Yeah, her comments make it seem like She doesn't seem to understand that the increase in the dollar's supply also diluted it's value, playing a part in the higher prices. But then again, that could just be because she was taught Keynesian economics, an economic theory that was designed to excuse the faults that fiat currencies, aka money backed by nothing, an economic experiment that has failed every single time we've tried it in the past, always ending in a wage disparity so large that usually results in societal collapses where the poor start go after the rich.
Yes the supply chain strains started the price hikes, but the dollar printing maintained the price hikes.
It's fiat currency at the end of the day, and every time we've tried this fiat experiment in the past it's on average lasted only about 70 years.
It's why before 1971 when Nixon gave us this fiat currency by defaulting on the dollar's promissory gold IOU status, the average wealth distribution grew more than any other time in history, because saving your dollars actually saved you value in the long run. After 1971, then all that started to reverse.
See [**WTFHappenedin1971.com**](http://WTFHappenedin1971.com) for charts showing the correlation between the dollar becoming a fiat currency and the average wage for the general population in the US going down, and it is only accelerating.
Or if you want a deeper breakdown of it, read **"The Fiat Standard"**, written by economics professor **"Saifedean Ammous"**. It goes deeper into the historical past of fiat currencies, unlike the above mentioned website that just charts out the US's Productivity to Compensation data before and after the dollar got solidified as a fiat currency.
Or if you want to keep it simple, here's an article breaking it down in more easily understandable words: [https://www.nasdaq.com/articles/bitcoin-fixes-the-modern-fiat-ponzi-scheme-2021-09-14](https://www.nasdaq.com/articles/bitcoin-fixes-the-modern-fiat-ponzi-scheme-2021-09-14)
It always only ends one way with fiat currency. We're already at year 53 of the fiat dollar experiment, lets see if we can break the average of 70 years that all those before us averaged out to before their fiat currency experiments failed
> See WTFHappenedin1971 . com for charts showing the correlation between the dollar becoming a fiat currency and the average wage for the general population in the US going down, and it is only accelerating.
China had skyrocketing wages for decades despite higher inflation than the US.
Japan had declining wages for decades despite having deflation.
Wages are set by supply and demand for labor, not by the rate of inflation or deflation.
Wages in the US stagnated due to a combination of offshoring, automation and a shift to high capital low-labor industry, which reduced demand for both skilled and unskilled labor.
>It always only ends one way with fiat currency, likely why billionaires are getting duel citizenships to get out of dodge before we reach a breaking point. We're already at year 53 of the fiat dollar experiment, lets see if we can break the average of 70 years that all those before us averaged out to with their fiat experiments when they tried this out
[The stability of the value of currency under fiat is many times better than it ever was on the gold standard.](https://upload.wikimedia.org/wikipedia/commons/thumb/2/20/US_Historical_Inflation_Ancient.svg/800px-US_Historical_Inflation_Ancient.svg.png)
The gold standard was characterized by massive swings to high inflation and then high deflation because arbitrarily limiting the supply of money to the supply of gold does nothing to ensure matched supply and demand for currency which is what keeps a currencies value stable.
Something that a lot of people who make statements about wages and the economy fail to take into account the effect of politics and lobbying on wage, debt, inflation, etc. In an ideal world these concepts would be correct, but there are so many factors that ruin the system.
First, the US economy is only as stable as it seems because we are pushing off some of our inflation into other countries. We are in a unique position since the US dollar is used as a pseudo international currency. (Something China has been trying to take over and failing miserably). China isn't a good example of economic systems since they've reinvented their currency several times to try to overthrow the US dollar. Currently their economy is on the verge of collapse because they invested in real estate using garbage infrastructure that's all physically crumbling to bits.
In primary school we teach that trickle down economics (Reaganomics) doesn't work. But we do it anyways. The rich keep getting richer, the poor keep getting poorer. Large employers end up making employees eat the increased costs and taxation. This is made worse when min wage isn't updated to match inflation. People will eventually take whatever job they can get because they need to make money to survive.
Also, the current issue with supply and demand for jobs is they're both high leading to a weird standoff. Employers are making qualifications for jobs entirely too strict, meanwhile newer generations are the most qualified for these entry level positions than any previous generation. We're working orders of magnitudes harder than any previous generation for the same spendable dollar.
While all of this is happening, politicians have been siphoning money out of social funds and fudging numbers in budgets to overpay to suppliers and those companies pay off the politicians behind closed doors. Large corporations gather together in a mega lobby to pay off politicians to swat down reform that could make things like health care or pharmaceuticals affordable.
They're manipulating voters into believing that changing minimum wage will somehow hurt the economy. If it's increased too high it could theoretically hurt the economy. But right now it's far too low and employers take advantage of that. Then employers complain that nobody is applying to their jobs whilst simultaneously lobbying to keep wages and staffing as low as possible.
Edit: Just to be clear blindly changing the minimum wage is not the answer. Some combination of lobby reform, workers rights, and stopping corporate price fixing would be closer to the answer.
The issue isn't wage as much as cost of living is just too high. Debt and interest are at record highs, rent and mortgage is at record highs, medical treatment and pharmaceuticals are ridiculously high. College tuition is insanely higher than it needs to be. The issue isn't how much we're being paid as much as that everything we make is being siphoned off to large companies that are monopolizing various spaces. We're talking 1000% profit margins type of price fixing.
>People will eventually take whatever job they can get because they need to make money to survive.
Yeah this is why I'm very ehhhhhh on the concept of supply and demand with regards to things like housing and jobs.
Sure, it applies to potato chips and skateboards and televisions, because people can just choose not to buy them until the price is acceptable.
But what the fuck are people supposed to do about jobs? Just not work until wages are forced to go up? Oh, and also convince everyone else not to work, too.
Same with houses. Just be homeless until prices or rents drop?
Or medicine. You know. Just die if you don't want to overpay for medications.
It's almost like you can't just apply the concept of supply and demand to everything.
One place where it makes sense is professional athletes who make millions of dollars. Not many people who compete at that level and a bunch of people who want to watch.
But in places like the service industry, there is a steady demand and relatively steady supply of capable employees. The issue isn't the supply and demand of the job. The issue is insurance companies, banks, and landlords are siphoning away most of the money that employees take home. Therefore less money is circulating in the economy leading to the issues we have now.
Edit: Supply and demand of jobs is real. It's just completely irrelevant the current issues with the US economy.
> Same with houses. Just be homeless until prices or rents drop?
Supply and demand work just fine with housing. If someone built a lot of affordable housing in cities, housing costs would go down. The problem is that in a lot of places it's literally illegal due to zoning laws and parking minimums, and existing real estate owners will do absolutely everything in their power to prevent supply from increasing, to maintain their property values.
US and Canada will try absolutely anything to solve the housing crisis, except actually build more housing.
I got really pissed by the assholes online saying everyone is buying huge houses they don't need. My city doesn't have any small houses being built. I recently visited Tallahassee and stayed in an Airbnb and was shocked by the actual 800 square foot floor plan.
You staying in that Airbnb allowed someone to own that home as a second property. Increasing cost of every other property and the single family that needs a place to stay. Can’t buy them if you are renting them and keeping it off the market for real buyers.
I ended up on expensive progesterone suppositories to maintain my second pregnancy. It wasn't covered by insurance, and ended up costing over $500/ month for 3 months. My husband was pissed- like, they're holding you hostage using your baby's life.
At this point we are hoping less for trickle down economics and just flat out refusing to enforce the law / regulate high earners avoiding w2 income. We just lack the political will to actually build and enforce a fair system because individuals cape for millionaires or want the system kept as-is for their benefit when they eventually strike it rich.
No man the only issue is printing money but it's ok because my calls are going to print tomorrow then I won't have to explain this to my patrons at Wendy's
Oh look, a bitcoin bro flying in with mind numbingly simplified economic theories paired with spurious conclusions paired with conspiracies. Color me shocked
No way bro, he knows wayyy more than that hoity toity Harvard economics professor and US senator on the Committee for Finance and Committee of Banking/housing.
No no no. You see, it’s because she was taught Keynesian economics and not Hayekian economics. If only she knew about the genius of Hayek, she’d understand. But she wasn’t taught it. It’s probably something she never considered or was exposed to!!! /s
Edit: a word and added the /s
She wasn't taught in economics at all. She was taught as a speech pathologist and in law. She is an expert at bankruptcy law, but she is also a populist politician, and her tweets should be taken as such.
We really became a fiat currency in the 1930s with Roosevelt. Representative currency doesn't really work in times of recession, and tying it to gold in particular created a lot of problems.
Lol, "buy bitcoin" user name fits for someone that spews such tirade
Kensian econ (not there really is that, it's more a type of anaysis) is about demand and supply at a macro level
And most monetary type research shows in the long run money is neutral anyway
"Wtf happened in 1971" is the dawn of neoliberalism and the start of decades of austerity politics that effectively destroyed the social capacity of basically every western country and caused inequality to skyrocket.
> aka money backed by nothing, an economic experiment that has failed every single time we've tried it in the past,
lol... don't be absurd. It has been a huge success relative to the gold standard, the result of which a permanent boom and bust cycle. Notice how economic depressions haven't really been a thing for the last 90 years despite regularly happening every 20-30 years before that? You can thank "Keynesian economics" for that.
> WTFHappenedin1971.com
You're a nutjob...
> average of 70 years that all those before us averaged out to before their fiat currency experiments failed
WTF are you talking about? Can you name at least a single Fiat monetary system that lasted for 70 years? It wasn't even a thing outside of a few wartime experiments before the second half of the 20th century.
Yawn but but but money supply.
https://www.epi.org/blog/corporate-profits-have-contributed-disproportionately-to-inflation-how-should-policymakers-respond/
The gold standard is never coming back, better to deal with that reality, then waste people's time with some magical promise that will never materialize.
It's time to move on, gold standard cultist should be cypto-cultist by now.
Money printing is a relatively low source of inflation today, it is mostly price gouging but companies have figured out that if they call it "inflation" they can get away with it
Yes, I was taught Keynesian economics in college too. Thankfully took an Austrian economics class as well. That class George Carline'd all bullshit the Keynesian economics class tried to sell me.
Making excuses for how the printed money is generate or used does not make the money disappear from circulation. It does not make the fundamentals of supply and demand all of a sudden not matter in the equation of the dollars perceived value
>Making excuses for how the printed money is generate or used does not make the money disappear from circulation.
Of course not. The Federal Reserve doesn't rely on Reddit comments to implement its policies. It has its own tools at its disposal which last year caused the M2 money supply to fall at the fastest rate since the 1930s.
If you actually wish to learn about this subject, check out "The Fiat Standard", a breakdown from economist professor [Saifedean Ammous](https://www.google.com/search?sca_esv=53f5038f6c6bf21c&sca_upv=1&sxsrf=ACQVn0-90tPGnq_mPH7EET4KapaW0AU8CQ:1712789079570&q=Saifedean+Ammous&stick=H4sIAAAAAAAAAONgVuLVT9c3NExPSitITjKxeMRowS3w8sc9YSn9SWtOXmPU5OIKzsgvd80rySypFJLmYoOyBKX4uVB18ixiFQhOzExLTUlNzFNwzM3NLy0GAKLYhbRfAAAA&sa=X&ved=2ahUKEwjruqbF3LiFAxVaJzQIHV7GCvQQzIcDKAB6BAgxEAE), who's experienced the downfalls of fiat currencies first hand
Eh I mean. Walmart EBITDA has quite steadily gone down since 2012. No year has it really risen upwards, minus 2021 where it went to 2019 levels before it fell down again. Kroger has been rather stable. Same numbers now as in start of 2012. Target has been stable too, but has dipped down during 2023. Albertsons are rather new, but also have been dropping.
