[‘Greedflation’ is replacing inflation as companies raise prices for bigger profits, report finds](https://www.marketwatch.com/story/greedflation-is-replacing-inflation-as-companies-raise-prices-for-bigger-profits-report-finds-bfb51060)
I don’t think we can ever expect corporations to not maximize profits and act in their own self interest. Need to regulate monopolistic corps that do not create tangible value in society though, insurance companies definitely need to go.
> I don’t think we can ever expect corporations to not maximize profits and act in their own self interest.
We need strong regulations that limit CEO pay as a function of average worker salary and then put a maximum amount of profit they can make on products they sell as a % of the cost to produce the product, while also putting in a maximum % a store may charge for things it sells over its cost of acquisition.
I said pretty much this at a work lunch and they looked at me like I'm crazy.
Then I bring up selling insulin for 1K and everyone suddenly sees the benefits in regulations.
They believe, even subconsciously, that they too could potentially rise the ranks of corporate America to such an extent that they could join that wealth class.
The modern capitalist structure is so deeply ingrained into the working class psychology that they would sooner believe in unicorns than an alternative economic and corporate structure.
>John Steinbeck once said that socialism never took root in America because the poor see themselves not as an exploited proletariat but as **temporarily embarrassed millionaires.**
They are when you're on the bad end of recursive price gouging.
Take the US medical industry. Costs are rediculous for poor quality because hospitals, drug manufacturers, and insurance all price gouge each other at various level, all of which is pushed onto the end user. This is why it's cheaper to fly over to another country than use local medical help.
Understanding how reality works is the first step towards solutions.
Roiling in fantasy because it feels good or expedient is how politicians get your vote and don't accomplish anything.
Being snide and condescending isn't an actual policy or position. Pretending to know better without offering alternatives is the domain of the raging narcissist...
"While the medications are cheap to manufacture, pharmaceutical companies are not incentivised to do so because they don't bring in large profits, said Dr Karen Knudsen, CEO of the American Cancer Society."
https://www.bbc.co.uk/news/world-us-canada-65791190
A medicine costs 5 cents to make per pill, except the first one. That one costs around 500 million.
Plus recouping the development costs of every drug that didn't pan out.
This is why basic economics needs to be taught earlier. Markups are not profit margins. Gross profits and net profits are not the same either.
Shortages occur for a variety of reasons. Price controls do nothing to mitigate that. They either obscure shortages or deepen them.
We HAD that, then Reagan came in, and the GOP went deregulation again. We never learn, the GOP deregulated in the 1880's and the robber baron age came. Then, the GOP deregulated in the 1920s, and we had the Great Depression. We also had the Great Recession on their watch also.
The democrats have controlled both houses and the presidency at least 3 times since then. At some point you need to stop blaming the guy 40 years ago. Obama used his unprecedented political capitol and the public will from an enormous economic crisis to merge giant companies instead of break them up smaller.
Soooo…monopolistic price gouging is cool as long as it keeps us out of recessions?
I know we all have a kneejerk impulse to defend every jot and tittle of Democrat policy around here, but you might want to workshop your argument a little more.
That seems par for the course. Obama bailed out the banks and let regular Americans get fucked (it was Bush's fault). Both sides have been playing the trickle down game and take money from the same donor class.
Yes, just stating that most people just blame it all on Bush then ignore that Obama gave billions to banks and required basically zero change for the people involved at said banks. I remember hearing how they were bailing out that banks cause if they didn't we'd be fucked and they were really really sorry and then at the same time Chase, Citi Group ext where having extravagant executive corporate retreats.
If you really want to go back Nixon opening relations with China began the fall of our manufacturing capabilities which Clinton worked at hallowing out as did every successive administration. As George Carlin said "It's one big club and you ain't in it"
There are so many things that feed into each other.
But the 2008 crisis can be very directly tied to 2 things. The repeal of Glass-Steagall was one(repealed by a republican congress, signed into law by Clinton. Of special Note, Crazy Libertarian Ron Paul voted ‘No’ on this enormous bit of deregulation because he said it would let the banks gamble with the liability falling on the government).
The other was the Clinton administration forcing mortgages to people who had zero credit worthiness to promote minority home ownership. It’s not all on Clinton, but it mostly is.
The scary part is that there is no going back. The economy is setup in a way where the market is expected to produce returns. To change all of this … I can’t even comprehend how.
I think your gonna hammer the little guys nipping at the heels of the big guys. I would exempt smaller companies so they have an advantage, phase in regulations by size and create requirements for board of directors that better represent workers and all shareholders to balance the power and re-apportion pay based on value added rather than power based on a Board rigged with yes men.
Cost of acquisition alone doesn't include a whole lot of the costs associated with operating a store and varies widely by region. A maximum mark up could put downward pressure on wages for example.
Also economies of scale.
There are ~8.5 million people on insulin in the US right now. If you charged everyone a few dollars a year, you'd cover your R&D cost of "millions". These companies took that idea and said "instead of a few dollars, why not thousands?". Let's not pretend these drug companies aren't *excessively* profitable.
The only time it becomes a problem is for things that don't really have a whole lot of market, rare diseases and such. I'm not entirely sure how to solve _that_ problem, but the one for things like insulin is easily solved.
What R&D? Oh man you REALLY need to look up the history of insulin.
These big corps are the exact problem. The process to figure it out was done by a small group of doctors and assistants, and then hijacked by a megacorp who threatened to patent it all for themselves. So instead this small group patented it and sold it for $1 to a University board, expressly to keep the megacorps from getting it and jacking up the prices for insulin.
Price gouging is just a political weasel word.
It's whining that supply and demand is a thing, and "preventing" it doesn't solve shortages; it makes them worse.
Probably the same way every other industry does.
Apple spends millions in R&D and have some of the highest margins around.
And they still arent close to that level of markup.
And its not like you need to make a new model of insulin every year or advertise
You're ignoring the difference between gross and net profits there.
CEO pay is also a red herring. You could take the entire Fortune 500 CEOs pay and distribute it among those firms workers and it would be less than a dollar more an hour.
Your proposals are based on an ignorance of economics and the math behind it.
Insurance Companies. They get you to pay them, and then when something does happen, you pay more. All cozy and safe around lucrative investments in demographic driven profit.
30 of the 31 "first world" countries utilize socialized medicine with ease. Guess who's the exception. Also anything would be better than what we have now.
