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The problem isn't inflation. It's prices. What goes up may not come down

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Re: The problem isn't inflation. It's prices. What goes up may not come down

#31

Post by Detrytus »

JumpCrisscross wrote: post #24
mensetmanusman wrote: post #2

In a well functioning capitalist economy prices should constantly decrease. The workaround is to get so large, that only the government could possibly compete with you, then you control prices.

> well functioning capitalist economy prices should constantly decrease Most things an average American would buy in 1923 are cheaper now in real terms. We just have more categories of things we purchase.

Yes, most things are cheaper, except those tiny, insignificant ones, like houses, college tuition, medical bills...

Re: The problem isn't inflation. It's prices. What goes up may not come down

#32

Post by sokoloff »

piva00 wrote: post #20
candiddevmike wrote: post #10

Earlier quoted context omitted.

Deflationary spirals are scary, at least for a debt and consumption driven economy like ours. In theory supply and demand should force prices back down over time, but ongoing consolidation/monopolies/backdoor price fixing (RealPage, Amazon Marketplace) kinda broke the efficient market stuff. Trust bust before the economy busts?

> In theory supply and demand should force prices back down over time, but ongoing consolidation/monopolies/backdoor price fixing (RealPage, Amazon Marketplace) kinda broke the efficient market stuff. One way this could happen is if salaries increased to match the new prices over time. The issue is that we are not seeing that happening, prices are increasing much faster than salaries, while corporate profits break re…

In any inflationary environment, corporate profits should be expected to regularly break records (in nominal terms) just like GDP should be expected to regularly break records.

Re: The problem isn't inflation. It's prices. What goes up may not come down

#33

Post by sokoloff »

Detrytus wrote: post #31
JumpCrisscross wrote: post #24

Earlier quoted context omitted.

> well functioning capitalist economy prices should constantly decrease Most things an average American would buy in 1923 are cheaper now in real terms. We just have more categories of things we purchase.

Yes, most things are cheaper, except those tiny, insignificant ones, like houses, college tuition, medical bills...

It's true that there was a lot less money spent on medical bills in 1923.

I'm also quite sure that I don't want to go back to 1923 medicine (or even 1923 housing; despite the bones of my house being approximately that old, the 2023 version has vastly nicer lighting, insulation, HVAC, and kitchens/baths).

Re: The problem isn't inflation. It's prices. What goes up may not come down

#34

Post by marcosdumay »

candiddevmike wrote: post #10
blitzar wrote: post #6

That people do not understand very basic concepts is scary. > The root of what’s going on here can feel obvious: blame inflation, which picked up in mid-2021 and throughout 2022. But that isn’t really the issue anymore, at least not at the current rate, because inflation is coming down. The actual problem here is prices. Inflation going from 10% to 5% is "inflation is coming down" - but it means that prices are risin…

Deflationary spirals are scary, at least for a debt and consumption driven economy like ours. In theory supply and demand should force prices back down over time, but ongoing consolidation/monopolies/backdoor price fixing (RealPage, Amazon Marketplace) kinda broke the efficient market stuff. Trust bust before the economy busts?

> In theory supply and demand should force prices back down over time

I'd bet that the theory you are using doesn't care a bit if prices go down or salaries go up.

I say that because no, no reasonable economic theory predicts prices go back down after a high inflation. That's because this is very obviously false. (Maybe a few go down, by a small bit. Certainly not on average.)

Re: The problem isn't inflation. It's prices. What goes up may not come down

#35

Post by JumpCrisscross »

adr1an wrote: post #29
tekla wrote: post #18

Earlier quoted context omitted.

Where is the evidence?

Casual stroll through the supermarket at OP's neighborhood

> Casual stroll through the supermarket at OP's neighborhood

At which point I’m sure they’re considering their metropolitan statistical area’s figures instead of the national ones. /s

Re: The problem isn't inflation. It's prices. What goes up may not come down

#36

Post by 303uru »

HDThoreaun wrote: post #26
darth_avocado wrote: post #12

Earlier quoted context omitted.

There is a reason corporate price gouging takes place when you see inflation narrative in the media. This is the only opportunity where people accept an increase in prices that sticks around. You raise the prices of eggs on a normal day, people will stop buying your eggs. You raise the prices of eggs when everyone is talking about inflation, people will accept it and focus on everything else.

Completely disagree. Eggs are a largely demand inelastic good. Prices go up when supply goes down, that's it. Commodity markets are very competitive, but when prices increase most people just get angry and pay anyway, it has nothing to do with media narratives.

Lol, you're the one who narrowed price gouging across nearly the entire marketplace to EGGS!!!!

Re: The problem isn't inflation. It's prices. What goes up may not come down

#37

Post by bryanlarsen »

piva00 wrote: post #20
candiddevmike wrote: post #10

Earlier quoted context omitted.

Deflationary spirals are scary, at least for a debt and consumption driven economy like ours. In theory supply and demand should force prices back down over time, but ongoing consolidation/monopolies/backdoor price fixing (RealPage, Amazon Marketplace) kinda broke the efficient market stuff. Trust bust before the economy busts?

> In theory supply and demand should force prices back down over time, but ongoing consolidation/monopolies/backdoor price fixing (RealPage, Amazon Marketplace) kinda broke the efficient market stuff. One way this could happen is if salaries increased to match the new prices over time. The issue is that we are not seeing that happening, prices are increasing much faster than salaries, while corporate profits break re…

Salaries basically only increase 2 ways: job hopping and unions.

The bottom 10% are doing a lot of job hopping these days.

Re: The problem isn't inflation. It's prices. What goes up may not come down

#38

Post by JumpCrisscross »

gustavus wrote: post #21

The problem isn't water, it's drowning. The problem isn't obesity, it's calories. The problem isn't expenses, it's income. Inflation is literally defined as prices rises in response to increase in currency....

> Inflation is literally defined as prices rises in response to increase in currency

Just the first part. An economy with constant money supply can experience inflation if its production is knocked offline, e.g. in a war.

Re: The problem isn't inflation. It's prices. What goes up may not come down

#39

Post by HDThoreaun »

Sohcahtoa82 wrote: post #30
HDThoreaun wrote: post #26

Earlier quoted context omitted.

Completely disagree. Eggs are a largely demand inelastic good. Prices go up when supply goes down, that's it. Commodity markets are very competitive, but when prices increase most people just get angry and pay anyway, it has nothing to do with media narratives.

I don't think the GP comment meant eggs specifically. They just chose a random specific consumer good as an example.

Neither did I. People aren't deciding what to buy based off the media's inflation narrative. They're trying to make the best decisions for themselves given the opportunities available. If that means buying expensive eggs they'll do it.
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