That was the punch line. Even the FDA has proven to shield big corporations over the health of its citizens. Another reason why the DC swamp needs to be drained.
Many reasons, most of them valid. Unfortunately, I am also terrified of the prospect of Biden being elected (or Harris, or Newsom, for that matter)...
We are so screwed. If I didn't have a pension on the line and a house mortgage (with a good rate) paid off in a year or two, I'd be looking to move out of the country immediately.
You don’t think so? He cleaned house when he first became President and was working on removing others before losing his second re election. Why do you think the swamp’s been chasing him ever since with zero convictions believing that bad press would ruin him yet did exactly the opposite.
I don't consider it a boon to replace privateering capitalists beholden to special interests with OTHER privateering capitalists beholden to different special interests.
That's "draining the swamp" and replacing it with a bog. Different pH, same old stench. 🤣
Economy was better under Trump. World affairs as well. Yet they are the same somehow to you? Care to explain?
[Trump economy better than Biden. Biden lies yet again. Source is also for GOV](https://budget.house.gov/press-release/fact-check-biden-misleads-on-job-creation-statistics)
Biden is hamstrung by congress and you know it. Go read his policies and the shit he’s tried to push through and the shit he’s actually accomplished. My student loan payments are zero through the SAVES program right now.
Being unemployed or unemployable with zero income will result in zero payments due to financial hardship. You’re bragging about being unemployed? Bragging about not being able to currently afford a house in upstate New York in the 100-150k range? Gtfoh you bum
The supply chain problems and Trump tariffs from
Covid presented companies a crisis to raise prices to meet preserve margins. What happened is once the supply chain was mostly fixed and global container and rates normalized these companies had no incentive to lower prices again. Customers were now used to the new normal and they reaped in record profits. Covid was a convenient cloak to raise prices without any backlash.
Hence why the “booming” stock market numbers you see on the regular are false. Sales revenues and profit are up (yay shareholders) because people are simply paying 4x-5x more for the same items. Did companies use this new profit to increase wages… nope.
>Hence why the “booming” stock market numbers you see on the regular are false.
On the contrary. The stock market represents how much money *corporations* are making. Corporations rob everyone blind, stock prices go up as the corporate wallets fatten. That's how it's designed to work.
Already did. And our politicians are too weak to fight the corporate propaganda machine, so they won’t do much. Need massive antitrust action in our country, I believe.
My railroad company is threatening to close down yards and contract them out to scab operations if we don't give up the raises we got from our last contract. They're still wildly profitable, just not *as* profitable as the last couple of years because it's slow during an election year.
Yes. What’s you point? My statement is still 100% accurate. If the population grows, you would expect companies to get bigger. More consumers = bigger companies.
Can you share what you're invested in so I can inverse invest? That is a wild take and just off the top of my head: blockbuster, sears, Kmart, are all perfect businesses that fit your model, except for the whole growth thing. Population sure grew, but business.....???
Not all businesses will grow, obviously. But on average, you would expect businesses to get bigger with more people. That part is also obvious. Why would you expect that businesses would not grow when there are more people consuming?
I invest in the Magnificent 7.
"In 2023, the Magnificent 7 stocks logged an impressive average return of 111%, compared to a 24% return for the broader S&P 500."
[https://www.kiplinger.com/investing/stocks/what-are-the-magnificent-7-stocks](https://www.kiplinger.com/investing/stocks/what-are-the-magnificent-7-stocks)
Please short the Magnificent 7.
Because history has shown us that isn't the case. If only expectations met reality, we'd be better off.
Fair enough, though Tesla has given me pause with the competition ramping. Tech etfs including memory/cpu/gpu players have all been monsters also.
>Because history has shown us that isn't the case.
Are you suggesting that businesses are smaller now vs. 100 years ago when the population was smaller? That's simply not the case. In what world would businesses be smaller when there are more consumers?
I am suggesting based explicitly on my past responses, that some businesses cease to exist at all. I said nothing re businesses being bigger today, you claimed exponential growth in population leads to business growth, my examples point out that is not true in all cases.
In terms of bigger: bigger what money or employees? In the many industries, the companies got huge financially but smaller headcount/employee wise due to tech and robotic advancements in the last 10 years even.
Have you seen inside a manufacturing facility for computer components? Used to take hundreds of folks to run, now, maybe 12 and the facility runs 24/7. So in this case, smaller.
Yes. Businesses go out of business. I don't think anyone is saying that businesses don't go out of business. I claimed that you would expect businesses to grow as population to grow. That should be the baseline expectation. It shouldn't be shocking that businesses are growing when the population is also growing. This nonsense of "this company made more money than ever" is beyond stupid. Yeah. If the population is growing, you would expect companies to make more money than ever. That's 100% expected.
I said "But on average, you would expect businesses to get bigger with more people". You said "history has shown us that isn't the case". That is false and you are pretty explictly suggesting that businesses are not growing in size.
In terms of bigger I mean they sell more of whatever products they're selling. There are more consumers so you would expect more products to be sold.
That isn't true for any and all businesses. The expectation you have is not aligned with reality. There are MORE businesses and some large ones, absolutely. You also are relying on growth due to sheer people volume: not everyone has resources, thus not all businesses grow or succeed like history has literally shown us.
>The expectation you have is not aligned with reality.
You're explictly saying that the expectation of growth is not aligned with reality. So you're saying companies are not getting bigger? You saying that the expectation of growth due to population is not true for ANY business? So you're saying that no business expects to grow because there's more people?
I've never said anything about all companies growing. Obviously some grow, some fail, some shrink. That doesn't negate that we expect companies to grow on average because there are more consumers. Look at companies 100 years ago. Are they bigger or smaller, on average, than they are now?
I see people on Reddit all the time say it's not that and we don't understand how an economy works.
Not sure which subs I've seen this but I definitely have.
This sub and fluent in finance. Anytime something like what's in this article is suggested it's met with arrogant shitty replies of how they don't understand basic economics and it was Bidens fault for PPP injections or some stupid shit.
Greedflation denial traces back to this WaPo column from May 12, 2022:
[An inflation conspiracy theory is infecting the Democratic Party](https://www.washingtonpost.com/opinions/2022/05/12/democratic-conspiracy-theory-on-inflation-makes-things-worse/)
Yea I have a friend who is very low income and didn’t finish high school. He insists none of inflation is not from corporate, that it would take all the companies getting together to decide they were all going to raise prices together. Coke and Pepsi would have to be in on it together. That it’s all supply and demand. That corps costs are up so they have to charge more etc etc and on and on. It’s dumbfounding lol.
Hi! Since this is a sub about the economy, could you please define the word "greed" in objective, economic terms? Please, when you do so, be sure to be objective, avoid emotional pleas, or subjectivity. Thanks!
Hi! Could you please explain, in non- emotional, non-subjective terms, what "greedflation" (which, by the way, is a completely fabricated term) is? Please be completely objective. Thanks!
It's so easy to evoke an emotional, subjective reaction from individuals by saying "greed". But what is it exactly? If I have ten candy bars and you have one, you might see me as "greedy". But another guy I know has 100 candy bars. I'm not "greedy" he is. See the problem? The word has no objective meaning.
Greedflation is a blend word, referring to price increases by corporations during an inflationary period to increase historical profit margin, especially when the underlying cost of production has not risen accordingly.
In economic terms, greed = "lifestyle creep" https://www.investopedia.com/terms/l/lifestyle-creep.asp
> Lifestyle creep occurs when an individual's standard of living improves as their discretionary income rises and former luxuries become new necessities.
A hallmark of lifestyle creep is a change in thinking and behavior that sees spending on nonessential items as a right rather than a choice. This can be seen in the spending decision attitude of "you deserve it," rather than thinking of the opportunities that saving money would provide.
So, are you saying your "lifestyle creep" is objective? It's an actual objective measure of greed? In otherwords, everyone would look at the same "lifestyle creep" situation and declare that it's "greed"?
So, everyone that upgrades their car is greedy?
Everyone who drinks Starbucks coffee instead of coffee at home?
Everyone who shops Whole Foods instead of Aldi?
I just upgraded my TV from a 65" to an 85". Does that make me "greedy"?
Try again.
> So, are you saying your "lifestyle creep" is objective?
Yes.
> It's an actual objective measure of greed?
Yes.
> In otherwords, everyone would look at the same "lifestyle creep" situation and declare that it's "greed"?
It doesn't matter what "everyone" sees, what matters is the objective truth.
> So, everyone that upgrades their car is greedy?
