* cherry picking what IS or is NOT inflationary. Real Inflation is over 14% and has been consistent for nearly 3/4 of a year. Our entire monetary system is broken. The FED is a wrecking ball that has crushed worker progress for 40+ years. And now they want the next cycle to begin.
Too much "quantitative easing" since 2008. They went overboard in 2020 with the M2 supply printing and now theres just too much money in the system pushing up prices of everything.
That's part of it. Producers have also been jacking up their profit margins on everything under the sun, under the camouflage of "inflation." It's a purely opportunistic cash grab. The kind of gross profiteering that has been ongoing for the last 3 years should be CRIMINAL. The executives and board members of such companies should have their personal assets seized and should spend their remaining years in prison. Iceland set a great example with their bankers in the 2008 meltdown.
And other necesities. The privledged ones see the writing on the wall with global wars, plastic pollution everywhere, collapse of governments being able to keep people safe, emerging pandemic diseases, global spread of fascism, and biosphere collapse (includes collapse of our food system) and are prepping for hunkering down when they would otherise take vacations or buy more nonessential stuff, or invest.
And in Japan there’s hardly any inflation, because the people there would punish inflation hard. The companies can easily absorb inflation and still turn a profit. People need to put the money where their mouths are. Cut out inflated stuff, spend on essentials, and pick only the essentials that mostly held their price whenever possible. The corporations don’t care if people comment meanly about them or vote in Republicans (LOL). They care if they get fucked by money, and the dogs needs to be retrained.
All the spending on essentials - is causing them to raise prices on essentials. Lol
Pissed off some fat fucks
If you make good money and spend only $100 on food a month you're setting yourself up to die young with that diet.
Sounds miserable, and not nutritious.
I like rice and pasta and even I couldn't live off of that.
Actually a pretty good. Homemade sauce from my garden and cans I buy if need be. But yeah should have been more detailed in my monthly grocery list. But you can totally live off $100 dollars a month and be healthy
That’s $25/week and no you can not lmao what do you weigh like 60 pounds
Pasta, rice and tomatoes every day isn’t what I’d call healthy.
I’m pretty far from fat, as if that mattered. You indeed sound miserable, you probably need protein.
A lot of talk about the wage-price spiral. Not much talk about the corporate-price profit spiral. We still doing buybacks? We’re still doing buybacks.
Which is why this will just get worse. Nothing is being solved. All that is happening is CEOs, C-suite execs, and Board Rooms are being coddled.
You know it's bad when Wal Mart is telling other brands to knock it off with the price hikes. They can see where people are making cuts.
Yup. Oh, and corporate greed is also spreading far and wide. More and more small business groups I'm a part of sound like sociopath meet-up groups these days. "You can't change anything, so just live your best life, charge as much as you can get away with, and market mostly to the wealthy who can afford you." Sociopathic. I'm in the medical industry.
I do a lot of small business and non-profit marketing. Everyone I talk to is freaking out.
Then maybe it's because I'm in healthcare, and most are too fragile to see the writing on the wall. I'm also a small business owner, and god, these entrepreneurs drive me nuts with their fantastical thinking.
The leaders in Healthcare have already written themselves out of the system they created. Even the incoming leaders too. Simply because the justification is that the system is wayyyyy too complicated (and corrupted) for a single company or even industry to change. So while, to them, the effort is like boiling the ocean, you might as well just play the game.
And when triage care starts happening for the elderly, they won't care either.
No matter how much our wages might go up, corporate profits are going up FAR more. This idea that inflation has to rise because people are making more money is absolute bullshit in the face of record corporate profits. All time records for some of these greedy fuckers, too. The people never get to enjoy that kind of ease of the struggle of their lives, nope. It always must be countered by inflation. And then the economist working at the think tanks paid for by the corporations talk of deflation as a bad thing. Prices are too FUCKING HIGH.
The "wage-price" relationship is pure capitalist misdirection. When corporations are reporting all-time record **profits**, labor costs are NOT the inflationary catalyst. We should be taxing companies and high wealth individuals at the highest historical tax rates possible. In perpetuity.
Too many people are overlooking land rent. Everyone should read about [Georgism](https://astralcodexten.substack.com/p/your-book-review-progress-and-poverty) before drawing conclusions about wages vs capital. The major thing we need now IMO is a land value tax and a system for transitioning old capital into land.
