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Companies would always like to raise prices and increase profits. There were able to do so in 2022 in part because too much government spending ("stimulus") had

Companies would always like to raise prices and increase profits. There were able to do so in 2022 in part because too much government spending ("stimulus") had increased demand without a corresponding increase in supply.

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> Companies would always like to raise prices and increase profits. And they're constantly trying to test the limits of what buyers will tolerate. Normally if they push too hard too quickly people start to feel cheated and sales drop. The pandemic was unique in that many people were desperate for familiar comforts. It fed a willingness to spend more if that was required. People were also primed to accept that everyone was struggling, even the companies making their products. There were legitimate supply chain issues and shortages for a time early in the pandemic. The news was filled with stories about suck boats, clogged ports, and shipping container shortages. That all helped consumers to be more forgiving of higher prices too. It didn't come out until much later that companies were actually pulling in record profits at the expense of consumers many of which were struggling to keep food on their tables and their bills paid. There was also collusion. Normally when one brand increases their prices, consumers who feel the price is too high will seek lower priced alternatives. When every company agrees to jack up their prices at the same time there's no where else for consumers to turn to and again, consumers were already less prepared to settle on something else or go without. Consumers had been sacrificing, putting up with less, or going without entirely for a long time already. People were willing to go into debt to get the things that would help them to feel better or adjust to being and working at home. > too much government spending ("stimulus") had increased demand without a corresponding increase in supply. Companies just took advantage of the situation. There really wasn't even a lack of supply in 2022. Supply could not have been higher. The US was overfilled with goods. Stores were overflowing with unsold merchandise and warehouse space became critically low. Some examples: http://stylemagazine.com/news/2022/aug/30/kohls-and-gap-have-surprising-plan-seasons-unsold-/ http://stylemagazine.com/news/2022/aug/30/kohls-and-gap-have... https://www.androidheadlines.com/2022/06/samsung-unsold-inventory-50-million-smartphones-galaxy.html https://www.androidheadlines.com/2022/06/samsung-unsold-inve... https://www.reuters.com/business/retail-consumer/target-puts-squeeze-suppliers-after-inventories-pile-up-2022-07-22/ https://www.reuters.com/business/retail-consumer/target-puts... https://www.forconstructionpros.com/business/article/22198029/dodge-data-analytics-warehouse-construction-to-increase-to-53b-in-2022 https://www.forconstructionpros.com/business/article/2219802... https://www.independent.co.uk/news/business/warehouse-supply-chain-crisis-christmas-shopping-b1938205.html https://www.independent.co.uk/news/business/warehouse-supply... You'd expect that a massive oversupply would result in lower prices, but that's not what happened. Stores decided they'd rather horde their merchandise in storage and prices rose higher and higher. There were a lot of things feeding into inflation but the pathetic amount of disaster relief American citizens received from either administration to help them get through lock downs and the other financial stresses put on them was not the cause it. The billions in Covid relief funds set aside for businesses that got wasted or lost might not have helped though ultimately the real cause was just greed.

deleted 2y ago

[deleted]

autoexec 2y ago

> Companies would always like to raise prices and increase profits. And they're constantly trying to test the limits of what buyers will tolerate. Normally if they push too hard too quickly people start to feel cheated and sales drop. The pandemic was unique in that many people were desperate for familiar comforts. It fed a willingness to spend more if that was required. People were also primed to accept that everyone was struggling, even the companies making their products. There were legitimate supply chain issues and shortages for a time early in the pandemic. The news was filled with stories about suck boats, clogged ports, and shipping container shortages. That all helped consumers to be more forgiving of higher prices too. It didn't come out until much later that companies were actually pulling in record profits at the expense of consumers many of which were struggling to keep food on their tables and their bills paid. There was also collusion. Normally when one brand increases their prices, consumers who feel the price is too high will seek lower priced alternatives. When every company agrees to jack up their prices at the same time there's no where else for consumers to turn to and again, consumers were already less prepared to settle on something else or go without. Consumers had been sacrificing, putting up with less, or going without entirely for a long time already. People were willing to go into debt to get the things that would help them to feel better or adjust to being and working at home. > too much government spending ("stimulus") had increased demand without a corresponding increase in supply. Companies just took advantage of the situation. There really wasn't even a lack of supply in 2022. Supply could not have been higher. The US was overfilled with goods. Stores were overflowing with unsold merchandise and warehouse space became critically low. Some examples: http://stylemagazine.com/news/2022/aug/30/kohls-and-gap-have-surprising-plan-seasons-unsold-/ http://stylemagazine.com/news/2022/aug/30/kohls-and-gap-have... https://www.androidheadlines.com/2022/06/samsung-unsold-inventory-50-million-smartphones-galaxy.html https://www.androidheadlines.com/2022/06/samsung-unsold-inve... https://www.reuters.com/business/retail-consumer/target-puts-squeeze-suppliers-after-inventories-pile-up-2022-07-22/ https://www.reuters.com/business/retail-consumer/target-puts... https://www.forconstructionpros.com/business/article/22198029/dodge-data-analytics-warehouse-construction-to-increase-to-53b-in-2022 https://www.forconstructionpros.com/business/article/2219802... https://www.independent.co.uk/news/business/warehouse-supply-chain-crisis-christmas-shopping-b1938205.html https://www.independent.co.uk/news/business/warehouse-supply... You'd expect that a massive oversupply would result in lower prices, but that's not what happened. Stores decided they'd rather horde their merchandise in storage and prices rose higher and higher. There were a lot of things feeding into inflation but the pathetic amount of disaster relief American citizens received from either administration to help them get through lock downs and the other financial stresses put on them was not the cause it. The billions in Covid relief funds set aside for businesses that got wasted or lost might not have helped though ultimately the real cause was just greed.