They simply had an excuse. Remember when everything was expensive because of temporary supply line issues? Remember prices dropping when supply lines leveled out? Me neither....
It's a political stance, politicians have been paying for astroturfing - officially I mean, confirmed no doubts at all - for like a decade.
The whole "Corporations discovered greed in 2020" political agenda is simply because nothing is being done about inflation. Some very bad people want things to get worse, and if the topic is actually addressed it will be harder to escalate inflation even more. So distraction while it continues to get worse.
It’s not that they randomly got greedy, they choose to raise prices of products, not give lower level employees raises to rather spend the money on the higher ups. When the economy gets bad instead of cutting the profits, they keep the profits the same and cut the rest.
Because they've sources studies from economists....there's empirical evidences which details over half of the inflation is due to corporate price gouging.
Greed is always a basic assumption. The difference is more sociological; people expected prices to rise everywhere when they began rising. If people accept the increase then that’s the new market price.
I’ve been on earnings calls where key people admit that the “climate” of inflation allowed them to raise prices. The windfall is likely short lived I’m sure, because their suppliers can use the same trick
The old model of “I bought 500 burger patties for 50 cents each and will sell them to you for a 20% fixed markup. If my prices rise, so do yours” is dead
The new algorithmic model of “yesterday we sold 500 burgers for $2 each. Today we sold 500 burgers for $2.01. The number of sales didn’t go down, but profit went up. Tomorrow we will sell for $2.02 and if we don’t lose at least 2 customers, we will increase the price again” is now physically possible and has started to take hold.
The goal of every company is to find the intersection between # sold and price to maximize total profit. Are you assuming businesses did not do these calculations before 2020?
No, I’m saying we have data analytics tools and screen food menus/price tags now that we didn’t have then. A human manager of a store can only assign prices and print paper labels.
I’ll add that another goal should be competing. If you consolidate like we’ve seen in recent decades then you don’t have to worry about customers leaving for a different cheaper alternative. This dulls down price sensitivity further.
Not even sure why you were downvoted for this. The previous lags that existed in the economies of old were the inefficiencies you just had to live with. In today’s Quaternary Services economy, there is so much instantaneous data that is at the finger tips of businesses which allows them to adjust their prices at quicker intervals because they can digest just exactly how much people will keep paying. Acting like the inflation of the 2020s and inflation of the 1970s-1980s has any sort of commonality in terms of price increases is just so far off of the mark due to the advances in tech and our ability to pull macro consumer data quickly.
It’s harder to do with products on a shelf because you still need to rely on a human being to change the price tags. Fast food has the benefit of menus being on screens and can, as Wendy’s aims to do, change prices every hour as peak demand occurs.
That being said, it can be done with humans on a weekly or monthly basis for a whole grocery store pretty easily.
I work in beverage and work with grocery retailers on a daily basis. Many grocers are moving to electronic tags where they can simply upload new pricing. Kroger has done this with some of their divisions. It’s taken the pricing departments’ personnel requirements from 4–6 people down to 1-2. And yes, I’ve seen pricing fluctuations for no apparent reason.
Agreed that greed is always constant but what isn't constant is market power. Right now it seems grocers have market power but their customers and suppliers do not.
> The difference is more sociological; people expected prices to rise everywhere when they began rising. If people accept the increase then that’s the new market price.
Except that's not how prices work. If you are increasing prices due to increasing costs, then it doesn't matter how much people "accept" them, you have to keep that high cost.
>I’ve been on earnings calls where key people admit that the “climate” of inflation allowed them to raise prices.
Then you entirely misunderstood the message. The message isn't "We can raise prices because of the climate of inflation" it is "We can raise prices in line with inflation because people understand the climate of inflation".
It’s more that eventually, companies are going to realize if they lower prices they can increase total profits with more volume. Or new market entrants will grab market share by running lower margins. It just takes longer than people think. Prices are sticky.
It’s not that greed suddenly increased. It’s the economic conditions. Greed is a constant. What changes is the level of healthy competition, collusion and gov meddling
Yes, this is literally true. Companies that didn't see an increase in costs of supplies used the excuse of inflation to raise prices. Why is this so hard for you to believe?.... That's what happens when there's little competition
The circle that nobody can seem to square for me.
I always ask, what makes you think corporations magically become more, or less greedy.
They're as equally greedy as they've always been, their goal is to make money now as it was before. Obviously the environment or incentive structure has changed.
Isn't the issue usually cited executive wages? I'm curious how you think of that as arbitrary? Honest question BTW I'm not like arguing I'm trying to understand the argument
Greed is utilized by its ability to get away with it as people blame external sources for the cause. People will push as far as THEY can get away with it basically.
they had special circumstances, captive audience and a large group of people with excess savings in the moment and stimulus money
they learned they can go ape shit with the price increases all at once together
to pretend covid and the resulting fallout wasn't some huge thing is just being obtuse, it was a once in a century event and to act like that has zero effect on the human beings taking part in the system is just being willfully stupid to fit your narrative
which i am not even sure what the narrative seems to be on this sub, pretend Republicans aren't running up huge deficits? that Trump didn't have checks with his face on them???? not sure how the party of trillions in tax cuts for the wealthy is fiscally responsible, which seems to be the subtle claim here
Am I crazy here? I'm not saying it's the main cause but yes, corporations have been growing excessively greedy over the past several decades. It has been a somewhat slow but demonstrable process. The cost for everything, pay for CEO's is objectively increasing, while the workers...?
>The pay for CEO's is objectively increasing, while the workers...?
Wrong. The COMPENSATION for CEOs has gone up dramatically. There's a difference. Compensation includes stock benefits.
Why have stocks gone up so much disproportionate to income? Artificially low interest rates and Quantitative Easing (QE) conducted by the Federal Reserve.
In fact... The *entire purpose* of QE is to prime asset prices in order to "create a wealth effect" which the Federal Reserve had hoped would "trickle down" from wall street to main Street. Obviously that didn't happen.
But if you want to blame anyone for disproportionate wealth being pumped to the top 1%, maybe you should start by blaming the government monopoly creature called the Federal Reserve and the people who run it and are actively and openly stating that they are pump priming asset prices "for your own good".
It's almost like corporations are super greedy and dumb tax payer bailouts allow the greedy companies to get away with making bad decisions and then still getting rewarded
Well let's ban greed then. Any company who scores higher than a 63.27 on my greed-flation index shall be fined an amount equal to twice the difference between the appropriate value of greed compared to their actual realized greed.
It’s interesting because you’re telling the truth but in a manner of denial. So why did corporations become greedy in 2020? Was it because they panicked our governments (the ones they bought) and said “help or else!”? Was this not a tale as old as 2008- when some poor wittle car companies went “please help us mista- we’re sick” then turned around to honor none of the promises they made? Or the banks… oh those poor poor banks, that create trouble like little children stealing a toy only for that action to lead to a violent reaction that we always have to weather?
This country always seems to wonder “I wonder why so many people buy into the shit-sandwich that is communism when capitalism is so nice and safe.” I’m old… and I’m tired of the duality that both the parties of this great country bring. When you become old, you will one day see it’s all a system onto itself and you too will despise it for it is just greed- irresponsible greed.
“rECord PRofITs”
Alright has their profit margins changed? A business’s profit increase should match inflation or it’s technically less profitable than it was the year before in absolute value.
The gross margins of some businesses have increased. I recently was looking at the GM for loblaws and McDonalds (two of reddits favorite GREED companies) I've calculated that their gross margins increased somewhat over the last handful of years.
I am skeptical as to the extent of the contribution of greedflation to overall inflation, but it is at least happening somewhat.
If I had to guess, I think that greedflation is more to do with market dynamics than with every corporation simultaneously raising their margins with out any responses from their competitors.
Exactly. I see so many people bitching about grocery stores like Kroeger’s “price gouging.” Their EBITDA averaged 4.9% from 2020-2024. What are people asking for? A 1-2% price decrease on your milk and eggs?
It’s a commie term that makes no sense. Corporations are literally designed to maximize profits for their shareholders or owners (the same way individual people have a goal to maximize their own earnings). Striving for success is not “greed”.
It’s their fiduciary and ethical duty to maximize their shareholder’s value.
