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Profit-Price Spiral: Excess Profits Fuelling Inflation, Not Wages

futurework.org.au

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Re: Profit-Price Spiral: Excess Profits Fuelling Inflation, Not Wages

#21

Post by sharts »

SamPatt wrote: post #4

Incredible that there's not even a mention of monetary policy. Are they proposing that corporations suddenly became greedy in 2020? During previous periods of low inflation, did they congratulate those corporations for their altruism in keeping prices low? Money is subject to the same laws of supply and demand as everything else, and when there's more of it, it's less valuable.

Corps are always inherently greedy. 2020 is when corps started blaming the working class for receiving pandemic aid to stay afloat and started price gouging. Nevermind a decade of low interest rates propping up garbage corps and inflating markets.

Has there even been "low inflation" since dropping of the gold standard?

Re: Profit-Price Spiral: Excess Profits Fuelling Inflation, Not Wages

#22

Post by ramraj07 »

SamPatt wrote: post #4

Incredible that there's not even a mention of monetary policy. Are they proposing that corporations suddenly became greedy in 2020? During previous periods of low inflation, did they congratulate those corporations for their altruism in keeping prices low? Money is subject to the same laws of supply and demand as everything else, and when there's more of it, it's less valuable.

Corporations didn't suddenly become greedy, they didn't realise that they could be this greedy and get away with it. Typically the market forces that would keep such price gouging in control is competition i.e. if you increase prices a competitor could cut you short and gain market. The pandemic allowed everyone to raise prices and now they played chicken to see who can keep the prices high for longer, only to realise they can not only keep prices high but keep jacking it further and everyone implicitly will do it in unison (or perhaps they had a secret cabal meeting agreeing to it).

We give these CEOs too much credit. The vast majority of them aren't that smart. They clearly realised this is possible, I doubt they have thought about the long term implications to their own bottom line. I suppose they really don't care either.

It'll be interesting to see how the market corrects itself. Everyone's selling good for insane profits, shouldn't that mean there's opportunity for an enterprising person to come in and disrupt that? Only time will tell.

Re: Profit-Price Spiral: Excess Profits Fuelling Inflation, Not Wages

#23

Post by Fervicus »

loandbehold wrote: post #6
yawnr wrote: post #3

It does really feel like the cat is out of the bag that producers anywhere in the supply chain of housing and food realized they could do whatever they want and we can all suck wind. Every significant expense I have is up more than 40% in the past two years.

Competition is supposed to drive prices down to the equilibrium level. Why is it not happening? Are produces colluding to fix prices? Why new players are not entering the market to take advantage of higher prices?

Competition works when you have a free market. It doesn't work when you have government interventions, subsidies, price controls, and lobbying.

Re: Profit-Price Spiral: Excess Profits Fuelling Inflation, Not Wages

#24

Post by flangola7 »

astrange wrote: post #11
freitzkriesler2 wrote: post #5

Earlier quoted context omitted.

Yup mine too and on top of that everything has gotten smaller and shittier in quality too. I really wish they would have met the banks collapse. That would have done wonders for fixing this inflation. Nope us wage slaves will continue to lose.

If the bank collapsed you'd lose because the bank has your paycheck in it.

Deposits are insured for regular people amounts of money.

Re: Profit-Price Spiral: Excess Profits Fuelling Inflation, Not Wages

#25

Post by mellosouls »

Note that despite the title, this isn't an impartial report on an unrelated academic institute's peer reviewed analysis.

It's a press release by the (political) institute that compiled its opinion on the subject.

That latter is not a problem (and the political bias could have been the other way), but bear in mind if you take the time to read it on the assumption the headline here has some weight.

Re: Profit-Price Spiral: Excess Profits Fuelling Inflation, Not Wages

#26

Post by diordiderot »

acslater00 wrote: post #18

Fake news. This is a measure of where inflation "goes", not what fuels inflation. The narrative that profits are "fueling" inflation is completely made up and the people pushing it are lying to everyone for political reasons. Inflation is caused - in most countries - by excessively loose monetary policy (sometimes fiscal policy, sometimes both). If government policy creates inflation (average prices go up) that money…

> price competition sets in

You going to start an airline, a Telco, or meat processing plant because the others are colluding

Re: Profit-Price Spiral: Excess Profits Fuelling Inflation, Not Wages

#27

Post by JumpCrisscross »

kneebonian wrote: post #20

Inflation is happening because of the continued printing of currency and an absolute refusal by all parts of the power structure to do anything that would decrease the amount of USD in circulation because it is politically unpopular. And their not going to, the best thing you can do is park your wealth in assets which will continue to appreciate. Not even big things necessarily, instead of renting things like Rototil…

> Inflation is happening because of the continued printing of currency

Money supply is currently falling [1]. Inflation is more complicated than more money higher prices.

[1] https://www.reuters.com/markets/funds/us-money-supply-fallin...

Re: Profit-Price Spiral: Excess Profits Fuelling Inflation, Not Wages

#28

Post by Fervicus »

This is the same narrative I am seeing in Canada too. Suddenly all the news feeds are about corporations making record profits and fleecing customers. Surely that is what's causing inflation and not the trillions of dollars the government has been printing for the last 5-10 years!

Corporations are greedy, but they have always been greedy. This is just government using MSM to deflect blame.

Re: Profit-Price Spiral: Excess Profits Fuelling Inflation, Not Wages

#29

Post by Auracle »

diordiderot wrote: post #26
acslater00 wrote: post #18

Fake news. This is a measure of where inflation "goes", not what fuels inflation. The narrative that profits are "fueling" inflation is completely made up and the people pushing it are lying to everyone for political reasons. Inflation is caused - in most countries - by excessively loose monetary policy (sometimes fiscal policy, sometimes both). If government policy creates inflation (average prices go up) that money…

> price competition sets in You going to start an airline, a Telco, or meat processing plant because the others are colluding

So, literally everyone is colluding then?

Re: Profit-Price Spiral: Excess Profits Fuelling Inflation, Not Wages

#30

Post by Auracle »

astrange wrote: post #9
loandbehold wrote: post #6

Earlier quoted context omitted.

Competition is supposed to drive prices down to the equilibrium level. Why is it not happening? Are produces colluding to fix prices? Why new players are not entering the market to take advantage of higher prices?

Housing has almost nothing to do with markets because Anglo countries run it by central planning. So they can't enter. Construction is pretty high where it's been allowed. As for food, it has fallen - eggs were high earlier this year and now aren't. This is mostly driven by gas prices and the occasional animal pandemic.

Housing is (almost) just as bad in rural areas, where there's plenty of land to build new houses. It's just supply and demand.
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