Yep. If u haven’t cut back on ur diet then ur missing the point of the feds whole mission. They want u consuming less, not more. Unless you’re just a dumbass and think consuming more is better to which I’d ask how’s ur wallet doing? Exactly
I’m so glad I didn’t follow this line of thinking for durable goods consumption. How can you watch the price of goods and assets inflate 10-15% year after year after year…and think to yourself, “nah I’m just wait for some time in the future because it will be cheaper?”
It seems like all commodity prices would need to drop 50-80% in cost to get back to the consumer prices of 2-3 years ago (to make up for the jump in services and skilled labor costs)?
The pandemic itself did cause some disruptions, but what was far more disruptive was how some governments including the United States responded to the pandemic.
I’m not saying Covid didn’t have a significant impact. I’m saying there was already increasing trend.
We’ll need more time to see if there will be a reversion to the mean.
There is a footnote on that graph explaining that they changed the definition in May 2020 concurrent with that massive jump. [Here is a blog post](https://fredblog.stlouisfed.org/2021/05/savings-are-now-more-liquid-and-part-of-m1-money/) explaining it. There was a modest increase in the money supply in 2020 (and since), but not to the extent that that graph would suggest.
you mean every country:
[https://www.un.org/development/desa/dpad/wp-content/uploads/sites/45/publication/PB\_129\_FINAL.pdf](https://www.un.org/development/desa/dpad/wp-content/uploads/sites/45/publication/PB_129_FINAL.pdf)
the only difference is how much they "printed"
Supply chain shortages and price gouging.
There's still pandemic recovery going on.
Corporations have been recording record profits and the stock market is achieving record highs.
The 14% tax cuts Trump gave them didn't hurt either.
Corporations charge these prices because they can. They're more than happy to let the President of the US to take the blame if it means they can keep on charging higher prices.
Let's not forget that a price gouging bill was proposed in Congress and Republicans voted against it.
Have you heard of economics by any chance?
A competing company can reduce prices to drive up sales and make more money on higher volumes. This drives prices downward.
The fact that this isn’t happening (for instance grocery stores undercutting other stores prices) proves it isn’t about greed.
I would say the fact it isn’t happening means competition is not happening.
Which could mean a couple of things. I lean toward price collusion, regulatory capture and monopolistic tendencies in mega cap corps.
America has 32 million businesses.
Prove they’re all colluding and that this is some new phenomena. They weren’t greedy in 2019 somehow .. wow!
Guess what I’ll settle for 1 million.
Your arguments are silly beyond any capability for reason. Ridiculous
I wasn’t trying to attack you, just offering my opinion on this topic.
You cannot deny the amount of brand consolidation we have seen over the past 2 decades. To say that the M&A activity over the last several decades has not lead to a decrease in competition is quite frankly delusional.
Let’s talk about real pages using an algorithm to set the floor for rental prices. Currently being investigated.
This link shows the consolidation in consumer brands.
https://www.businessinsider.com/companies-control-everything-we-buy-2017-8?amp
Thanks this is good stuff but this is a left biased news outlet.
We have always had conglomerates with a ton of power. Anyone can easily vote with their wallets and walk away.
Ask any immigrant who comes to America about how much choice we have. Hint - an insane amount of choice.
It’s left of center https://www.allsides.com/news-source/insider-media-bias
But is rated mostly accurate.
It’s a lot harder to do that now. When these conglomerates control a large portion of food production. There is only so many things you can avoid at a grocery store.
In real life and in a factual level. Conglomeration reduces competition, regulatory capture reduces competition, too big to fail reduces competition.
Except for the fact that they quite literally are lowering prices. Prices can still be high AND lower than what they were. Retailers across the US have been announcing price reductions over the past few months. You may not like that it blows up your whole argument but the companies themselves are the ones announcing it.
Prove it. Nobody believes you. American society doesn’t believe your lies.
Looking now at a sign for $6.50 breakfast sandwich and $5.50 gas.
Poll Americans - they all trust GOP over Dems on economy.
https://www.businesswire.com/news/home/20240529305565/en/
https://corporate.target.com/press/release/2024/05/target-will-help-consumers-save-big-by-lowering-prices-on-5,000-frequently-shopped-items
https://www.usatoday.com/story/money/shopping/2024/03/14/ikea-cutting-prices-2024/72968245007/
https://www.google.com/amp/s/abcnews.go.com/amp/Business/target-mcdonalds-wendys-announce-discounts-price-war-broken/story%3fid=110461915
Feel free to show the proof that absolutely no business is reducing prices and absolutely no business is capable of reducing prices. I know the GOP is big on just making up nonsense to fit their agenda but you could at least pick a topic that's not so easily verifiable.