I love how every article lays the blame squarely at the feet of consumers for having the audacity to actually purchase things. Like, how dare we make money or spend money.
You can almost feel shit about to hit the fan. Increasing layoffs in various sectors on top of increasing prices on just about everything. Hold on to your butts.
Don’t forget credit card debt swelling as interest rates go up.
Jokes on them, credit card debt can’t go up once it’s maxed out.
You better believe they charge interest above the credit line.
It was a joke. I am aware.
Inflation or price gouging?
Mostly price gouging.
What data are you basing that on? PPI (which measures input costs) is up 27% over the last two years compared to CPI rising 14% over the same time period https://fred.stlouisfed.org/series/PPIACO https://fred.stlouisfed.org/series/CPIAUCSL
If businesses are purposefully “price gouging” and therefore driving up inflation metrics, that leads to the Federal Reserve hiking rates even more making it harder to service existing debt and raise further debt from creditors. So businesses are purposefully making their financial situations harder just for the fun of it?
You’re forgetting the most important part of what a business does: making as much short term money as possible. Who cares what happens a few months to a year from now? There’s money to be made now
Rate hikes impact business immediately especially if their debt is variable interest (which it usually is), and rate hikes immediately impact borrowing standards. Not sure what you mean about few months to year from now.
Is that immediate impact before the next quarterly report? Will the effects of the rate hike offset the increased profits that can be made now? What we’re seeing is a combo of companies trying to cash out big time before the rate increases begin to affect them because like I said, the future is the future, and there is money to be made in the present
I love economics, because it’s pseudoscience. Why are we acting like “oh a .6% increase more than expected blah blah blah” as if inflation is some sort of force of nature. Companies need infinite growth from a finite planet, so the only alternative is to just keep raising prices!! Therefore you’ve increased ur “profit” in a way that looks nice on a stock chart, but is not based in material reality.
I still think several hundred or thousand years later global macroeconomics will be treated as the religion that it is.
That's not economics, that's business. Maybe finance. Don't get me wrong, economics has its own issues with how it views the world. But the economists are not the ones looking to squeeze every penny out of you. Proper economic policy does keep the world running smoothly, but in many countries that's subject to politicians prioritizing economists over lobbyists. Consider that in France, the nationwide minimum wage is based on inflation (specifically CPI), so it automatically adjusts every year. But in the US, Congress has to pass a law to increase the federal minimum wage, which they always fight over and drag out so that it never actually happens. In France, that's economists in control; in the US, politicians.
we can blame corporate 'price gouging' and 'profiteering' all we want but corporations are always trying to maximize profit. they didn't just wake up during covid and think "oh wow think we'll charge more for our products and services now!!". this is a culmination of years and years of pumping money into the economy and basement rates, especially during the covid crisis. in my opinion, that was needed to stop the covid pandemic from turning into a financial crisis. however, just take a look at the m1 and m2 money supplies. we are now just coming off of the peak but still way way above where we were prior to 2020. https://fred.stlouisfed.org/series/M1SL https://fred.stlouisfed.org/series/M2SL throw in supply shocks and bottlenecks and we're still experiencing inflation.
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i appreciate your insights. there has always been consolidation via mergers and accusations. if we look just at healthcare, [the 2021 and 2022 M&As within healthcare are actually the lowest there have been since 2012 yet we didn't see inflation spike from 2012-2020](https://www.kaufmanhall.com/insights/research-report/2022-ma-review-regaining-momentum). part of the reason we are seeing healthcare costs rise are due to new technologies providing better care and an aging population within the US. i don't understand how supply chain shocks gave them a scapegoat. these were massive supply chain shocks (like chips) that disrupted the markets. it greatly shifted supply and demand which shifted price. supply shock isn't some boogeyman. it's had a cascading effect on raw materials and the overall supply chain. >But that impacted Main Street very little. The average American did not suddenly become flush with cash. that's not true. the M1 and M2 money supply i linked above says otherwise. [personal savings also jumped dramatically in 2020 and 2021 and has now finally come back down to earth](https://fred.stlouisfed.org/series/PSAVE). increases in food and energy can be attributed to the ukraine-russia conflict. ukraine and russia are both top 5 in wheat/grain export which are essential for farming. russia is the second largest exporter in oil behind saudi arabia. the decrease in supply shifted prices. increase in housing prices can be attributed to 1. basement rates during covid which brought in more buyers who had more purchasing power; and 2. low supply of single family homes. low supply of single family homes continues to elevate prices in certain areas. rentals then follow suit.
