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That people do not understand very basic concepts is scary. > The root of what’s going on here can feel obvious: blame inflation, which picked up in mid-2021 a

• rzimmerman 3y ago
  It’s really disheartening to see the percentage of people that don’t understand this (and feel perfectly comfortable having an argument about it). People posting comparisons of receipts from 8 years ago and saying that prices are “really still up 30%” and “they’re lying to us”.
  • Capricorn2481 3y ago
    I see lots of people saying something different, which is the current state of prices doesn't match the rate of inflation we had the past few years. I'm way more disheartened by people talking about inflation like it's the end all be all of prices. We know what price gouging looks like.
    • merpnderp 3y ago
      We've had about 20% total inflation since 2021. In some sectors it is higher and some lower. Even Amazon's recent history of price gouging is only going to add up to peanuts on their yearly gross. I think it's more people just don't understand compounding rates and if you inject more dollars into the economy than there are goods and services, you'll have more dollars chasing those same goods and services.
  • soperj 3y ago
    They are lying to us though. Inflation is and was higher than what they're saying it is.
    • tekla 3y ago
      Where is the evidence?
      • adr1an 3y ago
        Casual stroll through the supermarket at OP's neighborhood
        • JumpCrisscross 3y ago
          > Casual stroll through the supermarket at OP's neighborhood At which point I’m sure they’re considering their metropolitan statistical area’s figures instead of the national ones. /s
      • s3r3nity 3y ago
        Not OP, but where I _may_ agree with the sentiment is that inflation has a wide distribution of impact by the underlying category of goods/services. e.g. food, energy, electricity, shelter, apparel, etc. Namely, even if average / median inflation is going down, inflation is still non-zero - and even still very high - in categories that significantly impact lower-income households, urban families, farmers, etc.
        • deleted 3y ago
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      • soperj 3y ago
        Just look at the economists who are calculating inflation using the 80s methodologies and it's been way higher that the public figure.
    • Clubber 3y ago
      Inflation isn't even across all states. Some states experience higher inflation than the national average. https://usafacts.org/articles/which-us-regions-have-the-highest-inflation-rates/ https://usafacts.org/articles/which-us-regions-have-the-high...
  • amanaplanacanal 3y ago
    Is this just young people? Those of us that lived through the 70s and 80s remember very well how this stuff worked.
    • wredue 3y ago
      Let me assure you that people not understanding extremely basic economics come from all walks of life. In fact, I was just listening to a random, she must’ve been 60 year old woman and her mother in a waiting room rant about “how is prices going up with inflation going down”. I’ve been working for 20 odd years now and still have coworkers who started the day I did rant “these fucking forced union wage increases! Don’t they know that I’ll hit a new tax bracket and then take home less money than before!” These people are 40+ years old. They should know better.
      • colejohnson66 3y ago
        The misconception of tax brackets is also frustrating. Tax brackets are marginal. If a tax bracket cutoff is, say, 10% at 100k, and you cross it to 110k, only 10k is taxed at 10%. The other 100k is taxed as before.
    • Izkata 3y ago
      The last 3.5 years have also screwed with peoples' sense of time, it's really common to see measures that normally get compared year-to-year instead get compared to 2019.
      • AnimalMuppet 3y ago
        Yes. But in fairness, inflation was basically zero for a decade before that. So it's kind of "since inflation (re)started", which makes a kind of sense, even though it's hard to compare to all the reported figures, which are annual.
  • Aunche 3y ago
    It's very easy to have selection bias. For example, your favorite restaurant might have been cheap when it was under the radar, but then they rose their prices by 30% after they went viral.
• candiddevmike 3y ago
  Deflationary spirals are scary, at least for a debt and consumption driven economy like ours. In theory supply and demand should force prices back down over time, but ongoing consolidation/monopolies/backdoor price fixing (RealPage, Amazon Marketplace) kinda broke the efficient market stuff. Trust bust before the economy busts?
  • piva00 3y ago
    > In theory supply and demand should force prices back down over time, but ongoing consolidation/monopolies/backdoor price fixing (RealPage, Amazon Marketplace) kinda broke the efficient market stuff. One way this could happen is if salaries increased to match the new prices over time. The issue is that we are not seeing that happening, prices are increasing much faster than salaries, while corporate profits break records. The money is flowing upwards, at some point people will get very fed up with that...
    • sokoloff 3y ago
      In any inflationary environment, corporate profits should be expected to regularly break records (in nominal terms) just like GDP should be expected to regularly break records.
      • piva00 3y ago
        Break nominal records, yes, not to break record margins.
        • sokoloff 3y ago
          Corporate profit margins are in the range which has been typical since the recovery from the 2007 GFC. https://www.gurufocus.com/economic_indicators/62/corporate-profit-margin-after-tax- https://www.gurufocus.com/economic_indicators/62/corporate-p... They're not currently breaking records and they jumped into this range during a period of notoriously low inflation (by historical and absolute measures).
    • 3y ago
• darth_avocado 3y ago
  There is a reason corporate price gouging takes place when you see inflation narrative in the media. This is the only opportunity where people accept an increase in prices that sticks around. You raise the prices of eggs on a normal day, people will stop buying your eggs. You raise the prices of eggs when everyone is talking about inflation, people will accept it and focus on everything else.