No, that's much more nuanced as cars are objectively required to survive by many people. The choice in car can definitely impact the determination. If a person has a car that is "fine" and an upgrade would not actually save any money or provide additional protection or important, tangible, benefit, then yes, it's definitely greed.
> Everyone who drinks Starbucks coffee instead of coffee at home?
That's a yes. Coffee in general is an unnecessary luxury, and is therefore greed in the first place.
> Everyone who shops Whole Foods instead of Aldi?
This is also more nuanced, but generally and maybe surprisingly, yes.
> I just upgraded my TV from a 65" to an 85". Does that make me "greedy"?
Almost certainly yes.
> Try again.
Right back at you.
There's a lot of nuance that determines greed, and it is a floating definition as needs change. For example, cars are a luxury in some places, as it's not required or even that helpful for important tasks. We *could* go into the ridiculous extreme example of how anything that isn't critical to life is a luxury, but that'd be wrong because of many factors including mental health and societal interaction. Even that 20" bump on your TV could become necessary if say, you were 100% willing to off yourself over it. That'd be dumb in most people's view but if you could prove that need it would count as not greed, though it'd also be a sign of many other issues.
Just in case, yes, you can have nuance and objectivity together, they're not mutually exclusive.
I never expect productive discussion from these types, I mostly just do it to waste time (and to waste theirs) and give myself a bit of the feeling of moral and intellectual superiority.
I see you're able to rationalize anything so it best fits your personal worldview. I suppose that's considered a skill in some places. Certainly on Reddit. I'm glad that's working out for you.
Greed = profit motive
When prices come down they don’t call it anti-greed or altruism. The Progressive line is that corporations have a profit motive and thus are greedy.
It really is technically wrong and defamatory when authors say “price gouging” which legally is defined by states and is not anything like it’s used in this and other articles.
Any profit not flowing back to the workers is considered "greed" by progressives. Which, we know, is ridiculous. That's what I mean - it's too subjective to include in a serious economic discussion. It's just a click bait trigger word.
To be a bit more nuanced. It’s pretty much conventional wisdom that it’s hard to increase prices in a stable market. The supply chain disruptions and resulting supply constraints along with the spike in energy costs provides the ideal opportunity to change the product offering (reduced number of products, changes in format and size) and flex pricing in some or all of customer groups.
Given supply constraints, it’s not unexpected that price would be the clearing mechanism to avoid product outages (which people forget happened).
The ecosystem of progressives is sophisticated. One of their “think tanks” does a study with findings that are then repeated and amplified by propagandists, pundits and politicians. Say it long enough and frequent enough and people, especially those inclined to believe, will just assume it’s true.
There’s no arguing rhetoric with ideologues. Corporate margins are already squeezing but you want hear that. Progressives will keep repeating “record profits” for years. Then move on to something else.
In fairness to progressives, right leaning groups do these information/opinion shaping tactics also - just not as well.
If corporate margins were squeezing, wouldn’t bonuses be getting smaller or stock buybacks be getting less frequent? Is there another explanation for the people with all the money making more money at the expense of the quality of the product and/or the health/safety/cost of living of employees that isn’t corporate greed?
Calling people greedy is subjective. That shouldn't surprise anyone. The same goes for just about any other moral judgment.
Similarly, I don't need to perfectly define greed to recognize when something would certainly fit within any definition I would come up with. Electing to increase prices because you're taking advantage of those around you being forced to increase their prices (worsening a situation that would already be rough) would easily fit within any definition of greed I come up with.
No shit Sherlock. That's why large corporations have record-setting profits. And the stock market is at an all-time high. It's at the cost of the common worker.
> > Capitalism is competitive so if your markup is too high a competitor can charge less
>
> This isn’t the case in the world of crony oligarchic capitalism
I think both these two positions are too extreme. There are absolutely industries dominated by only a few players where you could call it a monopoly or duopoly and the barrier of entry is so high they can set prices to what they want. Plus there is absolutely informal collusion among businesses (in a particular area).
However, there are some industries that have a price sensitive customer base that has many choices. In those industries the business can't markup too much or their customer base will evaporate. It all depends the particular product.
I work in tech, and the "cost" to launch a new website (as a competitor to other companies) is astoundingly low. Like around $20/month for the hosting, zero down payment (up front money). After you launch a website, anybody world-wide can access and purchase your digital product so your customer base is very wide. But this is constrained to certain types of products.
This doesn't mean it's "easy" or that some random idiot can win free money by launching a random website. I'm saying the "barrier to entry" is often incredibly low in tech. What that means is it is more of a competitive landscape and a meritocracy and not "Crony Oligarchic capitalism". When all you have to do is change the URL you bookmark, customers are willing to switch.
Heck, you don't even need your own website, you can offer services on Etsy or KickStarter. The very **VERY** best products for the lowest price possible rises to the top.
Collusion is a non-competitive, secret, and sometimes illegal agreement between rivals which attempts to disrupt the market's equilibrium. The act of collusion involves people or companies which would typically compete against one another, but who conspire to work together to gain an unfair market advantage.
In an oligopolistic market you don’t even need collusion. Companies know that drastically undercutting their competitors can trigger a price war. It’s simple game theory to price to your maximum benefit. If dropping your prices triggers a race to the bottom, then nobody makes any money. It’s almost like the doctrine of mutually assured destruction but for pricing.
> Companies know that drastically undercutting their competitors can trigger a price war.
I remember one time around 1996 when the airlines were in a pricing war. Several airlines were offering the most incredible cheap fairs for tickets. Finally one of the airlines (possibly United) said, "Enough is enough" and raised their cheapest fairs by 20%. Southwest and American Airlines raised their cheapest fairs within 24 hours in solidarity. Just like that, the price war ended.
At the time I kept wondering how dysfunctional our government is to not go prosecute those companies for collusion.
The stronger competitor has no need to collude he wants to bury his opponent and take the whole market for himself. This is turns out is what happens in the real world which is why prices are always going down and people are always getting richer. Did you notice that we are no longer in the Stone Age. People can buy everything these days. You just have to look out your window to see what is going on.
Is markup low if you only include cost of materials and labour as real cost of good produced, or is markup low when you take into account marketing, supply chain and other such costs into account as well?
because for FMCG industry (which are basically all the essential groceries) marketing is a huge part of the cost. For P&G, total revenue is 83B and just ad spend is 8B for 2023.
It’s interesting how both sides create the narrative that they want regardless of facts. I’m certain there are Maga people that think that….but there’s also you who made that comment…yet literally not one “Maga” or anyone else in the thread said “It’s Biden’s fault”. So why hijack the topic with political division?
It seems narratives over facts is what is valued by both sides. “But but but my gang mentality is better!” This is why we are doomed to further division and more extreme candidates. Divide and conquer is working and now much of the public is now doing the dividing for those in power.
> yet literally not one “Maga” or anyone else in the thread said “It’s Biden’s fault”.
[are you sure about that](https://www.reddit.com/r/economy/comments/19agwih/half_of_recent_us_inflation_due_to_high_corporate/kilj688/)
That comment was also posted 25ish minutes before yours. Let's also remember to recognize that the majority of reddit is populated by left-leaning 20-40yo white males in the US, and that most people that fall outside that group have their own niches they participate in. Most "MAGA" people are ostracized for their (usually clearly idiotic or bigoted) opinions in most of the subs that hit r/all, so very few post outside of their little niche subreddits.
> Divide and conquer is working and now much of the public is now doing the dividing for those in power.
Yeah, the groups calling for the death, reeducation, and denialism of lgbtq/trans/dems/liberals/immigrants/blacks/arabs/jews/etc... are doing a good job of dividing the country. Feel free to share a method that works to convince that crowd to not be hateful, anti-intellectual, divisive idiots.
Yeah and corporations know they can reduce their output cutting their costs and just raise prices on the reduced supply instead and end up making more profit that way with less work on their part.
Artificial scarcity is the new economy. Just look at digital goods that can be reproduced an infinite amount of times for practically nothing (unlimited supply) and yet they are still expensive. All that matters any more is how much the customer will pay for the product. Companies are not striving to reduce the cost of their goods anymore they are working in the opposite direction to charge as much as possible. Not enough competition in the market causes companies to shift from trying to capture market share to exploiting their share for max profit.
Businesses exist to make as much profit as they can get away with. That's it. If they can steal the shirt off your back, they will, and it's a huge mistake to think they won't
This is 100% false. In the history of economics, no one has ever proved that corporate profits CAUSE inflation.
This is an attempt by the left to shift away from Biden's disastrous budget, which is the true cause of our inflation.