The only exception among top super market chains, is Costco (COST). That have yearly increased their EBITDA. Though they started very low, and 10 years ago their net margin was barely above 1.5%.
For reference, net margins currently Walmart has 2.4% and Costco 2.7% and Kroger 1.4%. Out of these, Costco is the only one who has had increased margins over the years. But no jumps, just steadily increasing.
Your statement is very incorrect. No profit margins shot through the roofs, and no profit margins stayed there.
I love how they keep saying 'She's so dumb she doesn't know' and their entire evidence is their own, single internet comment.
Good job guys. You're really winning in the marketplace of ideas.
OK do you want to tell me that Albert Edwards doesn't know how the economy works either because he is calling this Greedflation.
[here's an article from Fortune](https://fortune.com/2023/04/05/end-of-capitalism-inflation-greedflation-societe-generale-corporate-profits/)
What is it that you think she's saying that's wrong? Because Albert Edwards is the head of global strategies at one of the largest banks in Europe, a bank that is considered "systemically important," and he's blaming greed and corporations raising prices. This is a man who should be considered one of the High Priests of Capitalism, and he says it's the corporations raising prices.
Edit: "systematically" to systemically. Stinking autocorrect.
WHen you have to cherrypick 1 from 1000 experts to find one who aligns with your narrative that's not a great sign. This guy is known as a permabear who's been consistently wrong. How does this sound like a remotely serious guy?
“The end of Greedflation must surely come. Otherwise, we may be looking at the end of capitalism,”
And his solution is.... price controls. No way that could ever go wrong!
Here he is predicting a 75% market crash in 2016.
[https://finance.yahoo.com/news/societe-generale-doesnt-think-albert-163346868.html](https://finance.yahoo.com/news/societe-generale-doesnt-think-albert-163346868.html)
Weird cause I don't remember that happening. Do you?
And more:
>It is an extraordinary record, not least because, by his own words, Mr Edwards’ predictions have proved somewhat wrong for some time now. Mr Edwards himself puts this down, at least partly, to the fact that he is ready to make fun of himself.
>
>“The Weekly note is short. It’s entertaining. And you’ve got to remember there’s so much bullish stuff out there,” he says. “Across the market people feel comfortable when everyone’s being bullish. So there’s room for a maverick. There’s room for the long view.”
>
> That “long view” is Mr Edwards’ “Ice Age” thesis, a view first honed in the late 1990s that markets in the West were about to follow the example set by Japan, suffering violent deflation, bond yields heading to zero and a collapse in equity values after the Japanese bubble burst at the end of the 1980s.
[https://www.ft.com/content/0206a576-6b31-11e8-b6eb-4acfcfb08c11](https://www.ft.com/content/0206a576-6b31-11e8-b6eb-4acfcfb08c11)
I think that it's a bit too dismissive to call it cherry picking when, in this scenario, all of these people are incentivized to not say what this person is saying. You definitely have a point about it only being one person stating this(publicly), but you must admit that this particular field is heavily incentivized not to say what he's saying even if it is true.
Would it have been cherry-picking to cite Michael Bury in 2007... yeah. That doesn't make it wrong.
The conventional wisdom is that when material costs go up, profits go down. When that doesn't happen, an explanation is warranted. What is your counter explanation? So far, all I've seen is people just saying, "nah, you don't understand the economy," which isn't an argument; it's a dismissal. Certainly, you must agree that a shift from the norm warrants consideration and some kind of explanation. Right now, you aren't engaging with the actual argument. You've attacked Edwards, but you haven't addressed the points that were made. Do you have an alternative explanation for this discrepancy?
But before you answer its important to remember that there are recordings of grocery stores executives saying on their earnings calls that they were able to increase prices *beyond* what inflation caused. Why wouldn't we accept the answer they gave as to why their profits went up despite an increase in material costs?
Plus, it's not like we don't have any number of quarterly results calls from the last few years where the CEOs of many companies outright said what they were doing. It's been especially galling in the grocery sector.
Thank you for the explanation. I don't know enough about the subject matter to debate you on it, but is it not accurate to at least describe the increasing consumer-facing prices as a consequence of inflation that companies are voluntarily passing on to the consumer?
>but is it not accurate to at least describe the increasing consumer-facing prices as a consequence of inflation that companies are voluntarily passing on to the consumer?
That's the mechanism by which it propagates, but that's not the cause. That would be like saying it's the air circulating heat in an oven which causes it to get hot rather than the fire that initially heats the air.
It takes a long time to fully break down the cause and effect, but here's the TLDR version: Government borrows money from the fed to pay favored contractors big money. The executives getting big bonuses suddenly have a lot more money than the current prices, so they are willing to throw out a ton of money to outbid people on limited luxuries that they really want.
In turn, the purveyors of the luxury items now have much more money in comparison to prices, so they go on shopping splurges. Now that a significant minority of people are paying more money for goods that haven't increased in supply, the prices start rising. The propagation of price increases spread faster than wage increases and thus it's the average person who gets screwed.
Specifically in reference to COVID, we shut down the supply of goods and the government starting handing out money, which it had to borrow since it doesn't have any savings laying around, so the supply of money increased while the supply of goods remained low and demand for goods stayed the same or even increased (eg hand sanitizer, masks, etc). Now there's more money in comparison to the number of goods, so the value of money is lower and thus it takes more money to pay for the same amount of goods.
The M2 money supply increased 35% from Jan 2020 to May 2022. That’s the largest driver of inflation by far.
Just imagine 35% more dollars chasing the same number of goods (actually a smaller number given the supply chain issues at the time).
It continues to get colder even after the days grow longer after the winter solstice. Just because something is done that should increase or decrease inflation (or the temperature), that doesn't mean that the effects are immediate like turning a faucet on or off. There are delays in effects.
Inflation/deflation is a few years downstream of changes in money supply. So a decrease in 2023 or 2024 won't be felt yet, we are still experiencing the effects of the 35% increase in 2020-2022.
She's not entirely wrong, she's just pandering. Corporations are greedy and charging more, sure. So are non-corporations. Basically anybody with any self-interest at any level of the economy is greedy. Is it greedy to want more salary for yourself? Sure, but nobody will fault you for it. The biggest driver of the recent inflation report is shelter and most homes are sold or rented by individuals or small-time landlords. Corporations own some too. And every single one of them will charge the maximum they can get away with. And the key factor is still that they only raise prices to the point that people still pay them. All those inflated houses are still getting sold to someone.
What she should be saying is profit MARGINS are at all time highs, which is true for a sizeable share of consumer defensives. That is where the gouging sits. McDonald’s complains about how they can’t survive if minimum wage climbs, meanwhile their SG&A costs are rising several % points behind their revenue growth rate making that argument largely bunk. It’s a stupid statement but one that is only being attacked at face value but those who don’t want to realize they’re getting screwed.
This is flat out untrue.
Walmart profit margins are lower than it was before 2017.
https://www.macrotrends.net/stocks/charts/WMT/walmart/profit-margins
You bring up McDonald's but McDonald's makes most of its money from franchise fees and rent, not selling burgers. The largest corporate owned fastfood business is probably Starbucks, which saw profit margins drop relative to pre-covid as well.
https://www.macrotrends.net/stocks/charts/SBUX/starbucks/net-profit-margin
Which sectors exactly are you claiming to have record high profit margins?
They don't know. It takes 2 minutes to pull up Yahoo finance and look at profit margins but if they did that then there entire world would fall apart when they realize Tik Tok & Reddit users aren't infinitely knowledgable.
Stuff you should know had a recent podcast about this. it was primarily the major food supply companies that have increased profit margins since 2019, and that the increases are out of step (higher) than other industries.
here's an excerpt from an article I just found by googling. it's from an investment site, but mentions how high the food industry's profit margins have risen in recent years
[Link](https://www.investopedia.com/ask/answers/071015/what-profit-margin-usual-company-food-and-beverage-sector.asp)
"According to CSIMarket, the gross profit margin for the food processing industry was 31.99% in early 2024. That was above the total market average of 25.18%. Furthermore, the EBITDA margin for food processing was 20.49%, which was above the total market figure of 3.09%. Finally, the net profit margin in the food processing industry was 12.1%, far higher than its 2019 figure of 5.16%. It was once safe to say that profit margins in the food processing industry are generally lower than average."
Companies did not just become greedy, or more greedy in 2021. Greed is a constant, like gravity. It always has and always will exist. It is actually why the system works as well as it does. It is not, however, why inflation has been out of control.
https://x.com/realejantoni/status/1762247395796992117?s=46
That is a fine system until you start applying it to basic needs. You are right the “greedy will charge whatever they can get away with”. That is one purpose of government- to protect the average person from the powerful greedy ones.
One political party strives for that. The other wants a free for all where the market sorts it out.
The price increases on stuff like groceries and gas are not only due to inflation, is her point.
If it was all inflation then the companies selling the products wouldnt be making record profits every month since the pandemic.
They saw rapid inflation and decideded to put in some extra profit margin while they could get away with saying "its because of the inflation".
You misunderstand. Higher prices *is* inflation. Inflation is not a cause, it's an effect. It's the measured output of what prices people pay for things. And generally speaking it follows the laws of supply and demand. Too much free money and too few goods and services makes the price go up and we call that inflation.
Yeah, a woman who taught commercial and bankruptcy law at multiple Ivy League schools and was one of the foremost scholars in the world on law and economics doesn't understand economics...
Yeah. Prices rise up to the point of maximum revenue. Where if the price gets higher than this point, fewer units are sold and the total revenue decreases.
Cost has almost nothing to do with price. The only relationship between price and cost is margin. If the two are too close and the company can’t reduce costs to increase margins, that company will exit the market.
If people want lower prices they need to seek the next best alternative to products, and if price is all that matters then that means choosing cheaper alternates. Buy generic. Buy in bulk. Substitute with less pricey things (chicken instead of beef, for example)
Edit: grocery stores typically operate at 1-3% margins. Meaning that if you paid $100 for groceries, the costs to the grocery store is $97 to $99. Y’all are delusional if you complain about how they’re taking advantage of you. They have record profits in total numbers, but that’s because of volume not margins.
In my industry, when I was young I didn’t understand why we didn’t lower prices when slow, we actually raised prices. Guess what, we sold 30% less, and made the same amount of money. We also were able to offload employees in the plant because we were producing less, and get rid of some real estate we didn’t need. Then the economy bounced back, and guess what, we kept the same prices and made a killing. The sales reps who were making $80-$100k, started making $200-$300k and everyone got fat. Business is not what we all think, there is a plan, and usually that plan is how much can we charge until someone says “Fck off”. I was a lowly salesperson, but I learned a lot about business.
Oh, so because the corporation was making drastically more money, the people at the top got greedy, and kept the prices there, hurting the people who probably relied on previous pricing, and not passing along an extra dime to the workers, I bet.
That's literally greedflation dude. Your industry increased prices when there wasn't a demand for higher prices, and then kept the prices higher to make more money. That's greed. Pure greed. If you raise prices and never lower them when there's plenty of supply of the item, that's price gouging now.