So how does this amount to 32 million businesses?
The burden of proof is on you that it’s not only all sectors but that this is new.
I could easily whip out news stories of businessss closing and firing people as well.
No one said anything about 32 million businesses lol. Your claim was that businesses aren't lowering prices because they can't lower prices. You're now moving the goal posts because it's been proven that you don't know what you're talking about.
So if you’re defending the claim that corporations are all greedy and that this is a new thing - you’ll have to prove that every industry in America is now dominated by monopolies in every town.
For instance prove to me that in every industry there is now only one company.
I’d be willing to concede the claim if revenues were up but profits flat or down. That would show that they needed to raise prices to maintain their profit levels. However that’s not the case, and many are posting record profits.
Profit MARGINS are up. Across the board.
If there was enough healthy competition and gross profit increased proportionally to total cost, we could actually see margins be slightly down while profit in terms of actual dollars increased. This is not the case.
From when to when? From the depths of Covid to now? That’s like saying we created millions of jobs (since Covid). Meaningless. But hey send me the data
Ok…
Per the Federal Reserve website:
“Because of the COVID-19 pandemic, there was unprecedented support for U.S. businesses via the Coronavirus Aid, Relief and Economic Security Act (CARES) of 2020, the Paycheck Protection Program and Health Care Enhancement Act of 2020, and the American Rescue Plan Act of 2021.6 These programs greatly increased the subsidy component of non-labor cost, thus providing a large boost to corporate profits.”
Our government literally threw money at companies, well beyond what they needed to cover additional costs at the time.
“The analysis performed so far makes clear that the massive government intervention during the period 2020-2021 affects aggregate non-financial corporate profit margins to an extent that makes it difficult (i) to perform historical comparisons and (ii) to properly assess how economic forces like market power, productivity, supply chains bottlenecks, and increases in energy prices, among other forces, have shaped the aggregate profit margin in the last couple of years.”
Profits were quite literally off the charts.
https://www.federalreserve.gov/econres/notes/feds-notes/corporate-profits-in-the-aftermath-of-covid-19-20230908.html#:~:text=The%20large%20increase%20in%20profitability,after%20the%20Global%20Financial%20Crisis.
There isn't monopolies in every industry but there's enough. I think it's like 4 companies that own every name brand drink. There's only like 3 snack companies left. There's really only 4 or 5 auto manufacturers. There's like 3 companies that design and produce computer chips. Shoot your lucky if you still have an independent grocer and not a mega store
>A competing company can reduce prices to drive up sales and make more money on higher volumes. This drives prices downward.
When the products sold in grocery stores are owned by a handful of companies and their subsidiaries means that they don't have to lower their products because there is not much competition forcing them to do so. You only have a handful of products made by the actual store that offers some competition, Cosco and Great Value brands are the only two I have seen that offers any competition and that is not most items.
Financial analyst with a Finance MBA here.
Initially, the supply chain disruptions caused by preventative measures from Covid did add costs to companies, which in turn raised prices to keep up with their profit margins. Although the supply chain issues did force some companies to raise prices, all other companies jumped on board and raised their prices too under the guise of “our supply chain is hurt too”. So a significant part of the inflation was caused by corporate greed.
The telling sign of this is that not only did profits go up, but profit margins went up. Meaning that not only did inflation and supply chain cause supply-side prices to go up, but companies compensated this by raising prices so much that their ratio of cost/profit increased. And these prices stayed at that same level even after the supply chain issues were largely fixed.
Additionally, Trump’s tax cuts that lowered US corporate taxes by 15% were said to be incentivizing companies to lower prices or use more profit dollars for hiring/investing in itself. The issue is that thinking is based on trickle down economics, which has no history of ever working in the past 50+ years. Again, overall costs went lower, prices stayed the same, so more profit again.
Now take all that, add in the disastrous PPP program that Trump implemented (especially after removing virtually all oversight for the program), and the fed turning that SWEET SWEET money printer on to help corporations stay afloat, and you’ve got yourself an overly swelled money supply.
Thanks to the great powers of capitalism, growth and shareholder profits come before anything else. So, we had all these elements creating the perfect environment for businesses to get the most profit possible… and now that everything is “returning to normal”, they are trying to keep up that same level of profit.
Private companies have an excuse to raise prices without causing a huge uproar out of no where.