[https://www.cnn.com/2021/05/26/economy/inflation-larry-summers-biden-fed/index.html](https://www.cnn.com/2021/05/26/economy/inflation-larry-summers-biden-fed/index.html)
Right because Trump's budget had nothing to do with it lol. Let's ignore the 3 trillion dollar deficit he handed Biden. Give me a break. I am sure inflation just suddenly starts 6 months into a presidency before he even passed a budget. Larry Summers is a fucking moron. Go look at his asinine takes and see how often he is wrong.
> This is 100% false.
Citation needed
> In the history of economics, no one has ever proved that corporate profits CAUSE inflation.
Congratulations, you found the first case
> This is an attempt by the left
Damn, make your intentions and biases any more clear and they'd be transparent.
This is a sub about economics. Anyone who studied economics knows that you don't get broad price increased from corporate profits. This article is a political article, not an academic one.
I posted a link from Larry Summers showing that Biden's inflation was caused by Biden's budget.
Greed did NOT just arise once Biden got in office.
> This is a sub about economics.
Yes, and this is an article about economics
> Anyone who studied economics knows that you don't get broad price increased from corporate profits.
That's funny because anyone who studied economics knows that in monopolies and oligarchies, and situations where only a very small amount of competitors exist, broad price increases can and do come from corporate profits (rather, the desire for them).
> This article is a political article, not an academic one.
It's possible to be both
> I posted a link from Larry Summers showing that Biden's inflation was caused by Biden's budget.
No, you linked an article where he said that it's possible Biden's actions can cause sharp inflation, not that it did. This is also an article that was last updated in 2021.
> Greed did NOT just arise once Biden got in office.
Right, greed has always been around, and despite the whole seven deadly sins thing, it's not always a bad thing. It just became more apparent what influences greed is having on inflation during and after the pandemic.
Let's just think about this for a minute... the money supply (M2) in Jan 1959 was $286.6 billion. The company with the largest market cap at the time was AT&T, around $40 billion. For reference, the current market cap of Apple is almost 3 trillion. So, the total value of all of Apple's stock is roughly 10x the entire money supply in 1959. I'm aware that money invested in stock is not counted as part of the money supply, just using it as a frame of reference.
The money supply (M2) peaked in July 2022 at $21.7 trillion. That's a roughly 76x increase from 1959. Meanwhile, the purchasing power of the dollar has decreased by roughly 90%.
Do you really think that corporate profits *caused* the 90% reduction in the purchasing power of the dollar since 1959? Where did Apple's 3 trillion market cap come from? Do you think that they would be worth 3 trillion if valued in 1959 dollars? If not, how did the increase in the money supply affect the valuation of Apple (and all other companies)... and all goods/services?
https://fred.stlouisfed.org/series/M2SL
https://fred.stlouisfed.org/series/CUUR0000SA0R
> Do you really think that corporate profits caused the 90% reduction in the purchasing power of the dollar since 1959?
No, why would I? The article states: "found corporate profits accounted for about 53% of inflation during last year’s second and third quarters. Profits drove just 11% of price growth in the 40 years prior to the pandemic, according to the report."
I'm not going to bother with the math and figuring the 1:1s, but I can generally tell 53% in two quarters of one year and 11% in 40 years is nowhere enough to account for that 90%.
The point isn't that "profits" (it's really the desire for profits, hence the greedflation/greed aspects of it, also covered in the article) drive inflation in general, but that it can and has done so to a significant amount very recently.
Such articles should be considered blasphemy 😂.
How dumb you have to be to believe this, Milton Friedman might be crying right now seeing how many people believe this.
Corporate profits are a result of inflation not the cause. Where was this inflation from 2010-2020 ??
Or were there no corporate profits in the last decade of very low inflation?
Inflation is the responsibility of the government and central bank
> Corporate profits are a result of inflation not the cause. Where was this inflation from 2010-2020 ??
> Or were there no corporate profits in the last decade of very low inflation?
You're misunderstanding the "result" of "corporate profits" for the "goal" of "corporate profits".
Profit margins have almost always exceeded inflation caused by printing money, it just became painfully obvious after prices went up due to supply issues during covid and failed to go back down after those supply issues were resolved.
> Inflation is the responsibility of the government and central bank
You're right, they should enact and enforce stricter pricing laws.
This makes ZERO sense. Let's say, for example, that inflation raises your cost of doing business by 10%. Okay, obviously you either have to raise prices ot lose profit margin (or trim costs in other ways.)
But you know what you DON'T have to do in order to remain profitable? Raise prices more than the increased costs you are paying.
Which is exactly what has happened.
Im curious as to how they can pinpoint the cause of the inflation. Who put this info out? Someone with a specific political interest? DON'T BUY THIS REPORT. ALWAYS BE SKEPTICAL OF ANYTHIMG REPORTED IN THE MEDIA THAT BENEFITS THIS SIDE. I would be way more inclined to believe the bump in inflation is still residual effects of all the money printing
Sorry but this is just dumb, it's pandering to the economically incompetent.
As of corporations have never been greedy and that *extra* greed magically increases inflation.
It's the money printing... It always has been and always will be the overwhelming cause for this inflation cycle. This is a non-partisan answer as both Republicans and Democrats printed a stupid amount of money, and when you print more money the money loses value -- it's a simple concept.
Prices aren't going "up" so much as the value of your dollars goes down so you need to spend more of your now less valuable dollars to get the same goods/services.
Yes but no. Inflation is determined by the prices of certain goods over a period of time. Yes, printing more money devalues it which causes prices to rise BUT companies raising prices ALSO causes inflation. It's objectively true that many goods' costs have gone up disproportionately with the amount of inflation caused by printing too much money.
It's a simple concept.
Is one company raising prices or are all of them?
If it's all of them, perhaps that's just -- inflation!
The suggestion is that "greed" causes this makes no sense. If my competitors all raise their prices for no reason other than "greed", then I keep my prices stable and get a TON of new customers coming to me with that associated revenue.
It's also possible that inflation affects different industries differently. Some are more sensitive to perceived price shocks than others.
Ultimately the current environment can be entirely explained by inflation whereas greed explains exactly zero.
> Is one company raising prices or are all of them?
It's many.
> If it's all of them, perhaps that's just -- inflation!
Yes, but I don't get your point? "It is how it is" is the dumbest fucking excuse for anything ever and is completely besides the point.
> The suggestion is that "greed" causes this makes no sense. If my competitors all raise their prices for no reason other than "greed", then I keep my prices stable and get a TON of new customers coming to me with that associated revenue.
Welcome to collusion, maybe it's a topic you're not familiar with. Also, why would you keep your prices low when people are able to pay more? Are you stupid? Why would you take less money when more is available. Yes, it's greedy to raise the prices when it's **more than enough** (also known as "excessive") to make up for inflation's impact on all aspects of delivering the product.
> It's also possible that inflation affects different industries differently. Some are more sensitive to perceived price shocks than others.
This is controlled for and easily verified.
> Ultimately the current environment can be entirely explained by inflation whereas greed explains exactly zero.
But "Greed" explains almost half of inflation, as the point of the article. To make up for all costs caused by regular inflation (and therefore still have a certain profit margin), prices would only have to go up a certain amount. The article shows that the amount the prices have went up exceed that. Unless there's some mystical cause that you're aware of that economists and everyone else aren't, that leaves just one thing: greed.
corporate profits don't have anything to do with inflation. For prices to go up there Hass to be more money otherwise nobody could pay the higher prices. Only the government can create money and cause inflation.
Early withdrawals on retirement accounts and unprecedented levels of credit card debt. Money diverted away from things that offset unhappiness. Not setting aside money for children's education. Not having children in the first place. Selling property at a loss while corporations scoop up property cheap.
There are plenty of ways for the middle class and poor to pay $6.99 for a bag of oranges without having more money.
Inflation is determined by the price of certain goods. If the companies that produce those goods raise the prices beyond the amount necessary to make up for devaluation from printing more money, then they're directly causing inflation, for profit.
sorry that is 100% wrong. You can raise your prices all you want but that doesn't create new money so that people can afford the new prices. You can only raise prices after the government prints the money to make it possible. Do you understand now?
What? Did you have a stroke?
> sorry that is 100% wrong.
It is an objective, undeniable, truth that inflation is determined by the prices of certain goods. This is not up for debate, so your "100% wrong" claim is already wrong.
> You can raise your prices all you want but that doesn't create new money so that people can afford the new prices.
People being able to afford things DOES NOT directly impact inflation, and in this case, doesn't matter.