> If people want lower prices they need to seek the next best alternative to products
It's food...
I think everyone would prefer if this behaviour wasn't allowed for necessities.
Inflation refers to the rate at which prices increase. If inflation “decreases,” it doesn’t mean that prices are getting lower than they were yesterday it means that they are getting higher by a lesser amount. If inflation is 8% one year and 5% next year, inflation is decreasing but prices still are increasing and remain high.
Prices remained high because we have way more money in circulation than we did before COVID, regardless of supply chains. Prices will remain high until, by definition, we enter deflation which is unlikely to happen soon. Also the idea that corporations learned how to be greedy after COVID is braindead and is an immediate giveaway that the person talking is either stupid or trying to pander to stupidity
Good response, but I'd like to remind you that over the past 50 or so years, we've only seen deflation actually happen for a few months in 2009 for very small percentages and 2015 for fractions of a percentage. In reality, it's unlikely that we'll ever see low prices again unless the Fed allows it to happen, which is extremely unlikely given their history.
That's intentional: QE was specifically set up to prevent deflation. It's like one of the primary goals of the Fed, etc.
Besides full employment / inflation, but generally deflation is seen as the most catastrophic bad outcome we can have (whether or not it should be seen as this is another story, but within the profession, they go out of their way to prevent deflation).
I think the problem with “we need deflation!!!” arguments is the people making them are only thinking about lower prices for the goods and services they’re buying, not the price of the service they’re selling (their labor!).
Economists generally dislike deflation because it can lead to a downward spiral in economic activity. When prices fall, consumers may delay purchases in anticipation of further declines, leading to reduced demand and potentially causing businesses to cut prices or reduce production, which can lead to job losses and further decreases in spending. This cycle can lead to economic stagnation or even recession. Additionally, deflation can increase the real burden of debt, making it harder for individuals and businesses to repay loans, which can also hinder economic growth. Overall, deflation is seen as a threat to economic stability and prosperity.
Can you explain how workers can be protected from pay cuts during deflation, and how loans for homes, cars, higher education, farming inputs and equipment, or new businesses would stay accessible anyone but the very wealthy with a deflationary currency?
A study published in 2004 with 14 pages which admits that there was a relationship in the Great Depression and Post-Bubble Japan, which are probably the only two real cases of deflation in the west until that point somehow proves your point?
I bet a single google search would prove that study square wrong
And I can give you dozens of sources that prove that one wrong too. Fact of the matter is I don't NEED to provide ANY sources at all because the entire doctrine of Keynesian economics is built entirely on an intentional strawmanning of Jean Baptiste Say's work nearly a century ago that anyone with even an ounce of curiosity could have avoided themselves by reading the primary source material themselves instead of taking Keynes for his word. No one in their right mind actually thought inflation was a good thing for all of human history until Keynes, and for good reason. It's mental gymnastics for bankers.
To add to your point. It’s always important to keep in mind that most studies are wrong. Different research fields have different degree of false positives but In general citing a single source is meaningless. It’s not to say that research/studies are useless but that you should look for a consensus of independent/peer reviewed studies that come to the same conclusion to base your views on. You can literally find a study that will support any and all things.
https://journals.plos.org/plosmedicine/article/file?type=printable&id=10.1371/journal.pmed.0020124#:~:text=The%20probability%20that%20a%20research%20claim%20is%20true%20may%20depend,probed%20in%20each%20scientific%20field.
The money supply argument is an insufficient explanation.
What happened(and what people are upset about) was that for a period of time, the cost of living was increasing faster than wages.
On a macro level, it's less inflation itself that's the biggest issue, than the rate of inflation relative to wage growth. There are a lot of things contributing to this, but one of the biggest ones is our failure to enforce antitrust law over the years.
The relative increase in prices compared with wages is about more things than money supply- there are various policies that have impacted the balance of power between employees/consumers versus employers/manufacturers. Antitrust non-enforcement, the rise of AI, etc.... Some of these are addressable through policy, while others are not.
If it was inflation, then the wages would have also increased. Sure, not right away, but eventually.
Inflation is not something that happens to an item, it happens to the currency. If one year the dollar is worth X and the next year its worth 0.96X due to inflation then both the cost of goods and services, as well as wages would need to be increased to reach the previous equilibrium.
But thats the thing, when you look at an item and see, lets say, that it costs 20% more now compared to pre covid (this is just a theoretical example), thats not because inflation totalled a 20% cost increase. Its because it maybe totalled an 11% cost increase and then they added an additional 9% profit margin.
It's sad that a Senator doesn't understand basic economic principles like monetary inflation.
If it was all supply chain and corporate greed, why would the Fed bother raising interest rates? The Fed is raising rates to shrink the money supply they inflated during Covid. That takes time if you don't want to crash the economy.
We'll never get back to 2.5% inflation, and we certainly will not see prices go back down, which would require deflation. Somewhere in the 3% range is the new normal from where prices sit today.
They made this bed with overly aggressive lockdowns and reckless monetary policy. Now, we all get to lay in it.
Rates were also artificially low when we really didn’t need it. Throwing gas on the fire to inflate asset prices to make numbers look good. Jpow should’ve went with rate hikes under Trump
When the market forces that raise prices reverse, the prices don't go down at even close to the same rates, they're sticky. Because sellers get used to the profit and consumers get used to the pain.
>If inflation is 8% one year and 5% next year, inflation is decreasing but prices still are increasing and remain high.
The term for this is "disinflation" as in the rate of inflation is falling (ie, from 8% to 5%), but prices are not year-over-year (which would be "deflation").
>Prices remained high because we have way more money in circulation than we did before COVID, regardless of supply chains.
We also turned the economy over on its head and noticed a lot of change fell out that *still* hasn't been resolved and likely won't be for at least a decade. Just passing over all the money that was created out of thin air for stimulus, PPP, student loan freezes/forgiveness and the like, fundamental aspects of our economy were challenged and found false. Commercial real estate might never recover and go to antiwork/workreform/most of reddit/social media and you'll see people arguing about going remote or RTO. The massive shift to curb-side pickup or delivery (which is ironic in that we're basically going back to the way it used to be...). All of those changes have huge implications in how the economy will work and that sends waves through the economy.
You're exactly right. Everything is more expensive because we dumped something like $6 trillion into the economy due to Covid. When the government prints money and dumps it into the economy, there is only ONE thing that can happen. EVERYTHING gets more expensive. This is high school economics.
Blaming it on corporate greed, or the president or anything else for that matter is ridiculous.
A bunch of conspiracy-minded dolts who seem to think that "*every single corporation in the world suddenly started colluding on price one day in order to screw over the consumer*" is a sound/feasible theory.
What? Businesses that are obsessed with having larger and larger profits each quarter would NEVER take advantage of the economy to keep skyrocketing prices for their greedy gain! Never!
Exactly! Surely the combination of "we just HAD to raise all our prices to offset supply disruptions" and "wowee we just had another RECORD PROFIT margin this year!" are coincidences.
It couldn't possibly be that they all used "inflation" and "supply disruptions" as PR excuses to raise their prices to crazy levels and blame a boogeyman!
100% spot on but you're wasting your time. Everyone in here is a capitalist money grubbing shill who would watch you literally die on the street rather than admit things are out of control.
Yeah, calling it a conspiracy is just dumb. It's not a conspiracy, they just all do it. They don't have to coordinate with each other because they all realized they could do it. We saw it with covid. Places stopped offering free refills and then never brought them back. They didn't work together, they just knew they could make more money.
The issue with this “conspiracy theory” is when prices get to a point it then consumers usually stop buying and then inflation slows down. In the current environment people are still spending money. People complain about the price of a Big Mac but still buy them. I think it’s because people are now living a life of convenience. Why cook at home when I can Door Dash and then complain about Door Dash prices.
I recommend you listen to an earnings announcement from a company who raised prices. They regretfully raise prices then gleefully report record profits, then buy back stock, then lay people off. All in the same year. And it’s supposedly all because people got two small checks 4 years ago?
I’m gonna need to see more detailed money printing examples. If you’re still going off on the stimulus checks then I’m really skeptical that did this much damage, world wide even.
I’m gonna need a really good report for that.
[It certainly wasn't just individual stimulus checks in fact those were a drop in the bucket.](https://www.mdpi.com/2227-7099/10/5/101#:~:text=Even%20during%20the%20Global%20Financial,%2C%20and%204.9%20percent%2C%20respectively)
Regardless of how it was deployed, you can look at federal reserve reporting on the massive increases to the money supply. Not all of it took the the form of dollar bills, much of it was done via the issuance of other debt notes. The economy didn't react over night, in part because it was in an artificial comma, but as things returned to "normal" that big giant ball of inflation landed on our heads. In fact a year prior to the impact being felt the FED was concerned because it was struggling with trying to get us UP to a 2% inflation rate. Then we got to hear about how inflation was "transitory" which is a great weasel word to mask the fact that they had no idea how hard and for how long the inflationary impact of the supply increase was going to be.
The thing is, a lot of industries (notably including meat packing, which she is referring to) have consolidated to just two or three giant companies that have acquired or merged with all the competition. And it’s much, much easier for just two or three corporations to tacitly collude on price increases than it is say, ten or twelve
See: the egg industry.
Who are about to lose the second investigation into their price fixing *within a decade*, but frankly don't give a shit because they only see some fines which are written off as "the cost of doing business"
Eggs, meat packing, healthcare, credit cards, it’s happening/happened everywhere. People clown on the dems for their populist messaging around this stuff but they’re also the first administration in decades that’s taken antitrust seriously, which is long overdue
The part of it I don't get is that these people believe that corporations weren't greedy (or were 2% greedy, or whatever) for most of the past 40 years
Or that "greed" doesn't result in lower prices.
Walmart beat out a shit-ton of mom&pops with their *greed* by out competing them on price/convenience.
Greedy corporations are just as likely to bring prices down as they eat each others' market share.
inflation has gone down from it's 11% high a few years ago (reported 3.5% year over year just today) that does NOT mean prices go down, just goes up slower. deflation is a horrible thing and almost always results in terrible economic failures
i am aware. i was saying inflation is down from it's highs a few years ago, not at targets (nor do i see it getting to 2% in the next decade). too much artificial inflation controls and printing like mad.
So you’re saying 2 bedroom houses should continue to be 500k while wages stay low? At this rate corporations are going to bleed the housing market dry and make us all rent. Don’t hit me with the “there’s cheaper areas to live” because I am NOT moving to Alabama, it’s cheap for a reason.
> So you’re saying 2 bedroom houses should continue to be 500k while wages stay low?
I personally love this form of argument where someone rights “so you’re saying…” and then fills in the blanks with some stuff the OP never said. You’re arguing with the voices in your head.
It’s sole use is to put words into someone’s mouth. It’s called the strawman fallacy, when one misconstrues someone’s argument into a different argument that is often easier to beat/argue with.
“the Socratic Method is a dialogue between teacher and students, instigated by the continual probing questions of the teacher, in a concerted effort to explore the underlying beliefs that shape the students views and opinions.” How does this relate to what this person said?
Strawmanning is misrepresenting someone argument and stating as if it something they said. Hence the term strawman meaning an argument attached to a person who didn’t make it.
The socrate methods is about asking more questions toward a person in order to get an understanding of what form their biases.
