I may be wrong, but I don't think everyone blaming corporations necessarily thinks that they are the root cause - what many do agree on is that corporations are taking advantage of the situation to make it worse. Of course, the root cause is poor monetary policy in general. That doesn't mean the actors are innocent.
People are being laid off and prices are still going up - who is setting the prices? If you're jacking prices to cover sliding sales, yes, you are the problem.
It's a lot easier to criticize "the market" when you live in a system that benefits from it. Life is universally worse in places where "the market" doesn't exist or economic actors aren't allowed to profit.
I think you’re confusing “any benefit” with “net benefit”.
The world, the US, and Capitalism would all survive just fine without McDonald’s, Walmart, or Oracle. In fact it would probably be better off without any of them. Global homogeneity is not awesome, it’s dystopian. Companies having less power than the 90th percentile of countries would be good.
When you have a regional company you can still afford to think of your customers more or less as humans instead of statistics.
> the root cause is poor monetary policy in general
These two things aren't even separate. Part of monetary policy is taxation and subsidies. The argument for "greedflation" is exactly one of poor monetary policy, in that we have allowed corporations (not necessarily any one person, but the corporation as a whole) to dictate too much of our monetary policy, and they're doing a poor job.
At least in the US the fed has specifically had full employment as one of their goals at least for the last few years so I'm pretty skeptical of "corporations control the fed arguments"
Like I agree there's a lot of regulatory capture in the US but I just don't see any reason to think the fed is responding to big business rather than their own preferences.
There are in fact people who are saying its only corporate inflation.
The real reason i'm skeptical of the greed argument is that its just a vibes based guess on whats happening and not based on any data or insight into the situation.
Yeah, it is a ridiculously bold to outright state it is not a factor of current inflation issues. At best you can argue that corporations 'only' further fuel it ( and take advantage in the process ), but are not primary factors for it rearing its head. Propaganda is strong, but I am starting to wonder if the powers that be learned nothing from Covid pushback to 'commute is your zen time'.
It's not ridiculous. Nobody has proved greed goes up and down. It can be a constant like gravity. A gas station doesn't determine its prices based on greed, otherwise we would see stations that decide to charge a hundred bucks a gallon.
In transportation and logistics, it turned into a bidding war, with the biggest box shops able to outbid anyone else. So rail and trucking and ships made the most profit in the history of existence by pitting everyone else against each other for a limited supply.
A bit of greed inflation and a bit of how a market economy works during a shortage. Now as shipping costs have dropped, companies have not dropped their prices accordingly because they have to cover their new massive headcounts and severance.
The problem I have with these claims are the lack of examples. Which companies would you say have been unfairly exploiting inflation to raise profits? The data is all transparent. The reason I ask is because what I keep seeing is something people reacting to things like "Company ABC's profits increased by 5%, to record breaking levels!" And in many cases that's absolutely true. But if your profits increase by 5%, and inflation increases by 9% - it means you're both (1) showing record breaking profits and (2) getting absolutely economically wrecked.
> But if your profits increase by 5%, and inflation increases by 9%
One should actually look not at inflation but at the increase in costs of that company. Not all companies are equally exposed to inflation, they will suffer different price increases.
Every seller needs a buyer for a transaction to happen. For some reason, people are still happy to take 84-month notes on $80k cars instead of sticking to their older car or buying a cheaper one; same with expensive beef, which could be substituted by lentils or other cheaper sources of protein.
A part, perhaps even a large part, of that "some reason" is likely the increase in money supply as well as fiscal stimulus. But consumers still share a part of the blame, if they willingly take on that transaction for non-essential goods and services. Few businesses have the pricing power to jack up their prices arbitrarily high, though there is a clear trend towards consolidation across many industries in the recent decades, and one could definitely argue that the US hasn't busted enough mergers and trusts.
If by self-reinforcing you mean run-away then the math doesn't work out.
For nearly any Good / Service the price is not 100% labor.
This means that if a price index (PI) goes up 2% and that causes a 2% increase in labor prices those labor prices will have a <2% increase in that PI. Lets be generous and say it has a 1% increase in that PI. That 1% increase will cause a 0.5% increase in the next PI iteration and next time it's a .25% and will effectively become 0% as the number of iterations increases.