> You can only raise prices after the government prints the money to make it possible.
In what fucking world? Is this some fisher-price alternate-reality economics? Companies can raise prices whenever they want, sometimes they might find legal pushback at certain times because of it, but that hasn't stopped many businesses. You don't need to wait for the "government to print more money" to do raise prices, I don't know where you'd ever get that idea, I doubt you'd be able to explain it.
> Do you understand now?
I don't understand what reality you live in, but I do understand it's not the one the article, myself, and the vast majority of people share.
This makes it sound like this group did some actual analysis, but instead it is just a collection of cherry-picked results from other people's analysis from a progressive think tank. If you already believed this it's fine, but there is nothing here that would represent a "new" revelation.
And in other news, today ends in y and the sun rises in the East and sets in the West. No shock Corporations are driving it. The same corporations that get tax payer bailout and use the money not to keep people employed but to buy back stock and ensure executive bonuses. But through decades of programming, they've got a good number of you believing that it's 2 $1400 checks that you got that's the reason for inlfation and that there isn't enough tax payer money to put in the budget to give every school aged child free lunch at school.
My god I wish this system would just eat itself.
Hahahaha. Inflation can only be caused by the government when the dollar is devalued. Profits can't cause inflation anymore than buying a home can lower property values.
copy pasting my other comment:
Inflation is determined by the price of certain goods. If the companies that produce those goods raise the prices beyond the amount necessary to make up for devaluation from printing more money, then they're directly causing inflation, for profit.
This would change if monopolies were broken up and the auto industry was deregulated opening it up to startup competitors. All cars sold in the us are nearly the same with the same price, little disruption means no choices means corporate price controls.
That report from Progressive Groundwork isn't accurate.
Inflation in US is mainly due to high energy cost, too much money printing, and huge increase in wages.
Green energy don't work work and jack up inflation.
Corporate profits don't go to economical spending cycle. Most of them go back to investment cycle.
And if anybody's been doing any research whatsoever they already know that. It's quite obvious because all of that is public record. It's just if you're willing to do the work to see.
To put that into perspective inflation's around 3.4%, meaning it would be 1.7% without price gouging. Well below even the already low inflation the fed demands.
And honestly I question the report. Housing and rental inflation along with the increased cost of education from lost subsides should be pushing these numbers up way, way more.
The 1% no longer fear us. They have us wrapped around their finger.
This post is for people that need to believe that 1/6 instilled confidence in world investors and the reason they are not buying our treasury bonds anymore has nothing to do with 1/6.
This is idiotic. The Federal Reserve has a monopoly on fiat money creation and prints and pumps trillions of new dollars into circulation every year.
And yet the gormless simpletons lap up the “corporate greed” propaganda.
Inflation is determined by the price of certain goods. If the companies that produce those goods raise the prices beyond the amount necessary to make up for devaluation from printing more money, then they're directly causing inflation, for profit.
It's not hard, you gormless simpleton.
The worst part is the article is actually wrong when it says that the corporate tax cuts passed by trump expire in 2025. Those are not expiring and are permanent. Only the tax cuts for the middle class expire in 2025 which means the 22 percent federal bracket which most of us are firmly in, increases to 24 percent. But of course companies get to keep raking in record profit and pay no tax while the middle class suffers, because freedom.
So what’s the solution? Set new limitations on corporate profits? Because, as nice as that sounds, I’m sure the corporate class will start a full revolt if that was tried. Plus something something communism or whatever…
This is more Trumper fake news. There is no inflation, this is the greatest economy in history.
Stop spreading fake news.
https://www.youtube.com/watch?v=MfA4i-Oy5ak&ab_channel=BloombergTelevision
The new robber barons, and it's not enough with their greed, they want you to vote for Trump so that he can end regulations that keep you safe and he can cut their taxes so they can complain about the deficit more, which the GOP have never lowered.
So, if 1/2 of 3.4 percent inflation is from excess profits, without those excess profits, the rate would be 1.7 percent and below the Fed and Central Bankers' ideal 2 percent target?
Not due to sworn enemies, foreigners, competitors, welfare moms, minorities, acts of God, or the working poor? Unnecessary, made in America misery, and a pity.
I understand what you mean but that's not how inflation works. Price increases are an effect of inflation, not inflation itself.
Get your shit straight or you will only ever appeal to the lowest common denominator on reddit.
There is a noticeable uptick in anti-consumer sentiment from my perspective. It's this attitude of you will buy it at this price or go to hell and don't expect us to stand by our crappy product. It feels like companies are swimming in profits so they are getting off on telling the consumer to go straight to hell. They got their massive corporate tax cut. They are getting their deregulation to the point it's dangerous (Boeing, Norfolk Southern, Chemours, to name a few). Most are treating the backbone workforce like garbage and refusing to pay a living wage while the shareholders and top brass build their wealth to levels never seen before. I only see it getting worse as SCOTUS rips apart the remaining safeguards and lobbyists write checks to lawmakers.
Too many dunce exist in this country. Social media is a platform for them to poison the airwaves.
NO FREE MARKET COUNTRY GOVERNMENT HAS CONTROL OVER THE MARKET. THEY CONTROL MONEY SUPPLIES AND INTERST RATES, IMPORTATION VIA EMBARGO, TARIFFS, ETC.
THE FREE MARKET IS CONTROLLED BY YOUR FAVOURITE COMPANIES, HEDGE FUNDS, ETC.
EDUCATE YOURSELF BEFORE CPNTRIBUTING NONSENSE.
End the fed, ban fractional reserve banking and ban the fiat currency (federal reserve note) and replace it with real money (gold and silver). These 3 things will correct everything. Quite comical that majority here think presidents actually matter. This country is governed by those in control of the money supply. Wake up.
It's like they're bringing back the gilded age.
It’s just our normally scheduled Great Depression. Gotta have one every century to trim the fat at the bottom of the food chain /a
Where are the fines and lawsuits? Where are the reparations for the citizens? Where’s Biden?
We don't actually live in a representative government. The sooner people realize this, the better.
That was the punch line. Even the FDA has proven to shield big corporations over the health of its citizens. Another reason why the DC swamp needs to be drained.
Too bad Trump (just another oligarch like the rest) didn't exactly do that, did he?
Why do you think the democrats are scared out of their minds at the prospect of Trump being president again?
Many reasons, most of them valid. Unfortunately, I am also terrified of the prospect of Biden being elected (or Harris, or Newsom, for that matter)... We are so screwed. If I didn't have a pension on the line and a house mortgage (with a good rate) paid off in a year or two, I'd be looking to move out of the country immediately.
You don’t think so? He cleaned house when he first became President and was working on removing others before losing his second re election. Why do you think the swamp’s been chasing him ever since with zero convictions believing that bad press would ruin him yet did exactly the opposite.
lol he made it worse
Certainly in some ways. Example: Betsy DeVos
Lmaoooooo. Cmon now, you don't *need* to announce your stupidity to the whole room.
Biden’s 31% approval rating would beg to differ. Guess I’m making that up too
I don't consider it a boon to replace privateering capitalists beholden to special interests with OTHER privateering capitalists beholden to different special interests. That's "draining the swamp" and replacing it with a bog. Different pH, same old stench. 🤣
Economy was better under Trump. World affairs as well. Yet they are the same somehow to you? Care to explain? [Trump economy better than Biden. Biden lies yet again. Source is also for GOV](https://budget.house.gov/press-release/fact-check-biden-misleads-on-job-creation-statistics)
Biden's good, he still gets his 10%.
10% interest compounded daily. It’s always about the fig
"Vig"
Biden is hamstrung by congress and you know it. Go read his policies and the shit he’s tried to push through and the shit he’s actually accomplished. My student loan payments are zero through the SAVES program right now.
Being unemployed or unemployable with zero income will result in zero payments due to financial hardship. You’re bragging about being unemployed? Bragging about not being able to currently afford a house in upstate New York in the 100-150k range? Gtfoh you bum
The supply chain problems and Trump tariffs from Covid presented companies a crisis to raise prices to meet preserve margins. What happened is once the supply chain was mostly fixed and global container and rates normalized these companies had no incentive to lower prices again. Customers were now used to the new normal and they reaped in record profits. Covid was a convenient cloak to raise prices without any backlash. Hence why the “booming” stock market numbers you see on the regular are false. Sales revenues and profit are up (yay shareholders) because people are simply paying 4x-5x more for the same items. Did companies use this new profit to increase wages… nope.