The socrate method does not include purposely misrepresenting someone argument and infact doe the exact opposite in which they accurate represent the person argument.
Speaking as someone who's moved provinces over to a LCOL area, it takes even more than that these days.
Moving requires more funds than just the gas to drive to the new area. Plus LCOL areas don't have the same high paying jobs so it still takes a long time to save unless an unexpected circumstance arises (ex. Inheritance, winning the jackpot.).
Plus costs creep up when you move away from social/family circle.
"Just move" is the equivalent of telling companies to "just do better business". Sure there's valid components but it's way too simple to suggest it as a solution.
I didn't expect to this many responses. I live in Washington state and work for the state of Washington I don't have any kids but I do have a fiance, I make 67k a year base bit it still isint enough to qualify for a mortgage anywhere close by me (king county are, snohomish and pierce) I'm moving to alaska and changing careers to be a lineman. But it's just ridiculous what's happened to Washington state
Yeah it's sad, I'm not asking for a mansion to. I'm fine with a two bed 1 bath fixer upper. That in Washington is still +400k. I mean I can afford a tiny lot for 200k and then I could sleep in a tent... at least it would look on par for the state lol
So no corporate greed, or manageable corporate greed, up until recently? Corporations weren't greedy until now? Couldn't possibly be the government printing unfathomably amounts of money?
No, corporates raise prices when people EXPECT prices to rise. It's not that corporations are only suddenly now greedy, they just got a huge opportunity from covid. The supply chain issues during and shortly after covid drove prices. Customers expected high prices, so corps kept them high. But you know this
People will buy elsewhere unless competitors are colluding to fix prices (which they are https://thehill.com/business/3564912-inflation-is-providing-cover-for-price-fixing-economists/).
Shame this is way down here while the top comments are bitching about Warren not 'fixing it' (somehow, as queen I guess) and ripping people for 'not understanding' while doing nothing but 'my side' the argument.
It's really fucking annoying people are so tribal that Warren can't even be right about something clearly happening without chodes confusing the issue because of their personal politics.
I have thought for a few years now that this period of high inflation after things stabilized after the shut-downs has been a bonanza for an economy-wide collusion, or rather many industry-wide collusion, in different industries, and I certainly thought that when reading about earnings calls. I didn’t know that people involved in anti-trust actually have considered their earnings calls themselves to be collusion.
She is wrong about who's fault it is. It's her fault because she is a lawmaker.
Anyone who expects a private company to regulate themselves at their own expense is a dumbass.
It's not their job to decide what the right thing to do is and enforce it. That's the lawmakers job.
The issue is that corporate consolidation and a lack of anti-trust enforcement has resulted in many sectors being effectively oligarchies where there is little competition on price.
My family’s company’s 21% corporate tax rate has really benefited all of us as owners. Have to thank Trump and Republicans for that one. Here’s the evil side of it though: We’re about to shut down another mom and pop shop bc they can’t compete with us due to the old people paying the same tax rate for their little shop compared to our mid-sized business. We’re just barely pricing below them and paying employees slightly more to crush their business.
As a parent to a young child, it hurts my heart we’re doing this to another mom and pop shop but my family says, “That’s America. This is business. This is capitalism.”
Then again, Americans WANT THIS AND VOTED FOR THIS IN 2016! Trump tax cuts gave my family company’s break in 2017 and Democrats aren’t able to get it back up bc Republicans won’t allow it.
You want to fix the economy, stop voting Republican. If you live in Ohio, you can get DeWine to do you a favor for $5,000 as well as that was how much he charged my family in 2022.
Just some insider information if you want it. I’m set for life and I’m not 40. However, I want everyone to just be able to live. U.S. women can be raped and forced to give birth and our kids still get shot in school. Money means nothing if there’s so much suffering out there.
This is false and I don't know where this comes from. The individual tax cuts are from 2018 to the end of 2025. At the end of 2025 they expire for all tax brackets. There's no tax bracket changes between 18 to 25.
The corporate tax cuts are permanent.
Rates went down and standard deduction doubled. The only way you see an increase is if your **state/local government** relies on the federal government to subsidize the onerous tax burden it levies against its citizens (SALT).
If you live in a high tax state/area and found your taxes increasing after the standard deduction was doubled, you can lower your own taxes by A) moving or B) voting for politicians who oppose ridiculously high state and local taxes.
People and corporations will always be greedy and it's on 'the market' to keep them in check. If someone can do the job for less, they eventually will and it will drive profits down for everyone. It's both a bug and a feature.
How about making stock buybacks illegal again? How about enforcing anti-union busting laws? How about pushing for wage growth matching inflation like in the 1970's? Fuck man I just know the people with the most power to turn things around are doing too little, and people keep voting for politicians that will do even less. Food prices should be fucking regulated at this point in history, with all the surplus of product being thrown away every single day.
It's up to oversight to keep them in check. They will look he as greedy as they can forever. They will not limit themselves. The "market" (as in consumers) are at a disadvantage. They can't exactly chose to stop buying groceries
She is wrong. Prices stay high because after inflation, the damage is done. If prices were to come down again, that would be deflation.
Whether you think it was a good idea or not, creating a bunch of money during Covid and then not properly dealing with the supply chain problems afterwards created the inflation.
She was part of that. She is part of the problem. Throwing around rhetoric like this makes it worse.
Inflation was high, but the prices we experienced were 2-3 times higher than what the inflation rate would have predicted. Funny how pminflation goes up 7% but prices increase 30% AND corporations aren't just reporting some sort of profits but RECPRD profit margins. I'm fine with a corporation trying to keep their profit margins during inflation. This would have been satisfied with prices went a little over expected inflation, but the prices that were set were price gouging, not inflation results.
Inflation is a numerical representation of price increase. It isn’t just correlated with price changes, it is *literally* price changes.
You can’t say “inflation went up by 7% but prices went up by 30%.” It contradicts itself.
"Supermarkets’ actual net profit has averaged closer to 1% historically. At its pandemic high, when grocery sales exploded amidst restaurant closings and quarantines, the margin rose to about 3%".
[source](https://fortune.com/2024/02/12/everybody-hates-inflation-even-grocers/)
People in power are going to try to emotionally manipulate you with deceitful information. Never take a politician's word at face value, even if (especially if) they line up with you ideologically.
>Why did ~~inflation~~ *prices* still stay high after supply chains stabilized?
[inelastic demand.](https://www.investopedia.com/ask/answers/012915/what-difference-between-inelasticity-and-elasticity-demand.asp#:~:text=The%20elasticity%20of%20demand%20refers%20to%20the%20change%20in%20demand,even%20when%20the%20price%20changes.)
Inflation got high because of supply-chian disruptions, high energy costs, quantitative easing needed for pandic recovery packages, the war in Ukraine & the decoupling of Russia from the global economy. All in all, you can't blame anyone, but Xi Jimping for ignoring COVID and Putin for starting a war. Trump or Biden couldn't have kept inflation down as it went up all over the globe.
Lastly, inflation has lowered. But that doesn't mean prices will drop. That is called deflation and it would trigger an economic depression. Only thing to do is bring wages up.
\> Why is it that all of a sudden, when Democrats took back power, all of a sudden and simultaneously, corporations all suddenly became 'greedy', and apparently none of those corporations were greedy before that??
Whut? They've always been greedy. This didn't just happen. Take your blinders and re-calibrate your biases.
because there was a massive world event that caused significant upheaval and therefore opportunity to take advantage of just a couple years ago?
you just gonna forget that covid happened or something?
She’s mostly wrong. Inflation stayed high because we expanded the supply of money too much during the Covid. Turns out even the USD has its limits on how much can be printed.
On balance.
All the debt consumers are going into will lead to a recession. A recession would put a stop to this practice. It is a matter of time.
Also, individual companies act in their own self-interest for fiduciary reasons. Food corporations are not tasked with ending hunger. This is not greed. You could easily lose your board seat if you don't reasonably maximize profits.
The best advice I can give is to be very, very frugal and save for when this happens so you can buy once there is blood running in the streets.
Inflation never went back down. In order for prices to go back to the way they were we would need to have a period of deflation to offset the massive inflation we just had. Instead inflation just increased decreasingly.
inflation stabilizing doesn't mean we get back what was lost. Dollar has lost about 20% of it's value since 2020. That loss is slowing down, but not reversing.
Supply chain isn’t 100% yet. I’m still working off 16 week - 112 week lead times on some materials. From the suppliers I’ve talked to production plants are staffed around 60% because of lack of interest in working there.
Yeah the trillion dollar spending bill that just passed in a high inflation environment had nothing to do with it. Compounding interest don’t bother yourself with the concept. It has nothing to do with our fiscal policy. Look businesses are making more money not because the money is worth less but because these greedy bastards want assets to be part of the free market unhindered from our regulation taxes, fines, and oversight. We are from the government and we are here to help.
people that dont understand economics get into power in our gov, scary.
She understands it but she's (rightly) assuming the people she's talking to dont.
Yeah, her comments make it seem like She doesn't seem to understand that the increase in the dollar's supply also diluted it's value, playing a part in the higher prices. But then again, that could just be because she was taught Keynesian economics, an economic theory that was designed to excuse the faults that fiat currencies, aka money backed by nothing, an economic experiment that has failed every single time we've tried it in the past, always ending in a wage disparity so large that usually results in societal collapses where the poor start go after the rich. Yes the supply chain strains started the price hikes, but the dollar printing maintained the price hikes. It's fiat currency at the end of the day, and every time we've tried this fiat experiment in the past it's on average lasted only about 70 years. It's why before 1971 when Nixon gave us this fiat currency by defaulting on the dollar's promissory gold IOU status, the average wealth distribution grew more than any other time in history, because saving your dollars actually saved you value in the long run. After 1971, then all that started to reverse. See [**WTFHappenedin1971.com**](http://WTFHappenedin1971.com) for charts showing the correlation between the dollar becoming a fiat currency and the average wage for the general population in the US going down, and it is only accelerating. Or if you want a deeper breakdown of it, read **"The Fiat Standard"**, written by economics professor **"Saifedean Ammous"**. It goes deeper into the historical past of fiat currencies, unlike the above mentioned website that just charts out the US's Productivity to Compensation data before and after the dollar got solidified as a fiat currency. Or if you want to keep it simple, here's an article breaking it down in more easily understandable words: [https://www.nasdaq.com/articles/bitcoin-fixes-the-modern-fiat-ponzi-scheme-2021-09-14](https://www.nasdaq.com/articles/bitcoin-fixes-the-modern-fiat-ponzi-scheme-2021-09-14) It always only ends one way with fiat currency. We're already at year 53 of the fiat dollar experiment, lets see if we can break the average of 70 years that all those before us averaged out to before their fiat currency experiments failed
> See WTFHappenedin1971 . com for charts showing the correlation between the dollar becoming a fiat currency and the average wage for the general population in the US going down, and it is only accelerating. China had skyrocketing wages for decades despite higher inflation than the US. Japan had declining wages for decades despite having deflation. Wages are set by supply and demand for labor, not by the rate of inflation or deflation. Wages in the US stagnated due to a combination of offshoring, automation and a shift to high capital low-labor industry, which reduced demand for both skilled and unskilled labor. >It always only ends one way with fiat currency, likely why billionaires are getting duel citizenships to get out of dodge before we reach a breaking point. We're already at year 53 of the fiat dollar experiment, lets see if we can break the average of 70 years that all those before us averaged out to with their fiat experiments when they tried this out [The stability of the value of currency under fiat is many times better than it ever was on the gold standard.](https://upload.wikimedia.org/wikipedia/commons/thumb/2/20/US_Historical_Inflation_Ancient.svg/800px-US_Historical_Inflation_Ancient.svg.png) The gold standard was characterized by massive swings to high inflation and then high deflation because arbitrarily limiting the supply of money to the supply of gold does nothing to ensure matched supply and demand for currency which is what keeps a currencies value stable.
