Corporate profits account for almost half the increase in Europe’s inflation • Hacker News Board

Re: Corporate profits account for almost half the increase in Europe’s inflation

#221

Post by bigfudge » Mon, Jun 26, 2023, 7:51 PM UTC

evancox100 wrote: post #165

Nebasuke wrote: post #135

Earlier quoted context omitted.

The UK government has done this various times in the last couple of years to argue against (high) pay rises for the National Health Service and other government institutions. One of the more recent articles: https://www.reuters.com/world/uk/uk-annual-wage-growth-72-ex... Or here: https://www.theguardian.com/business/2022/jun/20/would-a-wag...

So the one exception that I considered putting in would be cases where the government is the employer and is negotiating with their employees. And yes of course, they will use whatever arguments they can to come out ahead in labor negotiations, like any employer. I didn't see any mention of calls for workers to accept lower wages in the first article. In the second article, such calls were mentioned but not explicitl…

UK govt spokespeople have regularly argued that employers and employees, both public and private, should limit wage rises or accept lower rises to avoid inflation. It’s mad, but that’s actually what they say.

Ironically, they are most vehement when claiming wage rises in the public sector cause inflation, despite ethe evidence there being much weaker (or non existent according to many economists).

Re: Corporate profits account for almost half the increase in Europe’s inflation

#222

Post by evancox100 » Mon, Jun 26, 2023, 7:51 PM UTC

marcosdumay wrote: post #209

evancox100 wrote: post #103

Earlier quoted context omitted.

What government is arguing that employee wages should be lower/stagnant in order to fight inflation? EDIT: I mean advocating not just that we should avoid a wage/price spiral through other means, but specifically that individual workers should accept/volunteer for lower wages than they could otherwise get? Edit 2: seeing several cases of "$Reserve_Bank_Person says wage increases are too high and need to come down", n…

Ok, you are pushing your definitions into unreasonable territory. A central bank saying inflation is caused by high wages is exactly the same as the government telling people they should get a lower wage. There is no practical difference. It is in fact worse, because the central bank tends to act on that phrase. So the government not only tells people they should earn less, but forces their hands into that.

Right, but the central bank knows that IT is the one forcing the lower wages. They're not standing up there asking employees to shred part of their paycheck, because that is obviously dumb. The original person was talking about what workers should do "out of the goodness of their own heart." But no central bank is asking workers to take action, they are forcing workers' hands, explicitly.

You may think that is better or worse, but it is not appealing directly to workers to throw away their pay check.

Re: Corporate profits account for almost half the increase in Europe’s inflation

#223

Post by sdenton4 » Mon, Jun 26, 2023, 7:53 PM UTC

talkingtab wrote: post #210

The terminology we use is important. We call this "inflation" - things cost more. But it is not "things costing more" it is corporations extracting the wealth of the citizens. The cost of gas did go up, but the profits that gas companies went up at least as much. Money is like water, you need it to flow to do good. When it is dammed up by corporations it does no good. We will not survive if we allow corporation to co…

Greedflation, in other words...

Re: Corporate profits account for almost half the increase in Europe’s inflation

#224

Post by ClumsyPilot » Mon, Jun 26, 2023, 7:54 PM UTC

eastbound wrote: post #25

wpietri wrote: post #2

As they say, never waste a good crisis.

OR governments have demonstrated that they can take extreme decisions without warning, so businesses price accordingly. If you operate in this economy with unstable decision-making, then it creates margins to prepare padding. Even if all businesses were cash-flow-positive during Covid, the environment is still more unstable.

> extreme decisions without warning

As opposed to previous decades where we only invaded several countries and started a few wars. Or the decades prior US had the draft to send young men against their wilk to fight a war in vietnam. Or the war with china in Korea. Or wolld war?

This is amongst the calmest decades in terms of government actions

Re: Corporate profits account for almost half the increase in Europe’s inflation

#225

Post by bigfudge » Mon, Jun 26, 2023, 7:55 PM UTC

Can I hijack this thread to ask a ‘dumb’ question: If the point of high interest rates is to take money out of the economy, would it not be more effective and fairer to simply raise taxes and pay down debt or avoid taking on more debt in the current year? I can see this wouldn’t encourage saving, but the taxes could be targeted on things which are supply constrained…

Re: Corporate profits account for almost half the increase in Europe’s inflation

#226

Post by [deleted] » Mon, Jun 26, 2023, 7:55 PM UTC

evancox100 wrote: post #165

Nebasuke wrote: post #135

Earlier quoted context omitted.