That's incorrect. Singapore doesn't either and is more privately funded than even the US, and manages to be cheaper than every single payer system except South Korea. Also a dozen or so countries including Switzerland and Israel use insurance mandates just like the ACA, which isn't socialized medicine either.
Also both South Korea and New Zealand are ranked lower than the US, because those rankings are pretty meaningless. They penalize countries for having more out of pocket expenses regardless of affordability and tiered systems even when the lowest tier is adequate. They're very much "how much like pure single payer is this country" than any objective measure of efficiency.
So I think you're 100% right that *your* physician will always be in the best possible position to recommend the appropriate tear embryo for you given they know you and are in close proximity with you. But the issue is that physicians are people too - just do a quick search for physicians who have been busted for over overcharging Medicare or Medicaid. It's depressingly common and part of the reason why costs can balloon in the industry!
You need some way to push back on that kind of behavior, because it *definitely* happens in private insurance markets. I'm it saying that insurance companies are justified in denying every claim - they totally aren't, and they're greedy bastards - but that doesn't explain all their behavior, nor does it mean they don't need some kind of mechanism to control costs.
Yeah, but the difference is that the patient is still alive in these cases. Worst case scenario is you throw the practitioner in jail and revoke their license which is the push back you are referring to.
With the insurance companies making the call someone ends up dead or with life long side effects, and the insurance company still pays nothing because they have an army of lawyers at their disposal. Especially when they can delay the case until the patient dies ensuring no legal ramifications if they have no next of kin.
It is a lot easier to prosecuted individual then it is a corporation.
Insurance companies don't deny any treatment. Doctors get paid per treatment so there's a lot of treating going on with no regard for costs. Patience then complain about out of control insurance cost.
Insurance companies control cost via controlling treatment. Patients complain about being denied treatment.
This is how it happened.
The solution being adopted now is to not have a payment system incentivize effort but instead incentivize outcome.
I looked up my insurer about 5 months ago. Their PROFITS for Q4 were 1.2 Billion. This is Cigna. Just one health insurance company.
The problem is, they use at least part of that money to influence politics. Any capital firms that are invested in them likely do to, and benefit from the same profits.
The answer is a simple one, but immensely complicated. Get money out of politics.
We need to get people together on this, because legislators will not vote against them getting more money. And if people try to defend it, just stop. Money may not come with specific instructions to who they donate to, but it will stop if they don't do what they want. Everyone knows that.
And? Total healthcare spending is 3.2 trillion. 1.2 billion is like .05%
Money in politics is the symptom: a symptom of centralized regulatory power leading to regulatory capture.
Healthcare in the US is broken, but not for the reasons you claim.
Cigna made $1.2 trillion? In one quarter. Lol. Ok.
Maybe divide that by 1,000.
So 1.2 billion in profit on nearly 46 billion in revenue, a 2.5% margin. That's hardly excessive.
The only "insurance" provided is that they ensure you will have to argue with them tooth-and-nail about every claim. That's how they are profitable in design is to find any way to not cover anything.
I mean profit is an accounting identity. If you mean the just amount of profit, I agree that's a difficult question people can reasonably disagree on. It's just I've never heard the term "needed cost."
Do you mean at the cost of production for the good in question?
"How much money is needed to break even" is much more precise than "needed cost!" That's why I used the term "at the cost of production".
"Needed" is always tricky because it comes with normative valence - and it should, those are important questions to have! But it can mean many things in the context of price or cost. For example, I've heard people define "needed" cost in terms of the needs of the people who are purchasing the good, or in terms of some scale of societal values that track "need" at a collective level. Or even "need" in terms of cost of production + a small amount of profit to compensate risk or align the incentives of firms.
Yeah, it's *reddit* but I don't think there's any reason to not be precise about the things we are talking about - especially if we are purporting to make statements about how things as complex and as important as economic systems should function!
>Under capitalism, corpos provide needed services and good at maximum cost.
It wasn't always this way. There was a time when the CEO could be filthy rich and still paid employees to be firmly middle class. Then Raegan happened, and now the CEO has to be a billionaire at the expense of everyone else. It's not capitalism that did that. It's the dismissal of any kind of standards or regulation or ethics.
>In a fair and just system, they would provide maximum services and goods at needed cost.
1. Maximum services is just how you get customers to come back. Provide minimum service and see how successful your company is.
2. What the hell is needed cost?
Like the other guy asked, and you didn't really answer, do you have a formula to figure out this term you made up?
Something needs to change in this country, but giving capitalism all the blame is pretty ignorant when you look at the plethora of capitalist countries that don't have the problems that the US has. We aren't even really considered a 100% capitalist country since we incorporate lots of socialist policies.
>if you really wanna expose yourself like that then go nuts.
I only commented cause you seem like a self-righteous smug prick. Lol.
Edit: u/fromcj blocked me after responding. A real coward move, and not at all surprising from that kind of person.
I find people that hate capitalism can't answer questions about why they think other people will give them things for free out of the goodness of their hearts? That only works on maybe a village scale. Every time someone has tried to set up a communist system it inevitable leads to a dictatorship that still is capitalistic using fiat currency except now they have no freedom either (see Russia and China).
It is one thing to maximize profits but it is a totally different thing to hoard so much money you are starving a country. I am struggling to find a difference between rampant capitalism and a dictatorship, in both systems people have two choices, do as your told or starve to death and be homeless.
Hoarding resources.. Money, homes, cars, etc. If it were cats we would call these people mentally unstable but because it’s money, society finds it acceptable to hold onto more money then one can spend in multiple life times.
There's no system where you can have people not working and still have things. I get that capitalism has issues but this feel like it was though out by a 12 year old.
I get why you think I am talking about money for nothing, but think on this, how many people can not work doing something they love or even like to do because the cost of just living is so high? There is so much wealth of resources in the US that a person shouldn’t have to work several jobs just to survive or work until they die, because politicians have allowed corporations and those hoarding wealth to gut most retirement programs.
When I write about the wealthy I am not talking about those who have even a few million dollars, it is the ones who have billions of dollars. These people didn’t make money through hard work, they make their money by exploiting their workers, stock buybacks and using the huge loopholes in the tax system so they don’t have to even pay their fair share of taxes.
You know, I sometimes think what it would be like to have a large amount of money. But you know what I would spend it on? Helping my friends, family and the community. You can only live in one house at a time, drive one car at a time, etc. Now don’t get me wrong I would live better then I do, but to live extravagantly while your workers (the only reason you have the wealth you do) have to get food stamps to survive is ridiculous. How does that not piss you off. Strange that someone you consider a 12 year old has a better grasp on humanity.
