Retailers jacked up prices and squeezed consumers. They might have just blinkedI hope consumers still don’t bat many eyelashes because capitalism best practices def looked to squeeze consumers. Record profits, stock markets riding high, rich got even richer, meanwhile ever more people struggle up and down ‘main street’.
That’s okay, because eventually we’re just going to automate away the need for all those struggling people. And then we won’t care if they participate in the economy anymore. We can… ahem… zero them out.
We’re witnessing this process in areas like Yemen, Palestine, and Kashmir as we speak. If you get under the hood of MBS’s 30 year plan for Saudi Arabia, you’ll notice a sharp drop in the expected demand for labor. This, from a man who doesn’t bat an eye at walking a guy into an embassy and dismembering him with a chainsaw.
Go ask Andreessen Horowitz or Peter Thiel or Bill Gates what they’d like to see happen to the human population going into the 22nd century, and you’ll get similar speculative responses.
And then you think about it and you’re like “If inflation goes up X% and all wages need to go up the same amount in order for people to keep up, why is inflation necessary again?”
There’s an economic argument for steady inflation as a counterweight against compound interest and debt.
Inflation creates an economic incentive for productive investment. I’d rather own a $20 machine that generates $1/year of new valuable goods/services than a $20 bill in a vault, because the goods/services will inflate in value while the cash will not. And if I don’t have $20, I’ll be willing to borrow it if the value of the debt declines over time while the value of my annual production rises.
When wages match inflation rates and surplus cash can be productively invested, each new participant in the economy has an opportunity to grow their personal fortunes over time.
However, when wages lag inflation, only the early adopters get to see the benefits of new productivity. Old money compounds faster than new wage earn investment enters the pool. And eventually you get a Berkshire Hathaway / Goldman Sachs / Blackrock / Citadel style superfund that owns a significant percentage of virtually everything.
The same thing happens in deflation. People with access to cheap credit or liquid currency (banks, mostly) can horde capital while wages contract. And then, again, you end up with an economy in which a handful of feudal aristocrats hold the titles on all the properties.
But when wages grow faster than inflation, you see the reverse. Earners can buy into property at a steady discount, while investment of new properties promise higher yields than simply sitting on old capital stock indefinitely.
There’s an economist named Thomas Piketty who breaks it down thoroughly in Capitalism in the 21st Century, detailing why you want the economic growth of your national economy (G) to exceed the rate of return on investment (R) if you care about reducing overall economic inequality.
That’s fine and all, and I wish it were so. We just live in an economic reality that has been steadily increasing the inequality with consequences such as unaffordable housing, healthcare, and education.
Inflating the debt away is advantageous only if the TCO keeps up. In this case the wealthy get the lion’s share of inflationary increases while many people only see modest cost of living offsets that for two years fell behind inflation. We seldom see years where employers give a cost of living adjustment above the current inflationary rate beyond the current year index, to make up for prior years where they didn’t.
E.g. I see a job posting from 2007 that advertised 65k/year, in the same company with the same role they currently only compensate that same role at about 73k. $65k from 2007 equates to approximately $97k in today’s money. If things were truly equitable and commensurate, and I realize this is an isolated data sample, but it appears to be a common trend across the country.
For the numbers, that’s $24k of income that would be really great to have today.
E.g. I see a job posting from 2007 that advertised 65k/year, in the same company with the same role they currently only compensate that same role at about 73k. $65k from 2007 equates to approximately $97k in today’s money. If things were truly equitable and commensurate, and I realize this is an isolated data sample, but it appears to be a common trend across the country.
I absolutely agree. And I’m willing to bet that the profit at that same firm has only grown over time. So here we have a classic case in which profit margins have outpaced the real volume growth at this firm, making it less efficient and more expensive to operate as a result.
For the numbers, that’s $24k of income that would be really great to have today.
Oh sure. Numbers get even worse when you consider how that $24k of income is buying even less housing, health care, and utilities than it did in 2007, and for all the same reasons.
As profit margin eclipses real growth, the real economy is subsumed by fictitious assets.