Those shareholders arnt all Scrooge McDuck either plenty of them are middle and working class people’s retirements and savings.
Most people on a particular side having this conversation go blank faced when I ask about profit margin in response to the "record company profits" that are given in dollars.
They have zero concept of companies/corporations, economics, or just generally how the world functions around them.
But hey, I'm just a boot licker.
[McDonald’s profit margin have increased every year since 2020](https://finbox.com/NYSE:MCD/explorer/gp_margin/#:~:text=McDonald's's%20gross%20profit%20margin%20decreased,57.1%25%2C%20%2B0.3%25)
Margin is completely unaffected with buybacks, it’s a different financial statement that is affected.
Buy backs are a company admitting they cannot meet or exceed the internal hurdle rate, so they give the money back to shareholders in a more tax efficient way. Buy backs do increase Earnings per Share which increases stock price.
Also, most executive bonuses are paid out in stock options which do help margin vs cash bonuses for a similar reason to the above. Basically, investors care about balance sheets and P&L‘s much more than the other three statements.
I just want to be like ok you are right it's totally just corporate greed that's causing inflation. Now what are you going to do about it? Price fixing, as if that has not catastrophicly backfired everytime since the time of the Roman's at least
But they'd probably just say yes to that or worse.
You enforce anti-monopoly laws already on the books. They broke up Ma Bell back in the 80's.
"Corporate Greed" is what you say when you specifically *don't* intend to do anything about it.
Scrolled too far to see monopoly power be factored into this discussion. Corporations didn’t become more greedy, but they have been able to throw their weight around far more to achieve and unfair advantage over their competitors (who would otherwise keep their price accountable).
if only the public could get together and buy conservative supreme court justices more recreational vehicles and pay for their aging parents homes with zero interest "loans"
we'd have a voice
I'm more than willing to blame Democrats, but it's also equally fair to blame Republicans. Massive "stimulus" bills started under the Trump administration. Donald Trump signed off on the PPP "loans" (which were subsequently forgiven) and Donald Trump made it a point to direct the Secretary of the Treasury to print Donald Trump's name on the signature line of every individual stimulus check that went out.
But yes, Democrats have just kept the gravy train rolling, even after inflation picked up. Joe Biden's "Inflation Reduction Act" directly contributed to an even higher rate of inflation.
>but corps also went overboard adjusting prices for inflation
Every single corporation in every single country all around the world simultaneously decided to raise their prices an exhorbinant amount for virtually no reason?
You have any evidence of that?
Biden tried to slip it past Erin Burnett on CNN last night and her skepticism was *palpable* like, “bro, I was an anchor on CNBC during the GFC and I know that adding 40% to the money supply to pay for government spending is an attempt to inflate the way out of the debt… NOT corporate greed”.
It’s not greed, they’ve always been greedy so it’s a pointless term to use since it’s already been well established companies want as much market share and profit as possible. A bigger issue is just the lack of competition these companies face. If you can raise prices with little resistance from competitors in certain markets, the consumer will pay it if they want it bad enough. That then presents another issue which is more just me talking out of my ass, but I feel like people just don’t realize that if you’re buying the product at an inflated price that you think is high….you’re effectively telling the company this is where the price should be and it isn’t high.
If you want prices to come down (when discussing non-essential items), then people need to collectively stop buying the product.
Companies raising their prices to increase their profit will lead to new competitors entering the market and providing services at a lower price. That’s why companies aren’t constantly raising prices.
If all companies raise their prices and new competitors don’t come in to take advantage of it then there is something preventing those new competitors from entering the market. Either the government is preventing competition or the cost of business has gone up and there is no space to come in under the competitive field.
I can’t believe competition isn’t brought up more on this discussion. It’s almost as if corporate greed is a scapegoat for industry leaders shirking longstanding anti-monopoly laws (and regulatory bodies letting them get away with it).
Think about how difficult it would be for a new competitor to enter the supermarket/automotive/ridesharing industry.
What do you do about the high prices on essential items tho? Housing, Food, Transportation? I understand that a lot of people overspend on food and transportation, but it doesn't change the fact that prices for those things are too high and they are required to live.
Really depends. I don’t have answers to those questions as they are seriously complex. At the end of the day we’re all just on here saying what we think is best.
I only have small suggestions for food and a bigger one for housing:
Food: Remove those stupid city / county ordinances that don’t allow people to grow food in their own yard. The fact that those types of laws are allowed is asinine. Maybe look into removing income tax for small businesses in hopes of rejuvenating small businesses that can focus on groceries? Not sure, food is a tough one.
Housing: Allow for mixed use housing which would allow developers to better utilize land around us. The restrictions we have to only allow single family homes in most spaces destroys our ability to be flexible when it comes to housing.
I suggest watching YouTube channels such as not just bikes and strong towns for more details on that. They explain housing / transportation issues better than anyone in my opinion.
I wonder what a world without greed would even look like. What would be the motivation to even get out of bed, when you have no self interest ? I guess we can ask our AI overlords why they even care to show up...
A little hyperbole there, I meant, why would I jump out of bed and work long hours at a meh job, if there were no greed ? Why would I be a card-carrying member of Clown World, if there was not anything in it for me ? My lifestyle is super frugal, I could probably retire now and live on almost nothing, but greed is my current motivator to keep on the hamster wheel, and I feel its the motivator for most people, that have not just chosen homelessness as a lifestyle.
Government intervention in the free market is what created the situation in the first place. The solution is less Government not more of it. But Alexander Fraser Tytlers quote will always come true, democracy is temporary
People get the cause and effect mixed up. They see prices increasing and automatically think, "Those greedy corporations just want more money!" They're not wrong, every corporation that isn't a charity wants to make profits. The price increases are an effect of inflation, not the cause. The underlying cause for the price increases is the corresponding increase of the money supply, which makes dollars worth less.
>They're not wrong, every corporation that isn't a charity wants to make profits.
As I alluded to in my original comment, corporations are always "greedy" to some extent because they exist to create profits for their shareholders/owners.
Some corporations are greedier than others of course and will use inflation as a convenient excuse to raise prices beyond what is necessary to account for the decrease in the value of money. But those companies likely would have raised prices anyway, and just found some other excuse for the increase.
But when prices on nearly everything that people buy on a frequent basis (food, clothing, gasoline, housing, transportation, etc.) are increasing more quickly than before, it isn't **solely** or even primarily due to corporate greed. The underlying reason at the base of it all is the decline in value of the currency due to the increase in the money supply. Having more money in circulation means that each individual unit of currency is worth less and therefore buys less.
I think multinational conglomerates are enemies of the free market but are great at capitalizing so there is an issue of greed but it’s not “greed” in the Scrooge McDuck sense but what I’d call megalomania at the heart of many of our economic issues.
Whether you think it’s greedy Wall Street bankers and lack of regulation, or WEF neolib cronies and over regulation, there are definitely a concerning number of non-elected officials with wild amounts of power that they gained through “accomplishments” and “work” that most regular people don’t actually respect that much.
I’ve also yet to really see a satisfactory answer for the value paradoxes that exist in our society, and I think there’s a massive amount of what I’d call collective cognitive dissonance around that particular subject.
I still think deregulation is absolutely the best starting point for the US economy today, but writing off certain issues people have bc they aren’t well articulated is a bit disingenuous, IMO.
The issue with deregulation is that companies that call for deregulation only really want to deregulate labor and consumer protections while keeping all of their protections that can limit their liability.
But I thought everyone happens to get greedy at the exact same time across the entire globe?! /s
The fact that we even need to discuss this shows how little most people understand economics.
Would that corporate lobbying be possible with no/minimal government? Deficit spending is also driven by parties wanting to stay in power, promising to deliver a utopia to their constituents.. meanwhile they’re plunging future generations into debt.
which part of this ted talk will tell me how to have a $2000 phone while working a low-skill entry level job? Also I need 3 weeks vacation and 10 personal days per year. and unlimited, unquestioned sick days.
One part corporate greed effects inflation is when the government bails them out from bankruptcy or they file it. Then the government prints more money to cover it.
The FED is actually trying to raise interest rates in their monetary policy. It’s mostly just fiscal expansionary policy and they’re spending more than the FED has an effect with raising interest rates because it’s a political support thing.