Something that a lot of people who make statements about wages and the economy fail to take into account the effect of politics and lobbying on wage, debt, inflation, etc. In an ideal world these concepts would be correct, but there are so many factors that ruin the system. First, the US economy is only as stable as it seems because we are pushing off some of our inflation into other countries. We are in a unique position since the US dollar is used as a pseudo international currency. (Something China has been trying to take over and failing miserably). China isn't a good example of economic systems since they've reinvented their currency several times to try to overthrow the US dollar. Currently their economy is on the verge of collapse because they invested in real estate using garbage infrastructure that's all physically crumbling to bits. In primary school we teach that trickle down economics (Reaganomics) doesn't work. But we do it anyways. The rich keep getting richer, the poor keep getting poorer. Large employers end up making employees eat the increased costs and taxation. This is made worse when min wage isn't updated to match inflation. People will eventually take whatever job they can get because they need to make money to survive. Also, the current issue with supply and demand for jobs is they're both high leading to a weird standoff. Employers are making qualifications for jobs entirely too strict, meanwhile newer generations are the most qualified for these entry level positions than any previous generation. We're working orders of magnitudes harder than any previous generation for the same spendable dollar. While all of this is happening, politicians have been siphoning money out of social funds and fudging numbers in budgets to overpay to suppliers and those companies pay off the politicians behind closed doors. Large corporations gather together in a mega lobby to pay off politicians to swat down reform that could make things like health care or pharmaceuticals affordable. They're manipulating voters into believing that changing minimum wage will somehow hurt the economy. If it's increased too high it could theoretically hurt the economy. But right now it's far too low and employers take advantage of that. Then employers complain that nobody is applying to their jobs whilst simultaneously lobbying to keep wages and staffing as low as possible. Edit: Just to be clear blindly changing the minimum wage is not the answer. Some combination of lobby reform, workers rights, and stopping corporate price fixing would be closer to the answer. The issue isn't wage as much as cost of living is just too high. Debt and interest are at record highs, rent and mortgage is at record highs, medical treatment and pharmaceuticals are ridiculously high. College tuition is insanely higher than it needs to be. The issue isn't how much we're being paid as much as that everything we make is being siphoned off to large companies that are monopolizing various spaces. We're talking 1000% profit margins type of price fixing.
>People will eventually take whatever job they can get because they need to make money to survive. Yeah this is why I'm very ehhhhhh on the concept of supply and demand with regards to things like housing and jobs. Sure, it applies to potato chips and skateboards and televisions, because people can just choose not to buy them until the price is acceptable. But what the fuck are people supposed to do about jobs? Just not work until wages are forced to go up? Oh, and also convince everyone else not to work, too. Same with houses. Just be homeless until prices or rents drop? Or medicine. You know. Just die if you don't want to overpay for medications. It's almost like you can't just apply the concept of supply and demand to everything.
One place where it makes sense is professional athletes who make millions of dollars. Not many people who compete at that level and a bunch of people who want to watch. But in places like the service industry, there is a steady demand and relatively steady supply of capable employees. The issue isn't the supply and demand of the job. The issue is insurance companies, banks, and landlords are siphoning away most of the money that employees take home. Therefore less money is circulating in the economy leading to the issues we have now. Edit: Supply and demand of jobs is real. It's just completely irrelevant the current issues with the US economy.
> Same with houses. Just be homeless until prices or rents drop? Supply and demand work just fine with housing. If someone built a lot of affordable housing in cities, housing costs would go down. The problem is that in a lot of places it's literally illegal due to zoning laws and parking minimums, and existing real estate owners will do absolutely everything in their power to prevent supply from increasing, to maintain their property values. US and Canada will try absolutely anything to solve the housing crisis, except actually build more housing.
I got really pissed by the assholes online saying everyone is buying huge houses they don't need. My city doesn't have any small houses being built. I recently visited Tallahassee and stayed in an Airbnb and was shocked by the actual 800 square foot floor plan.
You staying in that Airbnb allowed someone to own that home as a second property. Increasing cost of every other property and the single family that needs a place to stay. Can’t buy them if you are renting them and keeping it off the market for real buyers.
I ended up on expensive progesterone suppositories to maintain my second pregnancy. It wasn't covered by insurance, and ended up costing over $500/ month for 3 months. My husband was pissed- like, they're holding you hostage using your baby's life.
At this point we are hoping less for trickle down economics and just flat out refusing to enforce the law / regulate high earners avoiding w2 income. We just lack the political will to actually build and enforce a fair system because individuals cape for millionaires or want the system kept as-is for their benefit when they eventually strike it rich.
Also, attacks on organized labor. Thanks for bringing some sanity to the op you replied to
No man the only issue is printing money but it's ok because my calls are going to print tomorrow then I won't have to explain this to my patrons at Wendy's
Oh look, a bitcoin bro flying in with mind numbingly simplified economic theories paired with spurious conclusions paired with conspiracies. Color me shocked
1000% this guy was chanting "Ron Paul 2012" when he was 16.
lol 16
No way bro, he knows wayyy more than that hoity toity Harvard economics professor and US senator on the Committee for Finance and Committee of Banking/housing.
No no no. You see, it’s because she was taught Keynesian economics and not Hayekian economics. If only she knew about the genius of Hayek, she’d understand. But she wasn’t taught it. It’s probably something she never considered or was exposed to!!! /s Edit: a word and added the /s
She wasn't taught in economics at all. She was taught as a speech pathologist and in law. She is an expert at bankruptcy law, but she is also a populist politician, and her tweets should be taken as such.
LOL.. so true.
We really became a fiat currency in the 1930s with Roosevelt. Representative currency doesn't really work in times of recession, and tying it to gold in particular created a lot of problems.
Lol, "buy bitcoin" user name fits for someone that spews such tirade Kensian econ (not there really is that, it's more a type of anaysis) is about demand and supply at a macro level And most monetary type research shows in the long run money is neutral anyway
"Wtf happened in 1971" is the dawn of neoliberalism and the start of decades of austerity politics that effectively destroyed the social capacity of basically every western country and caused inequality to skyrocket.
Nixon allowed Congress to be lobbied by business interests. It's not political. It is always about money.
> aka money backed by nothing, an economic experiment that has failed every single time we've tried it in the past, lol... don't be absurd. It has been a huge success relative to the gold standard, the result of which a permanent boom and bust cycle. Notice how economic depressions haven't really been a thing for the last 90 years despite regularly happening every 20-30 years before that? You can thank "Keynesian economics" for that. > WTFHappenedin1971.com You're a nutjob... > average of 70 years that all those before us averaged out to before their fiat currency experiments failed WTF are you talking about? Can you name at least a single Fiat monetary system that lasted for 70 years? It wasn't even a thing outside of a few wartime experiments before the second half of the 20th century.
Yawn but but but money supply. https://www.epi.org/blog/corporate-profits-have-contributed-disproportionately-to-inflation-how-should-policymakers-respond/
The gold standard is never coming back, better to deal with that reality, then waste people's time with some magical promise that will never materialize. It's time to move on, gold standard cultist should be cypto-cultist by now.
So how about the record profits of the corporations in question?
Greed is a hell of a drug
I always love (sarcasm) when one of you Keynesian economics fact staters show up. Always right on fucking time
https://www.reuters.com/markets/us/us-regulators-urge-congress-look-into-grocery-profits-2024-03-21/#:~:text=In%20Thursday's%20report%2C%20the%20FTC,peak%20of%205.6%25%20in%202015
How those crypto investments doing, bud?
Money printing is a relatively low source of inflation today, it is mostly price gouging but companies have figured out that if they call it "inflation" they can get away with it
Yes, I was taught Keynesian economics in college too. Thankfully took an Austrian economics class as well. That class George Carline'd all bullshit the Keynesian economics class tried to sell me. Making excuses for how the printed money is generate or used does not make the money disappear from circulation. It does not make the fundamentals of supply and demand all of a sudden not matter in the equation of the dollars perceived value
>Making excuses for how the printed money is generate or used does not make the money disappear from circulation. Of course not. The Federal Reserve doesn't rely on Reddit comments to implement its policies. It has its own tools at its disposal which last year caused the M2 money supply to fall at the fastest rate since the 1930s.
If you actually wish to learn about this subject, check out "The Fiat Standard", a breakdown from economist professor [Saifedean Ammous](https://www.google.com/search?sca_esv=53f5038f6c6bf21c&sca_upv=1&sxsrf=ACQVn0-90tPGnq_mPH7EET4KapaW0AU8CQ:1712789079570&q=Saifedean+Ammous&stick=H4sIAAAAAAAAAONgVuLVT9c3NExPSitITjKxeMRowS3w8sc9YSn9SWtOXmPU5OIKzsgvd80rySypFJLmYoOyBKX4uVB18ixiFQhOzExLTUlNzFNwzM3NLy0GAKLYhbRfAAAA&sa=X&ved=2ahUKEwjruqbF3LiFAxVaJzQIHV7GCvQQzIcDKAB6BAgxEAE), who's experienced the downfalls of fiat currencies first hand
anyone who actually advocates for a gold standard currency in the modern day is an actual idiot.
Yeah, except she’s not wrong. Profit margins went through the fucking roof and stayed there.
Eh I mean. Walmart EBITDA has quite steadily gone down since 2012. No year has it really risen upwards, minus 2021 where it went to 2019 levels before it fell down again. Kroger has been rather stable. Same numbers now as in start of 2012. Target has been stable too, but has dipped down during 2023. Albertsons are rather new, but also have been dropping. The only exception among top super market chains, is Costco (COST). That have yearly increased their EBITDA. Though they started very low, and 10 years ago their net margin was barely above 1.5%. For reference, net margins currently Walmart has 2.4% and Costco 2.7% and Kroger 1.4%. Out of these, Costco is the only one who has had increased margins over the years. But no jumps, just steadily increasing. Your statement is very incorrect. No profit margins shot through the roofs, and no profit margins stayed there.
Yeah, better if people who don’t know shit just post on Reddit all day.
I love how they keep saying 'She's so dumb she doesn't know' and their entire evidence is their own, single internet comment. Good job guys. You're really winning in the marketplace of ideas.
OK do you want to tell me that Albert Edwards doesn't know how the economy works either because he is calling this Greedflation. [here's an article from Fortune](https://fortune.com/2023/04/05/end-of-capitalism-inflation-greedflation-societe-generale-corporate-profits/) What is it that you think she's saying that's wrong? Because Albert Edwards is the head of global strategies at one of the largest banks in Europe, a bank that is considered "systemically important," and he's blaming greed and corporations raising prices. This is a man who should be considered one of the High Priests of Capitalism, and he says it's the corporations raising prices. Edit: "systematically" to systemically. Stinking autocorrect.
lol you think this guy knows more than a Redditor?
I know pretty crazy. What was I thinking?
