4 ms·

> The inflation of 2022 is also largely an illusion - it's really just that a few percentage points of what should have been normal inflation in 2020 and first

> The inflation of 2022 is also largely an illusion - it's really just that a few percentage points of what should have been normal inflation in 2020 and first-half 2021 was time-shifted into 2022. Food prices are up 48% at the nations second largest grocery chain. Rent prices are now through the roof, 20-30% year over year increases are common in major cities. Things are more expensive, full stop, and it isn't just "an extra year" more expensive.

vikingerik 4y ago
That's exactly what I'm talking about. Don't look at year-over-year numbers, you're falling for the illusion. A rent jump of 20% for 2022 is because rents were artificially suppressed in 2020 and 2021. The right comparison is to look at 2022 compared to 2019 and see if it looks out of line for a three-year period. A few things are, but most aren't. Also, citing one grocery chain is a cherry-picked outlier. Cite them all if you want a real number and not an artificial illusion.
- keester 4y ago
  rent did not go down in 2020
  - LUmBULtERA 4y ago
    It went down significantly in 2021 for me. Though it popped back up a lot in 2022 if we signed a new lease (did not).
- idiotsecant 4y ago
  This line of thought doesn't stand up to scrutiny when you look at real data. According to the USDA ERS food price outlook reports @ https://www.ers.usda.gov/data-products/food-price-outlook/ https://www.ers.usda.gov/data-products/food-price-outlook/ the 20 year average percent change year on year is something like 2.0% - 2.5%. The change from sept. 2021 to sept 2022 has been 11.2%. The forecasted change in 2022 is approximately 10%. The foretasted change in 2023 is approximately 3.5%. This is dramatically more than just delayed increases from a strange year.
  - inquirerGeneral 4y ago
    Don't worry, @vikingerik will continue to double down.
- RoddaWallPro 4y ago
  That is _not_ exactly what you are talking about: food prices do not normally go up 24% a year. Rent prices do not normally go up 10-15% a year. If their number is cherry-picked, give a real number yourself. Anecdotally, my grocery bills are easily 30%+ from what they were last year, and the same is true for many people I've asked.
  - vikingerik 4y ago
    That's still what I'm talking about. Any number you're looking at that's "in a year" is falling victim to the time-shifted demand effects from the pandemic. Compare 2022 to 2019 and look for the average change over three years. That's the real signal over the temporary noise. There are still some real effects, but it's much smaller than all the one-year-over-year numbers seem to indicate.
    - thatguy0900 4y ago
      This doesn't make sense. How can cost of groceries be up 30% over a three year period be normal. That would leave everyone starving within a decade, and obviously can't be right. Same with the rent increases.
      - culopatin 4y ago
        It would not leave everyone starving because salaries go up too, 10% inflation does exist. Argentina deals with 100% yearly inflation and has not blown up yet.
        thatguy0900 4y ago
        Salaries arnt going up that much. McDonald's near me is still offering 12.50. At best the people in these places got a few more dollars an hour
        culopatin 4y ago
        I’m not speaking about your particular scenario but about situations where inflation is actually more than 10% over several years. Salaries always lag, but they don’t remain at 0% increase. The post I’m replying to said that if inflation was 10% a year in food, everyone would starve in 10 years, and it’s simply not true.
- floxy 4y ago
  Prices of used cars: https://www.cargurus.com/Cars/price-trends/ https://www.cargurus.com/Cars/price-trends/ ...you can select the start date for the chart as early as August of 2010. Price increases starting in late 2020 don't look illusory to me.
  - dariusj18 4y ago
