Call me a conspiracy nut, but there appears to be a coordinated effort to destroy faith in the system that gave us all the wealth we currently enjoy. I can only assume that this is being done in the service of replacing it with... something.
The system that gave us wealth is not the system we have now
To some degree that is true, but it is definitely the continuation of the system that generated and distributed all that wealth. And the people actively undermining faith in our current system, aren't advocating a return to a less corrupted version of what we have today. It appears to be an attempt to completely condemn it.
This is exactly my reaction whenever I see things like this. Profit margins are not the DRIVER for any of these market changes, they are the end result of all the various factors at play.
The profit motive & margins fund lobbyists and political campaigns to change policies that absolutely drive these market changes. We could choose to have anti-trust measures with teeth. We could choose to tax assets. We could have progressive corporate taxes to encourage smaller company sizes and more public transparency. There are so many things we could choose, but the ones that we do choose are the ones that share…
These things may help reduce corporate profits, but it wouldn't change inflation.
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 "$Reserve_Bank_Person says wage increases are too high and need to come down", n…
USA enacted a wage freeze for both for WWs and for the Oil Shocks. https://en.wikipedia.org/wiki/Nixon_shock#:~:text=Nixon%20is... .
Note that this references an event in the Nixon administration, in 1971 (52 years ago).
What government is arguing that employee wages should be lower/stagnant in order to fight inflation? EDIT: I mean advocating not just that we should avoid a wage/price spiral through other means, but specifically that individual workers should accept/volunteer for lower wages than they could otherwise get? Edit 2: seeing several cases of "$Reserve_Bank_Person says wage increases are too high and need to come down", n…
USA enacted a wage freeze for both for WWs and for the Oil Shocks. https://en.wikipedia.org/wiki/Nixon_shock#:~:text=Nixon%20is... .
> 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.
>Governments etc. argue As they should. that's how it works and they are correct. Employees should argue against that and demand more if they dare. The job of Central bank is to increase interest rates until unemployment rate increases to the level where employees don't dare ask more. Unemployment reduces both demand and wage growth. That will slow down inflation but it also baits recession. Economy is a dynamic syst…
I think the OP was referring to how governments tend to be conciliatory to actors just responding to market forces in one side of the debate and not the other. Jon Stewart had a good interview with Larry Summers on this (although I realize he’s no longer in the government). Stewart’s point was that the govt/central bank tends to make excuses for letting corporations benefit from “market forces” but do more to actively thwart workers for using those same forces to their own benefit.
Remember: profits are a direct measure of the inefficiency of a given market. In a functioning market, the existence of profits either drives businesses to reduce their own profits by competing on price (problem: cartels) or else drives new businesses to emerge in order to seize some of those profits (problem: barriers to entry). To have record-breaking profits means that are markets are record-breakingly inefficient…
> To have record-breaking profits means that are markets are record-breakingly inefficient
You took that a step too far and started mixing up what inefficiency means. Apple, for instance, has record breaking profits. In general, profits increase year over year such that every year is a record breaker.
> 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.
>Governments etc. argue As they should. that's how it works and they are correct. Employees should argue against that and demand more if they dare. The job of Central bank is to increase interest rates until unemployment rate increases to the level where employees don't dare ask more. Unemployment reduces both demand and wage growth. That will slow down inflation but it also baits recession. Economy is a dynamic syst…
> job of Central bank is to increase interest rates until unemployment rate increases
This is incorrect. The job of the Fed is to maximise price stability (which it defines as 2% inflation) and minimise unemployment (which it defines as the natural unemployment rate, to which we are close). There has basically never been a time when the Fed wanted unemployment to go up. (Keep in mind: unemployment != wage increases, though the two are related as are prices.)
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…
Another angle on a solution: start your own gas company with competitive margins. Easier said than done, obviously. But maybe we should try to make it easier? I can imagine a downward spiral of government regulation creating moats for companies that take advantage of the lack of competition, leading to ever more government interventions that further entrench the status quo.
You would be correct.
To have a true capitalistic marketplace ala Adam Smith, you need government regulation to specifically break up oligopolies: companies which get so large they can collude and price-fix. We call these laws anti-trust laws.
In the US particularly, anti-trust laws are recklessly unenforced, leading to exactly this situation.
Yes and the first step to solving the problem is acknowledging it. In order to change some thing you have to prove that it’s happening. In the case of “What underlying structure creates society’s problems,” increasingly more research is pointing to inequality itself and lack of democratic participation/ownership in the economy. These are the foundational factors driving poverty and precarious economic conditions for…
The answer is competition. Most of markets nowadays are dominated by 2-5 big players with the CEOs going to the same golf club. Wink-wink, nudge-nudge, prices go up, nobody can do nothing. If we had 50 competing players, there would be enough incentive for a hungry challenger to lower prices and undercut the competition. Except, over a decade of leveraged acquisitions and antitrust regulators being asleep at the whee…
The problem with competition is, what happens after someone wins it? This is essentially what has happened in many markets; lots of small companies have been killed by or conglomerated into giant ones that rule the market. Sometimes antitrust regulation can't even help with this; what if there are no acquisitions, just one company doing stuff better killing all competition?
Yes and the first step to solving the problem is acknowledging it. In order to change some thing you have to prove that it’s happening. In the case of “What underlying structure creates society’s problems,” increasingly more research is pointing to inequality itself and lack of democratic participation/ownership in the economy. These are the foundational factors driving poverty and precarious economic conditions for…
The answer is competition. Most of markets nowadays are dominated by 2-5 big players with the CEOs going to the same golf club. Wink-wink, nudge-nudge, prices go up, nobody can do nothing. If we had 50 competing players, there would be enough incentive for a hungry challenger to lower prices and undercut the competition. Except, over a decade of leveraged acquisitions and antitrust regulators being asleep at the whee…
And how did we get to this state, through competition. The free market isn’t self sustaining, the goal of competition is to end competition