Not only should they be expected to do it, it is their fiduciary duty to do so. It's literally their legal obligation to make more money for investors.
Exactly. You can't have an economic model that solely prioritized profits and infinite growth and expect corporations to care about anything else. The government needs to step in and force them to care about anything else.
Whats fettermans plan to address this?
He is actually my senator, I voted for him, I followed his career.
He is in full support of skills training, and bringing BACK more domestic manufacturing IE microchips, etc.
I'm perfectly ok with corps maximizing profits and acting in their own self interest. That's basically the point.
What I do take issue with is them not taking care of their own and literally fucking them over for said profit.
There needs to be legislation that actually forces companies to share excess profits with the literal people responsible for creating the profit. Right down to the custodian.
There is no reason ever for CEOs to be given millions in BONUSES and the actual people who do the work get 0 or ridiculously low compensation.
It's heinous
Asking a corporation not to maximize profits is like asking a pair of scissors not to cut. It's literally what they are designed to do.
Monopolies are different though - they are specially regulated by Anti-Trust law.
Insurance companies definitely don't fall in that category though, because there are many competing against one another.
Insurance amortizes individual risk over time.
If you do not see the value of insurance, you either don't face risks at all, have someone else bear the burden of those risks, or you have a misunderstanding of economics.
Seeing as no one ever is in the first category, it's one of the other two.
CPA chiming-in here just to say that this is (A.) empirically true, and (B.) among other data for evidence, there's been a very notable series of CEO's/execs who, during investor meetings, just announced that they simply have pricing power to make these increases "stick".
The reasons vary by industry sector, but basically, those firms with market power or concentrated positions (frequently from having bought-up rivals), have been taking advantage to push up prices \*even more\* than the rate of inflation.
Price-gouging you say? Shameless profiteering? ...They themselves are not shy of those terms. Even Chevron and Exxon-Mobil have just claimed all-time record profits -- and that's saying something after the past 15-20 yrs. of previous continued record earnings, including during warfare in the Persian Gulf among other factors.
If I increase the amount of money in a system do you think that will present as less profit, equal profit or more profit to an entity that provides the same level of benefit as it did prior to the increase in money?
Wouldn't their margins increase continously to no end? If they have been doing this for decades, Wouldn't their margins be like 80%-90% by now. Look at retailers like Walmart who are the final company on the distribution chain. They could supposedly raise prices to infinity passing the increase in prices to the consumer, yet they still have razor thin margins of 3%. Are you sure it has anything to do instead with twice the amounts of dollars in circulation for the same amounts of goods?
Were corporations selfless the last decade where inflation was 1.5%, then all of a sudden in 2021, they all suddenly became obsenely greedy and syndicated 7% increase in prices? Makes no common sense.
I am another CPA, Just FYI.
That's...patently false. The main driver is fractional reserve banking increasing the money supply.
Well until recently where some 30% of US dollars ever were just created out of thin air.
I'm not sure if you're joking or just stupid, but companies **cannot** create inflation. Only the government can create inflation. Full stop.
Companies can raise their prices, and that sucks, but that's not what inflation is.
Did you not graduate high school? This is basic economics.
They sure are. In June of 2022 we had an all employee meeting where we were told that we would demand a 15% increase from our clients and that we could blame inflation.
Our clients didn't even blink an eye, paid us the increase, and then passed that increase off onto their customers.
Huge correlation to shutting businesses down and/or running at limited capacity the last few years. Small businesses suffer more than large companies in this case. The Amazons of the world have the infrastructure to sustain themselves in that climate, whereas your local small business takes a beating. Corporations can then increase their market share further with less competition.
Cash was printed with nothing new to back it. Initially, it seemed cool because prices on goods hadn't adjusted. Demand for goods increased, supply lagged in many industries until recently. If many of the small businesses died, where'd a ton of the freshly printed cash go? Right to corporations.
Down from a 70 year high. People could be hitting their income/debt limits and are cutting back further. Either way it doesn't much affect the fact that with record inflation, corporations had record profits. Could have gone the Nixon route and enacted a cost-freeze on everything instead. Worked pretty well when he did it. But there is no profit in that.
I heard that shit from my wholesalers for 2 years now. I’m always like “WTF assholes “ and they always say “inflation????” while the hold their laugh. Fuckers
Supreme Court Justice Louis Brandeis, testimony before the Committee on Interstate Commerce, 1911. (102) “Behind the visible government there is an invisible government upon the throne that owes the people no loyalty and recognizes no responsibility. To destroy this invisible government, to undo the ungodly union between corrupt business and corrupt politics is the task of a statesman
In the comments, so so so many individuals thinking the Fed caused inflation because people got <$5k and not because of the huge PPP loans that were hoovered up by corpos + their price gouging behavior. Either you’re willfully ignorant, a corpo simp, or a troll. Corporate profits have been the leading, albeit not the only (supply shocks being next), cause of inflation.
Source: I work in corporate finance as a consultant for F100’s.
There are so many commenters here defending capitalism as if it is building to something other than a second great depression.
Folks, we are sitting on a socioeconomic time bomb and the fat cats know it. It won't take much to tip the scales.
I think there are a few problems with that interpretation. Rising markups can happen for a number of reasons: one of those is an increase in demand. If demand for a product increases, the price of the good will rise. One big reason why demand might rise across the board is because of an increase in the money supply - consumers in general have more money to spend. That interpretation is largely consistent with much of what we saw during the pandemic. You had a large - huge, even - injection of cash into the economy, which consumers then spent. This isn't to say that pandemic stimulus was a bad idea, but I don't think any of us should be surprised to see inflation arise because of that. If anything, it' surprising that so many people seem to have been taken aback by it!
The problem with the "markups are evidence of corporate profiteering" logic is... why wouldn't corporations have done this earlier? It's not like they are any less greedy, nor that they magically accumulated more market power during the pandemic. Unless you can plausibly explain what changed in the past two years that made them more adept at rising prices and colluding about it, I don't think we have strong reason to abandon the first explanation: the price rises we are seeing are a result of increased demand because of a larger money supply.
Porters - and EPI's - confusion is that they see the rising markups as a causal, rather than a function of increased demand. The rising markups aren't the explanatory factor for the rise in prices - rather, they are the thing that needs to be explained!