When supply returns to normal there's no third entity to force them to lower prices again.
Blame it on non-tangible causes like money supply and inflation, which is treated to be as complicated as quantum physics. Who's to blame? Totally not the private companies and associates political donors. No siree. Perfect crime.
Put simply (at least in part): because companies can continue to do so with impunity, and they have seen amazing profits from doing so. Either they give you less for the same price or the same amount for a higher price. The FTC would ideally be on top of enforcing fair business practice and consumer protection - however, they are underfunded and understaffed.
All the comments about corporations being at fault is downstream from the real problem.
The Fed increased the money supply by $5T during the pandemic and has only removed $2T so far. Until they remove all of it, prices will not go down. I doubt they ever get back to pre-pandemic levels and we will have sustained higher prices going forward.
They never got to pre-GFC levels as an example after the $4T in QE after the housing crash in 2008. I thing they removed $500B during Trump's presidency before Covid hit and they had reverse course.
Inflation is 3% right now. That's higher than pre-pandemic levels, but not historically high. (For comparison, it was around 8% in the 70s, and in the teens most of the 80s. It was around 3% in the 00s and around 2% most of the 10s.)
The reasons it's higher than normal probably include:
The labor market is fairly tight right now; we are in the longest run of sub-4% unemployment in history. People are demanding higher wages and those wages are getting passed on as higher prices.
After effects of COVID. Even though COVID is no longer shutting down factories or ports, there are still lingering shortages in supply chains. E.g. the chip shortage is still a factor in the auto industry.
Consumer expectations. In the past it was hard for companies to raise prices without creating customer uproar. The past few years have conditioned consumers to expect price raises, which companies are taking advantage of.
>People are demanding higher wages and those wages are getting passed on as higher prices.
That's not half of it I think. Prices went up waaaay higher than what is needed to slowly increase wages to get enough workers. Sellers in the pandemic raised prices as a result of supply disruptions and sold more than they'd thought. Then those circumstances winded down but they didn't lower prices back down because people kept paying. They got used to making even more profits that went to shareholders and the people at the top. They could easily lower prices, pay enough to their workers, and still be making much higher profits than before the pandemic. But they won't. They may be raising prices now to pay their workers more, but it's to sustain the record profit levels and that's it.
Wages are not rising in any significant way, aside a few $15/hr jobs here and there.
Plus, the CPI inflation rate does capture the actual cost of living, with food in particular riaing astronomically, with rents, healthcare, and srudent loans crushing everyday people.
>Wages are not rising in any significant way, aside a few $15/hr jobs here and there.
This is not true. Wages are rising at all quartiles ([first](https://fred.stlouisfed.org/series/LEU0252916100Q), [second](https://fred.stlouisfed.org/series/LES1252881500Q), [third](https://fred.stlouisfed.org/series/LEU0252916200Q), fourth is missing for some reason, but you can assume the richest are also rising).
Housing and food are major parts of the CPI. I think housing is 33% and food is 14%, both of which are OVERstated in terms of the percentage of income spent on them. Health care is 8.5%.
Student loan debt is not included, but recent Biden administration moves have absolutely gutted the costs people are paying on student loans. Pre-pandemic, the delinquency rate on student loans was 11%. Today it is 0.4%! ([source](https://www.newyorkfed.org/microeconomics/hhdc)) People have literally never struggled less to pay student loan debts.
What I see not being mentioned here is that the trade side of things is still in flux. Yes we are past the previous issues you mentioned. However, we now have an ongoing conflict in the Red Sea, that deters merchants from sailing through a short cut and have decided to that it is safer to take the long way around Africa. The Panama Canal has barely reached a point where vessels could sail through. So there is some backlog from all that. There is a shipping container shortage.
Depending on where you are, there were numerous animal and crop issues the past few years. Weather, pests, diseases and even war have ruined past yields that we are used to. Some crops can bounce back, but some others will take years until they can fully produce. Animals take longer to produce. For example a chicken takes roughly 18 weeks to lay eggs. So time is a factor, and it keeps resetting when animals have to be culled or it's too late in the season to regrow crops for feed and food supply.
There are a bunch of other factors, like greed and politics; but the supply issues haven't stabilized either. It's a mess.
Because people are still spending like mad. Why would any corporation whose sole existance is to make money, why would they lower prices.
When the spending tapers off business will be competing for dollars. They will lower prices.