  • HDThoreaun 3y ago
    Completely disagree. Eggs are a largely demand inelastic good. Prices go up when supply goes down, that's it. Commodity markets are very competitive, but when prices increase most people just get angry and pay anyway, it has nothing to do with media narratives.
    • Sohcahtoa82 3y ago
      I don't think the GP comment meant eggs specifically. They just chose a random specific consumer good as an example.
      • HDThoreaun 3y ago
        Neither did I. People aren't deciding what to buy based off the media's inflation narrative. They're trying to make the best decisions for themselves given the opportunities available. If that means buying expensive eggs they'll do it.
    • 303uru 3y ago
      Lol, you're the one who narrowed price gouging across nearly the entire marketplace to EGGS!!!!
  • blitzar 3y ago
    Auto workers seem to have used the "narrative" to good effect.
  • adventured 3y ago
    Can you provide several strong examples of corporate price gouging showing up in public financial results (where we can see some evidence of it, instead of just empty claims)? I've yet to see any proof of it. Margins haven't skyrocketed on food products for example. Kroger still has horrible retailer margins. Prices at CVS and Walgreens have soared, their business margins are still horrible in retail. Kroger's gross profit barely moved over the three operating years during the inflation wave. Their sales increased by 12% across three years combined. Which is another way of saying in real terms their business shrank over three years. Their gross profit margin was 23% in 2021, and it's 22% now. They're one of the giant primary grocery stores in the US, if there was money to be made from price gouging consumers on the grocery price spike, where are the results? Walmart's gross profit margin for 2020 was 24%. It's 24% for the last four quarters. Their operating income margin in 2020 was 3.9%, and it was 3.4% for the last four quarters. Where's the big spike in profitability? The greatest operating retailer in history, with enormous leverage over vendors, if they can't take advantage of a supposed price gouging bonanza, who can? Their operating costs are going up faster than sales. Hershey, like a lot of candy makers, has raised prices by a lot during the inflation wave. Seemingly well beyond the rate of inflation. And yet both their gross and operating income margins have barely moved. Their operating income margin was 22% in 2020, and it's 23% for the last four quarters. They raised prices by 30-50% in stores, so why didn't their profitability margins soar? Their costs went up a lot. Their sales went up by 40% from fiscal 2019 to the latest rolling four quarters, their cost of revenue went up by 41%. Kraft Heinz has raised prices like everybody else and has barely seen any sales increase since 2020. So they're another contracting business. Their gross profit declined while their sales slightly went up over that time, so their margins are getting worse and their costs of operating are going up. Their operating income has dropped. Mondelez has raised prices like everybody else. Their gross profit margin in 2019 was 40%, and in the last four quarters it was 38%. Their operating income margin was 15% in 2019, and it's 15% for the last four quarters. Is it the oil companies? Oil is $80. That's ~$62 in 2013 dollars. Clearly not the problem. How many examples do you want? Where's the corporate price gouging showing up in fact? All I keep seeing is empty blame being cast without a lot of proof to go with it, despite the fact that we have access to vast amounts of public corporate financial information related to sales and profitability. It's a blame the corporations propaganda device, because the alternative is to face the music as it pertains to the consequences of magic free money being endlessly 'printed' and pumped into the system by the trillions of dollars to keep everything propped up (the inflation consequence is damaging to Keynesian economics in terms of reputation). The mainstream narrative for example about Japan has been deflation, deflation, deflation. Back in reality their currency has been hammered by intentional debasement (to try to deal with their drowning-in-debt problem) and their standard of living has imploded along with it. The direct consequences of their grand Keynesian experiment in gigantic state spending. While all the propaganda was targeted on deflation, they were inflating their currency by a lot and eroding the standard of living of their people.
• mattgreenrocks 3y ago
  From my POV it feels like every near-essential good has slow but steady inflationary effect and everyone just sort of accepts it: * health care * housing * cars * food It's hard not to feel like these markets each manifest a collective behavior of, "we know we're essential, so we are free to set prices as we wish because you have no real alternatives." It benefits all the players to play along, you don't even need to prove collusion. And there's no way to push back on it collectively. I realize some of them are due to limited supply (housing) or pure necessity (health care). But cars? I'm paying 10k more for the same thing I bought in 2016?
  • throw0101a 3y ago
    > housing Were you not around in the US (and many other places) in 2008-10? Prices can definitely fall.
    • mattgreenrocks 3y ago
      For sure! Definitely the exception rather than the norm. Wished I'd bought then, but was in no position to do so.
• sonicanatidae 3y ago
  There's also the problem of everyone still waiting for shipping carriers like UPS, FEDEX, etc. to lower the price increase from a fuel spike, a decade ago.
• nathanaldensr 3y ago
  Exactly. The argument comes down to "Yeah, but the exponential rise isn't quite as bad as before; therefore, the problem is going away!" No, it isn't. People are poorer, savings are being eroded, and basic life necessities are skyrocketing in price. Additionally, the government continues to deficit spend as if nothing is happening.
  • freeone3000 3y ago
    The government spending less money isn’t going to make your job pay more — if anything, it will cause your job to pay less.