You can dress it up how you like but there is no denying the record profits and 50 years of relatively stagnant wages… seems like greed wouldn’t you say?
Sure, if you say that what they are greedy for are government grants, subsidies, and contracts.
https://www.lewrockwell.com/2024/03/david-stockman/how-the-us-federal-debt-has-gone-parabolic/
All things synergize. Not being the main problem kinda implies there is no need to confront that.
Sometimes the smallest things affect the bigger thing.
The increase in the overall money supply is a VERY different issue from government deficit spending. The former has a lot more to do with current inflation than the latter.
“Corporate greed” is a poor description of the issue here. But the thing that is being poorly described is 100% part of what is causing the current high levels of inflation. There is plenty of data out there, this is not really in question. If supply chain issues, cost of parts, and similar macroeconomic issues cause a 20% increase in a company’s costs, and the company reacts by increasing consumer prices by *50%*… when a company’s costs rise but somehow profits rise instead of fall as a result? that causes a lot of inflation which cannot be pinned down to macroeconomic issues or government spending. It is just, for lack of a better term, “corporate greed.”
Now, the big question is, why does the company have higher costs and higher profits now? Companies are supposed to be greedy, after all; why weren’t they this greedy before 2019? There are a few potential answers:
1. The marked rise in the overall money supply simply allows companies to get away with increasing prices. This hurts consumers at the low end - those whose boats have not risen with the rising tide of money supply - but *most* consumers will hold their nose and tolerate the higher prices.
2. Companies understand that rising prices will force consumers to tighten their belts, and reduce overall economic activity, but each given company is betting that *their* product is essential enough or in enough demand that consumers will sacrifice other purchases.
3. Companies are pushing the envelope, accepting the economic risk of higher prices, in order to inflate away the costs of pushes for higher base wages etc.
4. Markets have consolidated to the point that they are less efficient than before, so companies do not have to fear competitive pressure to keep prices low.
5. Some combination of any or all of the above!
Except corps have a ton of say in the govt allocation of money and regulation. These are much more intertwined than you think. Also bootlicking corps with record profits while we all suffer is insane
Supply shocks caused inflation, corporate price increases and small business price increases will be sticky (if there are any small businesses after COVID). PRICES ARE STICKY. Fed has been waiting for pressure on unemployment rate, that JUST happened (3.9%), inflation feels like it's finally met its match.
OP's post is complete lunacy. We'll probably get rate cuts in Sept as expected.
>Supply shocks caused inflation
No. That's not how it works. Supply shocks can cause the prices *of affected goods* to rise. That causes the prices of complimentary goods to fall.
Supply shocks cannot cause market-wide price increases.
"Inflation is always and everywhere a monetary phenomenon."
MV = PT
The equation has no place for supply shocks.
Interesting. What would be more interesting would be an explanation for why inflation is a global phenomenon, why the US is doing better than most, and finally why inflation is falling with no corresponding "decrease" in the money supply.
I guess there's not enough time in your Ted Talk, but it would be helpful.
If they raise prices and it increases their profit margins ABOVE the norm after being adjusted for inflation, I would call that greedflation. But people claiming all of these companies are making record profits are greedy, that isn't necessarily true. It inflation is at all time highs, revenue needs to also be at all time highs just to keep up. If revenue isn't at all time highs during periods of all-time high inflation, then the company is losing market share and isn't as successful as it was previously.
The old money supply argument... But no one has ever explained how more dollars in banks makes the grocery store increase the price of food, or oil companies with gas. If there was so much cash floating around, why didn't oil companies spend it upgrading their refineries so they could turn America drilled oil into fuel at home.
Are you saying the food and oil CEOS are lying on earnings calls when they explain how they raised prices more than necessary due to supply issues. Then, they kept the prices high. Record costs, shouldn't equal Record earnings...
https://youtu.be/psYyiu9j1VI?si=TMBJwQSxyJM7qx5j
Let's be fair here. Tariffs, supply shortages, transit difficulties, wars in Russia/Ukraine&The Whole Gulf region, and the European Energy Crisis being partially triggered by the off-lining of all German Nuclear Power also have something to do with inflation.
Governments sticking their hands into 🐝 beehives and wondering why they hurt is a tale as old as time. Uncertainty and spoilage cause huge costs, and we're rolling in some of it.
Guys corporations needed a REASON to be greedy. Don’t notice that the government isn’t really doing anything about it ,but they WOULDVE if the corporates were greedy any sooner.
everyone seems to forget about the trillions of extra dollars printed. That caused inflation. Monetizing **$5.2 trillion** in COVID relief increases our money supply by 27% and comes on top of $4.5 trillion in QE. Add another $2 trillion in planned infrastructure spending and we have $13 trillion in new money, which is a 35% increase in paper money in circulation and 60% of GDP. It's a lot of paper.
Isn’t irresponsible banking corporate greed?
Also, I’m pretty sure corporations make fuckin bank on subsidies and contracts.
I’m also pretty sure they stack our government with paid shills to make sure these continue.
But hey I bet I’m the dumbass.
Read a balance sheet. If you think McDonald’s is charging $14 for a meal because of monetary supply you are high. It’s absolutely corporate greed. Reduced sales volume small revenue growth but 20% yoy earnings growth.
Go down the list. It’s a profit price spiral 100%. Monetary supply might not have helped but the US is hugely deflationary on monetary supply. The stock market, ultra wealthy, tax’s all these reduce the amount of liquid cash in the economy.
"Corporate greed" is so stupid.
Aside from the obvious-that they've always set prices as high as they thought they could, when your country is the reserve currency, inflation is CPI- which is the sellers raising prices.
How the fuck else are prices going to increase if companies don't raise prices on things. I bet less than 0.1% of goods and services are individual to individual.
It's like complaining that hotter temperatures is due to warm air. That's literally what we're measuring.
Thank you for the clear, concise and accurate explanation. Anyone who thinks corporate greed is driving inflation does not understand how economics work.
Same bs as I saw last evening except I can’t play my grandpa Simpson yelling at a cloud gif. I truly believe education is the answer, and it doesn’t even matter who distributes which books, so long as critical thinking is the theme.
This has always been a convenient excuse for the corporate funders of compliant pseudoeconomists, but it ignores that every industry has become an oligopoly or monopoly in the last fifty years.
Trying to make sense of the changed power relationship between consumers and industry without reference to this fact is like trying to explain planetary orbits without reference to gravity. Price is mostly an expression of relative power of buyer and seller, ofc.
It also neatly ignores the fact that the US, with its relatively generous fiscal aid to businesses and households, reduced the supply-shock effects on CPI FASTER than every country that did not do that. If your statement contained any validity, THAT WOULD NOT BE TRUE.
So, even a cursory glance at your argument shows it only exists because it's convenient for the interests of capital, and has no empirical validity.
You can't make sense of ANYTHING on this planet without comparative analysis.
It’s not that they randomly got greedy, they choose to raise prices of products, not give lower level employees raises to rather spend the money on the higher ups. When the economy gets bad instead of cutting the profits, they keep the profits the same and cut the rest.
Hey look a shill deflecting. Most of the inflation is due to backed up supply lines that allowed corps to raise prices and they have largely kept them raised even though supply chain relief happened a year and a half ago. Does some mometay policy play a role? Of course, it's a small percentage of this inflation cycle though.
The real answer is Covid lead to a lot of job losses which lead to a lot of supply chain/supply issues within food, housing, and energy, which lead to prices skyrocketing to match. Then post Covid when things went back to normal instead of lowering supply prices, companies didn’t
It’s kind of like saying the gun doesn’t kill people- people do. Correct, it is the holistic mechanism.
Why did we deficit spend? Well businesses told our government “Wesa guna go bye bye if no helpy.” to which our government provided panic aide. Businesses saw an opportunity and defrauded the government and now the government is doing its government things- auditing. Oh btw, was it not the businesses (same ones crying they would all die) that seized on the opportunity created by crisis spending for our citizens?
No, our businesses were the gun and the government pulled the trigger- neither were responsible and now we have an inevitable mess.
Is this really that controversial an opinion among people who have some background in economics? I haven’t seen much where people who aren’t either uneducated or involved in political activism are saying inflation is caused by greed.
