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I'm sorry, but "corporate greed" doesn't make sense. Were corporations not greedy in 2017?

bryanlarsen 5y ago
Sure, but they weren't able to execute on that greed to the same extent that they were in 2017. Look at the profits of big tech in 2021 compared to 2017. In a well-functioning free market, most of the surplus is captured by the consumer rather than the producer. So excess profits are a sign of an inefficient market, and thus the drum beat for anti-trust enforcement against Google/Apple/Amazon/Facebook.
- dcolkitt 5y ago
  Neither Google nor Facebook make any significant profit from selling consumer profits. It's pretty tenuous to claim that their large profits are driving consumer inflation. Amazon makes virtually zero profits in consumer goods. It's high recent profits come from the B2B segments of AWS and advertising. Apple's margins have always been historically high. If anything iPhone concentration in the smartphones has declined since 2017. The sizable bulk of consumer inflation is being driven by housing, energy, food and used cars. It's extremely tenuous to tie any of this to FAANG profits.
JaimeThompson 5y ago
https://www.nytimes.com/2021/12/27/business/beef-prices-cattle-ranchers.html https://www.nytimes.com/2021/12/27/business/beef-prices-catt... "Since the 1980s, the four largest meatpackers have used a wave of mergers to increase their share of the market from 36 percent to 85 percent...Their dominance has allowed them to extinguish competition and dictate prices." https://twitter.com/AlecMacGillis/status/1476219789899096064 https://twitter.com/AlecMacGillis/status/1476219789899096064
- ldiracdelta 5y ago
  In food supply, I think the issue is regulatory capture. If you make food in the USA you almost have to have a lawyer on staff to navigate all the regulation. Compliance team sizes are growing in ag. The difficulty of starting up a competing meatpacker plant is getting harder every year. When the ability of entry into food production is harder every year, you don't have to compete on efficiency and it trends toward monopoly.
- dcolkitt 5y ago
  How does a gradual consolidation over 40 years explain a sudden spike in meat prices in the past year? The meat industry was only barely less concentrated in 2017 than 2021.
  - archon 5y ago
    Not advocating for this point of view, but I think the thinking goes that even if <insert industry of choice here> wasn't any less concentrated in 2017 vs. now, the pandemic provided a lot of opportunity for price increase that might have otherwise caused regulatory scrutiny.

Sure, but they weren't able to execute on that greed to the same extent that they were in 2017. Look at the profits of big tech in 2021 compared to 2017. In a well-functioning free market, most of the surplus is captured by the consumer rather than the producer. So excess profits are a sign of an inefficient market, and thus the drum beat for anti-trust enforcement against Google/Apple/Amazon/Facebook.

dcolkitt 5y ago
Neither Google nor Facebook make any significant profit from selling consumer profits. It's pretty tenuous to claim that their large profits are driving consumer inflation. Amazon makes virtually zero profits in consumer goods. It's high recent profits come from the B2B segments of AWS and advertising. Apple's margins have always been historically high. If anything iPhone concentration in the smartphones has declined since 2017. The sizable bulk of consumer inflation is being driven by housing, energy, food and used cars. It's extremely tenuous to tie any of this to FAANG profits.

JaimeThompson 5y ago

https://www.nytimes.com/2021/12/27/business/beef-prices-cattle-ranchers.html https://www.nytimes.com/2021/12/27/business/beef-prices-catt... "Since the 1980s, the four largest meatpackers have used a wave of mergers to increase their share of the market from 36 percent to 85 percent...Their dominance has allowed them to extinguish competition and dictate prices." https://twitter.com/AlecMacGillis/status/1476219789899096064 https://twitter.com/AlecMacGillis/status/1476219789899096064

ldiracdelta 5y ago
In food supply, I think the issue is regulatory capture. If you make food in the USA you almost have to have a lawyer on staff to navigate all the regulation. Compliance team sizes are growing in ag. The difficulty of starting up a competing meatpacker plant is getting harder every year. When the ability of entry into food production is harder every year, you don't have to compete on efficiency and it trends toward monopoly.
dcolkitt 5y ago
How does a gradual consolidation over 40 years explain a sudden spike in meat prices in the past year? The meat industry was only barely less concentrated in 2017 than 2021.
- archon 5y ago
  Not advocating for this point of view, but I think the thinking goes that even if <insert industry of choice here> wasn't any less concentrated in 2017 vs. now, the pandemic provided a lot of opportunity for price increase that might have otherwise caused regulatory scrutiny.