If a company makes less profit than last quarter, no matter how many billions in profit that actually comes out to or how satisfied the customers are with the company’s products, investors will be sad and the line will go down. If a company makes more profit than last quarter, the line goes up regardless of if that growth is actually sustainable long term because that’s not our problem right now. All that matters is we can tell investors we had record profits this quarter, the executives get to take home their million dollar bonuses, and the line doesn’t go down until after those execs leave for even greener pastures.
So, a company can’t just be good at what it does at the scale that it does it, it must grow constantly like a cancerous tumor in order to stay attractive to investors. When people are flush with cash you squeeze it out of them as fast as you possibly can because, again, the future doesn’t matter right now and anyways they’ll just give it to someone else if you don’t take it first. Sell products that don’t last very long so the customer keeps coming back. Raise prices and cut staff when times are anything less than stellar but never under any circumstances lower prices or give workers more than the lowest amount it takes to keep them working, because that means less profit which means the line will go down which means the execs don’t get their bonuses and that is a fate worse than death.
And the problem is that even if it goes back to 2%, it’s still fresh in everyone’s memory that CPI was 17.5% lower (1$ March 2020 = 1.21$ March 2024) and it’s not very fair to the average person that the number they hear only compares to the previous year when it’s not what they’re feeling in their wallet as there’s never been deflation.
What I’m saying is, we know when the high inflation period started, media should report both the year-on-year change and inflation compared to a specific month before the last major economy influencing event, that would help people understand the information presented to them and why it feels like prices are still up much more than 3%.
The media reports it that way because the guys who run the economy report it that way. We need an inflation tracker website that tracks the divergence of wages from inflation like the conservatives have for the national debt.
You have a point in that corporations align closely with human greed. However, corporations are anti-social and amoral unlike human beings. We need them to serve humanity and not the other way round. They’re currently taking too much too quickly.
Greed is just one part of the equation of higher prices. You also need opportunity. If prices ramped up so rapidly without a plausible excuse, then it would lead to an investigation. Hell, the egg producers took their excuse of bird flu too far and jacked up prices about 6x, which was so ridiculous that it did lead to the threat of an investigation and that alone magically got the price down to “only” about 2x.
It doesn’t map so simply. Greed will try to push prices up as high as possible, but what’s possible depends on other factors. People can understand how a global pandemic causing supply issues would lead to higher prices, but greed took full advantage of that understanding and pushed it far beyond limits.
There are many scams and a lot of them don’t involve a contract at all. There are also ones that do involve a contract and upholding it is part of the scam. Regardless, you missed the point that just because someone pays the price, doesn’t mean everything is fine and dandy.
during those years the corporate/investors focus was on market share growth, so they purposely went for low prices or free when possible. when the money spigot turned off things switched from growth to profit/dividend and consumers are stuck.
You can’t just throw an image up. You have to source it or we’re going to assume you made it in MSPaint. But you’re already showing signs of not understanding what inflation is. It is not some stand alone year by year metric. It’s a velocity measurement. Like your car’s speedometer. You drove X number of miles in Y time. Instead here it’s you rose X points in 1 year. The previous points do not go away. The wage increases from year 4 do not magically erase inflation from years 1-3, unless they beat year 4 inflation by the the sum of inflation from years 1-3.
Where in my comment do I even mention interest rates? At any rate, you’re not wrong that they’re supposed to curb inflation but they haven’t. You’re own source says-
Leila Bengali decomposes inflation into interest-rate responsive and unresponsive categories. (whether each inflation category has historically declined >after a surprise interest rate hike)
Current excess inflation is entirely due to the unresponsive categories.
That’s that flat red section. It’s unresponsive to the rate change. You can see the blue section responded even before the FED actually made the change. That’s when the FED made statements about raising the rate. So we can see that the responsive section was very responsive. But the unresponsive section is keeping rates from properly coming down.
When the Fed makes statements, banks already respond because it affects the curve. If you expect higher rates in the future, you wouldn’t accept longer duration bonds right now for the current smaller rate.
So a statement that rates will be increased actually moves them for anything other than the current over night rates
Yes, that’s the blue section. The Red section it turns out is the housing sector, that DGAF because they’re heavily coordinating prices and there’s no cheaper alternative.