The fact that prices aren't 100% labor is also why when looking at minimum wage increases the cost of a good doesn't increase by the same amount that minimum wage does. i.e. increasing minimum wage 20% (historically) doesn't increase a PI by 20%.
> Everybody should have been asking for pay raises the last two years for at least enough to cover the inflation rate.
And your employer reserves the "right" to be ungrateful/not appreciate you/take a stance in negotiation to try to protect their bottom line and say "no".
If inflation happens, then you ask your employer to give you a raise, and they say yes, and they then pass the difference along (increased payroll cost) to their customers through increased prices of goods and services, that creates more inflation.
Wage-price spirals only happen when business owners refuse to adjust down their operating margins and instead pass the increased payroll costs on to their customers. Too much economic value is accruing to capital and not enough to labor. This is what needs to change.
Also: If companies could increase profits by raising prices, they would do so, regardless of what their wages were. The whole "we'll pass along prices to consumers" threat is empty. If companies could simply raise prices, they would (and they do, when they can).
Isn't the same true with labor? If they can get more money for their work, they will ask for more money or quit and find a job that pays more? At least, that is what seems to have been happening for the last couple of years. The only problem with that is that finding a new job kind of sucks and is risky.
You know, as a much, much younger person I actually thought that there is not even a reason for raises ( I had no concept of inflation ) if you are doing the same thing over and over. Eventually, I saw just how much an average manager makes and I realized that it is literally a zero sum game. Management just gets a bigger slice if they manage to somehow bamboozle its workforce so there is a big incentive to do just that regardless of whether it sounds stupid or is even based on facts.
More amusingly, I never saw a manager pass on an increase 'to not fuel inflation' further.
> More amusingly, I never saw a manager pass on an increase 'to not fuel inflation' further.
From a morale perspective, working year after year at the same place for the same pay kind of sucks. How often do you hear people being responsible for less/taking on less responsibility over time?
Inflation is the rising of prices. If prices are rising around you, it makes sense to raise your own prices. Just like it makes sense for workers to look for raises (i.e. raise their prices).
Yeah if you think the stores didn't use the general price hike and took advantage of it you our pretty gullible.
According to the ECB itself it was the corporates who were the main driver & cause: theguardian.com/business/2023/jun/27/corporate-profits-driving-up-prices-ecb-president-christine-lagarde
Yeah if its more then the inflation itself and you are doing it under the guise of inflation it's manipulative. Lots of products jumped 50% in grocery stores here, main argument was gas prices, then gas prices went down, still prices went up. And record profits as well.
I think that companies are always trying to make the most profit per unit sold. Inflation may have provided a stimulus that led to the companies being able to increase their prices, even beyond the increase in costs, but the inflation had to already be there for this to happen. I don't think it's really abuse; they are free to charge whatever they want.
we need only see how the government reacted since March of 2020 to see how they react to crisis
The government vetoed business, not the other way around. That's why do many shops were shut down or had signs blocking you from buying "non essential" goods
Deciding who is essential who is not is deciding who goes bankrupt and who makes record profits.
The Economist cares about pushing the baseless opinion of their unnamed editors. They're a rag without the courage to name or give credit to their writers.
Expected when the newspaper is owned by some of the richest families on Earth. This is basically the same as a police department investigating themselves for wrongdoing.
Yeah, I would have been interested in this alternative hypothesis if it had any evidence behind it. Just a lot of "trust me bro" statements which don't cut it when peoples lives/livelihoods are in the mix.
The claim is that "the alternative to letting the price mechanism bring supply and demand into line is to rely on something worse, such as rationing or queues."
The way the system works is we assume a profit-maximization motive by actors, and nothing about that changed before or during the inflation, so it's obvious that something else is going on (i.e. fiscal stimulus during supply chain disruptions).
> Though there may be examples of opportunistic or anti-competitive behaviour, the effects are unlikely to have been material.
So, there is prove that it is anti-competitive behavior. There is prove that all big corporations should be split in pieces. But The Economist decides to ignore that.