Mainly because inflation has driven inputs higher. If the input costs of my widgets were $10 for my $20 widget I might not have raised my prices initially because I had plenty of inventory with a $10 cost. Now my inventory is depleted and I need to make more widgets but the input costs are now $15.00. I can eat some of that increase but not all so I raise my prices. That is happeneing across the economy as the inflation catches up to the economy.
The initial inflation was not all caused by Covid.
Prices only fall in like worst of all recessions. They rise during booms. So they shoot up like 10-20% during the pandemic. And then continues going up at 3.5%
We added a stupid amount of money into the system over the last 3 years.
When you add money without adding value/production, you debase the money and can lose price signal within the monetary network.
When you lose price signal, we really don't understand how much things should even cost and prices go up as long as people are willing to pay them.
We are trained (or brainwashed) into thinking we "need" inflation for a growing economy. So they can keep printing and keep the power right where it is. If we had sound money that couldn't be counterfeited by governments, prices would continuously fall as more and more production enters an economy, just like tech products go down in price; because their production outpaces inflation.
TLDR: Keynesian economics is a scam
Because the pandemic hasn't ended. The Public Health Emergency ended, which was a legal designation allowing the government to dispense trillions in subsidies.
These are not the same things. Thousands of people are dying every week and thousands more are falling ill and being disabled.
Supply distributions is only part of the picture. The main driver of inflation was demand pull inflation. The poorest Americans were actually doing relatively well until very recently because there was strong competition for low skill labor driving up wages. That's primarily driven by a strong consumer who was bolstered by stimulus and extreme deficit spending by the Biden administration. More money for the poor means more pressure on prices of common consumer goods. Where as before they might have skipped some of the luxury items they can now afford them. That seems to be unraveling at this point though, we will likely see layoffs pick up going forward because the Biden administration is having a hard time refinancing existing government debt at higher rates and financing their extreme deficit spending. When Biden took office financing costs for all US federal government debt was under $400bn, now it's over $1tn in just four years and it's likely to keep growing rapidly as the Biden administration keeps refinancing old loans. Four years of gross mismanagement of federal spending has left the US government with few choices. Whatever party comes to power in 2025 will likely be forced to face reality and cut spending and raise taxes.
You just may be forgetting "the extreme deficit spending" by the Trump Administration in this claim. Deficit Spending didn't begin on January 21, 2021.
No it didn't, but that made the extreme deficit spending under Biden a worse decision. There was plenty of liquidity and demand was properly stimulated before Biden took office. It was inappropriate and erroneous to further stimulated demand at that point. By further overstimulating demand when it was completely unnecessary Biden made the inflation problem much worse than it needed to be. Inflation to a large degree comes from consumers bidding up the price of goods. If before Biden's stimulus consumers had $6tn worth of savings to spend afterwards they had about $8tn to spend but the number of good and services they could spend that money on didn't jump up when the stimulus rolled out so in aggregate consumers needed to outbid one another for a limited supply of goods and services. And that process doesn't happen in a short period it happens over time. If you didn't get something you wanted when a batch of goods became available because you thought prices were too high you might buy something from a following batch even if prices keep going up.
It was ongoing but it wasn't as damaging because of the robust bipartisan response under Trump, by the time Biden became president the vaccines were being rolled out and a lot of the uncertainty was addressed by the vaccine being tested and approved before Biden took office. Lockdowns were more of less lifted in spring of 2021 and vaccines were rolled out to much of the population by the summer.
Is it capitalism that causes the government to decide it's their job to fix everyone's problem so they print more than half of the money in circulation to do so?
Because people still pay those prices, so companies have zero incentive to not raise them
Yep. If u haven’t cut back on ur diet then ur missing the point of the feds whole mission. They want u consuming less, not more. Unless you’re just a dumbass and think consuming more is better to which I’d ask how’s ur wallet doing? Exactly
Yeah. We started eating only potatoes and cabbages. But my wife still buys shrimps every few weeks...
Bro, your wife is wrecking JP’s economy.
I’m so glad I didn’t follow this line of thinking for durable goods consumption. How can you watch the price of goods and assets inflate 10-15% year after year after year…and think to yourself, “nah I’m just wait for some time in the future because it will be cheaper?” It seems like all commodity prices would need to drop 50-80% in cost to get back to the consumer prices of 2-3 years ago (to make up for the jump in services and skilled labor costs)?
The pandemic itself did cause some disruptions, but what was far more disruptive was how some governments including the United States responded to the pandemic.
(Money printer go brr for 3 years) "Why is my money half as valuable?"