Now do Metro Area Rent. And do it over the last 4 years. Housing is screwed because of the high interest rate loans locking homeowners in place and dropping the available stock. Landlords however just declared open season on their renter’s wallets.
I didn’t get why you’re so resistant to this? We know where the bottleneck is before our economy hits stagflation. We can fix this. And then we’ll all celebrate being able to afford celebration again.
Stagflation is high inflation, low growth. One of the warning signs is intractable inflation because it forces a demand crisis once prices get high enough. That causes low growth while inflation is still running away. So yes we’re in danger of Stagflation.
You can’t get 2024 numbers for most things because it’s still 2024. Unless you personally call up an organization that does the tracking to get monthly or quarterly numbers. And unless it’s going to drop the price by 20% this year then it’s not going back to where it was pre-pandemic.
Again, I’m not sure why you’re fighting so hard. We knew there was something going on with inflation not responding. This means we can fix it with new policy and subsidies.
Considering there was already an unreasonable rise in rents from 2008 on, yeah we really need to actually go back on this one. Accepting the standard corporate position of prices only go up is part of how we got here in the first place.
And it’s fine if you want to scrape Zillow’s information and do your own spreadsheet. But the Daily Mail would have us believe Austin is in the middle of it’s own little 2008 style housing meltdown. If that’s true then this really is an exception to the rule right now and we should go back to talking national numbers.
Yes, the low interest rates we had for years meant basically free money for all these companies in addition to the low car loan and mortgage rates that the rest of us benefitted from. Interest rates being low was a tool used to pull us out of the recession but nobody had the balls to raise them back when things turned around because you can’t win elections by forcing people to take their medicine.
The average price of coca-cola during this period of time, adjusting for inflation, has been $1.89, and the most current price of $2.69 is 42.33% above that average.
It’s not price gouging, there’s no coca cola shortage and it’s not a necessary for life good. You’re acting like you can’t just stop buying it
And yes, the price people willing to pay for some goods is a reasonable price for them, unless it’s some necessity or it’s some disaster area. If it was unreasonable, people wouldn’t pay that price. Especially for something like coca cola
Sorry… how is a price increase that is not justified by inflation not price gouging?
Price gouging has nothing to do with what is necessary and Coca-Cola is being used as an example. I’m not why you think this is singly about coca-cola.
I think this simply depends on your definition of gouging. If I used “to charge someone too much money for something, in a way that is dishonest or unfair” as I found from google, one could argue that the increase was justified by some others means that didn’t qualify as dishonest or unfair, which is also subjective.
It’s justified by inflation, inflation is an average.
For example, if thing A goes up 20% and thing B goes up 0% we say the inflation is 10%. You will complain that A went up faster than the inflation. But you’re cherry picking the data, since you ignored B not going up
My dude, corporations were putting in their earnings reports for the COVID years that they were having record profits because they were using COVID-based supply disruptions to increase their prices. Even a basic knowledge of economics would lead one to understand that if supply for a good becomes limited, demand stays the same, and profits go up, it could only be because the price of that good has significantly increased as well.
That’s not the news you want it to be. First of all I’ve seen this breathlessly reported several times with bad data. The revised data comes out and repeatedly gives inflation the win. Second, even if we did come out as a wash this year, there’s still a 10 percent gap just between wages and Inflation in just the last few years. And a ~130 point gap since the mid 1970’s. So put the party hats down, we still have work to do.
Well, it is great that we have the good people of Lemmy to correct the economists from the Bureau of Labor Statistics and the banks then. Wouldn’t want fake news.
Also, when would that ever not be the top category? “Things cost too much” seems like kind of a supercategory covering most of the others. Maybe “lack of money” could compete.
The top is less important than the ratio. The top 2 answers are basically stuff costs too much. Over half the people are claiming that is their biggest problem. If times were better, it still might be the top, but it shouldn’t be the majority. Debt concerns, and retirement would take a bigger chunk.
I mean high cost of living isn't just "things cost too much"; it's "everything costs too much". That's different to things like rent and childcare, which are something specific being too expensive.
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