The Economist is not that bad. At least, it presents the data. Big monopolies are the source of inflation, the lack of competition is the source of inflation. But it always falls short to get to any reasonable conclusion, and decides to ignore its own data. That's a shame.
"material" means "having real importance or great consequences".
So the Economist is directly stating the opposite of your conclusion: the opportunistic and anti-competitive behavior, if any, is unlikely to have been a significant source of inflation.
Same. I don't read them anymore, but I used to subscribe. Much of what they do is worthwhile, but there's the occasional bad take. But same goes for New York Times, Washington Post, and Wall Street Journal.
> In economics, inflation is an increase in the general price level of goods and services in an economy. ~Wikipedia
If profit seeking is increasing the general price level of goods (via a “coincidentally” coordinated raising of prices), how is it not causing inflation?
They discovered that they could get even more profit than they believed possible before; specifically that customers could bear even higher prices, at least in the short term.
This was discovered by pandemic price increases caused by increased costs. The new plateaus have just never dropped, even as their costs have dropped.
> This was discovered by pandemic price increases caused by increased costs.
So to be clear, you agree with the article that companies increased prices in response to inflation, and therefore couldn't have been the preliminary cause of it.
That only exposed their mistaken assumptions. Education doesn’t cause anything; a person’s (or collective of people’s) choices caused the excessive profit seeking.
I say excessive because it’s not sustainable. The median wages can’t support these profit margins indefinitely.
For a counterpoint, see the Planet Money episode "Inflation and the Profit-Price Spiral" [1], where a researcher has some convincing arguments that yes, corporate decisions and profits are one of the most important drivers of the current inflation.
Personally I found it much more convincing than this article.
From memory: Products prices are determined by costs + profits. Inflation is a rise of that sum. Economists traditionally hyper-focus on costs, primarily wages, as the cause of inflation, while completely ignoring profits.
The podcast features a researcher, who has received high pushback from the economics corner although recently more articles support her view somewhat, who says that her research shows corporate profits are the main driver of the 2022+ inflation, and also played a - lesser but under-highlighted - role in the past inflationary periods in the 20th century.
One main reason she highlights is companies expect higher costs and raise prices, but those costs don't materialize, leading to higher profits. This also has a compounding effect throughout the supply chain because each intermediary adds an effect, resulting in a high increase at the consumer end.
> Products prices are determined by costs + profits.
That's already backwards, though. Prices are determined by what the market will bear, according to the demand curve and what competitors are charging (which puts a ceiling on it).
Then companies attempt to keep costs as low as possible, and their success or lack thereof determines their profits.
(This assumes a lack of collusion over pricing -- but that's the responsibility of the government to prevent, catch, and deter through antitrust.)
Summary of What has been driving inflation? Economists' thinking may have changed | Planet Money
This is an AI generated summary. There may be inaccuracies.
00:00:00 - 00:25:00
In this video, economists discuss the factors driving inflation and how their thinking has evolved. Traditionally, inflation has been attributed to factors such as excessive demand, insufficient supply, or too much money chasing too few goods. However, economists are now exploring alternative explanations, including the wage-price spiral and the profit-price spiral. While rising wages leading to higher prices and vice versa have been a historical concern, recent data suggests that wages have not been keeping up with inflation, prompting economists to examine the role of corporate profits. The video highlights that corporate greed is not the primary driver of inflation, as firms have always pursued profits. However, severe bottlenecks in the economy, such as those experienced after World War II and during the pandemic, can create opportunities for corporations to increase prices and profits. The economists discuss the concept of price controls and the role of corporate profit growth in driving inflation. They find evidence that markup growth, closely related to corporate profits, accounted for a significant portion of inflation in 2021. This challenges the traditional focus on wage growth as an indicator of inflation and suggests that rising profits should also be considered. The idea that the expectations of higher costs in the future could drive inflation, even if costs themselves don't increase, is also discussed. The economists express uncertainty and acknowledge they may not have all the answers, but they feel validated by the evidence gathered and are interested in seeing how corporations will behave in the coming year.
The only, and I mean only decent argument I've seen against 'greedflation' is that if corporations are increasing prices for increased profit, it's odd that I haven't seen it reflect in share prices.