The UK government has done this various times in the last couple of years to argue against (high) pay rises for the National Health Service and other government institutions. One of the more recent articles: https://www.reuters.com/world/uk/uk-annual-wage-growth-72-ex... Or here: https://www.theguardian.com/business/2022/jun/20/would-a-wag...

So the one exception that I considered putting in would be cases where the government is the employer and is negotiating with their employees. And yes of course, they will use whatever arguments they can to come out ahead in labor negotiations, like any employer. I didn't see any mention of calls for workers to accept lower wages in the first article. In the second article, such calls were mentioned but not explicitl…

[deleted]

Re: Corporate profits account for almost half the increase in Europe’s inflation

#227

Post by [deleted] » Mon, Jun 26, 2023, 7:55 PM UTC

ClumsyPilot wrote: post #219

surement wrote: post #198

Earlier quoted context omitted.

then you know it's not a great article.

I know you are not critically engaging with it. You know how you think the world should work and you reject evidence in front of you. You do not liok for counter-evidence, or find faults in the evidence presented - you just reject it outright, like how flat earther rejects physics

[deleted]

Re: Corporate profits account for almost half the increase in Europe’s inflation

#228

Post by howeyc » Mon, Jun 26, 2023, 7:55 PM UTC

I sell hammers for a 25% margin.

I buy hammers for $10, sell for $12.50. My supplier increases prices with inflation to $11. To keep my 25% markup, I sell for $13.75.

I sell 1 million hammers per year.

My profit went from 2.5 million to 2.75 million, an increase of 10%.

I doubt think the IMF is making this assumption, but a lot of people would see my hammer business as extracting all inflation to myself, as my profits rose 10%. However, selling 4 hammers nets me enough profit to buy one, both years. I'm not better off. I'm the same.

Re: Corporate profits account for almost half the increase in Europe’s inflation

#229

Post by asdff » Mon, Jun 26, 2023, 7:56 PM UTC

jldugger wrote: post #72

alexaholic wrote: post #19

I find it hilarious when companies are following their stated goal of making profits, while everybody else is rushing to explaining rising prices by factoring in everything but profits.

Well, you have to come up with a reason for why now -- the profit motive has been there forever. There's also a question of why high margins don't induce new entrants to these markets, or why consumers responding too cleanly to higher prices by buying less. There's been a variety of factors at play and I think if you want to pin it on profits you gotta put in the legwork to rule out or at least quantify the dozens of…

Its hard to enter a market as a truly novel competitor. Chances are on your way up you run into some essential sources that are controlled by a competitor. Imagine starting a Peach computer company in your garage today. You think Broadcom will want to potentially sour their relationship with Apple by offering you good terms? There's a reason why a lot of these "pulled myself up by the bootstraps" stories happened in eras where you could comfortably rent a workshop with little means and do things like solder your circuitry for a desktop computer by hand and ship it to clients yourself. A lot of such windows of opportunity were open for a few short years or even decades but have long since been shut and bricked over.

Re: Corporate profits account for almost half the increase in Europe’s inflation

#230

Post by giobox » Mon, Jun 26, 2023, 7:56 PM UTC

evancox100 wrote: post #165

Nebasuke wrote: post #135

Earlier quoted context omitted.

The UK government has done this various times in the last couple of years to argue against (high) pay rises for the National Health Service and other government institutions. One of the more recent articles: https://www.reuters.com/world/uk/uk-annual-wage-growth-72-ex... Or here: https://www.theguardian.com/business/2022/jun/20/would-a-wag...

So the one exception that I considered putting in would be cases where the government is the employer and is negotiating with their employees. And yes of course, they will use whatever arguments they can to come out ahead in labor negotiations, like any employer. I didn't see any mention of calls for workers to accept lower wages in the first article. In the second article, such calls were mentioned but not explicitl…

Sunak regularly has called on UK private sector leaders to show "restraint" when deciding pay awards. One such example:

https://www.bloomberg.com/news/articles/2022-11-15/uk-s-suna...