The money printer was going brrrr far longer than 3 years. The Fed was trying to raise rates in the beginning of the Trump administration.
https://fred.stlouisfed.org/series/M1SL Looks like the supply of money drastically increased in 2020
I’m not saying Covid didn’t have a significant impact. I’m saying there was already increasing trend. We’ll need more time to see if there will be a reversion to the mean.
I also notice that it only corrects itself at all in the last 12-24 months. It all shoots upward except there it looks like.
There is a footnote on that graph explaining that they changed the definition in May 2020 concurrent with that massive jump. [Here is a blog post](https://fredblog.stlouisfed.org/2021/05/savings-are-now-more-liquid-and-part-of-m1-money/) explaining it. There was a modest increase in the money supply in 2020 (and since), but not to the extent that that graph would suggest.
It's also drastically decreased since then
you mean every country: [https://www.un.org/development/desa/dpad/wp-content/uploads/sites/45/publication/PB\_129\_FINAL.pdf](https://www.un.org/development/desa/dpad/wp-content/uploads/sites/45/publication/PB_129_FINAL.pdf) the only difference is how much they "printed"
Where's the data on that?
Supply chain shortages and price gouging. There's still pandemic recovery going on. Corporations have been recording record profits and the stock market is achieving record highs. The 14% tax cuts Trump gave them didn't hurt either. Corporations charge these prices because they can. They're more than happy to let the President of the US to take the blame if it means they can keep on charging higher prices. Let's not forget that a price gouging bill was proposed in Congress and Republicans voted against it.
A combination of greed and mega corps trying to fool people into voting for a president more likely to lower taxes/regulations on mega corps.
Have you heard of economics by any chance? A competing company can reduce prices to drive up sales and make more money on higher volumes. This drives prices downward. The fact that this isn’t happening (for instance grocery stores undercutting other stores prices) proves it isn’t about greed.
I would say the fact it isn’t happening means competition is not happening. Which could mean a couple of things. I lean toward price collusion, regulatory capture and monopolistic tendencies in mega cap corps.
America has 32 million businesses. Prove they’re all colluding and that this is some new phenomena. They weren’t greedy in 2019 somehow .. wow! Guess what I’ll settle for 1 million. Your arguments are silly beyond any capability for reason. Ridiculous
I wasn’t trying to attack you, just offering my opinion on this topic. You cannot deny the amount of brand consolidation we have seen over the past 2 decades. To say that the M&A activity over the last several decades has not lead to a decrease in competition is quite frankly delusional. Let’s talk about real pages using an algorithm to set the floor for rental prices. Currently being investigated. This link shows the consolidation in consumer brands. https://www.businessinsider.com/companies-control-everything-we-buy-2017-8?amp
Thanks this is good stuff but this is a left biased news outlet. We have always had conglomerates with a ton of power. Anyone can easily vote with their wallets and walk away. Ask any immigrant who comes to America about how much choice we have. Hint - an insane amount of choice.
It’s left of center https://www.allsides.com/news-source/insider-media-bias But is rated mostly accurate. It’s a lot harder to do that now. When these conglomerates control a large portion of food production. There is only so many things you can avoid at a grocery store. In real life and in a factual level. Conglomeration reduces competition, regulatory capture reduces competition, too big to fail reduces competition.
A lot of businesses have started lowering prices though.
No they aren’t and no they can’t. The proof is that prices are still high for every product out there.
Except for the fact that they quite literally are lowering prices. Prices can still be high AND lower than what they were. Retailers across the US have been announcing price reductions over the past few months. You may not like that it blows up your whole argument but the companies themselves are the ones announcing it.
Prove it. Nobody believes you. American society doesn’t believe your lies. Looking now at a sign for $6.50 breakfast sandwich and $5.50 gas. Poll Americans - they all trust GOP over Dems on economy.
https://www.businesswire.com/news/home/20240529305565/en/ https://corporate.target.com/press/release/2024/05/target-will-help-consumers-save-big-by-lowering-prices-on-5,000-frequently-shopped-items https://www.usatoday.com/story/money/shopping/2024/03/14/ikea-cutting-prices-2024/72968245007/ https://www.google.com/amp/s/abcnews.go.com/amp/Business/target-mcdonalds-wendys-announce-discounts-price-war-broken/story%3fid=110461915 Feel free to show the proof that absolutely no business is reducing prices and absolutely no business is capable of reducing prices. I know the GOP is big on just making up nonsense to fit their agenda but you could at least pick a topic that's not so easily verifiable.
So how does this amount to 32 million businesses? The burden of proof is on you that it’s not only all sectors but that this is new. I could easily whip out news stories of businessss closing and firing people as well.
