Inflation

Do you think stagnant real wage growth and excess capacity in the labor market have any effect on inflation?

How many marks is this worth?

It is worth no marks, but it is December 15th and Santa Claus is watching...

Any effect? Sure, I'd ratify that.

yeah me too! I would even go so far as to say it could possibly keep inflation down instead of making it go up

OK. Good work. There's cake in the break room.

Sometimes when I read socialist writing from earlier decades (e.g., Raymond Williams on advertising), the way they talk about the irrationality, inefficiency, and waste of an unplanned economy sounds so alien to me, someone who grew up in Reagan-era US with the consumer economy a seemingly basic fact of life. Anyway, this is a very galling read:

There are many reasons for inflation, but here’s one that’s truly bananas.

Ocean carriers are taking advantage of the supply chain crisis by charging *billions of dollars* in extra fees 👇

— ProPublica (@propublica) July 5, 2022

Here's the lengthy article if tweets aren't your thing: https://www.propublica.org/article/ocean-freight-shipping-costs-inflation

we need to talk about lurpak

the internet tells me that's a brand of butter but that's all I know

A thing I don’t understand about these claims about price gouging etc is why don’t they just price gouge all the time and cry inflation? Why specifically now?

At least in terms of the case in that article, aiui, the pandemic provided an opening because there was a sudden calamitous shortage of truck drivers, so in a sense the fees were "justified." Then beyond that my personal explanation would be the fatal logic of capitalism: you can't justify turning down profits to your shareholders even if you're obtaining them illegally.

And that basic pandemic-as-crisis-point worked in lots of economic sectors, plus it provided a sort of general smokescreen for social change

Not sure how coherent any of that is

I mean unironically yes https://t.co/BssQhI7306

— suzuki ingmar burgman (@xoayquanh) October 6, 2022

And the madness keeps on going in Turkey, Erdogans...unorthodox approach unsurprisingly not yielding any results.

This is basically a supply-driven global inflation caused by the global pandemic and worsened by the Ukraine war, so let's look at a classic example of supply-driven inflation. During wartime, in a city under siege the supply of food and various other necessities dwindles rapidly while the supply of money stays fairly constant. When market forces determine the distribution of limited goods during a siege, the cost of a dead rat quickly exceeds the financial means of the majority of the inhabitants.

The confusing thing for me is how much of supply is essential if it can be diverted from services for those who have disposable income.

Is general economic uncertainty driving up prices of essential and non-essential goods and services beyond price increases in other times? Are there permanent or lasting changes in consumer behavior that require adjustment to supply? I think I read before that the price of wheat is basically inelastic because so much is produced, so it's sort of astounding to think that the pandemic and the war in the Ukraine have changed that, but also, I wonder if uncertainty has compounded supply shortages and allowed price increases to be generalized.

Supply can be manipulated. Demand is unpredictable and needs better models.

I know it's Lukashenko but I basically agree that keeping inflation down by whatever means so ppl can afford to live as a good thing.

ugh groceries are way higher - it all adds up =- I can't help but wonder if companies are just price gouging

(They are)

fuckers

https://www.macrotrends.net/stocks/charts/HSY/hershey/gross-profit#:~:text=Hershey%20annual%20gross%20profit%20for,a%209.38%25%20increase%20from%202020.

yeah it's been steady all year but I've particularly noticed it the last couple of weeks. feels like everything is 20-30% more than it was last year.

yup

Bigger corporate profits account for *over half* of the higher prices people are paying. pic.twitter.com/RZr5O0X4oJ

— Rep. Katie Porter (@RepKatiePorter) October 18, 2022

I saw a good discussion on (of all places) a food blog, sparked by that Fox dude claiming he paid $28 for lunch at Taco Bell. This was one response:

Another topic for some economists is consumer expectations. When consumers think that inflation is high, business can safely raise prices even beyond what's justified by rising costs. When you see high profits coupled with high inflation, that may be what's going on. And to bring it back to the $28 Taco Bell lunch, now everybody thinks Taco Bell has tripled prices and McBurgerdys can triple their prices without consumer resistance (exaggerating here but you get the idea.)

To which someone responded:

I agree with this sentiment that companies in a market based economy raise prices higher than inflation but use inflation as an excuse just like during the height of the pandemic shortages for toilet paper, cleaning products, etc. created an artificial short term demand which the companies like Procter and Gamble (Tide & Bounty Paper Towels) increased in price. As the pandemic went down the companies did not lower their prices, but on the contrary they have increased even more than when the supply chain shortages occurred during the pandemic. The thing that people complain about a capitalist society (which is not perfect in anyway) is that companies (especially publicly traded) have to show ever increasing profits quarter over quarter and to do that they keep increasing prices and cutting costs (smaller package sizes / same or higher price point).

This is the same in the fast food industry. while wages and raw materials have increased the price of the end product charged to the consumer has increased 2 or 3 fold from 5 or less years ago. People who follow stocks and earnings will notice a trend in that a majority of the big name companies out there are generating record earnings including McDonalds, Walmart, Kroger, Tyson Foods, etc.. and they definitely do not pass on the increased earnings to lower prices to the end consumers.

"they definitely do not pass on the increased earnings to lower prices to the end consumers."

this is meaningless

ECB frets and fears,
Inflation's blue monsters loom,
Eyes fixed on prices. pic.twitter.com/EgZFGrXROr

— Clément Fontan @clem✧✧✧@eupol✧✧✧.soc✧✧✧ (@clemfon) March 6, 2023

History shows 2% inflation is not the norm (avg. Inflation across developed markets since 1900) pic.twitter.com/IYe2KObKqU

— Tracy (𝒞𝒽𝒾 ) (@chigrl) March 9, 2023