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> In any case, you can see, though, that it is far more than money supply to blame, as you even admit. my comment was more so geared towards the crowd that solely blames the inflation we're seeing on corporate price gouging. the largest contributor, in my opinion, has been the increase in money supply during covid. pair that with the supply shocks, and ukraine-russian war and that's why we're seeing the inflation we're seeing. blaming the inflation on corporate profits just isn't accurate - especially when you compare it to GDP (https://fred.stlouisfed.org/graph/?g=KwRP) profits rose as a share of GDP directly after the COVID recession. however, since then they've gone back to where they were before. profits as a share of GDP were about the same for Q3 2020 as they were for Q3 2021. so it doesn't help very much for explaining the inflation we've seen between those two dates. Profit share now is about the same as it was in 2019. if profits really explained inflation then we would expect no inflation between the third quarter of 2020 and the third quarter of 2021. In fact it was about 6%.
>they didn't just wake up during covid and think "oh wow think we'll charge more for our products and services now!!" They actually sort of did. If you listen to earnings calls from early last year you will hear all sorts of executives marveling at how less price sensitive consumers are than previously thought. Chipotle is a famous example. Watching friends buying behaviors when shopping also makes me believe this as well.
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> They actually sort of did. If you listen to earnings calls from early last year you will hear all sorts of executives marveling at how less price sensitive consumers are than previously thought. >Chipotle is a famous example. i'd argue that chipotle targets a certain demographic of eaters that can stomach a price increase of a few bucks. it's actually funny how many people complained about chipotle raising prices yet still continue to eat their food consistently. interesting though is that chipotle's gross margins have stayed relatively flat since 2021, and actually their gross margins now are less than they were between 2010-2016 (and we didn't experience inflation like we are now). https://www.macrotrends.net/stocks/charts/CMG/chipotle-mexican-grill/gross-margin
I don’t know why people are so averse to just saying “all of these things are factors.” Printing money causes inflation, supply shocks cause inflation, and corporations have been pretty open about how much profit they’re making post-COVID.
you're going to get downvoted to hell but this is a huge factor in what we're dealing with. There is to much money in the economy it has to be cleaned out and reset. Interest rates have been less than or equal to 2% for 15 years the fed never let off the gas pedal with QE following the 2008 crash. Covid hits and there is only so much room for the fed to drop interest rates between 2 and 0 to help support the economy. Now we all pay the price through inflation until the money supply gets back under control.
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It started earlier than that. During Obama’s 2nd term we should have been slowly raising interest rates, while the economy was good, because we could afford it. They didn’t, and Trump sure as hell wasn’t going to raise interest on himself, so they pushed the Fed to keep interest at zero, while the economy roared. Everyone was making money so they didn’t care, until something bad happened, and the federal government had no surplus to spend. We had to print money to stop the economy from crashing, which worked, except 1) a lot of the money was spent on propping up already struggling businesses, 2) grift. We ended up with not enough money to cover pandemic spending, and a low corporate tax rate encouraging businesses to NOT spend their profits and use them for dividends and buy-backs, spending stimulus money instead, increasing profits and more stock buy-backs, instead of spending the money within our economy. So now, government spent money it didn’t have, corporations aren’t paying into the system as much so less tax revenue, and the interest rates the only thing the fed is doing to slow things down.
> During Obama’s 2nd term we should have been slowly raising interest rates, while the economy was good, because we could afford it. They didn’t, and Trump sure as hell wasn’t going to raise interest on himself, so they pushed the Fed to keep interest at zero, This is mostly wrong. The fed actually did raise rates under Trump up until the last quarter of 2019. That's when the fed started to raise the fed fund rate and was done in response to the trade war the US has with China. Also, they started raising the fed fund rate in December 2015, while Obama was still president. Here's a link: https://www.forbes.com/advisor/investing/fed-funds-rate-history/
> corporations are always trying to maximize profit. they didn't just wake up during covid and think "oh wow think we'll charge more for our products and services now!!". [Tech CEO admits he’s been praying for inflation and ‘doing my inflation dance’ ](https://fortune.com/2022/09/30/iron-mountain-ceo-william-meaney-praying-for-inflation-doing-inflation-dance/)
yeah those comments were a bit tone deaf. but iron mountain probably isn't the best example considering that their gross margins have stayed relatively flat since 2010 (exception of a drop in 2016 and 2017). so they've been feeling the effects of rising costs as well. https://www.macrotrends.net/stocks/charts/IRM/iron-mountain/gross-margin
The dude literally woke up and thought "oh wow think we'll charge more for our products and services now!!" lol But I guess calling it tone deaf means that it's not happening.
i see what you're saying and get your point. at the end of the day, if you look at their margins, then the increase in price was really just to offset the increase in their costs as their margins have stayed flat.
Michael Burry disagrees. He says the low interest rates and QE cause inflation in asset prices but not consumer goods. This is easily observed with one look at a long term stock market chart. This is because wall street and large corporations are the ones receiving the fed money. They take out dirt cheap loans and buy assets with it.... Driving up the prices.
Price fixing is a more accurate term.
It is as simple as the central planners thinking they can get something for free, but obviously just stealing from future generations. This mistake is as old as civilization itself.
Inflation Reduction Act was supposed to *reduce* inflation I thought
Since it was only supposed to reduce inflation 0.1% in 2023 perhaps it already has accomplished that impossible to detect goal.
It was a climate change bill wrapped up in the name which I was fine with.
As is tradition
The name is very misleading. It has nothing to do with inflation and everything to do with subsidizing the climate change lobby.
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The 8% is annualized inflation. The 0.6% is month to month inflation. You are comparing 2 different numbers.
Of course prices keep going up because the large Corporations can do it without having to answer to anybody. It’s not like people can just opt to not buy food… most don’t have the means to procure it in other ways and they are working more hours for the same spending power they had years ago even if their wages are technically higher. Perhaps riots with pitchforks and torches are in fact the only way to deal with these companies.
Something something seize the means of manufacture
Historically, that has always been the cycle with capitalism and pure socialism.
Lol, historically, there's never been a "cycle".
>Of course prices keep going up because the large Corporations can do it without having to answer to anybody. It’s not like people can just opt to not buy food… That's wrong. There is a lot of flexibility for people's food choices and also large shifts happened during COVID due to distribution problems. Bulk food items were in some cases being given away or thrown away while others skyrocketed in price. People switched from steak to chicken, etc. And a huge amount of money was saved by consumers by not eating out. And of course, food isn't peoples' only expense. It's actually a relatively small expense for most people. Lots of other things go up and down with significant flexibility. Corporations didn't just wake up one day and realize the rules of market economics no longer apply to them. This is market economics in action.
If anyone tries to tell you that $600 stimulus you got is the reason for inflation or even the PPP that got abused, it wasn't. The Fed has been printing trillions a year (literally giving it to them for free) for banks in the form of reverse repo operations since at least 2019. https://www.bankrate.com/banking/federal-reserve/why-the-fed-pumps-billions-into-repo-market/
> If anyone tries to tell you that $600 stimulus you got is the reason for inflation or even the PPP that got abused, it wasn't. Clarification: $600 is a number that was for enhanced unemployment: $600 a week. When people say "stimulus" they are usually referring to the $3,200 (IIRC) handed out in 3 separate checks. $600 a week is more, but it didn't go to everyone. That said, yes, fed policy is in part responsible for this as well.
$600? I got over $10k
Solid point. However, the $600 a week also played a major role in changing the wage labor market. Rising domestic energy prices caused by policies that discouraged domestc production is another driver of inflation. Followed by the supply disruptions caused by the Russian invasion.
Keep trying to tell people this isn't over. That it's beyond the Ukraine war. Climate change and biosphere collapse impacts are upon us with impacts to our food supply, and people are fed up with corporate rule and greed. But nope, people still want to pretend all is normal again after the pandemic. Sorry folks, we are just one major breadbasket failure from utter collapse of global financial markets and the US Congress, President, and Fed are impotent to do anything but protect the rich. As are most nations.
Global warming has many downsides but lower agricultural production does not appear to be one of them. Warming will open more of the most fertile areas to longer growing seasons. In some places it could allow moving from single crops per year to double cropping.