    This is pretty obvious knock on effect of the pandemic too. Inflation isn't making it so that every new car is selling at or above MSRP currently.
    - floxy 4y ago
      I suppose it matters whether you consider inflation a cause or an effect?
      - dariusj18 4y ago
        I think that is a good point, and one of the reasons this inflationary period seems to be so widely misunderstood and contentious. We just spent over 2 years dealing with a pandemic, there will be side effects caused by the pandemic as well as the solutions to ease its impact. In regard to car prices, I would say that the prices themselves contribute to the inflation statistics, but they are not caused by inflationary pressure.
uni_rule 4y ago
If you want to start arguments you can call that opportunistic rent seeking, something to consider in face of 2021 having record corporate profits. That idea is plausible enough that even some more conservative outlets gave it coverage: https://fortune.com/2022/03/31/us-companies-record-profits-2021-price-hikes-inflation/ https://fortune.com/2022/03/31/us-companies-record-profits-2...
dfxm12 4y ago
Look at their profits. This is a symptom of greed more than inflation. Recent research illustrates these inflationary-profit trends, in particular busting the myth of a wage-price spiral driven by increased worker incomes. Over 53% of price increases in the last two years have been driven by profit margin gains https://www.forbes.com/sites/errolschweizer/2022/05/10/how-windfall-profits-have-supercharged-food-inflation/?sh=965e31b66722 https://www.forbes.com/sites/errolschweizer/2022/05/10/how-w...
- mensetmanusman 4y ago
  May be greed, or may be because of regulatory capture. I.e. it is incredibly expensive to start a company due to all the requirements that the companies that do exist can continue to raise prices with no competition.
- lamontcg 4y ago
  > Look at their profits. This is a symptom of greed more than inflation. Inflation is just a rise in prices. Literally just defined as a rise in prices. It doesn't matter if the prices accurately reflect rising costs of doing business or wind up in profits. Inflation is more about the ability of consumers to continue to pay higher prices and the inelastic demand for whatever the good is. The market is fundamentally an auction and prices get bid up until elastic demand starts to appear.
- TexanFeller 4y ago
  Ask yourself why all of these companies were not greedy in previous years, and how it happened that they all became greedy at approximately the same time. The answer is that this line about greed is political propaganda you’ve been fed. The companies involved were merely responding to market forces as they always do, /for example: 1) Near zero interest rates during the pandemic - technically set by the Fed, but under obvious political pressure to do it from both the former and current administrations. 2) Helicopter money from the government. I’m not just talking about the one time checks that people use as a strawman to attack as an inflation cause. There were student loan pauses, 300/mo per child credit(they tried to make it permanant!), and more. The fact that much of the money actually went to younger or poorer folks, which we celebrate, probably also drove inflation much more than money going to rich people, because the poor and the young are the most likely to immediately spend it. Lots of pandemic loans given to businesses too with little to no oversight too. 3) Supply side constraints due to shutdowns at suppliers overseas. 4) Demand side rebound demand for things people avoided or weren’t allowed during the pandemic. Much of this is likely attributable to government policy, so I blame our political class.
ac29 4y ago
> Food prices are up 48% at the nations second largest grocery chain. This is a very specific claim to be completely unsourced. What is the chain, and what is the time period you are referring to? The latest CPI [0] has food prices up 11.2% over the past 12 months, so 48% would be more than just an outlier. [0] https://www.bls.gov/cpi/home.htm https://www.bls.gov/cpi/home.htm

