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> component was every company getting it into their heads to "test the price advantage" of their products This happens all the time. Companies are constantly m

> component was every company getting it into their heads to "test the price advantage" of their products This happens all the time. Companies are constantly maximizing greed. What allowed the price increases is the available cash (due to reckless spending). If customers hadn’t been able to pay, then companies wouldn’t have increased prices. I hear this comment a lot and it’s like saying “bob didn’t die from smoking, he died from the giant tumor.”

nkrisc 2y ago
Then prices will drop because without the infusion of cash consumers won’t be able to afford the inflated prices, right?
- anonym29 2y ago
  If the inflation is strictly caused by "corporate greed", and not by an expansion of the money supply, then yes, the prices would drop. If the inflation is caused by an expansion of the money supply and "corporate greed" is merely the proximal expression of this, and central banks do not decrease the money supply as quickly and as much as they expanded it by, then no, higher prices are here to stay. Time and reality will tell, no need to argue this out here with people who've already emotionally made up their mind and cannot be reasoned with through rational conversation.
  - ryandrake 2y ago
    I agree and I think we should start ore clearly distinguishing between inflation and price gouging. Both are going on, but when we blame everything on "inflation" we're really just letting the government be the fall guy and letting corporations off the hook for whatever increase they are doing beyond the currency's actual inflation.
dbspin 2y ago
Strongly disagree - the price increases were possible because people are strongly resistant to decrease their quality of life. e.g.: they'll pay significantly more of their income to maintain the same level of diet and travel up to the maximum they can afford (and beyond with debt). Rather than scaling back spending and reducing social status and leisure. This isn't even irrational, as status is linked to concrete health benefits (e.g.: Whitehall studies on cardiovascular health). There's been price matching across the food and service industries, due to consolidation and oligopoly - themselves a result of financialisation. So you have the whole food industry for example, responding to the supply shocks of covid by increasing price - then realising that demand elasticity doesn't apply if they act in unison.
- paulryanrogers 2y ago
  > ...then realising that demand elasticity doesn't apply if they act in unison. So you're not actually disagreeing?
- datavirtue 2y ago
  You have companies like Kroger whose prices are out of control. One way to save significant money is to avoid them if you can. If they have a competing grocer it is always drastically cheaper...free tank of gas per shopping trip cheaper. They are salivating over this Albertsons merger. Easy money. Thank the gods for Walmart.
- prepend 2y ago
  Consolidation and oligopoly aren’t new in the past 4 years. What is new is the trillions of cash injected into money supply. Greed is constant. Consolidation started in the 90s and the same 4 grocery companies have owned the market for 15-20 years. They only have ability to increase prices because consumers have more cash to spend. They would have loved to do this 5 years ago, but random $30k household income families of 4 didn’t get $16k handed out to them. (Two $2k/person stimulus rounds in 2020 and 2021)
  - deleted 2y ago
    [deleted]
  - dbspin 2y ago
    This is happening cross nationally - and very few nations gave out covid payments similar to the US. Side node - this is just a strange lens, for most people in Ireland (where we did receive covid payments) they were making up for work which had evaporated. Why is it always assumed to be additional to income in the US?
    - prepend 2y ago
      Not true actually. Many/most countries did massive increases in money supply. [0] I don’t know exactly how each country compares to the US and was only using the US because of others in thread and that’s what I know best. In the US it’s assumed to be additional income because you can measure money supply and see the increase. So it’s a correct assumption because there’s just much more cash. If it was replacement, then money supply would stay level. Also, in the US direct cash payments weren’t need based. Everyone got them despite income or necessity. Personally, I stayed employed, got overtime, and got $8k+ in direct cash deposits. Just an anecdote, but everyone I know got similar payments. So it always seemed odd to me that yuppie programmers got wads of cash. The rationale made sense as they needed to help people quickly and qualifying would slow things down. But this is a macro example of inflation drivers. So anyone with basic economics training would recognize this example. Arguing otherwise seems silly, without lots of evidence. Corporate greed is constant and universal. [0] https://www.investopedia.com/government-stimulus-and-relief-efforts-to-fight-the-covid-19-crisis-5113980 https://www.investopedia.com/government-stimulus-and-relief-...
bryanlarsen 2y ago
No, it doesn't happen all the time. Grocery prices are very sticky. Consumers notice when bread prices go up from $2.00 to $2.10, and they'll switch brands to avoid the increase. That's why you get shrinkflation, small changes in quantity aren't as easy to notice as price changes.