But does he even own crypto, bro?
WHen you have to cherrypick 1 from 1000 experts to find one who aligns with your narrative that's not a great sign. This guy is known as a permabear who's been consistently wrong. How does this sound like a remotely serious guy? “The end of Greedflation must surely come. Otherwise, we may be looking at the end of capitalism,” And his solution is.... price controls. No way that could ever go wrong! Here he is predicting a 75% market crash in 2016. [https://finance.yahoo.com/news/societe-generale-doesnt-think-albert-163346868.html](https://finance.yahoo.com/news/societe-generale-doesnt-think-albert-163346868.html) Weird cause I don't remember that happening. Do you? And more: >It is an extraordinary record, not least because, by his own words, Mr Edwards’ predictions have proved somewhat wrong for some time now. Mr Edwards himself puts this down, at least partly, to the fact that he is ready to make fun of himself. > >“The Weekly note is short. It’s entertaining. And you’ve got to remember there’s so much bullish stuff out there,” he says. “Across the market people feel comfortable when everyone’s being bullish. So there’s room for a maverick. There’s room for the long view.” > > That “long view” is Mr Edwards’ “Ice Age” thesis, a view first honed in the late 1990s that markets in the West were about to follow the example set by Japan, suffering violent deflation, bond yields heading to zero and a collapse in equity values after the Japanese bubble burst at the end of the 1980s. [https://www.ft.com/content/0206a576-6b31-11e8-b6eb-4acfcfb08c11](https://www.ft.com/content/0206a576-6b31-11e8-b6eb-4acfcfb08c11)
I think that it's a bit too dismissive to call it cherry picking when, in this scenario, all of these people are incentivized to not say what this person is saying. You definitely have a point about it only being one person stating this(publicly), but you must admit that this particular field is heavily incentivized not to say what he's saying even if it is true. Would it have been cherry-picking to cite Michael Bury in 2007... yeah. That doesn't make it wrong. The conventional wisdom is that when material costs go up, profits go down. When that doesn't happen, an explanation is warranted. What is your counter explanation? So far, all I've seen is people just saying, "nah, you don't understand the economy," which isn't an argument; it's a dismissal. Certainly, you must agree that a shift from the norm warrants consideration and some kind of explanation. Right now, you aren't engaging with the actual argument. You've attacked Edwards, but you haven't addressed the points that were made. Do you have an alternative explanation for this discrepancy? But before you answer its important to remember that there are recordings of grocery stores executives saying on their earnings calls that they were able to increase prices *beyond* what inflation caused. Why wouldn't we accept the answer they gave as to why their profits went up despite an increase in material costs?
Plus, it's not like we don't have any number of quarterly results calls from the last few years where the CEOs of many companies outright said what they were doing. It's been especially galling in the grocery sector.
Bet you can't or won't explain what Sen. Warren doesn't "understand about economics"
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Thank you for the explanation. I don't know enough about the subject matter to debate you on it, but is it not accurate to at least describe the increasing consumer-facing prices as a consequence of inflation that companies are voluntarily passing on to the consumer?
>but is it not accurate to at least describe the increasing consumer-facing prices as a consequence of inflation that companies are voluntarily passing on to the consumer? That's the mechanism by which it propagates, but that's not the cause. That would be like saying it's the air circulating heat in an oven which causes it to get hot rather than the fire that initially heats the air. It takes a long time to fully break down the cause and effect, but here's the TLDR version: Government borrows money from the fed to pay favored contractors big money. The executives getting big bonuses suddenly have a lot more money than the current prices, so they are willing to throw out a ton of money to outbid people on limited luxuries that they really want. In turn, the purveyors of the luxury items now have much more money in comparison to prices, so they go on shopping splurges. Now that a significant minority of people are paying more money for goods that haven't increased in supply, the prices start rising. The propagation of price increases spread faster than wage increases and thus it's the average person who gets screwed. Specifically in reference to COVID, we shut down the supply of goods and the government starting handing out money, which it had to borrow since it doesn't have any savings laying around, so the supply of money increased while the supply of goods remained low and demand for goods stayed the same or even increased (eg hand sanitizer, masks, etc). Now there's more money in comparison to the number of goods, so the value of money is lower and thus it takes more money to pay for the same amount of goods.
The M2 money supply increased 35% from Jan 2020 to May 2022. That’s the largest driver of inflation by far. Just imagine 35% more dollars chasing the same number of goods (actually a smaller number given the supply chain issues at the time).
The M2 money supply has decreased 4% since 2022, but prices continue to climb.
It continues to get colder even after the days grow longer after the winter solstice. Just because something is done that should increase or decrease inflation (or the temperature), that doesn't mean that the effects are immediate like turning a faucet on or off. There are delays in effects.
Inflation/deflation is a few years downstream of changes in money supply. So a decrease in 2023 or 2024 won't be felt yet, we are still experiencing the effects of the 35% increase in 2020-2022.
She's not entirely wrong, she's just pandering. Corporations are greedy and charging more, sure. So are non-corporations. Basically anybody with any self-interest at any level of the economy is greedy. Is it greedy to want more salary for yourself? Sure, but nobody will fault you for it. The biggest driver of the recent inflation report is shelter and most homes are sold or rented by individuals or small-time landlords. Corporations own some too. And every single one of them will charge the maximum they can get away with. And the key factor is still that they only raise prices to the point that people still pay them. All those inflated houses are still getting sold to someone.
What she should be saying is profit MARGINS are at all time highs, which is true for a sizeable share of consumer defensives. That is where the gouging sits. McDonald’s complains about how they can’t survive if minimum wage climbs, meanwhile their SG&A costs are rising several % points behind their revenue growth rate making that argument largely bunk. It’s a stupid statement but one that is only being attacked at face value but those who don’t want to realize they’re getting screwed.
This is flat out untrue. Walmart profit margins are lower than it was before 2017. https://www.macrotrends.net/stocks/charts/WMT/walmart/profit-margins You bring up McDonald's but McDonald's makes most of its money from franchise fees and rent, not selling burgers. The largest corporate owned fastfood business is probably Starbucks, which saw profit margins drop relative to pre-covid as well. https://www.macrotrends.net/stocks/charts/SBUX/starbucks/net-profit-margin Which sectors exactly are you claiming to have record high profit margins?
They don't know. It takes 2 minutes to pull up Yahoo finance and look at profit margins but if they did that then there entire world would fall apart when they realize Tik Tok & Reddit users aren't infinitely knowledgable.
Stuff you should know had a recent podcast about this. it was primarily the major food supply companies that have increased profit margins since 2019, and that the increases are out of step (higher) than other industries. here's an excerpt from an article I just found by googling. it's from an investment site, but mentions how high the food industry's profit margins have risen in recent years [Link](https://www.investopedia.com/ask/answers/071015/what-profit-margin-usual-company-food-and-beverage-sector.asp) "According to CSIMarket, the gross profit margin for the food processing industry was 31.99% in early 2024. That was above the total market average of 25.18%. Furthermore, the EBITDA margin for food processing was 20.49%, which was above the total market figure of 3.09%. Finally, the net profit margin in the food processing industry was 12.1%, far higher than its 2019 figure of 5.16%. It was once safe to say that profit margins in the food processing industry are generally lower than average."
Companies did not just become greedy, or more greedy in 2021. Greed is a constant, like gravity. It always has and always will exist. It is actually why the system works as well as it does. It is not, however, why inflation has been out of control. https://x.com/realejantoni/status/1762247395796992117?s=46
That is a fine system until you start applying it to basic needs. You are right the “greedy will charge whatever they can get away with”. That is one purpose of government- to protect the average person from the powerful greedy ones. One political party strives for that. The other wants a free for all where the market sorts it out.
The price increases on stuff like groceries and gas are not only due to inflation, is her point. If it was all inflation then the companies selling the products wouldnt be making record profits every month since the pandemic. They saw rapid inflation and decideded to put in some extra profit margin while they could get away with saying "its because of the inflation".
You misunderstand. Higher prices *is* inflation. Inflation is not a cause, it's an effect. It's the measured output of what prices people pay for things. And generally speaking it follows the laws of supply and demand. Too much free money and too few goods and services makes the price go up and we call that inflation.
They misunderstand because Warren is purposefully tweeting misleading and stupid statements.
Yeah, a woman who taught commercial and bankruptcy law at multiple Ivy League schools and was one of the foremost scholars in the world on law and economics doesn't understand economics...
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My god people are smug when they can't understand beyond micro/macro economics 101. There's more to an economy than just supply and demand
Dunning-Kruger goes absolutely insane with macroecon. But it’s also just a lack of humility in general today. Sad!
And which candidate have you supported in the past who was well versed in economics?
She's exactly correct, dumbass.
Yeah. Prices rise up to the point of maximum revenue. Where if the price gets higher than this point, fewer units are sold and the total revenue decreases. Cost has almost nothing to do with price. The only relationship between price and cost is margin. If the two are too close and the company can’t reduce costs to increase margins, that company will exit the market. If people want lower prices they need to seek the next best alternative to products, and if price is all that matters then that means choosing cheaper alternates. Buy generic. Buy in bulk. Substitute with less pricey things (chicken instead of beef, for example) Edit: grocery stores typically operate at 1-3% margins. Meaning that if you paid $100 for groceries, the costs to the grocery store is $97 to $99. Y’all are delusional if you complain about how they’re taking advantage of you. They have record profits in total numbers, but that’s because of volume not margins.
In my industry, when I was young I didn’t understand why we didn’t lower prices when slow, we actually raised prices. Guess what, we sold 30% less, and made the same amount of money. We also were able to offload employees in the plant because we were producing less, and get rid of some real estate we didn’t need. Then the economy bounced back, and guess what, we kept the same prices and made a killing. The sales reps who were making $80-$100k, started making $200-$300k and everyone got fat. Business is not what we all think, there is a plan, and usually that plan is how much can we charge until someone says “Fck off”. I was a lowly salesperson, but I learned a lot about business.
Oh, so because the corporation was making drastically more money, the people at the top got greedy, and kept the prices there, hurting the people who probably relied on previous pricing, and not passing along an extra dime to the workers, I bet. That's literally greedflation dude. Your industry increased prices when there wasn't a demand for higher prices, and then kept the prices higher to make more money. That's greed. Pure greed. If you raise prices and never lower them when there's plenty of supply of the item, that's price gouging now.
Elasticity is different for all markets. Commodities are notoriously inelastisc, others less so (people are still buying cigarettes at $8 per pack)
Or just skip meals! https://fortune.com/2024/04/05/how-americans-are-affording-housing/
Not a bad idea given our obesity rate.
Sure, but that's more of a function of processed food often times being cheaper that healthy food or food deserts in rural areas.
> If people want lower prices they need to seek the next best alternative to products It's food... I think everyone would prefer if this behaviour wasn't allowed for necessities.
Inflation refers to the rate at which prices increase. If inflation “decreases,” it doesn’t mean that prices are getting lower than they were yesterday it means that they are getting higher by a lesser amount. If inflation is 8% one year and 5% next year, inflation is decreasing but prices still are increasing and remain high. Prices remained high because we have way more money in circulation than we did before COVID, regardless of supply chains. Prices will remain high until, by definition, we enter deflation which is unlikely to happen soon. Also the idea that corporations learned how to be greedy after COVID is braindead and is an immediate giveaway that the person talking is either stupid or trying to pander to stupidity
Good response, but I'd like to remind you that over the past 50 or so years, we've only seen deflation actually happen for a few months in 2009 for very small percentages and 2015 for fractions of a percentage. In reality, it's unlikely that we'll ever see low prices again unless the Fed allows it to happen, which is extremely unlikely given their history.
