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Inflation has created a dark cloud over how everyday Americans view the economy (www.cnbc.com)
submitted 2 years ago by to c/news@lemmy.world
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[+] -6 points 2 years ago (1 child)

When the cost of essential goods is increased beyond the rate of inflation

Inflation is the measure of the cost of goods. You have cause and effect backwards here.

and those profits are going to people who are already in the top 10% of wealth holders

Wages are up across the board. Do you resent suppliers, warehouse staff, truck drivers, grocery employees, and distributors for making more money?

The only significant life changes that happened during the post-covid inflation was wages increasing. Hiring is up, wage pressure is up, union membership is way the fuck up.

Inflation happens because people have the money to support higher prices. It's no more greed to raise prices there than it is for you to want to make more money.

We do have an issue in our society of wealth capture, and that's a fixable problem we've seen steps toward. Wealth capture and inflation aren't directly related or correlated, however.

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  • [–] 4 points 2 years ago (2 children)

    Inflation is the measure of the cost of goods. You have cause and effect backwards here.

    Inflation is the devaluation of currency due to increased supply of it. And you're ignoring that price increases outpaced inflation and resulted in record profits. Companies used rising inflation as a cover to simply increase profits.

    Wages are up across the board. Do you resent suppliers, warehouse staff, truck drivers, grocery employees, and distributors for making more money?

    You may be forgetting all the unionization and strikes that helped with those increases. And you can't refute that there are still people making federal minimum wage, or that it is a poverty wage.

    The only significant life changes that happened during the post-covid inflation was wages increasing.

    If you're asserting that companies have not been raising prices beyond inflationary rate I can only conclude you're willfully ignorant on this topic or commenting in bad faith.

    https://www.businessinsider.com/companies-pocket-largest-profits-in-70-years-amid-inflation-complaints-2021-12

    https://thehill.com/business/3756457-corporate-profits-hit-record-high-in-third-quarter-amid-40-year-high-inflation/

    (paywall on this one) https://www.bloomberg.com/news/articles/2022-08-25/us-corporate-profits-soar-taking-margins-to-widest-since-1950

    Inflation happens because people have the money to support higher prices. It's no more greed to raise prices there than it is for you to want to make more money.

    Inflation happens because the government puts more money into circulation. Raising prices at a rate consistent with inflation is not wealth-hoarding greed. Raising prices well beyond inflation just because you can blame it on inflation and raking in the profits is.

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  • [–] -2 points 2 years ago* (1 child)

    Inflation happens because the government puts more money into circulation.

    No. The government is constantly putting more.money into circulation without inflationary effects. We literally had suboptimal inflation for almost a decade.

    Inflation is a measurement of price increases over time. Inflation happened this time due to COVID causing pent up demand, a glut of credit and cash on hand, and supply chain issues across the board.

    Companies making more profits is hardly surprising given that people wanted to go buy a ton of shit because they finally could.

    If you’re asserting that companies have not been raising prices beyond inflationary rate

    Again this is literally impossible because whatever they raise prices to is where we derive the inflation rate from

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  • [–] 4 points 2 years ago (1 child)

    Nobody is surprised about it companies wanting more money. We're just angry about it (the whole dark cloud thing the article is about). Nobody is out here complaining that a Lamborghini costs $20k more. It's about housing and groceries. The record profits aren't from introducing a new kind of egg or lowering the cost of production and distribution. The profits are from raising the prices on the same goods because people got stimulus money

    Yes, you have the technical economist definition of inflation correct. But, my dude, people are out here saying "our basic necessities like staple groceries are still more expensive even though inflation has gone down and we see that the companies producing those goods have reported their highest profits in 70 years" and you're telling them "no, no, they're not being greedy, it's your fault for being willing to spend so much money on basic survival goods and that's causing inflation". There was no negotiating the cost of eggs and milk at the grocery store. The price was just set higher and consumers had to either pay it or starve.

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  • [–] -3 points 2 years ago* (1 child)

    Housing costs arent even companies being greedy, but homeowners.

    I honestly think people don't even know what they're mad at they're just mad. This is why the real problems struggle to get fixed.

    I'm not being pedantic here - if you don't understand the problem, you're part of the problem, by definition. Fixing housing requires changing local zoning laws and depowering current homeowners from the ability to pull the ladder up after them to protect their investment. They will never back that en masse on their own, because they benefit.

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  • [–] 4 points 2 years ago (1 child)

    Housing costs arent even companies being greedy, but homeowners.

    Investment firms buying and holding homes are, by definition, homeowners, making them part of the problem. People who are trying to buy a home are having to get into bidding wars with investors, who are buying 1/4 homes sold in the last ~9 months.

    I honestly think people don't even know what they're mad at they're just mad

    Renters looking to buy a home are mad at investors who can buy up inventory with cash (which in this context I'm including individuals buying up single-family houses to rent out, not just companies), and afford to leave the property vacant rather than accepting less profit by lowering the rent on it.

    People trying to buy groceries are mad that wages increased 4-5% in 2022 while Tyson chicken prices went up 20% in 2021, and then in 2022 agreed to pay over $220M for price fixing while reporting $6.5B in profit that year.

    This is why the real problems struggle to get fixed.

    When you have unlimited corporate dark money going into politics, you get a government that seeks to obfuscate the issues to keep the population blaming the wrong things, to keep the money flowing into their "campaign funds."

    Fixing housing requires changing local zoning laws and depowering current homeowners from the ability to pull the ladder up after them to protect their investment. They will never back that en masse on their own, because they benefit.

    I don't disagree with that. And I'm in the minority of homeowners who do try and vote for making things more accessible knowing it will increase my own tax burden to pay for it, because I will benefit from having a more stable society around me even if my house doesn't appreciate another $100k.

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  • [–] -2 points 2 years ago

    People who are trying to buy a home are having to get into bidding wars with investors, who are buying 1/4 homes sold in the last ~9 months.

    This only happens because we already have such a shortage that there is guaranteed ROI.

    And I’m in the minority of homeowners who do try and vote for making things more accessible knowing it will increase my own tax burden to pay for it, because I will benefit from having a more stable society around me even if my house doesn’t appreciate another $100k.

    Same dude! We just gotta keep trying to change more minds.

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  • [–] -2 points 2 years ago (1 child)

    Inflation is the devaluation of currency due to increased supply of it

    This is simply not correct. Increased supply of currency relative to the actual amount of goods and services in an economy is probably the most prominent cause of inflation, but it's not the only cause. Inflation itself is the actual generalized rise in prices, which can be caused by a variety of factors. Find a basic econ textbook, or just read the Wikipedia article on inflation.

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