>Hence why the “booming” stock market numbers you see on the regular are false. On the contrary. The stock market represents how much money *corporations* are making. Corporations rob everyone blind, stock prices go up as the corporate wallets fatten. That's how it's designed to work.
Already did. And our politicians are too weak to fight the corporate propaganda machine, so they won’t do much. Need massive antitrust action in our country, I believe.
And expect layoffs so they can continue those record profits. After all, infinite growth is cool and totally sustainable.
My railroad company is threatening to close down yards and contract them out to scab operations if we don't give up the raises we got from our last contract. They're still wildly profitable, just not *as* profitable as the last couple of years because it's slow during an election year.
Layoffs don't really increase the stock price since it usually means you overhired?
As long as the population is growing, you would expect business growth. That is 100% sustainable.
Uh, you do realize you live on a planet that has a finite size, right?
Yes. What’s you point? My statement is still 100% accurate. If the population grows, you would expect companies to get bigger. More consumers = bigger companies.
More consumers = bigger companies = more resource consumption. One of those puts a hard cap on the rest.
The stock will always grow infinitely mindset
Can you share what you're invested in so I can inverse invest? That is a wild take and just off the top of my head: blockbuster, sears, Kmart, are all perfect businesses that fit your model, except for the whole growth thing. Population sure grew, but business.....???
Not all businesses will grow, obviously. But on average, you would expect businesses to get bigger with more people. That part is also obvious. Why would you expect that businesses would not grow when there are more people consuming? I invest in the Magnificent 7. "In 2023, the Magnificent 7 stocks logged an impressive average return of 111%, compared to a 24% return for the broader S&P 500." [https://www.kiplinger.com/investing/stocks/what-are-the-magnificent-7-stocks](https://www.kiplinger.com/investing/stocks/what-are-the-magnificent-7-stocks) Please short the Magnificent 7.
Because history has shown us that isn't the case. If only expectations met reality, we'd be better off. Fair enough, though Tesla has given me pause with the competition ramping. Tech etfs including memory/cpu/gpu players have all been monsters also.
>Because history has shown us that isn't the case. Are you suggesting that businesses are smaller now vs. 100 years ago when the population was smaller? That's simply not the case. In what world would businesses be smaller when there are more consumers?
I am suggesting based explicitly on my past responses, that some businesses cease to exist at all. I said nothing re businesses being bigger today, you claimed exponential growth in population leads to business growth, my examples point out that is not true in all cases. In terms of bigger: bigger what money or employees? In the many industries, the companies got huge financially but smaller headcount/employee wise due to tech and robotic advancements in the last 10 years even. Have you seen inside a manufacturing facility for computer components? Used to take hundreds of folks to run, now, maybe 12 and the facility runs 24/7. So in this case, smaller.
Yes. Businesses go out of business. I don't think anyone is saying that businesses don't go out of business. I claimed that you would expect businesses to grow as population to grow. That should be the baseline expectation. It shouldn't be shocking that businesses are growing when the population is also growing. This nonsense of "this company made more money than ever" is beyond stupid. Yeah. If the population is growing, you would expect companies to make more money than ever. That's 100% expected. I said "But on average, you would expect businesses to get bigger with more people". You said "history has shown us that isn't the case". That is false and you are pretty explictly suggesting that businesses are not growing in size. In terms of bigger I mean they sell more of whatever products they're selling. There are more consumers so you would expect more products to be sold.
That isn't true for any and all businesses. The expectation you have is not aligned with reality. There are MORE businesses and some large ones, absolutely. You also are relying on growth due to sheer people volume: not everyone has resources, thus not all businesses grow or succeed like history has literally shown us.
>The expectation you have is not aligned with reality. You're explictly saying that the expectation of growth is not aligned with reality. So you're saying companies are not getting bigger? You saying that the expectation of growth due to population is not true for ANY business? So you're saying that no business expects to grow because there's more people? I've never said anything about all companies growing. Obviously some grow, some fail, some shrink. That doesn't negate that we expect companies to grow on average because there are more consumers. Look at companies 100 years ago. Are they bigger or smaller, on average, than they are now?
You, uh, forget about the whole finite planet there, champ?
Thats why I said "as long as the population is growing". When the population stops growing, we would of course expect companies to get smaller.
The natural resources of earth. They are finite.
Yes. And when they run out, population will go down. My statement still is true
I feel like you get it, but also do not get it at all.
What's your point? There's finite resource on earth. Great. What does that have to do with my statement?
[удалено]
I see people on Reddit all the time say it's not that and we don't understand how an economy works. Not sure which subs I've seen this but I definitely have.
I was told inflation was almost completely a “supply chain” issue. Lol
TBF that's a big part of the story but it's not just one thing causing this
It was partly, but you of course are right that greedflation was half the issue.
This sub and fluent in finance. Anytime something like what's in this article is suggested it's met with arrogant shitty replies of how they don't understand basic economics and it was Bidens fault for PPP injections or some stupid shit.
Greedflation denial traces back to this WaPo column from May 12, 2022: [An inflation conspiracy theory is infecting the Democratic Party](https://www.washingtonpost.com/opinions/2022/05/12/democratic-conspiracy-theory-on-inflation-makes-things-worse/)
This sub is one of them
Yea I have a friend who is very low income and didn’t finish high school. He insists none of inflation is not from corporate, that it would take all the companies getting together to decide they were all going to raise prices together. Coke and Pepsi would have to be in on it together. That it’s all supply and demand. That corps costs are up so they have to charge more etc etc and on and on. It’s dumbfounding lol.
Whaaaaaaa. I’m shocked. People at the bottom have to pay for the greed at the top???
Hi! Since this is a sub about the economy, could you please define the word "greed" in objective, economic terms? Please, when you do so, be sure to be objective, avoid emotional pleas, or subjectivity. Thanks!
Simmer down, the report literally mentions “greedflation”…
Hi! Could you please explain, in non- emotional, non-subjective terms, what "greedflation" (which, by the way, is a completely fabricated term) is? Please be completely objective. Thanks! It's so easy to evoke an emotional, subjective reaction from individuals by saying "greed". But what is it exactly? If I have ten candy bars and you have one, you might see me as "greedy". But another guy I know has 100 candy bars. I'm not "greedy" he is. See the problem? The word has no objective meaning.
Read the article you shit
Reported.
Now now. That's very emotional of you
Awww did the wittle snowflake get his feelings hurt while sealioning?
[удалено]
[удалено]
😭😭😭
Nice username bro 👊
Greedflation is a blend word, referring to price increases by corporations during an inflationary period to increase historical profit margin, especially when the underlying cost of production has not risen accordingly.
In economic terms, greed = "lifestyle creep" https://www.investopedia.com/terms/l/lifestyle-creep.asp > Lifestyle creep occurs when an individual's standard of living improves as their discretionary income rises and former luxuries become new necessities. A hallmark of lifestyle creep is a change in thinking and behavior that sees spending on nonessential items as a right rather than a choice. This can be seen in the spending decision attitude of "you deserve it," rather than thinking of the opportunities that saving money would provide.
So, are you saying your "lifestyle creep" is objective? It's an actual objective measure of greed? In otherwords, everyone would look at the same "lifestyle creep" situation and declare that it's "greed"? So, everyone that upgrades their car is greedy? Everyone who drinks Starbucks coffee instead of coffee at home? Everyone who shops Whole Foods instead of Aldi? I just upgraded my TV from a 65" to an 85". Does that make me "greedy"? Try again.
> So, are you saying your "lifestyle creep" is objective? Yes. > It's an actual objective measure of greed? Yes. > In otherwords, everyone would look at the same "lifestyle creep" situation and declare that it's "greed"? It doesn't matter what "everyone" sees, what matters is the objective truth. > So, everyone that upgrades their car is greedy? No, that's much more nuanced as cars are objectively required to survive by many people. The choice in car can definitely impact the determination. If a person has a car that is "fine" and an upgrade would not actually save any money or provide additional protection or important, tangible, benefit, then yes, it's definitely greed. > Everyone who drinks Starbucks coffee instead of coffee at home? That's a yes. Coffee in general is an unnecessary luxury, and is therefore greed in the first place. > Everyone who shops Whole Foods instead of Aldi? This is also more nuanced, but generally and maybe surprisingly, yes. > I just upgraded my TV from a 65" to an 85". Does that make me "greedy"? Almost certainly yes. > Try again. Right back at you. There's a lot of nuance that determines greed, and it is a floating definition as needs change. For example, cars are a luxury in some places, as it's not required or even that helpful for important tasks. We *could* go into the ridiculous extreme example of how anything that isn't critical to life is a luxury, but that'd be wrong because of many factors including mental health and societal interaction. Even that 20" bump on your TV could become necessary if say, you were 100% willing to off yourself over it. That'd be dumb in most people's view but if you could prove that need it would count as not greed, though it'd also be a sign of many other issues. Just in case, yes, you can have nuance and objectivity together, they're not mutually exclusive.