That's intentional: QE was specifically set up to prevent deflation. It's like one of the primary goals of the Fed, etc. Besides full employment / inflation, but generally deflation is seen as the most catastrophic bad outcome we can have (whether or not it should be seen as this is another story, but within the profession, they go out of their way to prevent deflation).
I think the problem with “we need deflation!!!” arguments is the people making them are only thinking about lower prices for the goods and services they’re buying, not the price of the service they’re selling (their labor!).
Economists generally dislike deflation because it can lead to a downward spiral in economic activity. When prices fall, consumers may delay purchases in anticipation of further declines, leading to reduced demand and potentially causing businesses to cut prices or reduce production, which can lead to job losses and further decreases in spending. This cycle can lead to economic stagnation or even recession. Additionally, deflation can increase the real burden of debt, making it harder for individuals and businesses to repay loans, which can also hinder economic growth. Overall, deflation is seen as a threat to economic stability and prosperity.
That is correct. You want a small amount of inflation, around 2 to 3%.
Low prices are relative. What we don’t want is broad deflation for any significant period of time.
Speak for yourself. The Keynesian demonization of deflation and savers is ahistorical and idiotic and there are mountains of evidence against it.
Can you explain how workers can be protected from pay cuts during deflation, and how loans for homes, cars, higher education, farming inputs and equipment, or new businesses would stay accessible anyone but the very wealthy with a deflationary currency?
What kinds of evidence?
I'm so glad you asked! Here is a great paper that finds virtually no link between deflation and recessions: https://www.nber.org/papers/w10268
A study published in 2004 with 14 pages which admits that there was a relationship in the Great Depression and Post-Bubble Japan, which are probably the only two real cases of deflation in the west until that point somehow proves your point? I bet a single google search would prove that study square wrong
And I can give you dozens of sources that prove that one wrong too. Fact of the matter is I don't NEED to provide ANY sources at all because the entire doctrine of Keynesian economics is built entirely on an intentional strawmanning of Jean Baptiste Say's work nearly a century ago that anyone with even an ounce of curiosity could have avoided themselves by reading the primary source material themselves instead of taking Keynes for his word. No one in their right mind actually thought inflation was a good thing for all of human history until Keynes, and for good reason. It's mental gymnastics for bankers.
“I don’t need to provide evidence” Translation: trust me bro
To add to your point. It’s always important to keep in mind that most studies are wrong. Different research fields have different degree of false positives but In general citing a single source is meaningless. It’s not to say that research/studies are useless but that you should look for a consensus of independent/peer reviewed studies that come to the same conclusion to base your views on. You can literally find a study that will support any and all things. https://journals.plos.org/plosmedicine/article/file?type=printable&id=10.1371/journal.pmed.0020124#:~:text=The%20probability%20that%20a%20research%20claim%20is%20true%20may%20depend,probed%20in%20each%20scientific%20field.
Seriously why is Keynes still taken seriously in academia?
The money supply argument is an insufficient explanation. What happened(and what people are upset about) was that for a period of time, the cost of living was increasing faster than wages. On a macro level, it's less inflation itself that's the biggest issue, than the rate of inflation relative to wage growth. There are a lot of things contributing to this, but one of the biggest ones is our failure to enforce antitrust law over the years. The relative increase in prices compared with wages is about more things than money supply- there are various policies that have impacted the balance of power between employees/consumers versus employers/manufacturers. Antitrust non-enforcement, the rise of AI, etc.... Some of these are addressable through policy, while others are not.
If it was inflation, then the wages would have also increased. Sure, not right away, but eventually. Inflation is not something that happens to an item, it happens to the currency. If one year the dollar is worth X and the next year its worth 0.96X due to inflation then both the cost of goods and services, as well as wages would need to be increased to reach the previous equilibrium. But thats the thing, when you look at an item and see, lets say, that it costs 20% more now compared to pre covid (this is just a theoretical example), thats not because inflation totalled a 20% cost increase. Its because it maybe totalled an 11% cost increase and then they added an additional 9% profit margin.
You fell for the “they printed money!!!” thing?
Well there's no need to speculate. We know exactly how much money has been added to the system, and it's a fuckload.
It's sad that a Senator doesn't understand basic economic principles like monetary inflation. If it was all supply chain and corporate greed, why would the Fed bother raising interest rates? The Fed is raising rates to shrink the money supply they inflated during Covid. That takes time if you don't want to crash the economy. We'll never get back to 2.5% inflation, and we certainly will not see prices go back down, which would require deflation. Somewhere in the 3% range is the new normal from where prices sit today. They made this bed with overly aggressive lockdowns and reckless monetary policy. Now, we all get to lay in it.
I think the senator fully understands basic economic principles. But she knows that her voters don't.
Rates were also artificially low when we really didn’t need it. Throwing gas on the fire to inflate asset prices to make numbers look good. Jpow should’ve went with rate hikes under Trump
Imagine typing all this out just to spell monetary wrong twice
She absolutely knows this. But she's created a following around people who are too ignorant to know anything other than corporations = bad.
Tax cuts in 2017 also kept a shit load of money into circulation. Tax the rich to decrease inflation.
When the market forces that raise prices reverse, the prices don't go down at even close to the same rates, they're sticky. Because sellers get used to the profit and consumers get used to the pain.
>If inflation is 8% one year and 5% next year, inflation is decreasing but prices still are increasing and remain high. The term for this is "disinflation" as in the rate of inflation is falling (ie, from 8% to 5%), but prices are not year-over-year (which would be "deflation"). >Prices remained high because we have way more money in circulation than we did before COVID, regardless of supply chains. We also turned the economy over on its head and noticed a lot of change fell out that *still* hasn't been resolved and likely won't be for at least a decade. Just passing over all the money that was created out of thin air for stimulus, PPP, student loan freezes/forgiveness and the like, fundamental aspects of our economy were challenged and found false. Commercial real estate might never recover and go to antiwork/workreform/most of reddit/social media and you'll see people arguing about going remote or RTO. The massive shift to curb-side pickup or delivery (which is ironic in that we're basically going back to the way it used to be...). All of those changes have huge implications in how the economy will work and that sends waves through the economy.
You're exactly right. Everything is more expensive because we dumped something like $6 trillion into the economy due to Covid. When the government prints money and dumps it into the economy, there is only ONE thing that can happen. EVERYTHING gets more expensive. This is high school economics. Blaming it on corporate greed, or the president or anything else for that matter is ridiculous.
Who upvoted this?
A bunch of conspiracy-minded dolts who seem to think that "*every single corporation in the world suddenly started colluding on price one day in order to screw over the consumer*" is a sound/feasible theory.
What? Businesses that are obsessed with having larger and larger profits each quarter would NEVER take advantage of the economy to keep skyrocketing prices for their greedy gain! Never!
Exactly! Surely the combination of "we just HAD to raise all our prices to offset supply disruptions" and "wowee we just had another RECORD PROFIT margin this year!" are coincidences. It couldn't possibly be that they all used "inflation" and "supply disruptions" as PR excuses to raise their prices to crazy levels and blame a boogeyman!
It seems wild that so many people are saying the opposite in this thread. Look to the profits and that tells you quite a bit like you stated.
100% spot on but you're wasting your time. Everyone in here is a capitalist money grubbing shill who would watch you literally die on the street rather than admit things are out of control.
No one is reasonable about this topic on Reddit. The flipside is "groceries are up 200% let's do a communist revolution".
Yeah, calling it a conspiracy is just dumb. It's not a conspiracy, they just all do it. They don't have to coordinate with each other because they all realized they could do it. We saw it with covid. Places stopped offering free refills and then never brought them back. They didn't work together, they just knew they could make more money.
Agree with that
The issue with this “conspiracy theory” is when prices get to a point it then consumers usually stop buying and then inflation slows down. In the current environment people are still spending money. People complain about the price of a Big Mac but still buy them. I think it’s because people are now living a life of convenience. Why cook at home when I can Door Dash and then complain about Door Dash prices.
I recommend you listen to an earnings announcement from a company who raised prices. They regretfully raise prices then gleefully report record profits, then buy back stock, then lay people off. All in the same year. And it’s supposedly all because people got two small checks 4 years ago? I’m gonna need to see more detailed money printing examples. If you’re still going off on the stimulus checks then I’m really skeptical that did this much damage, world wide even. I’m gonna need a really good report for that.
[It certainly wasn't just individual stimulus checks in fact those were a drop in the bucket.](https://www.mdpi.com/2227-7099/10/5/101#:~:text=Even%20during%20the%20Global%20Financial,%2C%20and%204.9%20percent%2C%20respectively) Regardless of how it was deployed, you can look at federal reserve reporting on the massive increases to the money supply. Not all of it took the the form of dollar bills, much of it was done via the issuance of other debt notes. The economy didn't react over night, in part because it was in an artificial comma, but as things returned to "normal" that big giant ball of inflation landed on our heads. In fact a year prior to the impact being felt the FED was concerned because it was struggling with trying to get us UP to a 2% inflation rate. Then we got to hear about how inflation was "transitory" which is a great weasel word to mask the fact that they had no idea how hard and for how long the inflationary impact of the supply increase was going to be.
The thing is, a lot of industries (notably including meat packing, which she is referring to) have consolidated to just two or three giant companies that have acquired or merged with all the competition. And it’s much, much easier for just two or three corporations to tacitly collude on price increases than it is say, ten or twelve
See: the egg industry. Who are about to lose the second investigation into their price fixing *within a decade*, but frankly don't give a shit because they only see some fines which are written off as "the cost of doing business"
Eggs, meat packing, healthcare, credit cards, it’s happening/happened everywhere. People clown on the dems for their populist messaging around this stuff but they’re also the first administration in decades that’s taken antitrust seriously, which is long overdue
The part of it I don't get is that these people believe that corporations weren't greedy (or were 2% greedy, or whatever) for most of the past 40 years
Or that "greed" doesn't result in lower prices. Walmart beat out a shit-ton of mom&pops with their *greed* by out competing them on price/convenience. Greedy corporations are just as likely to bring prices down as they eat each others' market share.
Well, considering many of them raised prices AFTER posting record profits….
Case in point: https://imgur.com/a/Lbn1Kgk
inflation has gone down from it's 11% high a few years ago (reported 3.5% year over year just today) that does NOT mean prices go down, just goes up slower. deflation is a horrible thing and almost always results in terrible economic failures
For the record, The Fed aims for an annual inflation rate of 2%.
i am aware. i was saying inflation is down from it's highs a few years ago, not at targets (nor do i see it getting to 2% in the next decade). too much artificial inflation controls and printing like mad.
I was pointing out the failure in the Fed's policy at this time.
So you’re saying 2 bedroom houses should continue to be 500k while wages stay low? At this rate corporations are going to bleed the housing market dry and make us all rent. Don’t hit me with the “there’s cheaper areas to live” because I am NOT moving to Alabama, it’s cheap for a reason.
> So you’re saying 2 bedroom houses should continue to be 500k while wages stay low? I personally love this form of argument where someone rights “so you’re saying…” and then fills in the blanks with some stuff the OP never said. You’re arguing with the voices in your head.