A reminder that The Economist is owned by oligarchs and part of the very system it is poorly defending in this article. Look up who owns the Newspaper - as always, it's rich families like the Rothschilds, Cadburys, etc.
Really stop and think, what would these families and corporations prefer? A bunch of pissed of people in the streets mad at their governments and policies? Or a bunch of people reading a news article that says your concerns are 'nonsense'?
Not always, but yes, information brokers tend to consolidate wealth and power.
And I made no mention of political orientation, please stop with the tired idea that this is a conservative/liberal issue. I have more in common with a redneck in Alabama than I do with Jeff Bezos. Stop falling for their traps.
Sorry I misunderstood your point. You're right that they tend to support more socialistic policies, though I don't necessarily believe in how much they actually want these policies passed. They all greatly benefit from the status quo.
In the cases of these newspapers, it's clear they're used to hold political power and push narratives. The willingness for that billionaire to take on CNN for $1 despite it losing money shows that I think.
And I would say, they could easily be owned by readers in a consumer-coop model. These work for many other industries, I don't see why it wouldn't work for newspapers.
I think most importantly, a lot of newspapers now a days are money losing businesses. But they provide political influence (local in most cases) so they're still useful for rich people to push certain agendas whereas genuine competitors just don't have the resources to maintain them.
The entire field of "Economics" was created as a way for the wealthy elite to justify / rationalize their capitalist oppression of the working class, so it should come as no surprise that a publication that serves a mouthpiece for the wealthy elites and that is named after a field that was created to serve the wealthy elites espouses ideas that solely benefit the wealthy elite.
Anytime rich people say something is bad, one can generally assume that by bad they mean only for them and their entrenched wealth and power and so therefore is good for the rest of us.
In an efficient system, maybe we can blame monetary policy. But we don't have an efficient system; most of us live under mono/ologipolistic supermarket "regimes". They don't compete, they collude. And they're taking advantage of price volatility to gain profits.
There's nothing wrong with that because you're expecting costs to continue increasing but you might be locking in the price you charge for the next year.
That's the problem with attacking inflation -- it's not about changing current conditions but about changing expectations.
>There's nothing wrong with that because you're expecting costs to continue increasing but you might be locking in the price you charge for the next year.
Ha, if only.
The company I work for has increased their prices about a 10 times in the last 2 years.
Then that's fantastic they've got that flexibility. But then it's probably a fair assumption they didn't increase their price by 10% each of those 10 times, unless they're in a very small subset of industries.
But other companies sign one-year contracts with customers, for example. There's no need to be snarky about it.
Good article. If you're old enough or know history, you've seen how artificially low interest rates cause (or at least greatly contribute to) these problems in the first place, and then somehow everyone except the central economic planners get blamed.
Money should have a market price, not be manipulated by a few people in power.
"Greedflation" is such an odd word. It implies that, as of late, these companies have "jacked up the prices under the cover of inflation". But since when have any of these corporate entities needed a reason to increase their prices or lower their wages? So strange that we demand a rationale when it appears to me that they are behaving as they are made to behave?
I think this was always true, but maybe many companies realized that they were playing it too safe and conservative with price bumps?
What changed (besides a good excuse) is big data being and analytics being much easier to obtain and manage. If people can't get the same product category cheaper anywhere else and they keep buying it then of course the will raise more aggressively.
I feel the market will eventually correct if "greedflation" is real. Someone must come along and say that they are happy with X% less which is theoretically possible, to capture a market more aggressively and use this narrative as a marketing tool.
I know it's easier said than done when there are few players in an industry and the barrier to entry is rather high.
My cynical take is that, in this market, "human work" is cheaper than the cost of "human living". There's no real malice, just supply and demand. We've automated all our labor but we expect our workers to be ever more productive. Of course that can't be sustained, eventually the average value produced by a worker exceeds their cost of living. And then... IDK what happens next.
If one company unilaterally increase their prices in a stable environment they will probably lose market share to their competitors.
I guess that when prices are rising sharply anyway, it's easier to raise them and it won't be noticed so much. And their competitors probably make the same calculation.
In a lot of industries you have a company that's a price leader. If they raise prices their competitors will also raise prices to increase profits instead of trying to take away market share from the price leader. They'll do that because it's trivial to do vs the risk and logistical hassle of trying to increase production. Remember the price leader can instantly drop prices again which could put you underwater.