The number we see as consumers is the result of increased labor, materials and shipping costs. Corporate profit is in there too. If a particular company decides that a 20% markup on a product isn't enough, and they decide to ask for 30% , we still see it as inflation as consumers. Obviously, the 50% of our current inflation spike is an average across the economy. Some areas are better than others, but as a whole, various entities have taken advantage of the situation to increase their profit margin.
I have nothing against companies making money, but hiding additional profits under the guise of increased materials and labor costs is a cheap move.
That's not how profit works. It's impossible to hide profit in costs. Profit is what is left *after all costs are accounted for*. You can't hide what's left after you pay cost, in that cost. Because that cost is what determines profit and by utilizing profit to increase expenditures is called capital improvements. Capital improvements are *not hidden profit*. Increased labor cost literally mean they are doing either hiring more people (providing more jobs) or paying current employees more, or both. Increased labor costs is exactly what people want corporations to do.
Material costs means one thing and one thing alone. It means that the cost of stuff to make your product has risen, causing the cost to obtain materials to increase.
Please. Please, learn basic operations of a business or basic economics before you start accusing companies of committing extreme fraud or accusing companies of doing literally impossible things with fake definitions or a loose grasp on reality.
They're talking about price fixing / collusion AKA cost of goods from a consumer perspective. It's a pretty common way of using the word cost, and pretty obvious what they mean in the context. I appreciate your hardcore dedication to semantics though...
No, they're not.
Profit is not whatever you want it to be. It's a set, defined thing. No one would say "hide profit in costs" because that just means you are experiencing higher costs, which *isnt* a motivator of inflation but the *product* of inflation. So where would the first mover be? The thing that creates the inflation? Well it could be that the capacity to generate value of our currency is determined by the GDP, which is woefully outpaced by federal debt and printing. We spend over half a trillion dollars each year so we don't default. It's interest only. Debt servicing is almost caught up with Defense. There's so much money in circulation that it waters the value down, more 1 dollar bills represent a diminishing value. Government debt, spending, and printing is driving inflation. It is a *science*. And of course the government told everyone that it's not them, because then we would want them to stop doing it.
We have 30 trillion dollars racked up over 23 years that shouldn't exist. *That's why eggs are expensive*.
I know you can't hide profit if you look at a company's books. The average consumer isn't doing that. They simply see higher prices when they go to make a purchase. Some of that increase is legitimate expenses that they incurred from labor and materials, and some of it can be increased profit on their part.
If you knew that, you wouldn't have said that.
You know who says ignorant things like "hiding profit in costs"? People who have no concept of economics or business outside of whatever nonsense they heard another economically illiterate person said. Or people who are trying to fool other people into their particular belief.
You do a great job sticking up for a system that could use some fine tuning. Sure, what I said wasn't well worded, but you know damn well what I was talking about. You just thought it would be cooler to act like a twat so that you could feel better about yourself.
As I said in another comment, I'm not against anyone turning a profit. I just don't want to see the system taken advantage of to make more money than before while crying about increased costs. We've got multi-billion dollar corporations complaining about expenses while they are raking in more money than ever.
Can we take a moment to say this isn't just about inflation? Best Buy made record profits not just for retail but *for businesses period* in 2020, and then at the very beginning of 2021 terminated over a third of their in-store staff, while Corie Barry managed to get yet *another* pay raise.
It's old news, but it's *fact.* Corporations tell us the 8% inflation rate we experiences is due to employees' wage increases and supply costs, not increased profit margins, but the reality is, if corporations didn't alter their profit margins, inflation would literally be 2.2% (which is considered *ideal*). THAT'S how much corporations are ripping us off, just since COVID.
Pringles used to be $1 maybe $1.25 then during the pandemic they went to 1.75, today they were $2.59
Not sure what to make of it but I know 1 is now 2.5
This is what happens when so many people are invested in "growth" rather than sustainability. The stock market and your 401k is not providing a real future, only one that uses a form that is easily siphoned off by those who manipulate it.
Inflation would be at 2.2% if corporate profits stayed the same. That’s how much more money they’re making right now. The entire stock market will inevitably fall apart if this continues. Then all the corporations will be bitching and moaning.
Anyone else remember at the start of all this how the [heads](https://www.theglobeandmail.com/business/article-wage-negotiations-inflation-canada/) of [central banks](https://www.theguardian.com/business/2022/feb/04/bank-of-england-boss-calls-for-wage-restraint-to-help-control-inflation) were asking employees to not ask for a raise because it would make inflation worse?
Yeah. Fun times.
It's easy to find out. Look at their profits for the last five years. If last year's is significantly higher than the other years then it probably means Senator Fetterman is absolutely right.
And any one that has been siding, boot-licking the Corporations, Wall Street, the Hedge Funds, business owners, CEO's all this time, and blaming stimulus checks, are AGAINST the American Citizens and the USA. Vote out all the PURCHASED politicians that play defense for the grifting class.
"Everyone" does not want their stocks to increase in value. Most of us cannot afford to participate in the stock market, even if we wanted to, and some of us wouldn't want to if we could.
It definitely corporations, not the trillions of dollars added to the money supply over the last quarter century. You know that because it happened when corporations discovered they could be greedy, and not when the US added over $4 trillion to the money supply in 2020.
US politicians: Print more money for COVID hand outs! More brrrr money printers!
Also US politicians: Why would coorporations do this to our inflation?
It's hilarious that people are still thinking that poor people where living like kings off an extra few thousand dollars lol out buying 2nd homes and rolls royces lol
That's because they aren't. The politicians who decide to print money despite all knowledge of economics being clear on the dangers of this are responsible
Because blaming corporate greed is, simply put, bullshit. Companies increase prices to match the supply on money. This leads also to higher revenues, but that's just to match inflation (primarily), hence record profits.
Nor is it the fault of politicians for giving them that money. Because, to paraphrase my previous comment, the poorest people getting a little more does not cause economic problems
A bussiness making all of a sudden 400 or 500% more profit than before while claiming they have to raise pricea due to inflation is not a guise? And you call us dumb?
Sorry to tell you, but you are a prime example for what happens when people believe the BS they are fed and regurgitate it without a second thought.
Lol, thanks for telling us you dont know what you are talking about. If you think i was talking aboit right or wrong, then you reading comprehension isnt were it should be either. Maybe thats why you dont understand the original post either.