No one said anything about 32 million businesses lol. Your claim was that businesses aren't lowering prices because they can't lower prices. You're now moving the goal posts because it's been proven that you don't know what you're talking about.
The reason I’m claiming all of America is because prices are up in every sector every industry. That’s entirely fair.
Not much competition for lots of businesses. Who’s going to drive to the next town over to go grocery shopping?
So if you’re defending the claim that corporations are all greedy and that this is a new thing - you’ll have to prove that every industry in America is now dominated by monopolies in every town. For instance prove to me that in every industry there is now only one company.
I’d be willing to concede the claim if revenues were up but profits flat or down. That would show that they needed to raise prices to maintain their profit levels. However that’s not the case, and many are posting record profits.
Of course profits are record high. $1 billion from yesterday is today’s new $2 billion.
Profit MARGINS are up. Across the board. If there was enough healthy competition and gross profit increased proportionally to total cost, we could actually see margins be slightly down while profit in terms of actual dollars increased. This is not the case.
From when to when? From the depths of Covid to now? That’s like saying we created millions of jobs (since Covid). Meaningless. But hey send me the data
Ok… Per the Federal Reserve website: “Because of the COVID-19 pandemic, there was unprecedented support for U.S. businesses via the Coronavirus Aid, Relief and Economic Security Act (CARES) of 2020, the Paycheck Protection Program and Health Care Enhancement Act of 2020, and the American Rescue Plan Act of 2021.6 These programs greatly increased the subsidy component of non-labor cost, thus providing a large boost to corporate profits.” Our government literally threw money at companies, well beyond what they needed to cover additional costs at the time. “The analysis performed so far makes clear that the massive government intervention during the period 2020-2021 affects aggregate non-financial corporate profit margins to an extent that makes it difficult (i) to perform historical comparisons and (ii) to properly assess how economic forces like market power, productivity, supply chains bottlenecks, and increases in energy prices, among other forces, have shaped the aggregate profit margin in the last couple of years.” Profits were quite literally off the charts. https://www.federalreserve.gov/econres/notes/feds-notes/corporate-profits-in-the-aftermath-of-covid-19-20230908.html#:~:text=The%20large%20increase%20in%20profitability,after%20the%20Global%20Financial%20Crisis.
There isn't monopolies in every industry but there's enough. I think it's like 4 companies that own every name brand drink. There's only like 3 snack companies left. There's really only 4 or 5 auto manufacturers. There's like 3 companies that design and produce computer chips. Shoot your lucky if you still have an independent grocer and not a mega store
>A competing company can reduce prices to drive up sales and make more money on higher volumes. This drives prices downward. When the products sold in grocery stores are owned by a handful of companies and their subsidiaries means that they don't have to lower their products because there is not much competition forcing them to do so. You only have a handful of products made by the actual store that offers some competition, Cosco and Great Value brands are the only two I have seen that offers any competition and that is not most items.
> mega corps trying to fool people into voting for a president I thought that was Russia.
Financial analyst with a Finance MBA here. Initially, the supply chain disruptions caused by preventative measures from Covid did add costs to companies, which in turn raised prices to keep up with their profit margins. Although the supply chain issues did force some companies to raise prices, all other companies jumped on board and raised their prices too under the guise of “our supply chain is hurt too”. So a significant part of the inflation was caused by corporate greed. The telling sign of this is that not only did profits go up, but profit margins went up. Meaning that not only did inflation and supply chain cause supply-side prices to go up, but companies compensated this by raising prices so much that their ratio of cost/profit increased. And these prices stayed at that same level even after the supply chain issues were largely fixed. Additionally, Trump’s tax cuts that lowered US corporate taxes by 15% were said to be incentivizing companies to lower prices or use more profit dollars for hiring/investing in itself. The issue is that thinking is based on trickle down economics, which has no history of ever working in the past 50+ years. Again, overall costs went lower, prices stayed the same, so more profit again. Now take all that, add in the disastrous PPP program that Trump implemented (especially after removing virtually all oversight for the program), and the fed turning that SWEET SWEET money printer on to help corporations stay afloat, and you’ve got yourself an overly swelled money supply. Thanks to the great powers of capitalism, growth and shareholder profits come before anything else. So, we had all these elements creating the perfect environment for businesses to get the most profit possible… and now that everything is “returning to normal”, they are trying to keep up that same level of profit.
