261–270 of 476 posts
Earlier quoted context omitted.
> Just a few brands own most of the stuff you buy [1] and then supermarkets have deals with those. Both protect each other. I buy almost exclusively store brands. Probably less than 5% of my grocery spending goes to name brands.
Who do you think makes the store brand and prints the label for Kroger?
I think this talk about costs vs profits sounds important to lay people, but is completely irrelevant. Companies do not price goods based on the goodness of their hearts. They price it at the point that maximizes volume*(unit price-COGS). Companies are constantly testing this price point. For example, a promotion may produce data that can indicate how consumers will respond to a price change. In an inflationary perio…
I used to be the conference directory for a college club sport (specifically, paintball).
Part of my job was to find paintball fields to host college events. It's important at to say that the organization that funded these events was 501(c)(3) aka "non-profit" and we therefore were trying to minimize costs.
Something we ran into was this scenario:
- Fields knew we were college focused and a non-profit
- They would generally, out of the goodness of their hearts, charge us at cost or even below cost for our events
- This would sometimes mean turning away hosting events or players with better margin. You could argue that the fields received great free advertising by hosting events so it wasn't a net loss for them.
- That being said, we sometimes saw events coming back the next year saying "it wasn't worth it to host your event"
- This was a problem given that there were only limited fields AND I had a full time job at the time so, ideally, we would use the same field every year
- I would therefore add 10% to whatever cost the fields proposed to us as a "tip"/"return fee" to make sure they were happy
Now, you could argue that my job was to make sure that we always received the lowest possible price given our constraints on field safety, size and location.
I would argue that was ignoring the long term cost to the organization (and my time) to having to keep finding fields that would host us if we tried to minimize cost.
I mention this b/c companies maxing out profit to whatever the customer can bear feels like an excellent short term strategy. If by doing so, they drive customers into debt and then bankruptcy etc, this seems like a net loss to everyone on the longer timescale.
To finalize and maybe clarify: these discussion always seem to end up in a "well, companies maximize profits!" while ignoring the negative long term implications of that strategy.
Does this make anyone else spitefully want to spend less, even though they don't have to? My econ training is very limited, and perhaps this is a pointless idea, but - the central bank approach to curbing inflation seems to assume that actors in the economy won't change their spending patterns (and decrease firms' price-setting power) until they're unable to continue (i.e. are laid off, can't access financing, etc) o…
> Does this make anyone else spitefully want to spend less, even though they don't have to? You are trying to exercise individual market power, when there are other "scabs" who will go and spend that money keeping prices inflated anyway. Your action alone will not produce any value, it requires collusion with other market participants. If you want to make a change you need to exercise power and that means unionizing.
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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.
I think this talk about costs vs profits sounds important to lay people, but is completely irrelevant. Companies do not price goods based on the goodness of their hearts. They price it at the point that maximizes volume*(unit price-COGS). Companies are constantly testing this price point. For example, a promotion may produce data that can indicate how consumers will respond to a price change. In an inflationary perio…
It’s like companies shifting the burden of their plastic waste onto consumers by telling them to recycle rather than providing a better, less polluting product.
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how do you explain the fact that gazillions were printed for decades without much meaningful inflation? japan being the printiest of them all having had the least inflation of all crickets huh
The best explanation I heard after the great financial crisis (i.e., not recently) was that during that crisis, the Japanese bubble economy of the 80's, and to a lesser extent the dot com crash, huge amounts of credit (marked to market) were destroyed. If you look at the total supply of money and credit marked to market, there was not much, if any, increase. That was not true of the pandemic.
I believe this is a well accepted thing, with basically everybody that accepts that private credits are impactful enough to be important accepting it (what is not universal, but nobody else has an explanation).
The lack of inflation on the US between 08 and 20 is much harder to explain.
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…
That job goes to legislators and even then, they don't always have clear options. Windfall profits tax is a start, but what they do with the profits they collect is another. No one likes price controls, but taking short-term action or maybe enacting price stabilization could be very effective. And, of course, all legislation becomes a political minefield where vocal contingencies will simply disavow empirical evidence in favor of pushing an agenda.
I'd also caution against laying too much at the feet of "corporations". Absolutely anybody selling anything on the open market will be doing the same thing. Most homes are sold peer to peer and home prices are inflating like crazy. I wouldn't expect any rational home owner to sell their house for less than the maximum price they could extract because they think buyers deserve a break.
I think this talk about costs vs profits sounds important to lay people, but is completely irrelevant. Companies do not price goods based on the goodness of their hearts. They price it at the point that maximizes volume*(unit price-COGS). Companies are constantly testing this price point. For example, a promotion may produce data that can indicate how consumers will respond to a price change. In an inflationary perio…
that’s true for essential goods as well, something would have happened to those people that couldn't pay but they do have money and can still pay
that’s the other half of inflation
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> Companies do not price goods based on the goodness of their hearts. Governments etc. argue that employees should not demand higher pay to match inflation to avoid a "spiral" out of the goodness of their hearts. If employers catch the absolute currency value increase of inflation the employee employer balance is shifting.
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…
https://en.wikipedia.org/wiki/Nixon_shock#:~:text=Nixon%20is....
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> Please familiarize yourself with the definitions of market efficiency and market equilibrium. Yes I did that once during my economics degree. It’s a bastard science and can be debated no end, but those debates are a lot more valuable when the participants actually explain any of their conjectures. But I sense you are more in it for the argument than to help either of us learn.
I guess you've forgotten then. I'm not here to help you learn, I'm here to help other readers of these threads avoid trying to parse that word salad sophistry