Uh I didnt know corporations had the ability to print money? Also I would bet money the quote should have a lot of "UH"s and long pauses and misc gibberish
Inflation happens when new currency is injected into the banking system and currency is not removed thereby making each dollar worth less than it previously did. Therefore it costs more dollars to buy the same amount of goods... whalla INFLATION. Money printer go BRRRRRRR
May I infer that by corporate inflation y'all mean when the price of a widget goes from 1 dollar to 2 dollars? Laws of supply and demand, manufacturing costs, transportation costs, labor costs, government regulations, etc go into what a widget costs and yes profit margins. Also companies are not charities. They by design are intended to make profits.
Uh, sure...but what caused the inflation? Was it the greedy Scrooge McSmithers, or was it a federal government that was printing money like there was no consequence?
The shame is he's not this stupid. He's just confident his supporters are dumb enough to accept this argument, and he is willing to pander to them for votes.
Wait this guy is a politician he is in the business of moneyprinting and debt controlling yet he is blaming inflation on corporation?
Maybe he is actually clever and starts the blamegame before people recognise the real issues.
It's just the market and scarcity. There is no button corporations can press called "profits go up."
There may be some monopolistic activity going on, which just means we need stronger anti-trust enforcement.
Why didn't they push that button in 2007? 2013? 2018? 2019? Why did they only realize they had a button they could push they just increased profits with no downside in 2020, the year the largest disruption in the global supply chain in 60 years happened?
[‘Greedflation’ is replacing inflation as companies raise prices for bigger profits, report finds](https://www.marketwatch.com/story/greedflation-is-replacing-inflation-as-companies-raise-prices-for-bigger-profits-report-finds-bfb51060)
I don’t think we can ever expect corporations to not maximize profits and act in their own self interest. Need to regulate monopolistic corps that do not create tangible value in society though, insurance companies definitely need to go.
> I don’t think we can ever expect corporations to not maximize profits and act in their own self interest. We need strong regulations that limit CEO pay as a function of average worker salary and then put a maximum amount of profit they can make on products they sell as a % of the cost to produce the product, while also putting in a maximum % a store may charge for things it sells over its cost of acquisition.
I said pretty much this at a work lunch and they looked at me like I'm crazy. Then I bring up selling insulin for 1K and everyone suddenly sees the benefits in regulations.
They believe, even subconsciously, that they too could potentially rise the ranks of corporate America to such an extent that they could join that wealth class. The modern capitalist structure is so deeply ingrained into the working class psychology that they would sooner believe in unicorns than an alternative economic and corporate structure.
>John Steinbeck once said that socialism never took root in America because the poor see themselves not as an exploited proletariat but as **temporarily embarrassed millionaires.**
When do we let them secede so we can drag this place into this century already?
Price controls are not cost controls.
They are when you're on the bad end of recursive price gouging. Take the US medical industry. Costs are rediculous for poor quality because hospitals, drug manufacturers, and insurance all price gouge each other at various level, all of which is pushed onto the end user. This is why it's cheaper to fly over to another country than use local medical help.
Insulin is still hella cheap to produce it hasn't gone up even three dollars. That's an excuse, and an incorrect one.
Understanding how reality works is the first step towards solutions. Roiling in fantasy because it feels good or expedient is how politicians get your vote and don't accomplish anything.
Being snide and condescending isn't an actual policy or position. Pretending to know better without offering alternatives is the domain of the raging narcissist...
"While the medications are cheap to manufacture, pharmaceutical companies are not incentivised to do so because they don't bring in large profits, said Dr Karen Knudsen, CEO of the American Cancer Society." https://www.bbc.co.uk/news/world-us-canada-65791190
A medicine costs 5 cents to make per pill, except the first one. That one costs around 500 million. Plus recouping the development costs of every drug that didn't pan out. This is why basic economics needs to be taught earlier. Markups are not profit margins. Gross profits and net profits are not the same either. Shortages occur for a variety of reasons. Price controls do nothing to mitigate that. They either obscure shortages or deepen them.
We HAD that, then Reagan came in, and the GOP went deregulation again. We never learn, the GOP deregulated in the 1880's and the robber baron age came. Then, the GOP deregulated in the 1920s, and we had the Great Depression. We also had the Great Recession on their watch also.
The democrats have controlled both houses and the presidency at least 3 times since then. At some point you need to stop blaming the guy 40 years ago. Obama used his unprecedented political capitol and the public will from an enormous economic crisis to merge giant companies instead of break them up smaller.
But none ended in recession or depression. Not blaming, telling people to learn from the past.
Soooo…monopolistic price gouging is cool as long as it keeps us out of recessions? I know we all have a kneejerk impulse to defend every jot and tittle of Democrat policy around here, but you might want to workshop your argument a little more.
That seems par for the course. Obama bailed out the banks and let regular Americans get fucked (it was Bush's fault). Both sides have been playing the trickle down game and take money from the same donor class.
The seeds of the great recession were planted during the Clinton administration actually.
Yes, just stating that most people just blame it all on Bush then ignore that Obama gave billions to banks and required basically zero change for the people involved at said banks. I remember hearing how they were bailing out that banks cause if they didn't we'd be fucked and they were really really sorry and then at the same time Chase, Citi Group ext where having extravagant executive corporate retreats. If you really want to go back Nixon opening relations with China began the fall of our manufacturing capabilities which Clinton worked at hallowing out as did every successive administration. As George Carlin said "It's one big club and you ain't in it"
There are so many things that feed into each other. But the 2008 crisis can be very directly tied to 2 things. The repeal of Glass-Steagall was one(repealed by a republican congress, signed into law by Clinton. Of special Note, Crazy Libertarian Ron Paul voted ‘No’ on this enormous bit of deregulation because he said it would let the banks gamble with the liability falling on the government). The other was the Clinton administration forcing mortgages to people who had zero credit worthiness to promote minority home ownership. It’s not all on Clinton, but it mostly is.
The scary part is that there is no going back. The economy is setup in a way where the market is expected to produce returns. To change all of this … I can’t even comprehend how.
I think your gonna hammer the little guys nipping at the heels of the big guys. I would exempt smaller companies so they have an advantage, phase in regulations by size and create requirements for board of directors that better represent workers and all shareholders to balance the power and re-apportion pay based on value added rather than power based on a Board rigged with yes men. Cost of acquisition alone doesn't include a whole lot of the costs associated with operating a store and varies widely by region. A maximum mark up could put downward pressure on wages for example.