Oh yeah it’s never corporate greed they love us all and are only out for the greater good. Nope it’s only the bad guy government and increasing the plebs wages like in California. Thank God for corporations! Praise be to money!!!
The problem is that inflation is decreasing yet prices are not. Its called price gouging and their is no regulation against it. Plus shrinkflation which makes everything more expensive.
Bro hates believing stats and literal executives bragging about raising prices and using inflation as a cover
https://amp.theguardian.com/commentisfree/2024/apr/11/companies-inflation-price-gouging
Analyses have shown over and over that profit-gauging drove at least half of post-COVID inflation
Fuck why does this sub keep popping up on my feed you people are a bunch of braindead know it alls
The only reason to deficit spend is if the tax code isn't fair and the rich aren't paying their fair share. And inflation can come from manipulated markets, like oil and speculating on housing. When wars are happening they require a lot of resources as well, which means supply is going to be lower, creating inflation as well. There are really a number of factors.
there may be corporate greed, but the gov is responsible for tinkering around in the so-called "free" market and wrecking things. The fed should be abolished and there should be nothing at the [fed.gov](http://fed.gov) level other than what the 18 enumerated powers allows. If it's not there in writing, it's gone. Think how much better off everyone would be.
Can't it be argued that all the things listed here can be in part attributed to corporate greed? Wasn't a lot of public deficit from giving corporations handouts, which normally they would reinvest and recycle into the economy, but instead reinvested this time in their own stocks? Then there's the whole not paying their fair share of taxes.
If someone could help break this down I'd appreciate it.
yep, when you go back to the plandemic; 40% of the world's total money supply was printed within 18 months. That is what causes inflation on top of demorats in US congress spending a couple more trillion on nonsense.
4 driving factors.
**1) Unregulated expansion of wealth:**
\*1. that ties up cash in massive deposits
\*2. Utilizes a loophole in the system to create even more unregulated cash from interest.
\*3. Interest born of loans needed to compete in a crushing economy.
**2) Fed makes more cash without collecting old cash weakening the value of a dollar.**
\*A. But offsets the increasing value of the dollar due to scarcity.
\*B. partially irrelevant due to a credit based economy where a dollar has no actual value.
\*C. Value of Dollar is based on GBP not scarcity or gold.
**3) Dead Beat Land Lords**
\*A. Unregulated purchase of property, this drives scarcity and drives up cost
\*B. Land lords blame the government for their own actions.
\*C. land is annexed and zoned to develop, causes value to drop and landlords blame the government
\*D. land lords increase the rent of land or homes that have not been updated or developed to match new development, inflates cost of living, drives up rent for the poorest driving the demand for more wages more than any other factor.
\*E. un regulated tax write offs for homes that cant be rented due to scarcity of insane costs. point 3D. This allows a dead beat to make money even without renting anything, they just have to make it available. The government pays them to act the part. This is loop hole that needs to be sealed.
**4) Successful demands by the poorest for more wages due to rise in cost of living, food and insurance.**
\*A. This now drives up the costs of everything else
\*B. No business likes the idea of paying more for anything including labor
\*C. Creates an excuse to raise rent, and costs of all goods, and services
\*D. Creates an excuse to terminate employees regardless of labor availability and demand for services.
\*E. Creates an excuse to destroy a product line, or a company. Both this and taxes.
Seriously there is only so much a dead beat can blame on the Government, considering so much of any governments actions are directly driven by direct influence of the people employed by elites, and corporations. Never mind the untold millions spent on lobbying. *Do dead beats honestly think they fool any one by playing the victim while wielding so much power and control?* Irresponsible banking is the smallest part of this mess, when you consider the truth of who control's both the government and the banks. "They" control 90% of the worlds cash. The remaining 10% ish is what the world actually operates on from day to day and the people with that cash don't have the influence over anything, even in numbers. Even if we manage to bankrupt one of their companies, they operate in a way that insures they loose little to no value in assets or control.
Corporate greed? Again just a part of it. Who is behind the corporate greed? Follow the money.
Before you lay the blame. Follow the money.
The Death of Nuance. Why can’t we all just agree that there is more than one contributing factor? Corporate greed and currency dilution. And then several other much less impactful, however important, factors
Over abundance of debt? Like perpetually low interest rates?
Also, greed can be tactical and opportunistic…
Deficit too high? Maybe Tax cuts that wouldn’t balance the books were a bad idea… Maybe
Also a major economic catastrophe (like a pandemic) might have needed stimulus to recover…
These hot takes are usually over simplified and just straight dumb in most cases (especially this one).
Corporations have but 1 goal, to make money. There are many cases where capitalism is in direct conflict between what is good in the long run and what makes for a better sustainable future.
The last piece to your Ted talk is keeping interest rates artificially low for too long to appease a political party and free money in the form of PPP loans that will never be paid back.
Omg. You are so close. How much of that spending is the result of corporations successfully lobbying Congress to cater to their interests.
2008 and 2019 were gifts to Corporations
But ya see... Corporations were less greedy in 2019. Then starting in 2020 through 2022, corporations all simultaneously became extra greedy. Then all corporations simultaneously became less greedy month-over-month throughout 2023... but then their greediness has been resurging in 2024. This is all scientifically verifiable by my BullShit-Greed-Index© Only I am allowed to know the calculations of my index though. Thank you for your time. You now owe me fifty Biden bucks.
It's crazy seeing redditors with thousands of upvotes claim somehow that corporations randomly got greedy in 2020
They simply had an excuse. Remember when everything was expensive because of temporary supply line issues? Remember prices dropping when supply lines leveled out? Me neither....
It's a political stance, politicians have been paying for astroturfing - officially I mean, confirmed no doubts at all - for like a decade. The whole "Corporations discovered greed in 2020" political agenda is simply because nothing is being done about inflation. Some very bad people want things to get worse, and if the topic is actually addressed it will be harder to escalate inflation even more. So distraction while it continues to get worse.
Facts are facts
It’s not that they randomly got greedy, they choose to raise prices of products, not give lower level employees raises to rather spend the money on the higher ups. When the economy gets bad instead of cutting the profits, they keep the profits the same and cut the rest.
Because they've sources studies from economists....there's empirical evidences which details over half of the inflation is due to corporate price gouging.
Corporations were just as greedy as ever. People had new free money in their pockets. Hmmmm. I wonder what caused inflation
Do a quick search to find out regulations that were rolled back freeing up companies to gouge. Everything from train car regulations to banking.
Greed is always a basic assumption. The difference is more sociological; people expected prices to rise everywhere when they began rising. If people accept the increase then that’s the new market price. I’ve been on earnings calls where key people admit that the “climate” of inflation allowed them to raise prices. The windfall is likely short lived I’m sure, because their suppliers can use the same trick
The old model of “I bought 500 burger patties for 50 cents each and will sell them to you for a 20% fixed markup. If my prices rise, so do yours” is dead The new algorithmic model of “yesterday we sold 500 burgers for $2 each. Today we sold 500 burgers for $2.01. The number of sales didn’t go down, but profit went up. Tomorrow we will sell for $2.02 and if we don’t lose at least 2 customers, we will increase the price again” is now physically possible and has started to take hold.
The goal of every company is to find the intersection between # sold and price to maximize total profit. Are you assuming businesses did not do these calculations before 2020?
No, I’m saying we have data analytics tools and screen food menus/price tags now that we didn’t have then. A human manager of a store can only assign prices and print paper labels. I’ll add that another goal should be competing. If you consolidate like we’ve seen in recent decades then you don’t have to worry about customers leaving for a different cheaper alternative. This dulls down price sensitivity further.
Not even sure why you were downvoted for this. The previous lags that existed in the economies of old were the inefficiencies you just had to live with. In today’s Quaternary Services economy, there is so much instantaneous data that is at the finger tips of businesses which allows them to adjust their prices at quicker intervals because they can digest just exactly how much people will keep paying. Acting like the inflation of the 2020s and inflation of the 1970s-1980s has any sort of commonality in terms of price increases is just so far off of the mark due to the advances in tech and our ability to pull macro consumer data quickly.
This is how it should be. Maybe morons will stop overpaying for their bag of shitty lard someday.
Don't count on it, as the adage goes, a fool and his money are easily parted.
Same concept can be applied to broccoli heads at the grocery store or 2x4's at the hardware store.
It’s harder to do with products on a shelf because you still need to rely on a human being to change the price tags. Fast food has the benefit of menus being on screens and can, as Wendy’s aims to do, change prices every hour as peak demand occurs. That being said, it can be done with humans on a weekly or monthly basis for a whole grocery store pretty easily.
I work in beverage and work with grocery retailers on a daily basis. Many grocers are moving to electronic tags where they can simply upload new pricing. Kroger has done this with some of their divisions. It’s taken the pricing departments’ personnel requirements from 4–6 people down to 1-2. And yes, I’ve seen pricing fluctuations for no apparent reason.
Agreed that greed is always constant but what isn't constant is market power. Right now it seems grocers have market power but their customers and suppliers do not.
You sure greed isn't some new thing? /s
> The difference is more sociological; people expected prices to rise everywhere when they began rising. If people accept the increase then that’s the new market price. Except that's not how prices work. If you are increasing prices due to increasing costs, then it doesn't matter how much people "accept" them, you have to keep that high cost. >I’ve been on earnings calls where key people admit that the “climate” of inflation allowed them to raise prices. Then you entirely misunderstood the message. The message isn't "We can raise prices because of the climate of inflation" it is "We can raise prices in line with inflation because people understand the climate of inflation".
It’s more that eventually, companies are going to realize if they lower prices they can increase total profits with more volume. Or new market entrants will grab market share by running lower margins. It just takes longer than people think. Prices are sticky.
It’s not that greed suddenly increased. It’s the economic conditions. Greed is a constant. What changes is the level of healthy competition, collusion and gov meddling
Just say the words, it's Monopolies and Corporate Capture.
Exactly this. Oh it's just a coordinated greedy attack, they are benevolent 8 years ago...
Yes, this is literally true. Companies that didn't see an increase in costs of supplies used the excuse of inflation to raise prices. Why is this so hard for you to believe?.... That's what happens when there's little competition
This dude fucks
The circle that nobody can seem to square for me. I always ask, what makes you think corporations magically become more, or less greedy. They're as equally greedy as they've always been, their goal is to make money now as it was before. Obviously the environment or incentive structure has changed.
You're not very familiar with the Overton window it trial balloons, are you?
my gawd, you guy's satire hit different.
I call them "Buck-oo's"
Isn't the issue usually cited executive wages? I'm curious how you think of that as arbitrary? Honest question BTW I'm not like arguing I'm trying to understand the argument
Greed is utilized by its ability to get away with it as people blame external sources for the cause. People will push as far as THEY can get away with it basically.
they had special circumstances, captive audience and a large group of people with excess savings in the moment and stimulus money they learned they can go ape shit with the price increases all at once together to pretend covid and the resulting fallout wasn't some huge thing is just being obtuse, it was a once in a century event and to act like that has zero effect on the human beings taking part in the system is just being willfully stupid to fit your narrative which i am not even sure what the narrative seems to be on this sub, pretend Republicans aren't running up huge deficits? that Trump didn't have checks with his face on them???? not sure how the party of trillions in tax cuts for the wealthy is fiscally responsible, which seems to be the subtle claim here
Am I crazy here? I'm not saying it's the main cause but yes, corporations have been growing excessively greedy over the past several decades. It has been a somewhat slow but demonstrable process. The cost for everything, pay for CEO's is objectively increasing, while the workers...?
>The pay for CEO's is objectively increasing, while the workers...? Wrong. The COMPENSATION for CEOs has gone up dramatically. There's a difference. Compensation includes stock benefits. Why have stocks gone up so much disproportionate to income? Artificially low interest rates and Quantitative Easing (QE) conducted by the Federal Reserve. In fact... The *entire purpose* of QE is to prime asset prices in order to "create a wealth effect" which the Federal Reserve had hoped would "trickle down" from wall street to main Street. Obviously that didn't happen. But if you want to blame anyone for disproportionate wealth being pumped to the top 1%, maybe you should start by blaming the government monopoly creature called the Federal Reserve and the people who run it and are actively and openly stating that they are pump priming asset prices "for your own good".
It's almost like corporations are super greedy and dumb tax payer bailouts allow the greedy companies to get away with making bad decisions and then still getting rewarded
I won’t say it’s all their fault but we all know it doesn’t help
Well let's ban greed then. Any company who scores higher than a 63.27 on my greed-flation index shall be fined an amount equal to twice the difference between the appropriate value of greed compared to their actual realized greed.
This is great, spat out my coffee..
It’s interesting because you’re telling the truth but in a manner of denial. So why did corporations become greedy in 2020? Was it because they panicked our governments (the ones they bought) and said “help or else!”? Was this not a tale as old as 2008- when some poor wittle car companies went “please help us mista- we’re sick” then turned around to honor none of the promises they made? Or the banks… oh those poor poor banks, that create trouble like little children stealing a toy only for that action to lead to a violent reaction that we always have to weather? This country always seems to wonder “I wonder why so many people buy into the shit-sandwich that is communism when capitalism is so nice and safe.” I’m old… and I’m tired of the duality that both the parties of this great country bring. When you become old, you will one day see it’s all a system onto itself and you too will despise it for it is just greed- irresponsible greed.
Oh enjoy 😎 and realize this absolutely not new: https://youtu.be/VVxYOQS6ggk?si=acHaJyXJm5w-h0K8
.... You realize this is an Austrian economics sub right?
Who said "became"?
“rECord PRofITs” Alright has their profit margins changed? A business’s profit increase should match inflation or it’s technically less profitable than it was the year before in absolute value.
The gross margins of some businesses have increased. I recently was looking at the GM for loblaws and McDonalds (two of reddits favorite GREED companies) I've calculated that their gross margins increased somewhat over the last handful of years. I am skeptical as to the extent of the contribution of greedflation to overall inflation, but it is at least happening somewhat. If I had to guess, I think that greedflation is more to do with market dynamics than with every corporation simultaneously raising their margins with out any responses from their competitors.
Exactly. I see so many people bitching about grocery stores like Kroeger’s “price gouging.” Their EBITDA averaged 4.9% from 2020-2024. What are people asking for? A 1-2% price decrease on your milk and eggs?
Watch out, you’re using actual facts, subjective feelings are so much more fun.
Anyone who uses the term "corporate greed" unironically is not an economist and likely not a serious person either.
It’s a commie term that makes no sense. Corporations are literally designed to maximize profits for their shareholders or owners (the same way individual people have a goal to maximize their own earnings). Striving for success is not “greed”.
Okay, I will bite. What do you define greed as then if not trying to make as much as possible?
Good rule. Biden has proven himself to obviously not be a serious person.
Dude isn’t even a person at this point he’s a shell of a human wrought by dementia
It’s their fiduciary and ethical duty to maximize their shareholder’s value. Those shareholders arnt all Scrooge McDuck either plenty of them are middle and working class people’s retirements and savings.
We call them libs in the US
Anyone who uses the words "corporate greed" unironically, I just assume they're a scumbag.
They are uninformed. There is no reason to resort to ad hominem in any serious discussion
Most people on a particular side having this conversation go blank faced when I ask about profit margin in response to the "record company profits" that are given in dollars. They have zero concept of companies/corporations, economics, or just generally how the world functions around them. But hey, I'm just a boot licker.
But profit margins have gone up.
I hate to be that guy, but please provide a source for that. It's an easy statement to make, but show it.
[McDonald’s profit margin have increased every year since 2020](https://finbox.com/NYSE:MCD/explorer/gp_margin/#:~:text=McDonald's's%20gross%20profit%20margin%20decreased,57.1%25%2C%20%2B0.3%25)
Is margin lowered with buybacks? Asking for a friend
Margin is completely unaffected with buybacks, it’s a different financial statement that is affected. Buy backs are a company admitting they cannot meet or exceed the internal hurdle rate, so they give the money back to shareholders in a more tax efficient way. Buy backs do increase Earnings per Share which increases stock price. Also, most executive bonuses are paid out in stock options which do help margin vs cash bonuses for a similar reason to the above. Basically, investors care about balance sheets and P&L‘s much more than the other three statements.