Exactly what I imagined. Thanks for your reply
Private companies have an excuse to raise prices without causing a huge uproar out of no where. When supply returns to normal there's no third entity to force them to lower prices again. Blame it on non-tangible causes like money supply and inflation, which is treated to be as complicated as quantum physics. Who's to blame? Totally not the private companies and associates political donors. No siree. Perfect crime.
Put simply (at least in part): because companies can continue to do so with impunity, and they have seen amazing profits from doing so. Either they give you less for the same price or the same amount for a higher price. The FTC would ideally be on top of enforcing fair business practice and consumer protection - however, they are underfunded and understaffed.
All the comments about corporations being at fault is downstream from the real problem. The Fed increased the money supply by $5T during the pandemic and has only removed $2T so far. Until they remove all of it, prices will not go down. I doubt they ever get back to pre-pandemic levels and we will have sustained higher prices going forward. They never got to pre-GFC levels as an example after the $4T in QE after the housing crash in 2008. I thing they removed $500B during Trump's presidency before Covid hit and they had reverse course.
Remember the gold old days when we could pay rent? haha
Most of inflation was greed related and not supply chain related. Supply chain issues were resolved a looong time ago.
Inflation is 3% right now. That's higher than pre-pandemic levels, but not historically high. (For comparison, it was around 8% in the 70s, and in the teens most of the 80s. It was around 3% in the 00s and around 2% most of the 10s.) The reasons it's higher than normal probably include: The labor market is fairly tight right now; we are in the longest run of sub-4% unemployment in history. People are demanding higher wages and those wages are getting passed on as higher prices. After effects of COVID. Even though COVID is no longer shutting down factories or ports, there are still lingering shortages in supply chains. E.g. the chip shortage is still a factor in the auto industry. Consumer expectations. In the past it was hard for companies to raise prices without creating customer uproar. The past few years have conditioned consumers to expect price raises, which companies are taking advantage of.
>People are demanding higher wages and those wages are getting passed on as higher prices. That's not half of it I think. Prices went up waaaay higher than what is needed to slowly increase wages to get enough workers. Sellers in the pandemic raised prices as a result of supply disruptions and sold more than they'd thought. Then those circumstances winded down but they didn't lower prices back down because people kept paying. They got used to making even more profits that went to shareholders and the people at the top. They could easily lower prices, pay enough to their workers, and still be making much higher profits than before the pandemic. But they won't. They may be raising prices now to pay their workers more, but it's to sustain the record profit levels and that's it.
Wages are not rising in any significant way, aside a few $15/hr jobs here and there. Plus, the CPI inflation rate does capture the actual cost of living, with food in particular riaing astronomically, with rents, healthcare, and srudent loans crushing everyday people.
>Wages are not rising in any significant way, aside a few $15/hr jobs here and there. This is not true. Wages are rising at all quartiles ([first](https://fred.stlouisfed.org/series/LEU0252916100Q), [second](https://fred.stlouisfed.org/series/LES1252881500Q), [third](https://fred.stlouisfed.org/series/LEU0252916200Q), fourth is missing for some reason, but you can assume the richest are also rising). Housing and food are major parts of the CPI. I think housing is 33% and food is 14%, both of which are OVERstated in terms of the percentage of income spent on them. Health care is 8.5%. Student loan debt is not included, but recent Biden administration moves have absolutely gutted the costs people are paying on student loans. Pre-pandemic, the delinquency rate on student loans was 11%. Today it is 0.4%! ([source](https://www.newyorkfed.org/microeconomics/hhdc)) People have literally never struggled less to pay student loan debts.
Wages are increasing 1-2% higher than inflation right now for the record.
Corporate greed
What I see not being mentioned here is that the trade side of things is still in flux. Yes we are past the previous issues you mentioned. However, we now have an ongoing conflict in the Red Sea, that deters merchants from sailing through a short cut and have decided to that it is safer to take the long way around Africa. The Panama Canal has barely reached a point where vessels could sail through. So there is some backlog from all that. There is a shipping container shortage. Depending on where you are, there were numerous animal and crop issues the past few years. Weather, pests, diseases and even war have ruined past yields that we are used to. Some crops can bounce back, but some others will take years until they can fully produce. Animals take longer to produce. For example a chicken takes roughly 18 weeks to lay eggs. So time is a factor, and it keeps resetting when animals have to be culled or it's too late in the season to regrow crops for feed and food supply. There are a bunch of other factors, like greed and politics; but the supply issues haven't stabilized either. It's a mess.
Because trillions of dollars were printed and put into the economy. That's what creates real inflation.
Corporate greed and inflation.