vikingerik 4y ago

That's exactly what I'm talking about. Don't look at year-over-year numbers, you're falling for the illusion. A rent jump of 20% for 2022 is because rents were artificially suppressed in 2020 and 2021. The right comparison is to look at 2022 compared to 2019 and see if it looks out of line for a three-year period. A few things are, but most aren't. Also, citing one grocery chain is a cherry-picked outlier. Cite them all if you want a real number and not an artificial illusion.

keester 4y ago
rent did not go down in 2020
- LUmBULtERA 4y ago
  It went down significantly in 2021 for me. Though it popped back up a lot in 2022 if we signed a new lease (did not).
idiotsecant 4y ago
This line of thought doesn't stand up to scrutiny when you look at real data. According to the USDA ERS food price outlook reports @ https://www.ers.usda.gov/data-products/food-price-outlook/ https://www.ers.usda.gov/data-products/food-price-outlook/ the 20 year average percent change year on year is something like 2.0% - 2.5%. The change from sept. 2021 to sept 2022 has been 11.2%. The forecasted change in 2022 is approximately 10%. The foretasted change in 2023 is approximately 3.5%. This is dramatically more than just delayed increases from a strange year.
- inquirerGeneral 4y ago
  Don't worry, @vikingerik will continue to double down.
RoddaWallPro 4y ago
That is _not_ exactly what you are talking about: food prices do not normally go up 24% a year. Rent prices do not normally go up 10-15% a year. If their number is cherry-picked, give a real number yourself. Anecdotally, my grocery bills are easily 30%+ from what they were last year, and the same is true for many people I've asked.
- vikingerik 4y ago
  That's still what I'm talking about. Any number you're looking at that's "in a year" is falling victim to the time-shifted demand effects from the pandemic. Compare 2022 to 2019 and look for the average change over three years. That's the real signal over the temporary noise. There are still some real effects, but it's much smaller than all the one-year-over-year numbers seem to indicate.
  - thatguy0900 4y ago
    This doesn't make sense. How can cost of groceries be up 30% over a three year period be normal. That would leave everyone starving within a decade, and obviously can't be right. Same with the rent increases.
    - culopatin 4y ago
      It would not leave everyone starving because salaries go up too, 10% inflation does exist. Argentina deals with 100% yearly inflation and has not blown up yet.
      - thatguy0900 4y ago
        Salaries arnt going up that much. McDonald's near me is still offering 12.50. At best the people in these places got a few more dollars an hour
        culopatin 4y ago
        I’m not speaking about your particular scenario but about situations where inflation is actually more than 10% over several years. Salaries always lag, but they don’t remain at 0% increase. The post I’m replying to said that if inflation was 10% a year in food, everyone would starve in 10 years, and it’s simply not true.
floxy 4y ago
Prices of used cars: https://www.cargurus.com/Cars/price-trends/ https://www.cargurus.com/Cars/price-trends/ ...you can select the start date for the chart as early as August of 2010. Price increases starting in late 2020 don't look illusory to me.
- dariusj18 4y ago
  This is pretty obvious knock on effect of the pandemic too. Inflation isn't making it so that every new car is selling at or above MSRP currently.
  - floxy 4y ago
    I suppose it matters whether you consider inflation a cause or an effect?
    - dariusj18 4y ago
      I think that is a good point, and one of the reasons this inflationary period seems to be so widely misunderstood and contentious. We just spent over 2 years dealing with a pandemic, there will be side effects caused by the pandemic as well as the solutions to ease its impact. In regard to car prices, I would say that the prices themselves contribute to the inflation statistics, but they are not caused by inflationary pressure.

uni_rule 4y ago

If you want to start arguments you can call that opportunistic rent seeking, something to consider in face of 2021 having record corporate profits. That idea is plausible enough that even some more conservative outlets gave it coverage: https://fortune.com/2022/03/31/us-companies-record-profits-2021-price-hikes-inflation/ https://fortune.com/2022/03/31/us-companies-record-profits-2...

dfxm12 4y ago

Look at their profits. This is a symptom of greed more than inflation. Recent research illustrates these inflationary-profit trends, in particular busting the myth of a wage-price spiral driven by increased worker incomes. Over 53% of price increases in the last two years have been driven by profit margin gains https://www.forbes.com/sites/errolschweizer/2022/05/10/how-windfall-profits-have-supercharged-food-inflation/?sh=965e31b66722 https://www.forbes.com/sites/errolschweizer/2022/05/10/how-w...

mensetmanusman 4y ago
May be greed, or may be because of regulatory capture. I.e. it is incredibly expensive to start a company due to all the requirements that the companies that do exist can continue to raise prices with no competition.
lamontcg 4y ago
> Look at their profits. This is a symptom of greed more than inflation. Inflation is just a rise in prices. Literally just defined as a rise in prices. It doesn't matter if the prices accurately reflect rising costs of doing business or wind up in profits. Inflation is more about the ability of consumers to continue to pay higher prices and the inelastic demand for whatever the good is. The market is fundamentally an auction and prices get bid up until elastic demand starts to appear.
TexanFeller 4y ago
Ask yourself why all of these companies were not greedy in previous years, and how it happened that they all became greedy at approximately the same time. The answer is that this line about greed is political propaganda you’ve been fed. The companies involved were merely responding to market forces as they always do, /for example: 1) Near zero interest rates during the pandemic - technically set by the Fed, but under obvious political pressure to do it from both the former and current administrations. 2) Helicopter money from the government. I’m not just talking about the one time checks that people use as a strawman to attack as an inflation cause. There were student loan pauses, 300/mo per child credit(they tried to make it permanant!), and more. The fact that much of the money actually went to younger or poorer folks, which we celebrate, probably also drove inflation much more than money going to rich people, because the poor and the young are the most likely to immediately spend it. Lots of pandemic loans given to businesses too with little to no oversight too. 3) Supply side constraints due to shutdowns at suppliers overseas. 4) Demand side rebound demand for things people avoided or weren’t allowed during the pandemic. Much of this is likely attributable to government policy, so I blame our political class.

ac29 4y ago

> Food prices are up 48% at the nations second largest grocery chain. This is a very specific claim to be completely unsourced. What is the chain, and what is the time period you are referring to? The latest CPI [0] has food prices up 11.2% over the past 12 months, so 48% would be more than just an outlier. [0] https://www.bls.gov/cpi/home.htm https://www.bls.gov/cpi/home.htm