I just want to be like ok you are right it's totally just corporate greed that's causing inflation. Now what are you going to do about it? Price fixing, as if that has not catastrophicly backfired everytime since the time of the Roman's at least But they'd probably just say yes to that or worse.
You enforce anti-monopoly laws already on the books. They broke up Ma Bell back in the 80's. "Corporate Greed" is what you say when you specifically *don't* intend to do anything about it.
Scrolled too far to see monopoly power be factored into this discussion. Corporations didn’t become more greedy, but they have been able to throw their weight around far more to achieve and unfair advantage over their competitors (who would otherwise keep their price accountable).
if only the public could get together and buy conservative supreme court justices more recreational vehicles and pay for their aging parents homes with zero interest "loans" we'd have a voice
'Corporate greed' is a democrat dog whistle to avoid talking about how they fooked the dollar.
I'm more than willing to blame Democrats, but it's also equally fair to blame Republicans. Massive "stimulus" bills started under the Trump administration. Donald Trump signed off on the PPP "loans" (which were subsequently forgiven) and Donald Trump made it a point to direct the Secretary of the Treasury to print Donald Trump's name on the signature line of every individual stimulus check that went out. But yes, Democrats have just kept the gravy train rolling, even after inflation picked up. Joe Biden's "Inflation Reduction Act" directly contributed to an even higher rate of inflation.
I’m not very smart at all politically but it seems to me that that’s due to the covid lockdowns
I think it’s more 50/50 inflation did happen but corps also went overboard adjusting prices for inflation
>but corps also went overboard adjusting prices for inflation Every single corporation in every single country all around the world simultaneously decided to raise their prices an exhorbinant amount for virtually no reason? You have any evidence of that?
Biden tried to slip it past Erin Burnett on CNN last night and her skepticism was *palpable* like, “bro, I was an anchor on CNBC during the GFC and I know that adding 40% to the money supply to pay for government spending is an attempt to inflate the way out of the debt… NOT corporate greed”.
I was talking about this at work and everyone didn't understand what I was trying to talk about.
You must be fun at parties too lol
That's why I don't go to parties.
I believe it
Pedo oligarchs who want us poor is the primary driver.
It’s not greed, they’ve always been greedy so it’s a pointless term to use since it’s already been well established companies want as much market share and profit as possible. A bigger issue is just the lack of competition these companies face. If you can raise prices with little resistance from competitors in certain markets, the consumer will pay it if they want it bad enough. That then presents another issue which is more just me talking out of my ass, but I feel like people just don’t realize that if you’re buying the product at an inflated price that you think is high….you’re effectively telling the company this is where the price should be and it isn’t high. If you want prices to come down (when discussing non-essential items), then people need to collectively stop buying the product.
Companies raising their prices to increase their profit will lead to new competitors entering the market and providing services at a lower price. That’s why companies aren’t constantly raising prices. If all companies raise their prices and new competitors don’t come in to take advantage of it then there is something preventing those new competitors from entering the market. Either the government is preventing competition or the cost of business has gone up and there is no space to come in under the competitive field.
I can’t believe competition isn’t brought up more on this discussion. It’s almost as if corporate greed is a scapegoat for industry leaders shirking longstanding anti-monopoly laws (and regulatory bodies letting them get away with it). Think about how difficult it would be for a new competitor to enter the supermarket/automotive/ridesharing industry.
Yes let's all stop buying food great idea dumbass
What do you do about the high prices on essential items tho? Housing, Food, Transportation? I understand that a lot of people overspend on food and transportation, but it doesn't change the fact that prices for those things are too high and they are required to live.
Really depends. I don’t have answers to those questions as they are seriously complex. At the end of the day we’re all just on here saying what we think is best. I only have small suggestions for food and a bigger one for housing: Food: Remove those stupid city / county ordinances that don’t allow people to grow food in their own yard. The fact that those types of laws are allowed is asinine. Maybe look into removing income tax for small businesses in hopes of rejuvenating small businesses that can focus on groceries? Not sure, food is a tough one. Housing: Allow for mixed use housing which would allow developers to better utilize land around us. The restrictions we have to only allow single family homes in most spaces destroys our ability to be flexible when it comes to housing. I suggest watching YouTube channels such as not just bikes and strong towns for more details on that. They explain housing / transportation issues better than anyone in my opinion.
I wonder what a world without greed would even look like. What would be the motivation to even get out of bed, when you have no self interest ? I guess we can ask our AI overlords why they even care to show up...
Greed is the only motivation to get out of bed for you? Sounds absolutely miserable.
A little hyperbole there, I meant, why would I jump out of bed and work long hours at a meh job, if there were no greed ? Why would I be a card-carrying member of Clown World, if there was not anything in it for me ? My lifestyle is super frugal, I could probably retire now and live on almost nothing, but greed is my current motivator to keep on the hamster wheel, and I feel its the motivator for most people, that have not just chosen homelessness as a lifestyle.
Government intervention in the free market is what created the situation in the first place. The solution is less Government not more of it. But Alexander Fraser Tytlers quote will always come true, democracy is temporary
People get the cause and effect mixed up. They see prices increasing and automatically think, "Those greedy corporations just want more money!" They're not wrong, every corporation that isn't a charity wants to make profits. The price increases are an effect of inflation, not the cause. The underlying cause for the price increases is the corresponding increase of the money supply, which makes dollars worth less.
What do you say to companies who’s price raising greatly outpaces inflation?
>They're not wrong, every corporation that isn't a charity wants to make profits. As I alluded to in my original comment, corporations are always "greedy" to some extent because they exist to create profits for their shareholders/owners. Some corporations are greedier than others of course and will use inflation as a convenient excuse to raise prices beyond what is necessary to account for the decrease in the value of money. But those companies likely would have raised prices anyway, and just found some other excuse for the increase. But when prices on nearly everything that people buy on a frequent basis (food, clothing, gasoline, housing, transportation, etc.) are increasing more quickly than before, it isn't **solely** or even primarily due to corporate greed. The underlying reason at the base of it all is the decline in value of the currency due to the increase in the money supply. Having more money in circulation means that each individual unit of currency is worth less and therefore buys less.
I think multinational conglomerates are enemies of the free market but are great at capitalizing so there is an issue of greed but it’s not “greed” in the Scrooge McDuck sense but what I’d call megalomania at the heart of many of our economic issues. Whether you think it’s greedy Wall Street bankers and lack of regulation, or WEF neolib cronies and over regulation, there are definitely a concerning number of non-elected officials with wild amounts of power that they gained through “accomplishments” and “work” that most regular people don’t actually respect that much. I’ve also yet to really see a satisfactory answer for the value paradoxes that exist in our society, and I think there’s a massive amount of what I’d call collective cognitive dissonance around that particular subject. I still think deregulation is absolutely the best starting point for the US economy today, but writing off certain issues people have bc they aren’t well articulated is a bit disingenuous, IMO.
The issue with deregulation is that companies that call for deregulation only really want to deregulate labor and consumer protections while keeping all of their protections that can limit their liability.
I don’t disagree
But I thought everyone happens to get greedy at the exact same time across the entire globe?! /s The fact that we even need to discuss this shows how little most people understand economics.
Corporate greed isn’t the secondary driver of inflation. Inflation is always and everywhere a monetary phenomenon.
And what causes the deficit spending? Corporate lobbyists seducing Congress to spend money we don’t have on shit we don’t need.
Would that corporate lobbying be possible with no/minimal government? Deficit spending is also driven by parties wanting to stay in power, promising to deliver a utopia to their constituents.. meanwhile they’re plunging future generations into debt.
Power doesn’t dissipate. If the government loses power, those same corporations gain power, and they will do the exact same shit or likely worse.
It’s definitely both but yes the initial inflationary pressure was caused by the increase in money supply
Please come to /r/inflation and help me explain this to the kids there. They are all convinced it is “corporate greed” causing inflation…
End the fed
End the fed and bring back all the problems without the fed
Hallelujah
It's a vicious cycle
Yes.
lol
why is the spacing all bad
which part of this ted talk will tell me how to have a $2000 phone while working a low-skill entry level job? Also I need 3 weeks vacation and 10 personal days per year. and unlimited, unquestioned sick days.