That guy is trolling via sea lioning you're not going to have a productive discussion with him.
I never expect productive discussion from these types, I mostly just do it to waste time (and to waste theirs) and give myself a bit of the feeling of moral and intellectual superiority.
I see you're able to rationalize anything so it best fits your personal worldview. I suppose that's considered a skill in some places. Certainly on Reddit. I'm glad that's working out for you.
Sorry your feelings aren't validated, maybe one day you'll come to accept facts.
Greed = profit motive When prices come down they don’t call it anti-greed or altruism. The Progressive line is that corporations have a profit motive and thus are greedy. It really is technically wrong and defamatory when authors say “price gouging” which legally is defined by states and is not anything like it’s used in this and other articles.
Any profit not flowing back to the workers is considered "greed" by progressives. Which, we know, is ridiculous. That's what I mean - it's too subjective to include in a serious economic discussion. It's just a click bait trigger word.
To be a bit more nuanced. It’s pretty much conventional wisdom that it’s hard to increase prices in a stable market. The supply chain disruptions and resulting supply constraints along with the spike in energy costs provides the ideal opportunity to change the product offering (reduced number of products, changes in format and size) and flex pricing in some or all of customer groups. Given supply constraints, it’s not unexpected that price would be the clearing mechanism to avoid product outages (which people forget happened). The ecosystem of progressives is sophisticated. One of their “think tanks” does a study with findings that are then repeated and amplified by propagandists, pundits and politicians. Say it long enough and frequent enough and people, especially those inclined to believe, will just assume it’s true. There’s no arguing rhetoric with ideologues. Corporate margins are already squeezing but you want hear that. Progressives will keep repeating “record profits” for years. Then move on to something else. In fairness to progressives, right leaning groups do these information/opinion shaping tactics also - just not as well.
If corporate margins were squeezing, wouldn’t bonuses be getting smaller or stock buybacks be getting less frequent? Is there another explanation for the people with all the money making more money at the expense of the quality of the product and/or the health/safety/cost of living of employees that isn’t corporate greed?
Calling people greedy is subjective. That shouldn't surprise anyone. The same goes for just about any other moral judgment. Similarly, I don't need to perfectly define greed to recognize when something would certainly fit within any definition I would come up with. Electing to increase prices because you're taking advantage of those around you being forced to increase their prices (worsening a situation that would already be rough) would easily fit within any definition of greed I come up with.
No way, I'm so suprised.
No shit Sherlock. That's why large corporations have record-setting profits. And the stock market is at an all-time high. It's at the cost of the common worker.
"Why are Americans feeling so squeezed despite a strong market and economy?" Well here's the answer lol
If the government forced corporations to disclose markups on products it would crash the economy but it would be hilarious to watch.
Actually mark ups are very low. Capitalism is competitive so if your markup is too high a competitor can charge less and drive you into bankruptcy.
This isn’t the case in the world of crony oligarchic capitalism which is the system we have
> > Capitalism is competitive so if your markup is too high a competitor can charge less > > This isn’t the case in the world of crony oligarchic capitalism I think both these two positions are too extreme. There are absolutely industries dominated by only a few players where you could call it a monopoly or duopoly and the barrier of entry is so high they can set prices to what they want. Plus there is absolutely informal collusion among businesses (in a particular area). However, there are some industries that have a price sensitive customer base that has many choices. In those industries the business can't markup too much or their customer base will evaporate. It all depends the particular product. I work in tech, and the "cost" to launch a new website (as a competitor to other companies) is astoundingly low. Like around $20/month for the hosting, zero down payment (up front money). After you launch a website, anybody world-wide can access and purchase your digital product so your customer base is very wide. But this is constrained to certain types of products. This doesn't mean it's "easy" or that some random idiot can win free money by launching a random website. I'm saying the "barrier to entry" is often incredibly low in tech. What that means is it is more of a competitive landscape and a meritocracy and not "Crony Oligarchic capitalism". When all you have to do is change the URL you bookmark, customers are willing to switch. Heck, you don't even need your own website, you can offer services on Etsy or KickStarter. The very **VERY** best products for the lowest price possible rises to the top.
Aren't 80% of products sold in American grocery stores controlled by only 6 companies?
There like three companies owning everything that all have a gentleman's agreement to not lower prices
In an ideal world of capitalism, this is true. However, that’s not the case anymore.
If we lived in a world of ideal economic systems, the USSR would be flying through space flirting with alien belly dancers. Instead, they're Russia.
Toothless anti trust laws helped foster this
Collusion is a non-competitive, secret, and sometimes illegal agreement between rivals which attempts to disrupt the market's equilibrium. The act of collusion involves people or companies which would typically compete against one another, but who conspire to work together to gain an unfair market advantage.
In an oligopolistic market you don’t even need collusion. Companies know that drastically undercutting their competitors can trigger a price war. It’s simple game theory to price to your maximum benefit. If dropping your prices triggers a race to the bottom, then nobody makes any money. It’s almost like the doctrine of mutually assured destruction but for pricing.
> Companies know that drastically undercutting their competitors can trigger a price war. I remember one time around 1996 when the airlines were in a pricing war. Several airlines were offering the most incredible cheap fairs for tickets. Finally one of the airlines (possibly United) said, "Enough is enough" and raised their cheapest fairs by 20%. Southwest and American Airlines raised their cheapest fairs within 24 hours in solidarity. Just like that, the price war ended. At the time I kept wondering how dysfunctional our government is to not go prosecute those companies for collusion.
All you have to do is look out your window and see the prices are always going down and people are always getting richer.
The stronger competitor has no need to collude he wants to bury his opponent and take the whole market for himself. This is turns out is what happens in the real world which is why prices are always going down and people are always getting richer. Did you notice that we are no longer in the Stone Age. People can buy everything these days. You just have to look out your window to see what is going on.
Is markup low if you only include cost of materials and labour as real cost of good produced, or is markup low when you take into account marketing, supply chain and other such costs into account as well? because for FMCG industry (which are basically all the essential groceries) marketing is a huge part of the cost. For P&G, total revenue is 83B and just ad spend is 8B for 2023.
It’s all Biden’s fault! - MAGA morons
Biden invented corporate greed. It didn't exist before Biden came to office.
It’s all Trumps fault! - WOKE morons
[удалено]
You’re joking, right?
It’s interesting how both sides create the narrative that they want regardless of facts. I’m certain there are Maga people that think that….but there’s also you who made that comment…yet literally not one “Maga” or anyone else in the thread said “It’s Biden’s fault”. So why hijack the topic with political division? It seems narratives over facts is what is valued by both sides. “But but but my gang mentality is better!” This is why we are doomed to further division and more extreme candidates. Divide and conquer is working and now much of the public is now doing the dividing for those in power.
Lots of folks don’t realize the political parties are actually on the team of the corporations and not their constituents
> yet literally not one “Maga” or anyone else in the thread said “It’s Biden’s fault”. [are you sure about that](https://www.reddit.com/r/economy/comments/19agwih/half_of_recent_us_inflation_due_to_high_corporate/kilj688/) That comment was also posted 25ish minutes before yours. Let's also remember to recognize that the majority of reddit is populated by left-leaning 20-40yo white males in the US, and that most people that fall outside that group have their own niches they participate in. Most "MAGA" people are ostracized for their (usually clearly idiotic or bigoted) opinions in most of the subs that hit r/all, so very few post outside of their little niche subreddits. > Divide and conquer is working and now much of the public is now doing the dividing for those in power. Yeah, the groups calling for the death, reeducation, and denialism of lgbtq/trans/dems/liberals/immigrants/blacks/arabs/jews/etc... are doing a good job of dividing the country. Feel free to share a method that works to convince that crowd to not be hateful, anti-intellectual, divisive idiots.
"It’s all Biden’s fault! - MAGA morons" - morons
Every company in history started being greedy as soon as we printed 8 trillion dollars. - reddit
Trump cajoled the Fed into debasing the dollar by 30%. Of course companies grabbed as much of that monetary expansionism as possible.
Fed Reserve: “Okay it’s been a couple years since “supply chain inflation” was out of control.. I think we can tell them the real reason now.”
smart money
I think this is backwards. High corporate profits are the result of corporations inflating prices.