At no point does this article argue the idea that corporate profit increases are a significant driver of inflation. It's just whataboutism: "but governments did X!" "but consumers did Y!"
The thesis that "shortages create higher profits" is also not proven at all. Yes, in a shortage prices get higher, but at the same time there's less sales. Not to mention that downstream business also suffer from higher prices.
In the end this article comes from a place of treating capitalism as a machine that should be left untouched. Governments, consumers and workers must behave and fall in line, but God forbid questioning who's taking home the money that's mobilized to compensate for certain issues (COVID, war) and what could be done to stop that. Apparently it's never the fault of companies, as if they were some natural phenomenon whose behavior can't be changed.
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[ 3.0 ms ] story [ 213 ms ] threadPeople are being laid off and prices are still going up - who is setting the prices? If you're jacking prices to cover sliding sales, yes, you are the problem.
No such thing as profiteering.
It’s a lot easier to do a lot of things when you Other the people you deal with, including exploitation and especially warcrimes.
They don’t talk about citizens or people, they talk about “the market”, which is barely anthropomorphic.
The world, the US, and Capitalism would all survive just fine without McDonald’s, Walmart, or Oracle. In fact it would probably be better off without any of them. Global homogeneity is not awesome, it’s dystopian. Companies having less power than the 90th percentile of countries would be good.
When you have a regional company you can still afford to think of your customers more or less as humans instead of statistics.
Particularly when C-level execs continue to award themselves double-digit pay-rises, then publicly cry that wages should be compressed.
These two things aren't even separate. Part of monetary policy is taxation and subsidies. The argument for "greedflation" is exactly one of poor monetary policy, in that we have allowed corporations (not necessarily any one person, but the corporation as a whole) to dictate too much of our monetary policy, and they're doing a poor job.
Like I agree there's a lot of regulatory capture in the US but I just don't see any reason to think the fed is responding to big business rather than their own preferences.
There are in fact people who are saying its only corporate inflation.
The real reason i'm skeptical of the greed argument is that its just a vibes based guess on whats happening and not based on any data or insight into the situation.
A bit of greed inflation and a bit of how a market economy works during a shortage. Now as shipping costs have dropped, companies have not dropped their prices accordingly because they have to cover their new massive headcounts and severance.
> But if your profits increase by 5%, and inflation increases by 9%
One should actually look not at inflation but at the increase in costs of that company. Not all companies are equally exposed to inflation, they will suffer different price increases.
If your profit margin is increasing, then inflation means less.
A part, perhaps even a large part, of that "some reason" is likely the increase in money supply as well as fiscal stimulus. But consumers still share a part of the blame, if they willingly take on that transaction for non-essential goods and services. Few businesses have the pricing power to jack up their prices arbitrarily high, though there is a clear trend towards consolidation across many industries in the recent decades, and one could definitely argue that the US hasn't busted enough mergers and trusts.
> Last year Andrew Bailey, governor of the Bank of England, asked workers to “think and reflect” before asking for pay rises.
I literally laughed out loud. Everybody should have been asking for pay raises the last two years for at least enough to cover the inflation rate.
Allows us to ask for actual pay raises on top of that.
https://www.ecb.europa.eu/pub/pdf/other/mb200805_focus05.en....
For nearly any Good / Service the price is not 100% labor.
This means that if a price index (PI) goes up 2% and that causes a 2% increase in labor prices those labor prices will have a <2% increase in that PI. Lets be generous and say it has a 1% increase in that PI. That 1% increase will cause a 0.5% increase in the next PI iteration and next time it's a .25% and will effectively become 0% as the number of iterations increases.
The fact that prices aren't 100% labor is also why when looking at minimum wage increases the cost of a good doesn't increase by the same amount that minimum wage does. i.e. increasing minimum wage 20% (historically) doesn't increase a PI by 20%.
So it's illegal to give someone a pay cut?
I guess they lay them off instead, but probably that is a legal issue too?
Luckily going out of business is perfectly ok (I assume), as well as never starting a business in the first place.