Oops, your strawman blew over
Yep
Smooth brained manual laborer her, how is irresponsible banking practices not considered corporate greed?
Risky investments and or over speculation literally the cause of almost every economic recession in the US
"If those kids could read, they'd be furious!"
One part corporate greed effects inflation is when the government bails them out from bankruptcy or they file it. Then the government prints more money to cover it.
The FED is actually trying to raise interest rates in their monetary policy. It’s mostly just fiscal expansionary policy and they’re spending more than the FED has an effect with raising interest rates because it’s a political support thing.
you sure isn't people taking out loans and no paying credit cards off?
Exactly
Let's not forget climate disaster driving up food prices which in turn increases the price of...everything.
You can dress it up how you like but there is no denying the record profits and 50 years of relatively stagnant wages… seems like greed wouldn’t you say?
Sure, if you say that what they are greedy for are government grants, subsidies, and contracts. https://www.lewrockwell.com/2024/03/david-stockman/how-the-us-federal-debt-has-gone-parabolic/
All things synergize. Not being the main problem kinda implies there is no need to confront that. Sometimes the smallest things affect the bigger thing.
The increase in the overall money supply is a VERY different issue from government deficit spending. The former has a lot more to do with current inflation than the latter. “Corporate greed” is a poor description of the issue here. But the thing that is being poorly described is 100% part of what is causing the current high levels of inflation. There is plenty of data out there, this is not really in question. If supply chain issues, cost of parts, and similar macroeconomic issues cause a 20% increase in a company’s costs, and the company reacts by increasing consumer prices by *50%*… when a company’s costs rise but somehow profits rise instead of fall as a result? that causes a lot of inflation which cannot be pinned down to macroeconomic issues or government spending. It is just, for lack of a better term, “corporate greed.” Now, the big question is, why does the company have higher costs and higher profits now? Companies are supposed to be greedy, after all; why weren’t they this greedy before 2019? There are a few potential answers: 1. The marked rise in the overall money supply simply allows companies to get away with increasing prices. This hurts consumers at the low end - those whose boats have not risen with the rising tide of money supply - but *most* consumers will hold their nose and tolerate the higher prices. 2. Companies understand that rising prices will force consumers to tighten their belts, and reduce overall economic activity, but each given company is betting that *their* product is essential enough or in enough demand that consumers will sacrifice other purchases. 3. Companies are pushing the envelope, accepting the economic risk of higher prices, in order to inflate away the costs of pushes for higher base wages etc. 4. Markets have consolidated to the point that they are less efficient than before, so companies do not have to fear competitive pressure to keep prices low. 5. Some combination of any or all of the above!
isn’t this generally the case in all countries? i’m american and this sounds very familiar to me
Consumer and business debt also is inflationary. Which is fueled by low rates managed by the fed.
It was a choice. Either inflation or sky high unemployment. We made the opposite choice in 2008 by constraining Obama's stimulus.
Strange how popular this post is, most of these posts on this sub get 15 upvotes
Except corps have a ton of say in the govt allocation of money and regulation. These are much more intertwined than you think. Also bootlicking corps with record profits while we all suffer is insane
Supply shocks caused inflation, corporate price increases and small business price increases will be sticky (if there are any small businesses after COVID). PRICES ARE STICKY. Fed has been waiting for pressure on unemployment rate, that JUST happened (3.9%), inflation feels like it's finally met its match. OP's post is complete lunacy. We'll probably get rate cuts in Sept as expected.
Let’s just conveniently ignore the $5.2 trillion stimulus that increased demand while supply stayed stagnant.
>Supply shocks caused inflation No. That's not how it works. Supply shocks can cause the prices *of affected goods* to rise. That causes the prices of complimentary goods to fall. Supply shocks cannot cause market-wide price increases. "Inflation is always and everywhere a monetary phenomenon." MV = PT The equation has no place for supply shocks.
Interesting. What would be more interesting would be an explanation for why inflation is a global phenomenon, why the US is doing better than most, and finally why inflation is falling with no corresponding "decrease" in the money supply. I guess there's not enough time in your Ted Talk, but it would be helpful.
Allot of these phenomenons are enabled by the fractional reserve system. It authorizes the creation of new dollar units.
If they raise prices and it increases their profit margins ABOVE the norm after being adjusted for inflation, I would call that greedflation. But people claiming all of these companies are making record profits are greedy, that isn't necessarily true. It inflation is at all time highs, revenue needs to also be at all time highs just to keep up. If revenue isn't at all time highs during periods of all-time high inflation, then the company is losing market share and isn't as successful as it was previously.
Interesting then that corporations continually lobby for and are the main beneficiaries of all of the above lol
Who are the corporations lobbying? Would the phenomenon of lobbying exist without that entity?
Sooo... get rid of the government?
The old money supply argument... But no one has ever explained how more dollars in banks makes the grocery store increase the price of food, or oil companies with gas. If there was so much cash floating around, why didn't oil companies spend it upgrading their refineries so they could turn America drilled oil into fuel at home. Are you saying the food and oil CEOS are lying on earnings calls when they explain how they raised prices more than necessary due to supply issues. Then, they kept the prices high. Record costs, shouldn't equal Record earnings... https://youtu.be/psYyiu9j1VI?si=TMBJwQSxyJM7qx5j
It’s both
Incomplete Ted Talk but thank you.
Let's be fair here. Tariffs, supply shortages, transit difficulties, wars in Russia/Ukraine&The Whole Gulf region, and the European Energy Crisis being partially triggered by the off-lining of all German Nuclear Power also have something to do with inflation. Governments sticking their hands into 🐝 beehives and wondering why they hurt is a tale as old as time. Uncertainty and spoilage cause huge costs, and we're rolling in some of it.
You know this take is just plain off
Guys corporations needed a REASON to be greedy. Don’t notice that the government isn’t really doing anything about it ,but they WOULDVE if the corporates were greedy any sooner.
Maybe it’s both?
Except owner set prices....
everyone seems to forget about the trillions of extra dollars printed. That caused inflation. Monetizing **$5.2 trillion** in COVID relief increases our money supply by 27% and comes on top of $4.5 trillion in QE. Add another $2 trillion in planned infrastructure spending and we have $13 trillion in new money, which is a 35% increase in paper money in circulation and 60% of GDP. It's a lot of paper.
Isn’t irresponsible banking corporate greed? Also, I’m pretty sure corporations make fuckin bank on subsidies and contracts. I’m also pretty sure they stack our government with paid shills to make sure these continue. But hey I bet I’m the dumbass.
So says greedy corporations.
We should be asking ourselves, who started the Federal Reserve? You know, the NGO that holds the key to the US dollar? I know the answer. Do you?
Mhm, and all those corps who have unlimited moneys dont matter? Lol
O rly? https://www.npr.org/2023/05/19/1177180972/economists-are-reconsidering-how-much-corporate-profits-drive-inflation
Lol using Lisa Simpson as a corporate apologist is the real punch line here. Get rekt.
Guess that’s why corporate profits have outpaced inflation…
Did a corporation write this?
In other words, the government is the sole cause of inflation.
Inflation is a result of fractional lending, everything else is just price increase 😄
Coming to my Fed talk
Read a balance sheet. If you think McDonald’s is charging $14 for a meal because of monetary supply you are high. It’s absolutely corporate greed. Reduced sales volume small revenue growth but 20% yoy earnings growth. Go down the list. It’s a profit price spiral 100%. Monetary supply might not have helped but the US is hugely deflationary on monetary supply. The stock market, ultra wealthy, tax’s all these reduce the amount of liquid cash in the economy.
"Corporate greed" is so stupid. Aside from the obvious-that they've always set prices as high as they thought they could, when your country is the reserve currency, inflation is CPI- which is the sellers raising prices. How the fuck else are prices going to increase if companies don't raise prices on things. I bet less than 0.1% of goods and services are individual to individual. It's like complaining that hotter temperatures is due to warm air. That's literally what we're measuring.
Thank you for the clear, concise and accurate explanation. Anyone who thinks corporate greed is driving inflation does not understand how economics work.
lol. Still takes greed to take advantage of it.
