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This take seems ignorant of basic economics. Profits are up because of supply constraints leading to a supply/demand mismatch; blaming it on consumers “passivel

by NickM 3y ago

This 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 3y ago
The 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 3y ago
  I 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 3y ago
    This 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 3y 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 3y ago
Corporate 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 3y ago
  Are the profit margins unusually high, though?
  - orwin 3y ago
    In my country yes.
    - vuln 3y ago
      Which country? That context helps the discussion without it the discussion stops.
lowkey 3y ago
I 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.

by NickM 3y ago

MilnerRoute 3y ago

The 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 3y ago
I 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 3y ago
  This 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 3y 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 3y ago

Corporate 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 3y ago
Are the profit margins unusually high, though?
- orwin 3y ago
  In my country yes.
  - vuln 3y ago
    Which country? That context helps the discussion without it the discussion stops.

lowkey 3y ago

I 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.