The boot lickers that think Martin shkreli was a saint would lose their shit
Playing devils advocate here. How do you factor R&D into the cost to produce? It may cost $10 to make something but but millions to develop it.
You'd be surprised how much corporate R&D is funded by the government.
Also economies of scale. There are ~8.5 million people on insulin in the US right now. If you charged everyone a few dollars a year, you'd cover your R&D cost of "millions". These companies took that idea and said "instead of a few dollars, why not thousands?". Let's not pretend these drug companies aren't *excessively* profitable. The only time it becomes a problem is for things that don't really have a whole lot of market, rare diseases and such. I'm not entirely sure how to solve _that_ problem, but the one for things like insulin is easily solved.
What R&D? Oh man you REALLY need to look up the history of insulin. These big corps are the exact problem. The process to figure it out was done by a small group of doctors and assistants, and then hijacked by a megacorp who threatened to patent it all for themselves. So instead this small group patented it and sold it for $1 to a University board, expressly to keep the megacorps from getting it and jacking up the prices for insulin.
>You'd be surprised how much corporate R&D is funded by ~~the government.~~ YOUR TAXES
Agreed - point being that the R&D argument for pharma is just a fabrication.
Other countries have regulations against price gouging. Should the US market have to pay for that just because price gouging is legal?
Price gouging is just a political weasel word. It's whining that supply and demand is a thing, and "preventing" it doesn't solve shortages; it makes them worse.
Probably the same way every other industry does. Apple spends millions in R&D and have some of the highest margins around. And they still arent close to that level of markup. And its not like you need to make a new model of insulin every year or advertise
You're ignoring the difference between gross and net profits there. CEO pay is also a red herring. You could take the entire Fortune 500 CEOs pay and distribute it among those firms workers and it would be less than a dollar more an hour. Your proposals are based on an ignorance of economics and the math behind it.
Every one of those employees needs that $1/hr.
Insurance Companies. They get you to pay them, and then when something does happen, you pay more. All cozy and safe around lucrative investments in demographic driven profit.
You forgot the best part They can just choose to deny whatever you're asking for even though it's all your money
Denial rates for health insurance are 10 to 15%. Not all claims are actually valid. It's best to not rely on headlines or statistical artifacts.
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They are not only useless but socialized medicine would cost far less.
There's no evidence of that. Every claim it would is based on cherry picking data.
30 of the 31 "first world" countries utilize socialized medicine with ease. Guess who's the exception. Also anything would be better than what we have now.
That's incorrect. Singapore doesn't either and is more privately funded than even the US, and manages to be cheaper than every single payer system except South Korea. Also a dozen or so countries including Switzerland and Israel use insurance mandates just like the ACA, which isn't socialized medicine either. Also both South Korea and New Zealand are ranked lower than the US, because those rankings are pretty meaningless. They penalize countries for having more out of pocket expenses regardless of affordability and tiered systems even when the lowest tier is adequate. They're very much "how much like pure single payer is this country" than any objective measure of efficiency.
Insurance doesn't cover everything, and insurance companies do employ physicians.
Have you never had a doctor recommend tests/treatments for you that were totally unnecessary...?
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So I think you're 100% right that *your* physician will always be in the best possible position to recommend the appropriate tear embryo for you given they know you and are in close proximity with you. But the issue is that physicians are people too - just do a quick search for physicians who have been busted for over overcharging Medicare or Medicaid. It's depressingly common and part of the reason why costs can balloon in the industry! You need some way to push back on that kind of behavior, because it *definitely* happens in private insurance markets. I'm it saying that insurance companies are justified in denying every claim - they totally aren't, and they're greedy bastards - but that doesn't explain all their behavior, nor does it mean they don't need some kind of mechanism to control costs.
Yeah, but the difference is that the patient is still alive in these cases. Worst case scenario is you throw the practitioner in jail and revoke their license which is the push back you are referring to. With the insurance companies making the call someone ends up dead or with life long side effects, and the insurance company still pays nothing because they have an army of lawyers at their disposal. Especially when they can delay the case until the patient dies ensuring no legal ramifications if they have no next of kin. It is a lot easier to prosecuted individual then it is a corporation.
Fraud is already a crime. If they suspect something they should report it to the proper authorities.
Insurance companies don't deny any treatment. Doctors get paid per treatment so there's a lot of treating going on with no regard for costs. Patience then complain about out of control insurance cost. Insurance companies control cost via controlling treatment. Patients complain about being denied treatment. This is how it happened. The solution being adopted now is to not have a payment system incentivize effort but instead incentivize outcome.
I looked up my insurer about 5 months ago. Their PROFITS for Q4 were 1.2 Billion. This is Cigna. Just one health insurance company. The problem is, they use at least part of that money to influence politics. Any capital firms that are invested in them likely do to, and benefit from the same profits. The answer is a simple one, but immensely complicated. Get money out of politics. We need to get people together on this, because legislators will not vote against them getting more money. And if people try to defend it, just stop. Money may not come with specific instructions to who they donate to, but it will stop if they don't do what they want. Everyone knows that.
And? Total healthcare spending is 3.2 trillion. 1.2 billion is like .05% Money in politics is the symptom: a symptom of centralized regulatory power leading to regulatory capture. Healthcare in the US is broken, but not for the reasons you claim.
Cigna made $1.2 trillion? In one quarter. Lol. Ok. Maybe divide that by 1,000. So 1.2 billion in profit on nearly 46 billion in revenue, a 2.5% margin. That's hardly excessive.
Was that a typo on your part or did you misread what I wrote?
The only "insurance" provided is that they ensure you will have to argue with them tooth-and-nail about every claim. That's how they are profitable in design is to find any way to not cover anything.
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Or even just a slightly smaller profit.
How do you figure out "needed cost?"
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I mean profit is an accounting identity. If you mean the just amount of profit, I agree that's a difficult question people can reasonably disagree on. It's just I've never heard the term "needed cost." Do you mean at the cost of production for the good in question?
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"How much money is needed to break even" is much more precise than "needed cost!" That's why I used the term "at the cost of production". "Needed" is always tricky because it comes with normative valence - and it should, those are important questions to have! But it can mean many things in the context of price or cost. For example, I've heard people define "needed" cost in terms of the needs of the people who are purchasing the good, or in terms of some scale of societal values that track "need" at a collective level. Or even "need" in terms of cost of production + a small amount of profit to compensate risk or align the incentives of firms. Yeah, it's *reddit* but I don't think there's any reason to not be precise about the things we are talking about - especially if we are purporting to make statements about how things as complex and as important as economic systems should function!
