41–50 of 88 posts
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wait, so there's no profit in capitalism?
In a perfectly competitive market, yes, profits go to zero. https://www.investopedia.com/ask/answers/031815/why-are-ther... But there's no such thing as a perfectly competitive market.
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> 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...
These three areas of our economy are broken. Granted. But they also illustrate my point. 1920s tenements, education standards (most people didn’t go to college) and medical practices (most people didn’t have an annual physical) were objectively inferior to our standards today.
Prices went up. But so did what and how much we’re consuming.
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It’s really disheartening to see the percentage of people that don’t understand this (and feel perfectly comfortable having an argument about it). People posting comparisons of receipts from 8 years ago and saying that prices are “really still up 30%” and “they’re lying to us”.
They are lying to us though. Inflation is and was higher than what they're saying it is.
https://usafacts.org/articles/which-us-regions-have-the-high...
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It’s really disheartening to see the percentage of people that don’t understand this (and feel perfectly comfortable having an argument about it). People posting comparisons of receipts from 8 years ago and saying that prices are “really still up 30%” and “they’re lying to us”.
Is this just young people? Those of us that lived through the 70s and 80s remember very well how this stuff worked.
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…
* health care
* housing
* cars
* food
It's hard not to feel like these markets each manifest a collective behavior of, "we know we're essential, so we are free to set prices as we wish because you have no real alternatives." It benefits all the players to play along, you don't even need to prove collusion. And there's no way to push back on it collectively. I realize some of them are due to limited supply (housing) or pure necessity (health care). But cars? I'm paying 10k more for the same thing I bought in 2016?
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> 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.
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…
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.
Kroger's gross profit barely moved over the three operating years during the inflation wave. Their sales increased by 12% across three years combined. Which is another way of saying in real terms their business shrank over three years. Their gross profit margin was 23% in 2021, and it's 22% now. They're one of the giant primary grocery stores in the US, if there was money to be made from price gouging consumers on the grocery price spike, where are the results?
Walmart's gross profit margin for 2020 was 24%. It's 24% for the last four quarters. Their operating income margin in 2020 was 3.9%, and it was 3.4% for the last four quarters. Where's the big spike in profitability? The greatest operating retailer in history, with enormous leverage over vendors, if they can't take advantage of a supposed price gouging bonanza, who can? Their operating costs are going up faster than sales.
Hershey, like a lot of candy makers, has raised prices by a lot during the inflation wave. Seemingly well beyond the rate of inflation. And yet both their gross and operating income margins have barely moved. Their operating income margin was 22% in 2020, and it's 23% for the last four quarters. They raised prices by 30-50% in stores, so why didn't their profitability margins soar? Their costs went up a lot. Their sales went up by 40% from fiscal 2019 to the latest rolling four quarters, their cost of revenue went up by 41%.
Kraft Heinz has raised prices like everybody else and has barely seen any sales increase since 2020. So they're another contracting business. Their gross profit declined while their sales slightly went up over that time, so their margins are getting worse and their costs of operating are going up. Their operating income has dropped.
Mondelez has raised prices like everybody else. Their gross profit margin in 2019 was 40%, and in the last four quarters it was 38%. Their operating income margin was 15% in 2019, and it's 15% for the last four quarters.
Is it the oil companies? Oil is $80. That's ~$62 in 2013 dollars. Clearly not the problem.
How many examples do you want? Where's the corporate price gouging showing up in fact? All I keep seeing is empty blame being cast without a lot of proof to go with it, despite the fact that we have access to vast amounts of public corporate financial information related to sales and profitability.
It's a blame the corporations propaganda device, because the alternative is to face the music as it pertains to the consequences of magic free money being endlessly 'printed' and pumped into the system by the trillions of dollars to keep everything propped up (the inflation consequence is damaging to Keynesian economics in terms of reputation).
The mainstream narrative for example about Japan has been deflation, deflation, deflation. Back in reality their currency has been hammered by intentional debasement (to try to deal with their drowning-in-debt problem) and their standard of living has imploded along with it. The direct consequences of their grand Keynesian experiment in gigantic state spending. While all the propaganda was targeted on deflation, they were inflating their currency by a lot and eroding the standard of living of their people.
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They are lying to us though. Inflation is and was higher than what they're saying it is.
Where is the evidence?
Namely, even if average / median inflation is going down, inflation is still non-zero - and even still very high - in categories that significantly impact lower-income households, urban families, farmers, etc.