And your employer reserves the "right" to be ungrateful/not appreciate you/take a stance in negotiation to try to protect their bottom line and say "no".
If inflation happens, then you ask your employer to give you a raise, and they say yes, and they then pass the difference along (increased payroll cost) to their customers through increased prices of goods and services, that creates more inflation.
https://en.wikipedia.org/wiki/Wage-price_spiral
More amusingly, I never saw a manager pass on an increase 'to not fuel inflation' further.
From a morale perspective, working year after year at the same place for the same pay kind of sucks. How often do you hear people being responsible for less/taking on less responsibility over time?
Yeah, pay raises aren't good for shareholder value.
Besides, we all know the CEO deserves all the money. They do all the work, why shouldn't they reap all the profits? (/s for those that need it)
https://www.bankofengland.co.uk/freedom-of-information/2022/...
Already been shown that inflation is being abused to raise prices in many places.
Now it might not have started this mess, but it's for sure keeping it going.
It's the ECB itself, normally Unilever's friend, who argued such: https://www.theguardian.com/business/2023/jun/27/corporate-p...
Now fair enough, the ECB should point the finger at itself for it's monetary policy.
Inflation is the rising of prices. If prices are rising around you, it makes sense to raise your own prices. Just like it makes sense for workers to look for raises (i.e. raise their prices).
According to the ECB itself it was the corporates who were the main driver & cause: theguardian.com/business/2023/jun/27/corporate-profits-driving-up-prices-ecb-president-christine-lagarde
It's as unsurprising as RT's opinion on who blew up the Kakhova Dam was.
>> Though there may be examples of opportunistic or anti-competitive behaviour, the effects are unlikely to have been material.
Then completely fails to substantiate.
Wasn’t worth the click.
The way the system works is we assume a profit-maximization motive by actors, and nothing about that changed before or during the inflation, so it's obvious that something else is going on (i.e. fiscal stimulus during supply chain disruptions).
So, there is prove that it is anti-competitive behavior. There is prove that all big corporations should be split in pieces. But The Economist decides to ignore that.
The Economist is not that bad. At least, it presents the data. Big monopolies are the source of inflation, the lack of competition is the source of inflation. But it always falls short to get to any reasonable conclusion, and decides to ignore its own data. That's a shame.
"material" means "having real importance or great consequences".
So the Economist is directly stating the opposite of your conclusion: the opportunistic and anti-competitive behavior, if any, is unlikely to have been a significant source of inflation.
When I read them I try not to get anything that wades into their very obvious lassiez-faire bias.
If profit seeking is increasing the general price level of goods (via a “coincidentally” coordinated raising of prices), how is it not causing inflation?
This was discovered by pandemic price increases caused by increased costs. The new plateaus have just never dropped, even as their costs have dropped.
So to be clear, you agree with the article that companies increased prices in response to inflation, and therefore couldn't have been the preliminary cause of it.
I say excessive because it’s not sustainable. The median wages can’t support these profit margins indefinitely.
Personally I found it much more convincing than this article.
[1] https://www.youtube.com/watch?v=mu0HLfcK5hs
The podcast features a researcher, who has received high pushback from the economics corner although recently more articles support her view somewhat, who says that her research shows corporate profits are the main driver of the 2022+ inflation, and also played a - lesser but under-highlighted - role in the past inflationary periods in the 20th century.
One main reason she highlights is companies expect higher costs and raise prices, but those costs don't materialize, leading to higher profits. This also has a compounding effect throughout the supply chain because each intermediary adds an effect, resulting in a high increase at the consumer end.
That's already backwards, though. Prices are determined by what the market will bear, according to the demand curve and what competitors are charging (which puts a ceiling on it).
Then companies attempt to keep costs as low as possible, and their success or lack thereof determines their profits.
(This assumes a lack of collusion over pricing -- but that's the responsibility of the government to prevent, catch, and deter through antitrust.)
This is an AI generated summary. There may be inaccuracies.
