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How someone can look at that graph and say that greedflation is nonsense is absurd. Look at the growth in margins from 2019-today and tell me that margin growt

How someone can look at that graph and say that greedflation is nonsense is absurd. Look at the growth in margins from 2019-today and tell me that margin growth isn’t egregious. Forget rate changes…look at the base numbers - 15% average profit is usury by most definitions (the US financial system even got a legal carve out for credit cards to be egregiously usurious) This author wants us to ignore the last 5 years of greed fueled inflation - which used debt to drive margins up - coming due now.

NBJack 3y ago
https://www.pbs.org/newshour/show/oil-companies-post-massive-profits-as-consumers-feel-squeeze-from-high-gas-prices https://www.pbs.org/newshour/show/oil-companies-post-massive... An example from site itself: 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... It's absurd.
- gottorf 3y ago
  What's absurd is the notion that profit is evil, or that there is some set amount of profit above which it is evil. Before its blowout result in 2022, Exxon Mobil (the first company the PBS article points a finger at) lost $20b in one quarter back in 2020[0], more than its net income in any single quarter since then. Should companies not be allowed to lose money, either, then? [0]: https://www.macrotrends.net/stocks/charts/XOM/exxon/net-income https://www.macrotrends.net/stocks/charts/XOM/exxon/net-inco...
  - BaseballPhysics 3y ago
    > What's absurd is the notion that profit is evil, or that there is some set amount of profit above which it is evil. The term "price gouging" exists because we collectively agree that, at a certain point, yes, excessive profits are indicative of abuse. This isn't even controversial. The most extreme libertarian economist would agree that, for example, market failures like monopolies can create circumstances where excess profits become egregious. And we know from history that widespread crises can lead to market conditions that result in excess profits. > Should companies not be allowed to lose money, either, then? And this is a silly strawman that isn't worth responding to.
    - pauldenton 3y ago
      Price gouging is a term, but so is Klingon. It's not real. https://youtu.be/ymMzJAdIAes https://youtu.be/ymMzJAdIAes
  - slowmovintarget 3y ago
    Profit is not evil. Having record profits and having layoffs, paying stagnant wages, giving exorbitant bonuses to executives for "op-ex reduction," while price fixing is evil.
gottorf 3y ago
> 15% average profit is usury by most definitions Usury strictly refers to interest and has no bearing on the profit margin of a risky enterprise that deals in goods and services. If my landscaper spends $5 in gasoline and an hour and a half to mow my lawn, where he values his own time at $20 an hour, his cost is $35. If he charges me $50 for this service, are you going to call that usurious?
- AndrewKemendo 3y ago
  >Are you going to call that usurious Absolutely
yojo 3y ago
Margins go up when firms have pricing power. This happens when demand outstrips supply. The system is set up to raise prices to allocate that supply to whoever values it most. You can argue for different systems of allocation, but right now we use capitalism, and it’s working as intended. We can also argue about why demand is outstripping supply. Are monopolies keeping out competitors and artificially limiting supply? In some industries probably. But we did dump a ton of money via fiscal stimulus into a system that was already stretched thin due to supply chain disruptions. That seems like the most likely explanation for the broad inflation we’re experiencing, though consolidation has likely exacerbated the problem.

NBJack 3y ago

https://www.pbs.org/newshour/show/oil-companies-post-massive-profits-as-consumers-feel-squeeze-from-high-gas-prices https://www.pbs.org/newshour/show/oil-companies-post-massive... An example from site itself: 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... It's absurd.

gottorf 3y ago
What's absurd is the notion that profit is evil, or that there is some set amount of profit above which it is evil. Before its blowout result in 2022, Exxon Mobil (the first company the PBS article points a finger at) lost $20b in one quarter back in 2020[0], more than its net income in any single quarter since then. Should companies not be allowed to lose money, either, then? [0]: https://www.macrotrends.net/stocks/charts/XOM/exxon/net-income https://www.macrotrends.net/stocks/charts/XOM/exxon/net-inco...
- BaseballPhysics 3y ago
  > What's absurd is the notion that profit is evil, or that there is some set amount of profit above which it is evil. The term "price gouging" exists because we collectively agree that, at a certain point, yes, excessive profits are indicative of abuse. This isn't even controversial. The most extreme libertarian economist would agree that, for example, market failures like monopolies can create circumstances where excess profits become egregious. And we know from history that widespread crises can lead to market conditions that result in excess profits. > Should companies not be allowed to lose money, either, then? And this is a silly strawman that isn't worth responding to.
  - pauldenton 3y ago
    Price gouging is a term, but so is Klingon. It's not real. https://youtu.be/ymMzJAdIAes https://youtu.be/ymMzJAdIAes
- slowmovintarget 3y ago
  Profit is not evil. Having record profits and having layoffs, paying stagnant wages, giving exorbitant bonuses to executives for "op-ex reduction," while price fixing is evil.

gottorf 3y ago

> 15% average profit is usury by most definitions Usury strictly refers to interest and has no bearing on the profit margin of a risky enterprise that deals in goods and services. If my landscaper spends $5 in gasoline and an hour and a half to mow my lawn, where he values his own time at $20 an hour, his cost is $35. If he charges me $50 for this service, are you going to call that usurious?

AndrewKemendo 3y ago
>Are you going to call that usurious Absolutely

yojo 3y ago

Margins go up when firms have pricing power. This happens when demand outstrips supply. The system is set up to raise prices to allocate that supply to whoever values it most. You can argue for different systems of allocation, but right now we use capitalism, and it’s working as intended. We can also argue about why demand is outstripping supply. Are monopolies keeping out competitors and artificially limiting supply? In some industries probably. But we did dump a ton of money via fiscal stimulus into a system that was already stretched thin due to supply chain disruptions. That seems like the most likely explanation for the broad inflation we’re experiencing, though consolidation has likely exacerbated the problem.