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Corpos are slowing down the gouging..
There's a term for that: greedflation. When a company raises their prices to improve their margins then blames the increase on inflation.
They tend to do that when people stop buying all the stupid extra shit.
Nah I bet the government economists just found a trick to make the numbers look smaller.
Inflation generally begins with suppliers, so unless you consider truckers, farmers, miners, etc "corpos" your take is way off base.
Today's inflation is a direct result of the pandemic, exacerbated through savings/loose credit/"free" money as a result of not being able to spend during the pandemic. Demand didn't disappear, it just got built up. Meanwhile, manufacturers, shippers, and receivers literally couldn't get staff, and their costs rose. This carried all the way down the chain
The common retort here is the "record profits" line, but like... Yeah. Demand built up for TWO YEARS. Everyone and their mom is hiring. Of course they're seeing record profits.
Gouging has nothing to do with it. Unless you're talking about crude oil prices then yeah it's a lot of gouging, lol. Monopoly on supply and all that. But again, those costs trickle out through the entire economy.
My salary didn't increase enough to match inflation but the amount we charge our customers at my job did. Oh and my clients are all government or large manufacturing outfits. Not like malls or something.
Nothing to see here, right?
If every person's salary increased to match I flation we would enter a wage hike spiral where wages go up, inflation rises, wages go up, inflation rises, etc
You can't fix anything, you should just accept that life is shit, and all the things that I said were bad ideas are great ideas for the super rich.
-every time economists talk.
That is not at all how economists look at resolving problems.
Bull.
List of bailouts economist have supported: Banks, airlines, car companies, banks again, and anyone claiming to have a covid impacted business.
List of bailouts economists have not supported: Student loan debt.
See a pattern? Inflation is only an issue when it involves helping the poor or middle class. The moment it helps a big corp or a well-connected donor it is just good policy.
Many economists support forgiving student loan debt.
Here's Noah Smith supporting it: https://www.noahpinion.blog/p/does-student-loan-forgiveness-make
The 5th dentist. Why doesn't the Brookings Institute agree?
Noah Smith is not a "5th dentist" lol (cool term tho - thanks for teaching me that)
I happen to agree with the Brookings institution
Targeted debt relief is ideal.
As I said. Economists only think it is a problem when it benefits the poor or middle class. It wasn't a problem when it was bank bailouts.
That is the literal opposite of what this link says.
Nothing in your article mentions the bank bailouts that I saw. Show me where they pointed it out.
It's your link bro
Uh, yes to all 3.
Only 9% of truckers are owner operators. 91% work for companies, the vast majority of which work for large companies like SWIFT, or major retailers like Walmart.
The vast majority of miners work for large corporations too.
A majority of farmland is owned by mid-large sized corps too.
So truckers, farmers, and miners themselves might not be corpos, but they’re labor for a capitalist just like most everyone else. And those capitalist owners are looking to extract the maximum profit possible.
You don't seem to understand that most trucking companies, by a VERY large margins, are not large fleets. I worked in that industry for a decade.
Your hate of capitalism is nonsensical.
I don't hate capitalism anymore than I hate natural gas. I would rather cook with it instead of inhaling it.
It has its uses and limitations.
Gouging is roughly half of the reason for the hough inflation. Even industries that saw no shortages raised their prices because they saw they could because people expected higher prices. There have been a few econ papers written on the subject. Initially the additional profit margins were not looked at much because generally that is not the cause of inflation. But it can be. The last time it was a significant source of inflation was after WWII when people expected higher prices because factories had to completely switch what they were producing back to commercial good.
Can you link those papers?
Here is one of them:
https://chrisconlon.github.io/site/markups_pnp.pdf
That study shows the opposite of what you're claiming.
Sorry about that. I'm traveling and only on mobile. I had heard it on Planet Money and assumed they would link it and they apparently linked a very short paper that does not show it.
Here is a paper from the Kansas City Fed that shows increased profit margins made up over 50% of the price increases:
https://www.kansascityfed.org/Economic%20Review/documents/9329/EconomicReviewV108N1GloverMustredelRiovonEndeBecker.pdf
The EPI also wrote on it but they are left biased so I would put a little less stock in it:
https://www.epi.org/blog/corporate-profits-have-contributed-disproportionately-to-inflation-how-should-policymakers-respond/
Not to mention, "record profits" is exactly what you would expect in absolute numbers in an inflationary environment. If all of a company's costs double, and they subsequently double all prices, then they'll get "record profits", despite nothing meaningful having changed.
Individual workers are also making "record" amounts of income, but again, that number in isolation isn't meaningful at all. I have significantly more dollars than a 1700s NYC landlord. I'd still much rather have his relative financial situation.
That’s not how net profit works. Net profit takes into account the cost of goods, if cost of goods, doubles, and gross profit doubles, net profit hasn’t changed at all. These companies are taking advantage of the fact that cost of goods (including shipping) have gone up to massively crank up prices, hence record net profits.
Corporate profit margins hit a 70 year peak in 2022 despite plenty of supply turbulence in the highest inflation since the 1980s.
Yes, it is.
Expenses: $500
Revenue: $1000
Net profit: $500
Now, say we've had runaway inflation, and the dollar is suddenly worth half as much.
Expenses: $1000
Revenue: $2000
Net profit: $1000
You might thing, "hey, that's $500 more dollars!" Yes, but these dollars have half the value as they did in the previous scenario, so you have the same amount of actual value as before the inflation, even though the absolute number is higher and thus you've broken records. Profit margin is a much more useful metric to look at, and that is unchanged in this example.
Now, as I understand, there are some industries where profit margins have noticeably increased, and there are interesting questions that can be asked there. But profits going up simply isn't a very interesting thing. Profits remaining static is actively a bad thing, because again, inflation is a thing. To flip this around, a worker never getting a raise in 20 years is obviously not doing very well. Workers need regular raises just to keep up with inflation. The exact same thing is true for businesses as well.
It's actually record profit margins, not just record profits. Even industries that were not affected by shortages raised their prices and there was an increase in profit margins almost across the board.
For sure, and I'm very much not saying that businesses are blameless or haven't exploited the situation. I'd just vastly prefer reporting to talk about the metrics that actually matter, like profit margins, rather than essentially meaningless ones like net profit than do nothing more than push an obvious underlying agenda.
From data I could find, you see a very sharp dip in margins during 2020, a significant rise in 2021-2022, and in 2023, things have largely returned to pre-pandemic numbers. I won't pretend to be an economist, but if we're going to be claiming uniquely bad corporate malfeasance, I want strong evidence showing that, not essentially meaningless fluff like "numbers go up in a highly inflationary environment".