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Six months into tariffs, businesses have no idea how to price anything

wsj.com

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Re: Six months into tariffs, businesses have no idea how to price anything

#11

Post by thayne »

casey2 wrote: post #3

This is how you know most economic theory is a total lie, if it wasn't they would just "price what people are willing to pay" and be forced to eat the loss. Is that cause copper bathtubs are a special item or are you just making up more rules after the fact to patch holes in your leaky theory.

It's because basic economic theory makes some really bad assumptions. It assumes everyone has the information they need, and sellers can instantaneously change prices in response to changes in demand or cost of production.

Neither of which is true in the real world.

Re: Six months into tariffs, businesses have no idea how to price anything

#13

Post by furyofantares »

unnamed76ri wrote: post #10
more_corn wrote: post #4

Because the cost of goods continues to fluctuate wildly due to ongoing tariff wrangling that nobody asked for or needed. Also farmers can’t sell anything because retaliation has destroyed international demand (I’d say decimated but it’s way worse than reduction by a tenth)

I don’t know if you can factually back up your claims but I applaud your proper use of decimate. It is a rare thing. One might even say it happens less than 10% of the time.

Decimation was way worse than reduction by a tenth. It was a punishment in the Roman army where the offending unit was divided into groups of 10 and each group had to draw straws. Whoever drew the short straw must be stoned or clubbed to death by the other 9.

If you threatened me with death if I didn't cut off my feet, I wouldn't consider that "reduction by 10%" even if mathematically it might be.

Re: Six months into tariffs, businesses have no idea how to price anything

#14

Post by [deleted] »

more_corn wrote: post #4

Because the cost of goods continues to fluctuate wildly due to ongoing tariff wrangling that nobody asked for or needed. Also farmers can’t sell anything because retaliation has destroyed international demand (I’d say decimated but it’s way worse than reduction by a tenth)

[deleted]

Re: Six months into tariffs, businesses have no idea how to price anything

#15

Post by CorrectHorseBat »

unnamed76ri wrote: post #10
more_corn wrote: post #4

Because the cost of goods continues to fluctuate wildly due to ongoing tariff wrangling that nobody asked for or needed. Also farmers can’t sell anything because retaliation has destroyed international demand (I’d say decimated but it’s way worse than reduction by a tenth)

I don’t know if you can factually back up your claims but I applaud your proper use of decimate. It is a rare thing. One might even say it happens less than 10% of the time.

It's not proper use, it's archaic use. Do you also claim bread is meat? A cat is a deer?

Re: Six months into tariffs, businesses have no idea how to price anything

#16

Post by wtallis »

thayne wrote: post #11
casey2 wrote: post #3

This is how you know most economic theory is a total lie, if it wasn't they would just "price what people are willing to pay" and be forced to eat the loss. Is that cause copper bathtubs are a special item or are you just making up more rules after the fact to patch holes in your leaky theory.

It's because basic economic theory makes some really bad assumptions. It assumes everyone has the information they need, and sellers can instantaneously change prices in response to changes in demand or cost of production. Neither of which is true in the real world.

I don't think you've successfully demonstrated that those assumptions are bad. They're simplifying assumptions that are necessary to have a "basic" economic theory in the first place—one with tractable and understandable mathematics that can produce an answer without immediately dumping you into partial differential equations or requiring impossibly detailed input data.

The assumptions are only bad if they prevent the simple models from being useful, and the existence of a scenario where a model's simplifying assumptions prevent it from being useful does not prove that the model is worthless.

Re: Six months into tariffs, businesses have no idea how to price anything

#17

Post by ashton314 »

sirnonw wrote: post #12

Funny how there is a post-it with a password glued to the screen of the computer in the lede image, now in plain sight for thousands of readers.

Looks like there's a year at the end; might be to facilitate suckurity requirements such as yearly password rotation.

Re: Six months into tariffs, businesses have no idea how to price anything

#18

Post by thayne »

s1mplicissimus wrote: post #6

Now that I think about it, creating confusion and uncertainty is actually a pretty effective move if you want to play protectionism. Any "known" tariff would just be paid as far as still profitable.

Maybe. But if your goal is to incentivize more domestic manufacturing, putting tariffs on the raw materials to do that manufacturing and build new factories is pretty counterproductive.

Re: Six months into tariffs, businesses have no idea how to price anything

#19

Post by JumpCrisscross »

s1mplicissimus wrote: post #6

Now that I think about it, creating confusion and uncertainty is actually a pretty effective move if you want to play protectionism. Any "known" tariff would just be paid as far as still profitable.

> if you want to play protectionism

It’s great if you want to grant yourself the power to exempt those who please or pay you.

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