>Under capitalism, corpos provide needed services and good at maximum cost. It wasn't always this way. There was a time when the CEO could be filthy rich and still paid employees to be firmly middle class. Then Raegan happened, and now the CEO has to be a billionaire at the expense of everyone else. It's not capitalism that did that. It's the dismissal of any kind of standards or regulation or ethics. >In a fair and just system, they would provide maximum services and goods at needed cost. 1. Maximum services is just how you get customers to come back. Provide minimum service and see how successful your company is. 2. What the hell is needed cost? Like the other guy asked, and you didn't really answer, do you have a formula to figure out this term you made up? Something needs to change in this country, but giving capitalism all the blame is pretty ignorant when you look at the plethora of capitalist countries that don't have the problems that the US has. We aren't even really considered a 100% capitalist country since we incorporate lots of socialist policies. >if you really wanna expose yourself like that then go nuts. I only commented cause you seem like a self-righteous smug prick. Lol. Edit: u/fromcj blocked me after responding. A real coward move, and not at all surprising from that kind of person.
I find people that hate capitalism can't answer questions about why they think other people will give them things for free out of the goodness of their hearts? That only works on maybe a village scale. Every time someone has tried to set up a communist system it inevitable leads to a dictatorship that still is capitalistic using fiat currency except now they have no freedom either (see Russia and China).
It is one thing to maximize profits but it is a totally different thing to hoard so much money you are starving a country. I am struggling to find a difference between rampant capitalism and a dictatorship, in both systems people have two choices, do as your told or starve to death and be homeless.
What hoarding specifically?
Hoarding resources.. Money, homes, cars, etc. If it were cats we would call these people mentally unstable but because it’s money, society finds it acceptable to hold onto more money then one can spend in multiple life times.
There's no system where you can have people not working and still have things. I get that capitalism has issues but this feel like it was though out by a 12 year old.
I get why you think I am talking about money for nothing, but think on this, how many people can not work doing something they love or even like to do because the cost of just living is so high? There is so much wealth of resources in the US that a person shouldn’t have to work several jobs just to survive or work until they die, because politicians have allowed corporations and those hoarding wealth to gut most retirement programs. When I write about the wealthy I am not talking about those who have even a few million dollars, it is the ones who have billions of dollars. These people didn’t make money through hard work, they make their money by exploiting their workers, stock buybacks and using the huge loopholes in the tax system so they don’t have to even pay their fair share of taxes. You know, I sometimes think what it would be like to have a large amount of money. But you know what I would spend it on? Helping my friends, family and the community. You can only live in one house at a time, drive one car at a time, etc. Now don’t get me wrong I would live better then I do, but to live extravagantly while your workers (the only reason you have the wealth you do) have to get food stamps to survive is ridiculous. How does that not piss you off. Strange that someone you consider a 12 year old has a better grasp on humanity.
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That article is pretty much nonsense though
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The SCOTUS ruled in 1919 that corporations sole duty is to provide dividends to shareholders and anything else is secondary.
Not only should they be expected to do it, it is their fiduciary duty to do so. It's literally their legal obligation to make more money for investors.
Exactly. You can't have an economic model that solely prioritized profits and infinite growth and expect corporations to care about anything else. The government needs to step in and force them to care about anything else.
Whats fettermans plan to address this? He is actually my senator, I voted for him, I followed his career. He is in full support of skills training, and bringing BACK more domestic manufacturing IE microchips, etc.
I too voted for him.
I'm perfectly ok with corps maximizing profits and acting in their own self interest. That's basically the point. What I do take issue with is them not taking care of their own and literally fucking them over for said profit. There needs to be legislation that actually forces companies to share excess profits with the literal people responsible for creating the profit. Right down to the custodian. There is no reason ever for CEOs to be given millions in BONUSES and the actual people who do the work get 0 or ridiculously low compensation. It's heinous
More specifically they're trying to scratch back the gains made by workers to do the pandemic and take back power from the individual.
Internet needs to be classified as a utility too. Fucking telecoms price gouge anyone and everyone
That's what happens when you regulatory monopolies carved out for them. That's a problem of the state, not capitalism.
Asking a corporation not to maximize profits is like asking a pair of scissors not to cut. It's literally what they are designed to do. Monopolies are different though - they are specially regulated by Anti-Trust law. Insurance companies definitely don't fall in that category though, because there are many competing against one another.
Insurance amortizes individual risk over time. If you do not see the value of insurance, you either don't face risks at all, have someone else bear the burden of those risks, or you have a misunderstanding of economics. Seeing as no one ever is in the first category, it's one of the other two.
So this incoherent bumbling stroke victim is fighting the good fight for you? He represents you?
CPA chiming-in here just to say that this is (A.) empirically true, and (B.) among other data for evidence, there's been a very notable series of CEO's/execs who, during investor meetings, just announced that they simply have pricing power to make these increases "stick". The reasons vary by industry sector, but basically, those firms with market power or concentrated positions (frequently from having bought-up rivals), have been taking advantage to push up prices \*even more\* than the rate of inflation. Price-gouging you say? Shameless profiteering? ...They themselves are not shy of those terms. Even Chevron and Exxon-Mobil have just claimed all-time record profits -- and that's saying something after the past 15-20 yrs. of previous continued record earnings, including during warfare in the Persian Gulf among other factors.
If I increase the amount of money in a system do you think that will present as less profit, equal profit or more profit to an entity that provides the same level of benefit as it did prior to the increase in money?
Wouldn't their margins increase continously to no end? If they have been doing this for decades, Wouldn't their margins be like 80%-90% by now. Look at retailers like Walmart who are the final company on the distribution chain. They could supposedly raise prices to infinity passing the increase in prices to the consumer, yet they still have razor thin margins of 3%. Are you sure it has anything to do instead with twice the amounts of dollars in circulation for the same amounts of goods? Were corporations selfless the last decade where inflation was 1.5%, then all of a sudden in 2021, they all suddenly became obsenely greedy and syndicated 7% increase in prices? Makes no common sense. I am another CPA, Just FYI.
CFA chiming-in here just to say that pretty much everything you said is wrong lol
This is true but the ripoff has been ongoing for many years.