00:00:00 - 00:25:00 In this video, economists discuss the factors driving inflation and how their thinking has evolved. Traditionally, inflation has been attributed to factors such as excessive demand, insufficient supply, or too much money chasing too few goods. However, economists are now exploring alternative explanations, including the wage-price spiral and the profit-price spiral. While rising wages leading to higher prices and vice versa have been a historical concern, recent data suggests that wages have not been keeping up with inflation, prompting economists to examine the role of corporate profits. The video highlights that corporate greed is not the primary driver of inflation, as firms have always pursued profits. However, severe bottlenecks in the economy, such as those experienced after World War II and during the pandemic, can create opportunities for corporations to increase prices and profits. The economists discuss the concept of price controls and the role of corporate profit growth in driving inflation. They find evidence that markup growth, closely related to corporate profits, accounted for a significant portion of inflation in 2021. This challenges the traditional focus on wage growth as an indicator of inflation and suggests that rising profits should also be considered. The idea that the expectations of higher costs in the future could drive inflation, even if costs themselves don't increase, is also discussed. The economists express uncertainty and acknowledge they may not have all the answers, but they feel validated by the evidence gathered and are interested in seeing how corporations will behave in the coming year.
Really stop and think, what would these families and corporations prefer? A bunch of pissed of people in the streets mad at their governments and policies? Or a bunch of people reading a news article that says your concerns are 'nonsense'?
And I made no mention of political orientation, please stop with the tired idea that this is a conservative/liberal issue. I have more in common with a redneck in Alabama than I do with Jeff Bezos. Stop falling for their traps.
In the cases of these newspapers, it's clear they're used to hold political power and push narratives. The willingness for that billionaire to take on CNN for $1 despite it losing money shows that I think.
And I would say, they could easily be owned by readers in a consumer-coop model. These work for many other industries, I don't see why it wouldn't work for newspapers.
I think most importantly, a lot of newspapers now a days are money losing businesses. But they provide political influence (local in most cases) so they're still useful for rich people to push certain agendas whereas genuine competitors just don't have the resources to maintain them.
A coop newspaper would be cool, although if it is viable why isn't it already happening? Or is it?
Anytime rich people say something is bad, one can generally assume that by bad they mean only for them and their entrenched wealth and power and so therefore is good for the rest of us.
This would incentivize companies to be slightly more "greedy" if you define "greedy" by "seeking current profits".
In practice, a bunch of data scientists have looked into "greedflation", and I'm not aware of anyone finding anything significant.
NPR did an episode on it: https://www.npr.org/2023/06/13/1182019025/is-greedflation-re...
If you start with the world view that companies are evil and the source of all problems, it's easy to see "greedflation" everywhere.
Seek and you shall find.
In an efficient system, maybe we can blame monetary policy. But we don't have an efficient system; most of us live under mono/ologipolistic supermarket "regimes". They don't compete, they collude. And they're taking advantage of price volatility to gain profits.
That's the problem with attacking inflation -- it's not about changing current conditions but about changing expectations.
Ha, if only.
The company I work for has increased their prices about a 10 times in the last 2 years.
But other companies sign one-year contracts with customers, for example. There's no need to be snarky about it.
Money should have a market price, not be manipulated by a few people in power.
What changed (besides a good excuse) is big data being and analytics being much easier to obtain and manage. If people can't get the same product category cheaper anywhere else and they keep buying it then of course the will raise more aggressively.
I feel the market will eventually correct if "greedflation" is real. Someone must come along and say that they are happy with X% less which is theoretically possible, to capture a market more aggressively and use this narrative as a marketing tool.
I know it's easier said than done when there are few players in an industry and the barrier to entry is rather high.
I guess that when prices are rising sharply anyway, it's easier to raise them and it won't be noticed so much. And their competitors probably make the same calculation.
At least, that's what I understand by it.
> where corporate profits are falling
Bull-fucking-shit
The thesis that "shortages create higher profits" is also not proven at all. Yes, in a shortage prices get higher, but at the same time there's less sales. Not to mention that downstream business also suffer from higher prices.
In the end this article comes from a place of treating capitalism as a machine that should be left untouched. Governments, consumers and workers must behave and fall in line, but God forbid questioning who's taking home the money that's mobilized to compensate for certain issues (COVID, war) and what could be done to stop that. Apparently it's never the fault of companies, as if they were some natural phenomenon whose behavior can't be changed.