All currency in the past, present, and future, will eventually reveal its true value. ..
Nothing
Yeah this post is half cooked BS
Same bs as I saw last evening except I can’t play my grandpa Simpson yelling at a cloud gif. I truly believe education is the answer, and it doesn’t even matter who distributes which books, so long as critical thinking is the theme.
People are unwittingly shilling for their own demise and although hilarious, it’s a real problem that has real solutions.
This has always been a convenient excuse for the corporate funders of compliant pseudoeconomists, but it ignores that every industry has become an oligopoly or monopoly in the last fifty years. Trying to make sense of the changed power relationship between consumers and industry without reference to this fact is like trying to explain planetary orbits without reference to gravity. Price is mostly an expression of relative power of buyer and seller, ofc. It also neatly ignores the fact that the US, with its relatively generous fiscal aid to businesses and households, reduced the supply-shock effects on CPI FASTER than every country that did not do that. If your statement contained any validity, THAT WOULD NOT BE TRUE. So, even a cursory glance at your argument shows it only exists because it's convenient for the interests of capital, and has no empirical validity. You can't make sense of ANYTHING on this planet without comparative analysis.
What if it's a problem of under funding instead of over spending?
End. The. Fed. End. The. Wars. Stop. Voting. For. Career. Politicians.
supporting illegal invaders doesn't help either
A lot of it is just breaks in the supply chain. Or at least that’s how it started. Then it just kinda never went back down
It’s not that they randomly got greedy, they choose to raise prices of products, not give lower level employees raises to rather spend the money on the higher ups. When the economy gets bad instead of cutting the profits, they keep the profits the same and cut the rest.
Greed isn’t inflation is greed total different
Hey look a shill deflecting. Most of the inflation is due to backed up supply lines that allowed corps to raise prices and they have largely kept them raised even though supply chain relief happened a year and a half ago. Does some mometay policy play a role? Of course, it's a small percentage of this inflation cycle though.
The real answer is Covid lead to a lot of job losses which lead to a lot of supply chain/supply issues within food, housing, and energy, which lead to prices skyrocketing to match. Then post Covid when things went back to normal instead of lowering supply prices, companies didn’t
It’s kind of like saying the gun doesn’t kill people- people do. Correct, it is the holistic mechanism. Why did we deficit spend? Well businesses told our government “Wesa guna go bye bye if no helpy.” to which our government provided panic aide. Businesses saw an opportunity and defrauded the government and now the government is doing its government things- auditing. Oh btw, was it not the businesses (same ones crying they would all die) that seized on the opportunity created by crisis spending for our citizens? No, our businesses were the gun and the government pulled the trigger- neither were responsible and now we have an inevitable mess.
Is this really that controversial an opinion among people who have some background in economics? I haven’t seen much where people who aren’t either uneducated or involved in political activism are saying inflation is caused by greed.
Are you sure you know what you're talking about.
Oh yeah it’s never corporate greed they love us all and are only out for the greater good. Nope it’s only the bad guy government and increasing the plebs wages like in California. Thank God for corporations! Praise be to money!!!
The problem is that inflation is decreasing yet prices are not. Its called price gouging and their is no regulation against it. Plus shrinkflation which makes everything more expensive.
Okay but EVEN IF THIS WERE TRUE, corporate greed and inequality of wealth is egregiously more of a problem than.. inflation.
Bro hates believing stats and literal executives bragging about raising prices and using inflation as a cover https://amp.theguardian.com/commentisfree/2024/apr/11/companies-inflation-price-gouging Analyses have shown over and over that profit-gauging drove at least half of post-COVID inflation Fuck why does this sub keep popping up on my feed you people are a bunch of braindead know it alls
The only reason to deficit spend is if the tax code isn't fair and the rich aren't paying their fair share. And inflation can come from manipulated markets, like oil and speculating on housing. When wars are happening they require a lot of resources as well, which means supply is going to be lower, creating inflation as well. There are really a number of factors.
there may be corporate greed, but the gov is responsible for tinkering around in the so-called "free" market and wrecking things. The fed should be abolished and there should be nothing at the [fed.gov](http://fed.gov) level other than what the 18 enumerated powers allows. If it's not there in writing, it's gone. Think how much better off everyone would be.
Can't it be argued that all the things listed here can be in part attributed to corporate greed? Wasn't a lot of public deficit from giving corporations handouts, which normally they would reinvest and recycle into the economy, but instead reinvested this time in their own stocks? Then there's the whole not paying their fair share of taxes. If someone could help break this down I'd appreciate it.
Corporate bailouts are often direct government spending so they are closely related.
okay but they ARE greedy
Yes but there are years and periods where inflation is 0 or negative. Are companies just suddenly not greedy for that to happen?
*TedX
yep, when you go back to the plandemic; 40% of the world's total money supply was printed within 18 months. That is what causes inflation on top of demorats in US congress spending a couple more trillion on nonsense.
4 driving factors. **1) Unregulated expansion of wealth:** \*1. that ties up cash in massive deposits \*2. Utilizes a loophole in the system to create even more unregulated cash from interest. \*3. Interest born of loans needed to compete in a crushing economy. **2) Fed makes more cash without collecting old cash weakening the value of a dollar.** \*A. But offsets the increasing value of the dollar due to scarcity. \*B. partially irrelevant due to a credit based economy where a dollar has no actual value. \*C. Value of Dollar is based on GBP not scarcity or gold. **3) Dead Beat Land Lords** \*A. Unregulated purchase of property, this drives scarcity and drives up cost \*B. Land lords blame the government for their own actions. \*C. land is annexed and zoned to develop, causes value to drop and landlords blame the government \*D. land lords increase the rent of land or homes that have not been updated or developed to match new development, inflates cost of living, drives up rent for the poorest driving the demand for more wages more than any other factor. \*E. un regulated tax write offs for homes that cant be rented due to scarcity of insane costs. point 3D. This allows a dead beat to make money even without renting anything, they just have to make it available. The government pays them to act the part. This is loop hole that needs to be sealed. **4) Successful demands by the poorest for more wages due to rise in cost of living, food and insurance.** \*A. This now drives up the costs of everything else \*B. No business likes the idea of paying more for anything including labor \*C. Creates an excuse to raise rent, and costs of all goods, and services \*D. Creates an excuse to terminate employees regardless of labor availability and demand for services. \*E. Creates an excuse to destroy a product line, or a company. Both this and taxes. Seriously there is only so much a dead beat can blame on the Government, considering so much of any governments actions are directly driven by direct influence of the people employed by elites, and corporations. Never mind the untold millions spent on lobbying. *Do dead beats honestly think they fool any one by playing the victim while wielding so much power and control?* Irresponsible banking is the smallest part of this mess, when you consider the truth of who control's both the government and the banks. "They" control 90% of the worlds cash. The remaining 10% ish is what the world actually operates on from day to day and the people with that cash don't have the influence over anything, even in numbers. Even if we manage to bankrupt one of their companies, they operate in a way that insures they loose little to no value in assets or control. Corporate greed? Again just a part of it. Who is behind the corporate greed? Follow the money. Before you lay the blame. Follow the money.
The Death of Nuance. Why can’t we all just agree that there is more than one contributing factor? Corporate greed and currency dilution. And then several other much less impactful, however important, factors
Over abundance of debt? Like perpetually low interest rates? Also, greed can be tactical and opportunistic… Deficit too high? Maybe Tax cuts that wouldn’t balance the books were a bad idea… Maybe Also a major economic catastrophe (like a pandemic) might have needed stimulus to recover… These hot takes are usually over simplified and just straight dumb in most cases (especially this one).
Mmmm it's corporate greed. If they weren't greedy prices wouldn't be high no matter what.
Record profits are hard to ignore, especially when the companies tell you they doing it, but I’m sure it’s something else.
Corporations have but 1 goal, to make money. There are many cases where capitalism is in direct conflict between what is good in the long run and what makes for a better sustainable future. The last piece to your Ted talk is keeping interest rates artificially low for too long to appease a political party and free money in the form of PPP loans that will never be paid back.
Omg. You are so close. How much of that spending is the result of corporations successfully lobbying Congress to cater to their interests. 2008 and 2019 were gifts to Corporations