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We’ve all been way too accepting of inflation
- NickM 4y agoThis take seems ignorant of basic economics. Profits are up because of supply constraints leading to a supply/demand mismatch; blaming it on consumers “passively accepting” price increases is just as ridiculous as calling it “corporate greed”.
- MilnerRoute 4y agoThe article specifically says that it's not just supply constraints. "The idea that corporate profit expansion has been a big driver of inflation was once mostly confined to trade unions and left-wing academics, but it’s now taken seriously by central bankers." Updated to add: While pure inflation may be driven by the amount of money in a system, prices can also increase for entirely different reasons. (The authors even cite the newly-coined term "excuseflation".) The two authors of this piece previously wrote for the Financial Times, so they have a lot of credibility.
- ALittleLight 4y agoI think they have less credibility after writing this article. Corporate profits don't change the amount of money in a system which is what drives inflation.
- govolckurself 4y agoThis is, apparently, a frequent misunderstanding of inflation. Inflation means prices go up. That's it. It can be because of an increase in the money supply, but it can also be because of an increase in demand, or a decrease in supply. People tend to use the misunderstanding to push a specific agenda, I've noticed.
- than3 4y ago> The two authors of this piece previously wrote for the Financial Times, so they have a lot of credibility. Honestly, taking their work on its face, they really don't have any credibility. They misattribute, and show a complete lack of understanding regarding what drives cost-push inflation. They promote misleading and false ideas about what you can do about it too. People have no say about what prices are when business sector concentration exceeds a certain point, they have to feed themselves. The article is garbage, and sector concentration is or has exceeded what was previously known during https://en.wikipedia.org/wiki/Robber_baron_(industrialist) https://en.wikipedia.org/wiki/Robber_baron_(industrialist)
- jnwatson 4y agoCorporate profits are high. That they can do this is a function of the ultimate source of the problem: lack of competition. In a competitive environment, businesses would be less able to pass costs onto the consumer. It is time for the anti-trust machinery to start working again.
- mypastself 4y agoAre the profit margins unusually high, though?
- lowkey 4y agoI find it curious to talk about basic economics when referring to the cost and supply of money. Money is subject to centralized control and manipulation by a quasi-private entity (the Federal Resserve) which holds a monopoly on the cost and supply of money. Remember, money accounts for half of every transaction in our economy. When one-half of every transaction is controlled by a centralized monopoly, we do not in fact have a free market subject to the laws of economics.
- uoaei 4y agoHard not to "accept" inflation when life's necessities are priced on markets experiencing inflation... What does "consumer pushback" even mean? How does one "vote with your dollar" in a captured market? Does Bloomberg think "protests" are going to do anything except feed the culture wars by giving fodder to news media outlets' spin doctors?
- NickC25 4y agoSeriously. Great comment. Example: Food price inflation is not something one can choose to accept or reject, you have to eat regardless. When all the grocery stores and farmer's markets (and everything in between) all have relatively similar if not equal pricing on the most basics one needs (fresh veggies and fruit), there's no choice, not even an illusion of choice. This article misses the point completely - we depend on our elected officials to rid us of inflation, but unfortunately they've become victim to regulatory capture, or worse - political pressure. JPowell is a terrible central banker, regardless of what happens going forward. It's not all Biden's fault, either, no matter what the media wants anyone to think.
- im3w1l 4y agoWell if veggies are so expensive why don't they buy cake?
- NickC25 4y agoHa! Cake, despite being loaded with preservatives and cheap sugars, is incredibly expensive. I have celiac disease so gluten-free cakes are my only option if I want cake, and those cakes are, well, prohibitively expensive. shit even gluten-free cake/cookie/brownie mix is like $18-20 which is crazy.
- klyrs 4y agoI wanted a quick binge treat last week and two slices of grocery store cake were $12.99. I actually didn't eat cake, nor the $3 apple that I walked by on the way to the cake department.
- 4y ago
- nathanaldensr 4y ago"We" have? Speak for yourself, Bloomberg. The unfortunate thing is that the government has a monopoly on violence and a completely captured voting system. We poor citizens don't have the right to accept or decline anything related.
- dsfyu404ed 4y agoRegardless, even if you reject their on violence who are you gonna shoot? Responsibility is so diffuse that nobody you shoot will be seen to have "had it coming". This is a feature, not a bug.
- jt2190 4y agoI know we’re not supposed to gripe about moderation, but I wish that there was a guideline to prefix the title with “Opinion:”. A lot of people see the domain bloomberg.com and assume “news”.
- justin66 4y agoI can see that being a problem in a lot of cases, but in this the title would seem to be sufficient to the reader to indicate this is a probably opinion piece. "We’ve all been way too accepting of inflation" is literally an opinion.
