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The whole "corporate profiteering drove inflation" narrative is/was entirely driven by click farming economically distressed people. It never was the case and e

The whole "corporate profiteering drove inflation" narrative is/was entirely driven by click farming economically distressed people. It never was the case and even mild understanding of economics/finance quickly unravels the narrative. Inflation was driven primarily by low interest rates, very generous financial support/relief(rent moratorium, student loan pause, bolstered and extended unemployment), and the ability for most white collar workers to keep on working from home. Supply chain issues didn't help, but it's not even clear if 2019 supply chains would have been able to keep up with the insane consumer demand of 2021.

toomuchtodo 3y ago
> The whole "corporate profiteering drove inflation" narrative is/was entirely driven by click farming economically distressed people. It never was the case and even mild understanding of economics/finance quickly unravels the narrative. My citation is the Kansas City Fed in case you missed it.
- deleted 3y ago
  [deleted]
- Workaccount2 3y ago
  If you read their research you will see that the reason corporations raised prices was because of future anticipation of costs rising - inflation. https://www.kansascityfed.org/research/economic-review/how-much-have-record-corporate-profits-contributed-to-recent-inflation/ https://www.kansascityfed.org/research/economic-review/how-m...
  - toomuchtodo 3y ago
    I have read it. Have they lowered prices? Or have they held them high because they can? https://www.ippr.org/media-office/revealed-how-powerful-companies-are-amplifying-inflation-through-their-profit-margins https://www.ippr.org/media-office/revealed-how-powerful-comp... https://www.axios.com/2023/05/18/once-a-fringe-theory-greedflation-gets-its-due https://www.axios.com/2023/05/18/once-a-fringe-theory-greedf... ("In March, the chief economist at UBS Global Wealth Management, Paul Donovan, published a note on "profit margin-led inflation," describing how in late 2022 and into this year, companies — particularly retailers and consumer goods makers — convinced consumers that they needed to raise prices. (They didn't really.)" https://www.interest.co.nz/business/122533/paul-donovan-what-profit-led-inflation-how-it-happens-and-how-combat-it https://www.interest.co.nz/business/122533/paul-donovan-what... ("Paul Donovan on what profit-led inflation is, how it happens and how to combat it") https://www.federalreserve.gov/newsevents/speech/brainard20230119a.htm#:~:text=Retail%20markups%20in%20a%20number,the%20increases%20in%20input%20prices https://www.federalreserve.gov/newsevents/speech/brainard202.... ("Retail markups in a number of sectors have seen material increases in what could be described as a price–price spiral, whereby final prices have risen by more than the increases in input prices." https://www.nytimes.com/2023/07/13/business/pepsico-earnings-2q-2023.html https://www.nytimes.com/2023/07/13/business/pepsico-earnings... | https://archive.today/RgxsB https://archive.today/RgxsB ("Price Increases Lead to Big Jump in Profit at PepsiCo")
    - Workaccount2 3y ago
      Why would they lower prices if the market easily bore the cost of those goods? Yeah of course corporations were racking in cash, so were consumers. https://fred.stlouisfed.org/series/WFRBLN40059 https://fred.stlouisfed.org/series/WFRBLN40059 https://fred.stlouisfed.org/series/M2REAL https://fred.stlouisfed.org/series/M2REAL
      - toomuchtodo 3y ago
        So you admit that inflation is caused by corporations that can raise prices and keep them high? Because, in this thread, you've gone from "this narrative is/was entirely driven by click farming economically distressed people" to "of course they did this, they clearly can" as we've worked our way down to here from my top level comment.
        Workaccount2 3y ago
        Corporations didn't discover that they can raise prices in 2021. They need headroom in order to do it. You are confusing the manifestation of inflation (rising prices) with the cause of inflation (more money on the table than hard value underneath it). Yes, rising prices perpetuate inflation (a price-price spiral as mentioned in the research), but the root cause of inflation was not corporations suddenly learning of this new tool called "raising prices". It was a reaction to the unrivaled level of economic stimulus pumped into the economy.

toomuchtodo 3y ago

> The whole "corporate profiteering drove inflation" narrative is/was entirely driven by click farming economically distressed people. It never was the case and even mild understanding of economics/finance quickly unravels the narrative. My citation is the Kansas City Fed in case you missed it.

deleted 3y ago
[deleted]
Workaccount2 3y ago
If you read their research you will see that the reason corporations raised prices was because of future anticipation of costs rising - inflation. https://www.kansascityfed.org/research/economic-review/how-much-have-record-corporate-profits-contributed-to-recent-inflation/ https://www.kansascityfed.org/research/economic-review/how-m...
- toomuchtodo 3y ago
  I have read it. Have they lowered prices? Or have they held them high because they can? https://www.ippr.org/media-office/revealed-how-powerful-companies-are-amplifying-inflation-through-their-profit-margins https://www.ippr.org/media-office/revealed-how-powerful-comp... https://www.axios.com/2023/05/18/once-a-fringe-theory-greedflation-gets-its-due https://www.axios.com/2023/05/18/once-a-fringe-theory-greedf... ("In March, the chief economist at UBS Global Wealth Management, Paul Donovan, published a note on "profit margin-led inflation," describing how in late 2022 and into this year, companies — particularly retailers and consumer goods makers — convinced consumers that they needed to raise prices. (They didn't really.)" https://www.interest.co.nz/business/122533/paul-donovan-what-profit-led-inflation-how-it-happens-and-how-combat-it https://www.interest.co.nz/business/122533/paul-donovan-what... ("Paul Donovan on what profit-led inflation is, how it happens and how to combat it") https://www.federalreserve.gov/newsevents/speech/brainard20230119a.htm#:~:text=Retail%20markups%20in%20a%20number,the%20increases%20in%20input%20prices https://www.federalreserve.gov/newsevents/speech/brainard202.... ("Retail markups in a number of sectors have seen material increases in what could be described as a price–price spiral, whereby final prices have risen by more than the increases in input prices." https://www.nytimes.com/2023/07/13/business/pepsico-earnings-2q-2023.html https://www.nytimes.com/2023/07/13/business/pepsico-earnings... | https://archive.today/RgxsB https://archive.today/RgxsB ("Price Increases Lead to Big Jump in Profit at PepsiCo")
  - Workaccount2 3y ago
    Why would they lower prices if the market easily bore the cost of those goods? Yeah of course corporations were racking in cash, so were consumers. https://fred.stlouisfed.org/series/WFRBLN40059 https://fred.stlouisfed.org/series/WFRBLN40059 https://fred.stlouisfed.org/series/M2REAL https://fred.stlouisfed.org/series/M2REAL
    - toomuchtodo 3y ago
      So you admit that inflation is caused by corporations that can raise prices and keep them high? Because, in this thread, you've gone from "this narrative is/was entirely driven by click farming economically distressed people" to "of course they did this, they clearly can" as we've worked our way down to here from my top level comment.
      - Workaccount2 3y ago
        Corporations didn't discover that they can raise prices in 2021. They need headroom in order to do it. You are confusing the manifestation of inflation (rising prices) with the cause of inflation (more money on the table than hard value underneath it). Yes, rising prices perpetuate inflation (a price-price spiral as mentioned in the research), but the root cause of inflation was not corporations suddenly learning of this new tool called "raising prices". It was a reaction to the unrivaled level of economic stimulus pumped into the economy.