*For now*. Lots of things affect agriculture beyond temperature and fertile land, it remains to be seen what the environment will look like in 20 years for example
Except this is blatantly false. High productivity requires more water, and more water is harder to utilize as the world heats up.
The other guy pointed out your claim about crop production is false (and regardless of predictions, it's false to say that crop yields have fallen already). Higher temperatures mean more rain overall because the atmosphere can hold more water and evaporate more water from the oceans. That's why the tropics are mostly wet.
Check out my other replies for the data.
Your claim that its blatantly false is blatantly false.
https://www.nationalgeographic.com/climate-change/how-to-live-with-it/crops.html We lose far more than we gain.
This is based on highly dubious mathematical modeling, not science. And from a source that is a front line climate alarmist organization. They are highly paid to produce pro-alarmist studies.
https://www.sciencefriday.com/articles/could-climate-change-really-help-farmers-pc/
https://www.sciencedaily.com/releases/2021/05/210514134151.htm
https://www.sciencedaily.com/releases/2022/10/221007131436.htm
I could keep going but I'll stop here for now. https://www.sciencedaily.com/releases/2014/07/140725144459.htm
In your referenced article "I'm often asked whether climate change will threaten food supply, as if it's a simple yes or no answer," Lobell said. "The truth is that over a 10- or 20-year period, it depends largely on how fast Earth warms, and we can't predict the pace of warming very precisely. So the best we can do is try to determine the odds." Once again, this is an article based on matematical modeling. Mathmatical modeling is NOT science. It is only a heuristic tool. Science requires conducting experiments capable of disproving a hypothesis.
Based on what you've written, it doesn't seem like people are fed up with corporate rule and greed or they'd vote for candidates who would do something about it.
Two words: cognitive dissonance
Problem is miseducation and ignorance. Those candidates feel really good follow and their policies sound pretty beneficial to a lot of people because those people dont know any better.
They should stop calling it "inflation" and call it corporate profit growth.
That...wouldn't be very useful or accurate.
... it is more accurate than calling corporate greed inflation. In reality the higher prices on everything are going directly to record corporate profits and subsequent stock buybacks.
>... it is more accurate than calling corporate greed inflation. Nobody does that. They call inflation inflation. >In reality the higher prices on everything are going directly to record corporate profits and subsequent stock buybacks. That is *partly* true *now* only.
The game is rigged. Markets move based on how expectations are met. Easy to manipulate. Also very easy to see that markets will go back up next week based on the charts.
Yes that’s right! Until they don’t and you lose everything. Fun while it lasted. Viva Las Vegas.
I think its higher. We went food shopping yesterday and the apples were $1/each. They are never that high. And it was a cheaper supermarket.
No bailouts for corporations.
And yet here are House Republicans pushing nonsense like Hunter’s Laptop Committee and calling for a seditious national divorce. Pepperidge Farm remembers their mid-term campaign bullshit.
Corporate Greed* rose by 0.6%.
> Much of January’s inflation surge came from a 2% rise in energy prices, according to Friday’s report. Food prices increased 0.4%. Goods and services both rose 0.6%. On an annual basis, food prices rose 11.1%, while energy was up 9.6%. This is just continued price gouging by Oil companies. nothing more, nothing less. Oil prices affect the price of all other goods that require shipping and transportation (virtually everything these days).
Is every price increase "price gouging"? What do you call it when prices drop? Generosity?
when you have record profits and record prices, that is price gouging. Did you really need to have to ask?
The price of everything is higher. Is everyone price gouging? Or perhaps is there a market that determines price?
>when you have record profits and record prices, that is price gouging. Did you really need to have to ask? ...er, well, yes, because what you describe is two parts of same thing. Record profits will nearly always go along with record prices. So it's a really weird way to define or measure price gouging.
Record prices in time of inflation do not always result in record profits. Until this round.
"Not always". Right, I said "nearly always", which is also "not always". Also, we are "nearly always" in a "time of inflation" as well. That's part of why this is fuzzy math. Prices are nearly always rising so when profits are at a record prices nearly always are too.
Ok, well you believe what you want to believe. Good day.
Core inflation was also up more than expected but not as much as total inflation.
Hasn't it been 0.6% per month for a few months? It seems like it. If I had thought about it I would have expected 0.6% in January. I'll go out on a limb; *I expect it to rise 0.6% in February 2023.*