nkrisc 2y ago

Then prices will drop because without the infusion of cash consumers won’t be able to afford the inflated prices, right?

anonym29 2y ago
If the inflation is strictly caused by "corporate greed", and not by an expansion of the money supply, then yes, the prices would drop. If the inflation is caused by an expansion of the money supply and "corporate greed" is merely the proximal expression of this, and central banks do not decrease the money supply as quickly and as much as they expanded it by, then no, higher prices are here to stay. Time and reality will tell, no need to argue this out here with people who've already emotionally made up their mind and cannot be reasoned with through rational conversation.
- ryandrake 2y ago
  I agree and I think we should start ore clearly distinguishing between inflation and price gouging. Both are going on, but when we blame everything on "inflation" we're really just letting the government be the fall guy and letting corporations off the hook for whatever increase they are doing beyond the currency's actual inflation.

dbspin 2y ago

Strongly disagree - the price increases were possible because people are strongly resistant to decrease their quality of life. e.g.: they'll pay significantly more of their income to maintain the same level of diet and travel up to the maximum they can afford (and beyond with debt). Rather than scaling back spending and reducing social status and leisure. This isn't even irrational, as status is linked to concrete health benefits (e.g.: Whitehall studies on cardiovascular health). There's been price matching across the food and service industries, due to consolidation and oligopoly - themselves a result of financialisation. So you have the whole food industry for example, responding to the supply shocks of covid by increasing price - then realising that demand elasticity doesn't apply if they act in unison.

paulryanrogers 2y ago
> ...then realising that demand elasticity doesn't apply if they act in unison. So you're not actually disagreeing?
datavirtue 2y ago
You have companies like Kroger whose prices are out of control. One way to save significant money is to avoid them if you can. If they have a competing grocer it is always drastically cheaper...free tank of gas per shopping trip cheaper. They are salivating over this Albertsons merger. Easy money. Thank the gods for Walmart.
prepend 2y ago
Consolidation and oligopoly aren’t new in the past 4 years. What is new is the trillions of cash injected into money supply. Greed is constant. Consolidation started in the 90s and the same 4 grocery companies have owned the market for 15-20 years. They only have ability to increase prices because consumers have more cash to spend. They would have loved to do this 5 years ago, but random $30k household income families of 4 didn’t get $16k handed out to them. (Two $2k/person stimulus rounds in 2020 and 2021)
- deleted 2y ago
  [deleted]
- dbspin 2y ago
  This is happening cross nationally - and very few nations gave out covid payments similar to the US. Side node - this is just a strange lens, for most people in Ireland (where we did receive covid payments) they were making up for work which had evaporated. Why is it always assumed to be additional to income in the US?
  - prepend 2y ago
    Not true actually. Many/most countries did massive increases in money supply. [0] I don’t know exactly how each country compares to the US and was only using the US because of others in thread and that’s what I know best. In the US it’s assumed to be additional income because you can measure money supply and see the increase. So it’s a correct assumption because there’s just much more cash. If it was replacement, then money supply would stay level. Also, in the US direct cash payments weren’t need based. Everyone got them despite income or necessity. Personally, I stayed employed, got overtime, and got $8k+ in direct cash deposits. Just an anecdote, but everyone I know got similar payments. So it always seemed odd to me that yuppie programmers got wads of cash. The rationale made sense as they needed to help people quickly and qualifying would slow things down. But this is a macro example of inflation drivers. So anyone with basic economics training would recognize this example. Arguing otherwise seems silly, without lots of evidence. Corporate greed is constant and universal. [0] https://www.investopedia.com/government-stimulus-and-relief-efforts-to-fight-the-covid-19-crisis-5113980 https://www.investopedia.com/government-stimulus-and-relief-...

bryanlarsen 2y ago

No, it doesn't happen all the time. Grocery prices are very sticky. Consumers notice when bread prices go up from $2.00 to $2.10, and they'll switch brands to avoid the increase. That's why you get shrinkflation, small changes in quantity aren't as easy to notice as price changes.