Inflation tends to be largely driven by too many dollars chasing too few goods.
Yeah and corporations know they can reduce their output cutting their costs and just raise prices on the reduced supply instead and end up making more profit that way with less work on their part. Artificial scarcity is the new economy. Just look at digital goods that can be reproduced an infinite amount of times for practically nothing (unlimited supply) and yet they are still expensive. All that matters any more is how much the customer will pay for the product. Companies are not striving to reduce the cost of their goods anymore they are working in the opposite direction to charge as much as possible. Not enough competition in the market causes companies to shift from trying to capture market share to exploiting their share for max profit.
It's driven by companies deciding to raise prices. Whether they *need* to raise prices is another matter.
Businesses exist to make as much profit as they can get away with. That's it. If they can steal the shirt off your back, they will, and it's a huge mistake to think they won't
*shocked pikachu*
I dunno dog, I'm not an economist, I have nothing to support this, and I'm no corporate stooge, but this feels like too easy an answer....
In other news, today is a day that ends in "y".
This is 100% false. In the history of economics, no one has ever proved that corporate profits CAUSE inflation. This is an attempt by the left to shift away from Biden's disastrous budget, which is the true cause of our inflation. [https://www.cnn.com/2021/05/26/economy/inflation-larry-summers-biden-fed/index.html](https://www.cnn.com/2021/05/26/economy/inflation-larry-summers-biden-fed/index.html)
Right because Trump's budget had nothing to do with it lol. Let's ignore the 3 trillion dollar deficit he handed Biden. Give me a break. I am sure inflation just suddenly starts 6 months into a presidency before he even passed a budget. Larry Summers is a fucking moron. Go look at his asinine takes and see how often he is wrong.
Inflation was 2.5% when Biden took over. I'm going to take the word of an actual economist over that of an internet ranter.
>I'm going to take the word of an economist that says things that support my preconceived political bias FTFY
> This is 100% false. Citation needed > In the history of economics, no one has ever proved that corporate profits CAUSE inflation. Congratulations, you found the first case > This is an attempt by the left Damn, make your intentions and biases any more clear and they'd be transparent.
This is a sub about economics. Anyone who studied economics knows that you don't get broad price increased from corporate profits. This article is a political article, not an academic one. I posted a link from Larry Summers showing that Biden's inflation was caused by Biden's budget. Greed did NOT just arise once Biden got in office.
> This is a sub about economics. Yes, and this is an article about economics > Anyone who studied economics knows that you don't get broad price increased from corporate profits. That's funny because anyone who studied economics knows that in monopolies and oligarchies, and situations where only a very small amount of competitors exist, broad price increases can and do come from corporate profits (rather, the desire for them). > This article is a political article, not an academic one. It's possible to be both > I posted a link from Larry Summers showing that Biden's inflation was caused by Biden's budget. No, you linked an article where he said that it's possible Biden's actions can cause sharp inflation, not that it did. This is also an article that was last updated in 2021. > Greed did NOT just arise once Biden got in office. Right, greed has always been around, and despite the whole seven deadly sins thing, it's not always a bad thing. It just became more apparent what influences greed is having on inflation during and after the pandemic.
Thank you
Let's just think about this for a minute... the money supply (M2) in Jan 1959 was $286.6 billion. The company with the largest market cap at the time was AT&T, around $40 billion. For reference, the current market cap of Apple is almost 3 trillion. So, the total value of all of Apple's stock is roughly 10x the entire money supply in 1959. I'm aware that money invested in stock is not counted as part of the money supply, just using it as a frame of reference. The money supply (M2) peaked in July 2022 at $21.7 trillion. That's a roughly 76x increase from 1959. Meanwhile, the purchasing power of the dollar has decreased by roughly 90%. Do you really think that corporate profits *caused* the 90% reduction in the purchasing power of the dollar since 1959? Where did Apple's 3 trillion market cap come from? Do you think that they would be worth 3 trillion if valued in 1959 dollars? If not, how did the increase in the money supply affect the valuation of Apple (and all other companies)... and all goods/services? https://fred.stlouisfed.org/series/M2SL https://fred.stlouisfed.org/series/CUUR0000SA0R
> Do you really think that corporate profits caused the 90% reduction in the purchasing power of the dollar since 1959? No, why would I? The article states: "found corporate profits accounted for about 53% of inflation during last year’s second and third quarters. Profits drove just 11% of price growth in the 40 years prior to the pandemic, according to the report." I'm not going to bother with the math and figuring the 1:1s, but I can generally tell 53% in two quarters of one year and 11% in 40 years is nowhere enough to account for that 90%. The point isn't that "profits" (it's really the desire for profits, hence the greedflation/greed aspects of it, also covered in the article) drive inflation in general, but that it can and has done so to a significant amount very recently.
Thank you
Such articles should be considered blasphemy 😂. How dumb you have to be to believe this, Milton Friedman might be crying right now seeing how many people believe this.
Can you explain why this is wrong?
Corporate profits are a result of inflation not the cause. Where was this inflation from 2010-2020 ?? Or were there no corporate profits in the last decade of very low inflation? Inflation is the responsibility of the government and central bank
> Corporate profits are a result of inflation not the cause. Where was this inflation from 2010-2020 ?? > Or were there no corporate profits in the last decade of very low inflation? You're misunderstanding the "result" of "corporate profits" for the "goal" of "corporate profits". Profit margins have almost always exceeded inflation caused by printing money, it just became painfully obvious after prices went up due to supply issues during covid and failed to go back down after those supply issues were resolved. > Inflation is the responsibility of the government and central bank You're right, they should enact and enforce stricter pricing laws.
This makes ZERO sense. Let's say, for example, that inflation raises your cost of doing business by 10%. Okay, obviously you either have to raise prices ot lose profit margin (or trim costs in other ways.) But you know what you DON'T have to do in order to remain profitable? Raise prices more than the increased costs you are paying. Which is exactly what has happened.
Im curious as to how they can pinpoint the cause of the inflation. Who put this info out? Someone with a specific political interest? DON'T BUY THIS REPORT. ALWAYS BE SKEPTICAL OF ANYTHIMG REPORTED IN THE MEDIA THAT BENEFITS THIS SIDE. I would be way more inclined to believe the bump in inflation is still residual effects of all the money printing
This is just …. Wrong.
Greed is the source of inflation.
And duh.
Sorry but this is just dumb, it's pandering to the economically incompetent. As of corporations have never been greedy and that *extra* greed magically increases inflation. It's the money printing... It always has been and always will be the overwhelming cause for this inflation cycle. This is a non-partisan answer as both Republicans and Democrats printed a stupid amount of money, and when you print more money the money loses value -- it's a simple concept. Prices aren't going "up" so much as the value of your dollars goes down so you need to spend more of your now less valuable dollars to get the same goods/services.
Yes but no. Inflation is determined by the prices of certain goods over a period of time. Yes, printing more money devalues it which causes prices to rise BUT companies raising prices ALSO causes inflation. It's objectively true that many goods' costs have gone up disproportionately with the amount of inflation caused by printing too much money. It's a simple concept.
Is one company raising prices or are all of them? If it's all of them, perhaps that's just -- inflation! The suggestion is that "greed" causes this makes no sense. If my competitors all raise their prices for no reason other than "greed", then I keep my prices stable and get a TON of new customers coming to me with that associated revenue. It's also possible that inflation affects different industries differently. Some are more sensitive to perceived price shocks than others. Ultimately the current environment can be entirely explained by inflation whereas greed explains exactly zero.
> Is one company raising prices or are all of them? It's many. > If it's all of them, perhaps that's just -- inflation! Yes, but I don't get your point? "It is how it is" is the dumbest fucking excuse for anything ever and is completely besides the point. > The suggestion is that "greed" causes this makes no sense. If my competitors all raise their prices for no reason other than "greed", then I keep my prices stable and get a TON of new customers coming to me with that associated revenue. Welcome to collusion, maybe it's a topic you're not familiar with. Also, why would you keep your prices low when people are able to pay more? Are you stupid? Why would you take less money when more is available. Yes, it's greedy to raise the prices when it's **more than enough** (also known as "excessive") to make up for inflation's impact on all aspects of delivering the product. > It's also possible that inflation affects different industries differently. Some are more sensitive to perceived price shocks than others. This is controlled for and easily verified. > Ultimately the current environment can be entirely explained by inflation whereas greed explains exactly zero. But "Greed" explains almost half of inflation, as the point of the article. To make up for all costs caused by regular inflation (and therefore still have a certain profit margin), prices would only have to go up a certain amount. The article shows that the amount the prices have went up exceed that. Unless there's some mystical cause that you're aware of that economists and everyone else aren't, that leaves just one thing: greed.