- metadat 4y agohttps://archive.today/QT7Xj https://archive.today/QT7Xj
- narutosasuke 4y agoThis is a really weird article "The women-led grocery store boycotts of the 1960s in the US were ultimately unsuccessful, and inflation was only stamped out years later by the Federal Reserve hiking interest rates to punishing levels. But today’s consumers have a far more effective tool than placards — social media. " K. So it hasn't worked in the past and Federal Reserve Hiking did? "Leaving a one-star Google review for a price-gouging local business or a TikTok campaign against a bigger target might sound anti-business. But in fact it’s far better for the economy (and stock prices) than massive rate hikes that cause unnecessary unemployment. " This borders on parody. Individuals are supposed to figure out what price increases are necessary and which are price gouging themselves. I hear people shout price gouging when a restaurant has to increase their burger prices, this is a nonstarter and will simply be noise. "So far, consumers have mostly gone about tackling inflation quietly by, for example, switching from household-name brands to supermarkets’ cheaper private-label goods, turning to no-frills stores like Aldi and Lidl, or making products last longer." So the brands that increase their prices too much suffer and the ones that don't lose customers. Why are you writing this article?
- stephen_g 4y agoThe rate hikes just coincided with the energy crisis easing, which actually did resolve inflation, so I still strongly believe the hikes themselves didn’t do anything to help bring down inflation (but did cause unnecessary unemployment). But yeah, the grocery store boycotts wouldn’t have done anything either…
- crmd 4y ago“Greed is good”, say the capitalists, except in the case of rising workforce salaries which is bad and requires intervention by the Federal Reserve.
- readthenotes1 4y agoGreed is the necessary evil of capitalism. Fair markets are the necessary counter.
- ALittleLight 4y agoWow, what a coincidence - companies decide to get greedier at the same time as massive government deficit spending and global productivity loss. This article talks about "justifying" profits. I think that's backwards. Profits justify businesses - making a profit is why people make cars, beers, whatever. Companies don't have to justify their profits if their consumers are willing to buy them. The article mentions the spike in profits for Cal-Maine foods. That's well trod ground for this discussion. The author also, to his credit, mentions that avian flu devastated competitors flocks (50+ million birds killed) but didn't touch Cal-Maine. The other part of the puzzle is that Cal-Maine had a bad fiscal year the year before so year over year profits look like a huge spike. I don't really see how you can discuss inflation without recognizing that the creation of lots of new dollars is going to play a big role. If we start regulating profits we will disrupt markets, not make them more productive.
- deepthunder 4y agoRegulate monopolies.
- than3 4y agoDeeper regulation doesn't do what you think it would. They need to retool the incentives and taxes, basically make it so its not worth growing beyond 8% marketshare. Anything larger and you get coercion, influence, and monopolistic practices.
- htag 4y agoI'm confused. As an American consumer I thought I was suppose to spend money to fuel the economy. Now this article says I am ruining the economy by causing inflation and I should be selective about how I spend my money. This seems crazy, because if everyone gravitates to the few goods that are not experiencing inflation then the demand for those will cause a supply shortage which might lead to higher prices.... Virtually all food stuff, all transportation options, all housing options, all educational services, and all medical care has been hit hard by inflation over the last 3+ years. Is this bloomberg columnist asking that we just don't participate in those sectors of the economy?
- than3 4y agoNo, this bloomberg columnist is just writing what their bosses want them to write. Its mass manipulation on a grand scale, they want to blame the consumer for inflation, instead of the real cause. Anyone that knows anything realizes what a shill position this is. In many respects, we really need to start punishing businesses that engage in malign influence campaigns. Its just like this article here. Completely false if you look at the publicly released data, but they still publish it, and if you are too dumb to tell otherwise you end up supporting them. https://www.reuters.com/markets/us/location-location-location-us-manufacturing-boom-has-real-estate-problem-2023-04-13/ https://www.reuters.com/markets/us/location-location-locatio...
- pixl97 4y agoNo, you see, they saved up a bunch of cash on hand and are waiting for you to stop spending. When you stop spending companies will downsize and large amount of unemployment will occur. This will lead to huge amount of foreclosures and a deflationary cycle. Then when prices are low they'll strike with their cash on hand buying up these cheap assets and win the game of capitalism as they strike it rich in the next inflationary cycle.
- 20after4 4y agoBingo! This is exactly what's happening.
- 4y ago
- anonymousiam 4y agoOne thing that we've all been even more accepting of is the assumption that the federal debit limit will be cooperatively raised every time a new spending bill is passed. The limit was enacted for a good reason, but somehow each spending bill warrants an exception to the rule. Spending is completely out of control and all political parties should agree on this.
- credit_guy 4y agoThe headline is a tautology. By definition inflation is a different way of saying that buyers accept to pay higher prices for the same goods and services.
- antibasilisk 4y agoyes yes we get it you have a bunch of short positions
- frankreyes 4y agoI'm from a country of 100% inflation. I've heard this song before. The only complacency is for people to believe that inflation is for companies to make more money, that its because greed, or that the government can't do anything. History repeats itself