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> It is unlikely that either the extent of corporate greed or even the power of corporations generally has increased during the past two years. Instead, the alr
by legitster 4y ago
> It is unlikely that either the extent of corporate greed or even the power of corporations generally has increased during the past two years. Instead, the already-excessive power of corporations has been channeled into raising prices rather than the more traditional form it has taken in recent decades: suppressing wages. That said, one effective way to prevent corporate power from being channeled into higher prices in the coming year would be a temporary excess profits tax.
I appreciate that they don't claim there is some invisible "greed" metric that it somehow higher now than before. But this still feels a bit half-baked. If this is so much more successful than suppressing wages, why not do this this whole time? Also, why does inflation continue even when the stock market is suppressed?
I think everyone is really ignoring what happened supply-side the last few years. We lost a huge amount of suppliers, especially in sectors with inelastic demand (like energy). With a semi-artificial constraint on the economy, of course profits are going to be higher. If you are a US oil producer, a war in Ukraine was the best thing to happen to your business.
Focusing on the corporate profitability kind of misses the forest for the trees - prices are higher because there is just less stuff.
- deepsquirrelnet 4y ago> Focusing on the corporate profitability kind of misses the forest for the trees - prices are higher because there is just less stuff. I don’t think the article missed that. Their major point was that the reduction in supply and increase in demand for goods (as opposed to services, which collapsed during the pandemic) gave them outsized power over setting prices. > If this is so much more successful than suppressing wages, why not do this this whole time? Because if there is not constraints in the supply chain, it’s not an option. When supply is able to meet or exceed demand, only illegal price fixing can do what you’re suggesting.
- hcurtiss 4y agoAt least in the lumber business, prices have been sky high the past couple years and production has literally never been higher. All of us are producing full throttle and have been ever since about May 2020 after a couple month dip. At least in the context of lumber, this idea that pricing is all driven by supply constraints is just wrong. It’s driven by truly and objectively unprecedented take-away/demand. Those prices are presently falling as Powell closes the easy money tap.
- bcrl 4y agoIt doesn't help that the US keeps throwing tariffs on top of Canadian softwood. Let's increase inflation by raising prices on a critical input to housing construction!