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> It was only when there was a broad narrative shift towards inflation that businesses began increasing prices dramatically economy makes more sense when you c

> It was only when there was a broad narrative shift towards inflation that businesses began increasing prices dramatically economy makes more sense when you consider that things are being done intentionally and are not just a collection of random events converging to create a scenario that somehow almost always f--ks 90% of people and benefits the top 1%.

zeusk 3y ago
Really seems the other way though
- 5350-uiop-1130 3y ago
  this is why i think markets tend to do opposite of what i expect. for me, war is bad so i expect markets to go down...but instead they rally. because war is good for the 1%. markets are ultimately driven by the incentives and best interest of the monopolists. and there is always a monopoly whatever the political or economic system is called. the stock market rally this year which put S&P and Nasdaq at one point their best year since 1995 and 1970s was presented in the media heavily as an AI narrative rally. but you can see the markets started rallying (and diverged from most other markets) on the exact day that the BTFP (bank term funding program/shadow liquidity) was announced to bailout SVB and provide another money spigot for bankers to yolo into.
  - lukifer 3y ago
    Lieutenant Jadzia Dax: As the 34th Rule of Acquisition states, "Peace is good for business". Quark: That's the 35th Rule. Lieutenant Jadzia Dax : Oh, you're right. What's the 34th? Quark: "War is good for business". It's easy to get them confused.
    - k12sosse 3y ago
      Rule 34 is very different "in my day, Son."
      - kaibee 3y ago
        The "Rules of Acquisition" are a Star Trek reference actually, so they actually predate that other Rule 34. *disclaimer: not a trekkie, just a pedant
        k12sosse 3y ago
        Gotcha. I never got into the whole Jedi craze so I guess it went over my head. But I understand now
dalbasal 3y ago
Everything makes more sense when you believe it to be intentionally orchestrated by someone or something. That's why this way of thinking is so popular. Edit:them/it
- xtian 3y ago
  Belief in ideals like blind chance and isolated, rational actors is popular for a similar reason.
- pjmorris 3y ago
  “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.” ― Conspiracy Theorist Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations
  - metaphor 3y ago
    Stale dogma. Times change and Smith didn't live in the Information Age. See this paper[1] for a deeper perspective on relevant market dynamics. [1] https://scholarworks.umass.edu/econ_workingpaper/343/ https://scholarworks.umass.edu/econ_workingpaper/343/
    - pjmorris 3y ago
      From the abstract, "This requires an implicit agreement which can be coordinated by sector-wide cost shocks and supply bottlenecks" Can you help me distinguish between this and the 'stale dogma?'
      - metaphor 3y ago
        You quoted Smith Chapter X Part II, whose argument in context is that the pressure of competition quickly kills attempts at collusion, while surviving conspiracies are enabled by regulation. The paper contrasts commodities from all other concentrated markets; whereas the former is expected to have an impulse transient response whose price discovery quickly settles by way of competitive forces consistent with Smith, the latter has a salient capacity as price maker to play games. Megacorps and multi-nationals weren't exactly meta in the 18th century. Exponential tech complexity, sector consolidation, global economies of scale, regulatory capture, the speed of information and capacity of market participants to meaningfully act are just a few modern barriers to entry in concentrated markets suppressing the notional competition that Smith leans heavily into.
sokoloff 3y ago
Weather makes a lot more sense when you realize it snows the day after all the weathermen collude to tell you it will. Do you really believe that businesses priced their products low until the business press started reporting on inflation and then realized “oh man, I should raise my prices!”? Did the (apparent) sudden flourishing of gen-AI from a bunch of different companies come about because the press started reporting on gen-AI? Or do the press start writing about the early part of the wave?
- RhodesianHunter 3y ago
  >Do you really believe that businesses priced their products low until the business press started reporting on inflation and then realized “oh man, I should raise my prices!”? Absolutely yes. They had an excuse they thought their customers would swallow, and saw other companies doing it.
  - sokoloff 3y ago
    Man, the business press really screwed people over then. If they’d just have kept their traps shut, that inflation wave could have been avoided./s My view is: A. Injecting as much money into the economy as we did was bound to reduce the value of an individual dollar. B. Sellers would naturally demand more of those less valuable dollars for their goods and services. C. The press then reports on the first signs of that wave landing. D. The rest of the wave then lands. Starting at step C, it looks like the reporting caused inflation. I think that’s a “wet streets cause rain” analysis of the situation. It’s quite possible that the injection was the least bad thing given the real and perceived constraints of the day. But the inevitable consequence was the devaluing of the dollar.
    - sanp 3y ago
      Well - if the dollar being devalued is the whole story everything should go up by more or less the same %. This was clearly not the case. Perhaps one could argue that the dollar being devalued triggered inflation but the quantum of it is a combination of mutliple factors - one (and probably the biggest) of which is supplier concentration and their pricing power.
chadcmulligan 3y ago
A lot of economics assumes that businesses don't collude on prices/employee conditions etc, this isn't true in my experience. Casual conversations, business magazines, investors, even monitoring other companies prices all set the norms, a truly free market doesn't exist.
- pjmorris 3y ago
  “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.” ― Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations

zeusk 3y ago

Really seems the other way though

5350-uiop-1130 3y ago
this is why i think markets tend to do opposite of what i expect. for me, war is bad so i expect markets to go down...but instead they rally. because war is good for the 1%. markets are ultimately driven by the incentives and best interest of the monopolists. and there is always a monopoly whatever the political or economic system is called. the stock market rally this year which put S&P and Nasdaq at one point their best year since 1995 and 1970s was presented in the media heavily as an AI narrative rally. but you can see the markets started rallying (and diverged from most other markets) on the exact day that the BTFP (bank term funding program/shadow liquidity) was announced to bailout SVB and provide another money spigot for bankers to yolo into.
- lukifer 3y ago
  Lieutenant Jadzia Dax: As the 34th Rule of Acquisition states, "Peace is good for business". Quark: That's the 35th Rule. Lieutenant Jadzia Dax : Oh, you're right. What's the 34th? Quark: "War is good for business". It's easy to get them confused.
  - k12sosse 3y ago
    Rule 34 is very different "in my day, Son."
    - kaibee 3y ago
      The "Rules of Acquisition" are a Star Trek reference actually, so they actually predate that other Rule 34. *disclaimer: not a trekkie, just a pedant
      - k12sosse 3y ago
        Gotcha. I never got into the whole Jedi craze so I guess it went over my head. But I understand now

dalbasal 3y ago

Everything makes more sense when you believe it to be intentionally orchestrated by someone or something. That's why this way of thinking is so popular. Edit:them/it

xtian 3y ago
Belief in ideals like blind chance and isolated, rational actors is popular for a similar reason.
pjmorris 3y ago
“People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.” ― Conspiracy Theorist Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations
- metaphor 3y ago
  Stale dogma. Times change and Smith didn't live in the Information Age. See this paper[1] for a deeper perspective on relevant market dynamics. [1] https://scholarworks.umass.edu/econ_workingpaper/343/ https://scholarworks.umass.edu/econ_workingpaper/343/
  - pjmorris 3y ago
    From the abstract, "This requires an implicit agreement which can be coordinated by sector-wide cost shocks and supply bottlenecks" Can you help me distinguish between this and the 'stale dogma?'
    - metaphor 3y ago
      You quoted Smith Chapter X Part II, whose argument in context is that the pressure of competition quickly kills attempts at collusion, while surviving conspiracies are enabled by regulation. The paper contrasts commodities from all other concentrated markets; whereas the former is expected to have an impulse transient response whose price discovery quickly settles by way of competitive forces consistent with Smith, the latter has a salient capacity as price maker to play games. Megacorps and multi-nationals weren't exactly meta in the 18th century. Exponential tech complexity, sector consolidation, global economies of scale, regulatory capture, the speed of information and capacity of market participants to meaningfully act are just a few modern barriers to entry in concentrated markets suppressing the notional competition that Smith leans heavily into.

sokoloff 3y ago

Weather makes a lot more sense when you realize it snows the day after all the weathermen collude to tell you it will. Do you really believe that businesses priced their products low until the business press started reporting on inflation and then realized “oh man, I should raise my prices!”? Did the (apparent) sudden flourishing of gen-AI from a bunch of different companies come about because the press started reporting on gen-AI? Or do the press start writing about the early part of the wave?

RhodesianHunter 3y ago
>Do you really believe that businesses priced their products low until the business press started reporting on inflation and then realized “oh man, I should raise my prices!”? Absolutely yes. They had an excuse they thought their customers would swallow, and saw other companies doing it.
- sokoloff 3y ago
  Man, the business press really screwed people over then. If they’d just have kept their traps shut, that inflation wave could have been avoided./s My view is: A. Injecting as much money into the economy as we did was bound to reduce the value of an individual dollar. B. Sellers would naturally demand more of those less valuable dollars for their goods and services. C. The press then reports on the first signs of that wave landing. D. The rest of the wave then lands. Starting at step C, it looks like the reporting caused inflation. I think that’s a “wet streets cause rain” analysis of the situation. It’s quite possible that the injection was the least bad thing given the real and perceived constraints of the day. But the inevitable consequence was the devaluing of the dollar.
  - sanp 3y ago
    Well - if the dollar being devalued is the whole story everything should go up by more or less the same %. This was clearly not the case. Perhaps one could argue that the dollar being devalued triggered inflation but the quantum of it is a combination of mutliple factors - one (and probably the biggest) of which is supplier concentration and their pricing power.

chadcmulligan 3y ago

A lot of economics assumes that businesses don't collude on prices/employee conditions etc, this isn't true in my experience. Casual conversations, business magazines, investors, even monitoring other companies prices all set the norms, a truly free market doesn't exist.

pjmorris 3y ago
“People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.” ― Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations