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

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

#361

Post by bedobi »

the_gastropod wrote: post #45
bedobi wrote: post #35

Earlier quoted context omitted.

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

As a rule of thumb, it's safe to assume anyone who complains generically about "money printing" doesn't actually have a rational point. They're generally hand-waving broadly, suggesting some John Birch Society type of inflation conspiracy.

Welcome to HackerNews! Threads about Medicine and Economics are some of the best - everyone here is apparently a Nobel grade expert. They don't know first thing about any of it but you see they know how to code so their overinflated ego, belief in their superior intellect, and ability to know better than and disrupt other fields is all they need!

Now just wait for someone to point out that the Nobel in Economics isn't actually a Nobel, sigh

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

#362

Post by LudwigNagasena »

the_gastropod wrote: post #338
LudwigNagasena wrote: post #312

Earlier quoted context omitted.

Ah, the ol’ good tactic of taking a straightforward statement, calling it a dog whistle and dismissing it.

As a straight forward statement, it’s reductive malarkey. The Fed, in no way, prints money. When people use that phrase, it’s almost always a good sign they have no idea how money works.

Of course the Fed prints money (and no, it is not the Bureau of Engraving and Printing). It seems that it's you who is actually confused how money works.

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

#363

Post by gsatic »

pmontra wrote: post #83
gsatic wrote: post #66

Earlier quoted context omitted.

Consumers have 3 inch chimp brains. Even the Kardashians have worked out how to exploit those brains. Don't live in some day dream about what modern marketing can make the chimp brain do.

I'm not sure about that. It's more likely that each of us has a lot of different stuff to care about, more and more as we transition to adulthood, families, etc, and it's not economical (as in time+energy) to care too much about prices and wages as long as we can get what we care about. When the money run short, it changes.

It doesn't change. Have you checked how much credit card debt exists? How and why did that happen? People are easy to game.

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

#364

Post by shermanyo »

rgbrenner wrote: post #33

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…

> this permits companies to increase prices, and produce higher profits. Note, their upstream providers are doing the same, and some of these higher profits will be passed on upstream.

No, upstream price increases are included as a part of their increased expenses. Any increase in profits is on top of this.

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

#365

Post by [deleted] »

rgbrenner wrote: post #33

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…

[deleted]

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

#366

Post by s1artibartfast »

AndrewKemendo wrote: post #310
hunson_abadeer wrote: post #293

Earlier quoted context omitted.

Then when they jack up prices, it creates an incentive for new companies to enter that field and make the same item for less. A better question might be: what hinders this process today? Capital disparity plays a role (a wealthy company can perhaps make a competitor a buyout offer they can't refuse, or temporarily lower prices to try to kill them), but another major cause is excess regulation and the weaponization of…

What hinders the process is that the people holding the capital are the same ones that benefit from the new competition. So they sell the stock of the company that is wringing out excess profits just as they are putting money into the “disruptor” that is going to capture all the consumers leaving company #1. Now ensure that you push for a decade of overleveraged growth and regulatory capture (ensuring you don’t get d…

I don't think you answered the question. Your story depends on competition Rising and companies falling. It doesn't explain why markets are winner take all or why competition is slow to rise.

For example, if Amazon has a monopoly, why haven't capitalist profiteers bled it dry yet,

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

#367

Post by theknocker »

evancox100 wrote: post #103
rightbyte wrote: post #56

Earlier quoted context omitted.

> 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…

[dead]

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

#368

Post by SV_BubbleTime »

rthrfrd wrote: post #176
kibwen wrote: post #92

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…

Thank you for articulating this. This is not just about monetary policy, but structural failures and regulatory capture that are creating unprecedented opportunities for rent-seeking. Personally I also believe that the pandemic only accelerated this, as smaller players were disproportionately disadvantaged in many key markets where economies of scale dominate.

>the pandemic only accelerated this, as smaller players were disproportionately disadvantaged

I’m ll give you a guess what size business disproportionality donated and had congress’s ears.

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

#369

Post by space_fountain »

HDThoreaun wrote: post #140
space_fountain wrote: post #62

Earlier quoted context omitted.

I mean something unusual definitely happened in the US https://fred.stlouisfed.org/series/M1SL . Is the alternative that companies suddenly discovered they were greedy? edit: though I do want to add the m2 supply might be more important here, and it doesn't show anything as dramatic https://fred.stlouisfed.org/series/M2SL . https://fredblog.stlouisfed.org/2021/01/whats-behind-the-rec...

They changed the definition of m1 which is the cause of that spike. M2 is definitely the better metric.

I did notice that change, but then the article didn’t mention it? Do you have a source for the change being responsible for the spike? The timing is suspicious, but the fed appears to be trying to bring the money supply back in line with the trend from before the spike

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

#370

Post by SV_BubbleTime »

asdff wrote: post #247
mjburgess wrote: post #129

Earlier quoted context omitted.

I think what people operating from vauely "austrian premeses" miss is: the pandemic. We have no model of how a pandemic is going to "correlate" economic markets typically under competition. I think it's highly likely that "supra-economic" shocks of the kind we've experienced have handed a strange unexpected market power that the usual (free market) suspects have yet to parse.

>We have no model of how a pandemic is going to "correlate" economic markets typically under competition. Most crashes are correlated without needing a pandemic thanks to how leveraged the world is globally.

The MBAification of the world. Everyone is running too lean to wether a disruption, in debt, you can rely on zero interest loans, the governments will bail you out if you are important or a big enough donor.
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