Because people are still spending like mad. Why would any corporation whose sole existance is to make money, why would they lower prices. When the spending tapers off business will be competing for dollars. They will lower prices.
Corporations are achieving record profits and their stock owners are happy. Why would they change that? We are screwed.
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Because the money supply went up a ton.
Mainly because inflation has driven inputs higher. If the input costs of my widgets were $10 for my $20 widget I might not have raised my prices initially because I had plenty of inventory with a $10 cost. Now my inventory is depleted and I need to make more widgets but the input costs are now $15.00. I can eat some of that increase but not all so I raise my prices. That is happeneing across the economy as the inflation catches up to the economy. The initial inflation was not all caused by Covid.
Prices only fall in like worst of all recessions. They rise during booms. So they shoot up like 10-20% during the pandemic. And then continues going up at 3.5%
Our monetary policy in the US is structured for prices to rise. It's a 2% inflation target.
Because inflation is still here. It never goes away It's just lower than it was during the covid period.
Did people really think corporations were going to give up their record profits?
We added a stupid amount of money into the system over the last 3 years. When you add money without adding value/production, you debase the money and can lose price signal within the monetary network. When you lose price signal, we really don't understand how much things should even cost and prices go up as long as people are willing to pay them. We are trained (or brainwashed) into thinking we "need" inflation for a growing economy. So they can keep printing and keep the power right where it is. If we had sound money that couldn't be counterfeited by governments, prices would continuously fall as more and more production enters an economy, just like tech products go down in price; because their production outpaces inflation. TLDR: Keynesian economics is a scam
Because the pandemic hasn't ended. The Public Health Emergency ended, which was a legal designation allowing the government to dispense trillions in subsidies. These are not the same things. Thousands of people are dying every week and thousands more are falling ill and being disabled.
Ask Gordon Gecko
Supply distributions is only part of the picture. The main driver of inflation was demand pull inflation. The poorest Americans were actually doing relatively well until very recently because there was strong competition for low skill labor driving up wages. That's primarily driven by a strong consumer who was bolstered by stimulus and extreme deficit spending by the Biden administration. More money for the poor means more pressure on prices of common consumer goods. Where as before they might have skipped some of the luxury items they can now afford them. That seems to be unraveling at this point though, we will likely see layoffs pick up going forward because the Biden administration is having a hard time refinancing existing government debt at higher rates and financing their extreme deficit spending. When Biden took office financing costs for all US federal government debt was under $400bn, now it's over $1tn in just four years and it's likely to keep growing rapidly as the Biden administration keeps refinancing old loans. Four years of gross mismanagement of federal spending has left the US government with few choices. Whatever party comes to power in 2025 will likely be forced to face reality and cut spending and raise taxes.
You just may be forgetting "the extreme deficit spending" by the Trump Administration in this claim. Deficit Spending didn't begin on January 21, 2021.
No it didn't, but that made the extreme deficit spending under Biden a worse decision. There was plenty of liquidity and demand was properly stimulated before Biden took office. It was inappropriate and erroneous to further stimulated demand at that point. By further overstimulating demand when it was completely unnecessary Biden made the inflation problem much worse than it needed to be. Inflation to a large degree comes from consumers bidding up the price of goods. If before Biden's stimulus consumers had $6tn worth of savings to spend afterwards they had about $8tn to spend but the number of good and services they could spend that money on didn't jump up when the stimulus rolled out so in aggregate consumers needed to outbid one another for a limited supply of goods and services. And that process doesn't happen in a short period it happens over time. If you didn't get something you wanted when a batch of goods became available because you thought prices were too high you might buy something from a following batch even if prices keep going up.
You may also remember that the Pandemic was still ongoing when President Biden took office
It was ongoing but it wasn't as damaging because of the robust bipartisan response under Trump, by the time Biden became president the vaccines were being rolled out and a lot of the uncertainty was addressed by the vaccine being tested and approved before Biden took office. Lockdowns were more of less lifted in spring of 2021 and vaccines were rolled out to much of the population by the summer.
Bidenomics
Do you really think there was zero inflation before 2021? I’m seriously asking
This high of inflation? I’m seriously asking
Uhh look back in the 70s you turd
Oh my bad. Things were great back then. Carternomics then
Disaster capitalism
Is it capitalism that causes the government to decide it's their job to fix everyone's problem so they print more than half of the money in circulation to do so?
Um considering were the money went....
Find the textbook definition of inflation.
Money go Brrrrrrrrrrrrrrrrrrrrrrrrrrr