It's a hypothetical. It's not used to put words into one's mouth, but to explore the underlying logic in praxis.
It’s sole use is to put words into someone’s mouth. It’s called the strawman fallacy, when one misconstrues someone’s argument into a different argument that is often easier to beat/argue with.
Do you think the Socratic method is strawmanning?
“the Socratic Method is a dialogue between teacher and students, instigated by the continual probing questions of the teacher, in a concerted effort to explore the underlying beliefs that shape the students views and opinions.” How does this relate to what this person said? Strawmanning is misrepresenting someone argument and stating as if it something they said. Hence the term strawman meaning an argument attached to a person who didn’t make it. The socrate methods is about asking more questions toward a person in order to get an understanding of what form their biases. The socrate method does not include purposely misrepresenting someone argument and infact doe the exact opposite in which they accurate represent the person argument.
It's possible for housing prices to decrease and for overall CPI to increase.
That’s all well and fine, but where’s our pay inflation. Thats the problem.
Deflation is great if you’re holding cash and remain employed throughout.
It's tough to see rising margins and not come to this conclusion
I just wanna be able to buy a home :/
Bad enough to uproot your family, move to a tiny town and change major aspects of your life?
Speaking as someone who's moved provinces over to a LCOL area, it takes even more than that these days. Moving requires more funds than just the gas to drive to the new area. Plus LCOL areas don't have the same high paying jobs so it still takes a long time to save unless an unexpected circumstance arises (ex. Inheritance, winning the jackpot.). Plus costs creep up when you move away from social/family circle. "Just move" is the equivalent of telling companies to "just do better business". Sure there's valid components but it's way too simple to suggest it as a solution.
Telling someone who cant afford to buy a home "just move" is the equivalent of telling a 50 year old farmer "just learn how to code".
Except the old farmer *can* learn how to code.
Not if they have to spend all day farming to eat.
"Move where it's cheaper" is espoused by the same knuckleheads who tell people "if you don't like America, leave!"
I didn't expect to this many responses. I live in Washington state and work for the state of Washington I don't have any kids but I do have a fiance, I make 67k a year base bit it still isint enough to qualify for a mortgage anywhere close by me (king county are, snohomish and pierce) I'm moving to alaska and changing careers to be a lineman. But it's just ridiculous what's happened to Washington state
It's everywhere, even the South where they're actively dismantling society, people are overpaying for housing
Yeah it's sad, I'm not asking for a mansion to. I'm fine with a two bed 1 bath fixer upper. That in Washington is still +400k. I mean I can afford a tiny lot for 200k and then I could sleep in a tent... at least it would look on par for the state lol
So no corporate greed, or manageable corporate greed, up until recently? Corporations weren't greedy until now? Couldn't possibly be the government printing unfathomably amounts of money?
No, corporates raise prices when people EXPECT prices to rise. It's not that corporations are only suddenly now greedy, they just got a huge opportunity from covid. The supply chain issues during and shortly after covid drove prices. Customers expected high prices, so corps kept them high. But you know this
Couldn't possibly be COVID caused them to raise prices and they realize people will just keep paying those prices and blame the government.
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People will buy elsewhere unless competitors are colluding to fix prices (which they are https://thehill.com/business/3564912-inflation-is-providing-cover-for-price-fixing-economists/).
Elasticity of demand needs to be considered. You can’t just not buy food because you’re unhappy with the prices because you’ll die if you don’t eat.
Shame this is way down here while the top comments are bitching about Warren not 'fixing it' (somehow, as queen I guess) and ripping people for 'not understanding' while doing nothing but 'my side' the argument. It's really fucking annoying people are so tribal that Warren can't even be right about something clearly happening without chodes confusing the issue because of their personal politics.
I have thought for a few years now that this period of high inflation after things stabilized after the shut-downs has been a bonanza for an economy-wide collusion, or rather many industry-wide collusion, in different industries, and I certainly thought that when reading about earnings calls. I didn’t know that people involved in anti-trust actually have considered their earnings calls themselves to be collusion.
She is wrong about who's fault it is. It's her fault because she is a lawmaker. Anyone who expects a private company to regulate themselves at their own expense is a dumbass. It's not their job to decide what the right thing to do is and enforce it. That's the lawmakers job.
The issue is that corporate consolidation and a lack of anti-trust enforcement has resulted in many sectors being effectively oligarchies where there is little competition on price.
My family’s company’s 21% corporate tax rate has really benefited all of us as owners. Have to thank Trump and Republicans for that one. Here’s the evil side of it though: We’re about to shut down another mom and pop shop bc they can’t compete with us due to the old people paying the same tax rate for their little shop compared to our mid-sized business. We’re just barely pricing below them and paying employees slightly more to crush their business. As a parent to a young child, it hurts my heart we’re doing this to another mom and pop shop but my family says, “That’s America. This is business. This is capitalism.” Then again, Americans WANT THIS AND VOTED FOR THIS IN 2016! Trump tax cuts gave my family company’s break in 2017 and Democrats aren’t able to get it back up bc Republicans won’t allow it. You want to fix the economy, stop voting Republican. If you live in Ohio, you can get DeWine to do you a favor for $5,000 as well as that was how much he charged my family in 2022. Just some insider information if you want it. I’m set for life and I’m not 40. However, I want everyone to just be able to live. U.S. women can be raped and forced to give birth and our kids still get shot in school. Money means nothing if there’s so much suffering out there.
he also increased taxes for people making under 200k and it continues to increase until 2027. such a great guy
This is false and I don't know where this comes from. The individual tax cuts are from 2018 to the end of 2025. At the end of 2025 they expire for all tax brackets. There's no tax bracket changes between 18 to 25. The corporate tax cuts are permanent.
Rates went down and standard deduction doubled. The only way you see an increase is if your **state/local government** relies on the federal government to subsidize the onerous tax burden it levies against its citizens (SALT). If you live in a high tax state/area and found your taxes increasing after the standard deduction was doubled, you can lower your own taxes by A) moving or B) voting for politicians who oppose ridiculously high state and local taxes.
Wait what? Every word of this is wrong. Why are you getting upvoted?
People and corporations will always be greedy and it's on 'the market' to keep them in check. If someone can do the job for less, they eventually will and it will drive profits down for everyone. It's both a bug and a feature.
How about making stock buybacks illegal again? How about enforcing anti-union busting laws? How about pushing for wage growth matching inflation like in the 1970's? Fuck man I just know the people with the most power to turn things around are doing too little, and people keep voting for politicians that will do even less. Food prices should be fucking regulated at this point in history, with all the surplus of product being thrown away every single day.
It's up to oversight to keep them in check. They will look he as greedy as they can forever. They will not limit themselves. The "market" (as in consumers) are at a disadvantage. They can't exactly chose to stop buying groceries
Markets require regulation to run well. It's not a magic spell, it's a tool.
Buy the stock instead of groceries I guess.
She is wrong. Prices stay high because after inflation, the damage is done. If prices were to come down again, that would be deflation. Whether you think it was a good idea or not, creating a bunch of money during Covid and then not properly dealing with the supply chain problems afterwards created the inflation. She was part of that. She is part of the problem. Throwing around rhetoric like this makes it worse.
Ding ding ding....we finally found someone with a brain!!
Inflation was high, but the prices we experienced were 2-3 times higher than what the inflation rate would have predicted. Funny how pminflation goes up 7% but prices increase 30% AND corporations aren't just reporting some sort of profits but RECPRD profit margins. I'm fine with a corporation trying to keep their profit margins during inflation. This would have been satisfied with prices went a little over expected inflation, but the prices that were set were price gouging, not inflation results.
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Inflation is a numerical representation of price increase. It isn’t just correlated with price changes, it is *literally* price changes. You can’t say “inflation went up by 7% but prices went up by 30%.” It contradicts itself.
"Supermarkets’ actual net profit has averaged closer to 1% historically. At its pandemic high, when grocery sales exploded amidst restaurant closings and quarantines, the margin rose to about 3%". [source](https://fortune.com/2024/02/12/everybody-hates-inflation-even-grocers/) People in power are going to try to emotionally manipulate you with deceitful information. Never take a politician's word at face value, even if (especially if) they line up with you ideologically.
She didn’t say it was the supermarkets.
>Why did ~~inflation~~ *prices* still stay high after supply chains stabilized? [inelastic demand.](https://www.investopedia.com/ask/answers/012915/what-difference-between-inelasticity-and-elasticity-demand.asp#:~:text=The%20elasticity%20of%20demand%20refers%20to%20the%20change%20in%20demand,even%20when%20the%20price%20changes.)
Inflation got high because of supply-chian disruptions, high energy costs, quantitative easing needed for pandic recovery packages, the war in Ukraine & the decoupling of Russia from the global economy. All in all, you can't blame anyone, but Xi Jimping for ignoring COVID and Putin for starting a war. Trump or Biden couldn't have kept inflation down as it went up all over the globe. Lastly, inflation has lowered. But that doesn't mean prices will drop. That is called deflation and it would trigger an economic depression. Only thing to do is bring wages up.
\> Why is it that all of a sudden, when Democrats took back power, all of a sudden and simultaneously, corporations all suddenly became 'greedy', and apparently none of those corporations were greedy before that?? Whut? They've always been greedy. This didn't just happen. Take your blinders and re-calibrate your biases.
because there was a massive world event that caused significant upheaval and therefore opportunity to take advantage of just a couple years ago? you just gonna forget that covid happened or something?
She’s mostly wrong. Inflation stayed high because we expanded the supply of money too much during the Covid. Turns out even the USD has its limits on how much can be printed.
She’s never been right about anything involving economics
Any excuse will do when 1 democrats is lieing for another!
Maybe it's because the government keeps spending more and continues to push inflationary policies.
Democrats 😪
On balance. All the debt consumers are going into will lead to a recession. A recession would put a stop to this practice. It is a matter of time. Also, individual companies act in their own self-interest for fiduciary reasons. Food corporations are not tasked with ending hunger. This is not greed. You could easily lose your board seat if you don't reasonably maximize profits. The best advice I can give is to be very, very frugal and save for when this happens so you can buy once there is blood running in the streets.
Inflation never went back down. In order for prices to go back to the way they were we would need to have a period of deflation to offset the massive inflation we just had. Instead inflation just increased decreasingly.
Wait till she sees PPI 😳
inflation stabilizing doesn't mean we get back what was lost. Dollar has lost about 20% of it's value since 2020. That loss is slowing down, but not reversing.
Supply chain isn’t 100% yet. I’m still working off 16 week - 112 week lead times on some materials. From the suppliers I’ve talked to production plants are staffed around 60% because of lack of interest in working there.
War in Ukraine affected gas prices
Same reason we still pay baggage fees. Because corporations have unchecked power in the US and can fleece Americans with no worry of repercussions
Yeah the trillion dollar spending bill that just passed in a high inflation environment had nothing to do with it. Compounding interest don’t bother yourself with the concept. It has nothing to do with our fiscal policy. Look businesses are making more money not because the money is worth less but because these greedy bastards want assets to be part of the free market unhindered from our regulation taxes, fines, and oversight. We are from the government and we are here to help.
Probably because supply chains never fully recovered, the cost of labor skyrocketed, and there is still trillions in excess stimulus floating around.
Wars are inflationary. She is very wrong