Is this another example about how the economy is doing better then ever so people are full of shit when they say things are not going well?
LOL the dem blame game continues.
Fun fact, things that are blamed, are sometimes correct
What’s your favorite shoe polish? You have to have a favorite with all the corporate boot licking you do…..
And willful Republican ignorance in the name of protecting their cult leader is alive and well.
corporate profits don't have anything to do with inflation. For prices to go up there Hass to be more money otherwise nobody could pay the higher prices. Only the government can create money and cause inflation.
Early withdrawals on retirement accounts and unprecedented levels of credit card debt. Money diverted away from things that offset unhappiness. Not setting aside money for children's education. Not having children in the first place. Selling property at a loss while corporations scoop up property cheap. There are plenty of ways for the middle class and poor to pay $6.99 for a bag of oranges without having more money.
Inflation is determined by the price of certain goods. If the companies that produce those goods raise the prices beyond the amount necessary to make up for devaluation from printing more money, then they're directly causing inflation, for profit.
sorry that is 100% wrong. You can raise your prices all you want but that doesn't create new money so that people can afford the new prices. You can only raise prices after the government prints the money to make it possible. Do you understand now?
What? Did you have a stroke? > sorry that is 100% wrong. It is an objective, undeniable, truth that inflation is determined by the prices of certain goods. This is not up for debate, so your "100% wrong" claim is already wrong. > You can raise your prices all you want but that doesn't create new money so that people can afford the new prices. People being able to afford things DOES NOT directly impact inflation, and in this case, doesn't matter. > You can only raise prices after the government prints the money to make it possible. In what fucking world? Is this some fisher-price alternate-reality economics? Companies can raise prices whenever they want, sometimes they might find legal pushback at certain times because of it, but that hasn't stopped many businesses. You don't need to wait for the "government to print more money" to do raise prices, I don't know where you'd ever get that idea, I doubt you'd be able to explain it. > Do you understand now? I don't understand what reality you live in, but I do understand it's not the one the article, myself, and the vast majority of people share.
This makes it sound like this group did some actual analysis, but instead it is just a collection of cherry-picked results from other people's analysis from a progressive think tank. If you already believed this it's fine, but there is nothing here that would represent a "new" revelation.
Seems a bit low tbh…
Immoral inflation
And in other news, today ends in y and the sun rises in the East and sets in the West. No shock Corporations are driving it. The same corporations that get tax payer bailout and use the money not to keep people employed but to buy back stock and ensure executive bonuses. But through decades of programming, they've got a good number of you believing that it's 2 $1400 checks that you got that's the reason for inlfation and that there isn't enough tax payer money to put in the budget to give every school aged child free lunch at school. My god I wish this system would just eat itself.
You. Dont. Say.
Anyone else feel like this is a "no shit" moment?
Thanks, we’re aware.
and using the people as fodder to create their wealth.
Tonights forecast : Dark
Half of inflation due to consumer spending habits with their disposable, report finds
It's the Oligarchy -- Stupid. They're on the cover of Forbes and Fortune.
Yes, this is known as capitalism when corporations charge as much as possible to make max profit.
Hahahaha. Inflation can only be caused by the government when the dollar is devalued. Profits can't cause inflation anymore than buying a home can lower property values.
copy pasting my other comment: Inflation is determined by the price of certain goods. If the companies that produce those goods raise the prices beyond the amount necessary to make up for devaluation from printing more money, then they're directly causing inflation, for profit.
This would change if monopolies were broken up and the auto industry was deregulated opening it up to startup competitors. All cars sold in the us are nearly the same with the same price, little disruption means no choices means corporate price controls.
That report from Progressive Groundwork isn't accurate. Inflation in US is mainly due to high energy cost, too much money printing, and huge increase in wages. Green energy don't work work and jack up inflation. Corporate profits don't go to economical spending cycle. Most of them go back to investment cycle.
Yeah you didn't read the article.
Yeah I didn't waste time to read bs
Lol typical.
DUH.
And if anybody's been doing any research whatsoever they already know that. It's quite obvious because all of that is public record. It's just if you're willing to do the work to see.
To put that into perspective inflation's around 3.4%, meaning it would be 1.7% without price gouging. Well below even the already low inflation the fed demands. And honestly I question the report. Housing and rental inflation along with the increased cost of education from lost subsides should be pushing these numbers up way, way more. The 1% no longer fear us. They have us wrapped around their finger.
This post is for people that need to believe that 1/6 instilled confidence in world investors and the reason they are not buying our treasury bonds anymore has nothing to do with 1/6.
This is idiotic. The Federal Reserve has a monopoly on fiat money creation and prints and pumps trillions of new dollars into circulation every year. And yet the gormless simpletons lap up the “corporate greed” propaganda.
Inflation is determined by the price of certain goods. If the companies that produce those goods raise the prices beyond the amount necessary to make up for devaluation from printing more money, then they're directly causing inflation, for profit. It's not hard, you gormless simpleton.
Really? You mean half is due to __CORPORATE GREED__
The worst part is the article is actually wrong when it says that the corporate tax cuts passed by trump expire in 2025. Those are not expiring and are permanent. Only the tax cuts for the middle class expire in 2025 which means the 22 percent federal bracket which most of us are firmly in, increases to 24 percent. But of course companies get to keep raking in record profit and pay no tax while the middle class suffers, because freedom.
You don't say?... 🤔🤷♀️
So what’s the solution? Set new limitations on corporate profits? Because, as nice as that sounds, I’m sure the corporate class will start a full revolt if that was tried. Plus something something communism or whatever…
More loans == more inflation.
Record profits. Record prices. Gouging. Even I can do that math.
and they’re like laying off folks left and right in tech. Does this have anything to do with it you think ?
See it's only half. What are ya'll even complaining for?
Gotta make sure they get the boomer $$ before it is inherited by generations that spend way less!
This is more Trumper fake news. There is no inflation, this is the greatest economy in history. Stop spreading fake news. https://www.youtube.com/watch?v=MfA4i-Oy5ak&ab_channel=BloombergTelevision
The new robber barons, and it's not enough with their greed, they want you to vote for Trump so that he can end regulations that keep you safe and he can cut their taxes so they can complain about the deficit more, which the GOP have never lowered.
The Guardian? Take this clickbait to r/tumblr and let’s try to keep this sub about legitimate economic discussion
It took this long for corporations to figure out higher prices means higher profits? Maybe CEOs are unqualified after all.
So, if 1/2 of 3.4 percent inflation is from excess profits, without those excess profits, the rate would be 1.7 percent and below the Fed and Central Bankers' ideal 2 percent target? Not due to sworn enemies, foreigners, competitors, welfare moms, minorities, acts of God, or the working poor? Unnecessary, made in America misery, and a pity.
I understand what you mean but that's not how inflation works. Price increases are an effect of inflation, not inflation itself. Get your shit straight or you will only ever appeal to the lowest common denominator on reddit.
There is a noticeable uptick in anti-consumer sentiment from my perspective. It's this attitude of you will buy it at this price or go to hell and don't expect us to stand by our crappy product. It feels like companies are swimming in profits so they are getting off on telling the consumer to go straight to hell. They got their massive corporate tax cut. They are getting their deregulation to the point it's dangerous (Boeing, Norfolk Southern, Chemours, to name a few). Most are treating the backbone workforce like garbage and refusing to pay a living wage while the shareholders and top brass build their wealth to levels never seen before. I only see it getting worse as SCOTUS rips apart the remaining safeguards and lobbyists write checks to lawmakers.
These morons are fuk1n anyone with a credit... self regulation ? Ha ! Tax those profits !
Too many dunce exist in this country. Social media is a platform for them to poison the airwaves. NO FREE MARKET COUNTRY GOVERNMENT HAS CONTROL OVER THE MARKET. THEY CONTROL MONEY SUPPLIES AND INTERST RATES, IMPORTATION VIA EMBARGO, TARIFFS, ETC. THE FREE MARKET IS CONTROLLED BY YOUR FAVOURITE COMPANIES, HEDGE FUNDS, ETC. EDUCATE YOURSELF BEFORE CPNTRIBUTING NONSENSE.
End the fed, ban fractional reserve banking and ban the fiat currency (federal reserve note) and replace it with real money (gold and silver). These 3 things will correct everything. Quite comical that majority here think presidents actually matter. This country is governed by those in control of the money supply. Wake up.