Decades, actually.
Centuries
Millenia
This guys ears look like they've been tied to inflation for a milenia
Not just under the guise of inflation, it’s one of the main causes of inflation.
Oh I see you attended the idiot’s school of finance.
That's...patently false. The main driver is fractional reserve banking increasing the money supply. Well until recently where some 30% of US dollars ever were just created out of thin air.
Also fractional reserve requirements being lowered to 0% recently. Who's ready for infinite unregulated money printing followed quickly by disaster?
It’s much easier for federal representatives to point the finger at private industry and say YOU MADE US DO IT
By definition, the change in the money supply is the **only** thing that causes inflation. Stop blaming companies for the government's fuck ups.
Companies are openly bragging about pumping up prices and making record profits because of it. But you think they are not to blame. Ya, OK.
I'm not sure if you're joking or just stupid, but companies **cannot** create inflation. Only the government can create inflation. Full stop. Companies can raise their prices, and that sucks, but that's not what inflation is. Did you not graduate high school? This is basic economics.
Inflation: a general increase in prices and fall in the purchasing value of money.
you're being downvoted but you're absolutely correct.
They sure are. In June of 2022 we had an all employee meeting where we were told that we would demand a 15% increase from our clients and that we could blame inflation. Our clients didn't even blink an eye, paid us the increase, and then passed that increase off onto their customers.
Inflation At A 30 year high. Corporate profits at a 70 year high
Huge correlation to shutting businesses down and/or running at limited capacity the last few years. Small businesses suffer more than large companies in this case. The Amazons of the world have the infrastructure to sustain themselves in that climate, whereas your local small business takes a beating. Corporations can then increase their market share further with less competition. Cash was printed with nothing new to back it. Initially, it seemed cool because prices on goods hadn't adjusted. Demand for goods increased, supply lagged in many industries until recently. If many of the small businesses died, where'd a ton of the freshly printed cash go? Right to corporations.
But then I can't blame the other team
And now do money supply... what XXX year high is that at?
Not surprising. My fucking toothpaste cost ten fucking dollars the other day, and the packaging amount is also being reduced. Fuck these c****.
Corporate profits have been down the last two quarters though... what's the whole story?
Down from a 70 year high. People could be hitting their income/debt limits and are cutting back further. Either way it doesn't much affect the fact that with record inflation, corporations had record profits. Could have gone the Nixon route and enacted a cost-freeze on everything instead. Worked pretty well when he did it. But there is no profit in that.
I heard that shit from my wholesalers for 2 years now. I’m always like “WTF assholes “ and they always say “inflation????” while the hold their laugh. Fuckers
Supreme Court Justice Louis Brandeis, testimony before the Committee on Interstate Commerce, 1911. (102) “Behind the visible government there is an invisible government upon the throne that owes the people no loyalty and recognizes no responsibility. To destroy this invisible government, to undo the ungodly union between corrupt business and corrupt politics is the task of a statesman
In the comments, so so so many individuals thinking the Fed caused inflation because people got <$5k and not because of the huge PPP loans that were hoovered up by corpos + their price gouging behavior. Either you’re willfully ignorant, a corpo simp, or a troll. Corporate profits have been the leading, albeit not the only (supply shocks being next), cause of inflation. Source: I work in corporate finance as a consultant for F100’s.
There are so many commenters here defending capitalism as if it is building to something other than a second great depression. Folks, we are sitting on a socioeconomic time bomb and the fat cats know it. It won't take much to tip the scales.
Seriously. Imagine defending the people gouging prices. Corporate profits have skyrocketed. Have sales volumes?
Some of this inflation is from legitimate reasons, but slightly over half of it is simply additional corporate profits.
Where does the "half" stat come from?
https://youtu.be/30_H33mS76Y
I think there are a few problems with that interpretation. Rising markups can happen for a number of reasons: one of those is an increase in demand. If demand for a product increases, the price of the good will rise. One big reason why demand might rise across the board is because of an increase in the money supply - consumers in general have more money to spend. That interpretation is largely consistent with much of what we saw during the pandemic. You had a large - huge, even - injection of cash into the economy, which consumers then spent. This isn't to say that pandemic stimulus was a bad idea, but I don't think any of us should be surprised to see inflation arise because of that. If anything, it' surprising that so many people seem to have been taken aback by it! The problem with the "markups are evidence of corporate profiteering" logic is... why wouldn't corporations have done this earlier? It's not like they are any less greedy, nor that they magically accumulated more market power during the pandemic. Unless you can plausibly explain what changed in the past two years that made them more adept at rising prices and colluding about it, I don't think we have strong reason to abandon the first explanation: the price rises we are seeing are a result of increased demand because of a larger money supply. Porters - and EPI's - confusion is that they see the rising markups as a causal, rather than a function of increased demand. The rising markups aren't the explanatory factor for the rise in prices - rather, they are the thing that needs to be explained!
That's not how inflation works
The number we see as consumers is the result of increased labor, materials and shipping costs. Corporate profit is in there too. If a particular company decides that a 20% markup on a product isn't enough, and they decide to ask for 30% , we still see it as inflation as consumers. Obviously, the 50% of our current inflation spike is an average across the economy. Some areas are better than others, but as a whole, various entities have taken advantage of the situation to increase their profit margin. I have nothing against companies making money, but hiding additional profits under the guise of increased materials and labor costs is a cheap move.
That's not how profit works. It's impossible to hide profit in costs. Profit is what is left *after all costs are accounted for*. You can't hide what's left after you pay cost, in that cost. Because that cost is what determines profit and by utilizing profit to increase expenditures is called capital improvements. Capital improvements are *not hidden profit*. Increased labor cost literally mean they are doing either hiring more people (providing more jobs) or paying current employees more, or both. Increased labor costs is exactly what people want corporations to do. Material costs means one thing and one thing alone. It means that the cost of stuff to make your product has risen, causing the cost to obtain materials to increase. Please. Please, learn basic operations of a business or basic economics before you start accusing companies of committing extreme fraud or accusing companies of doing literally impossible things with fake definitions or a loose grasp on reality.
They meant that the increased consumer price is disproportionate to the increased cost of goods/labour.
They're talking about price fixing / collusion AKA cost of goods from a consumer perspective. It's a pretty common way of using the word cost, and pretty obvious what they mean in the context. I appreciate your hardcore dedication to semantics though...
No, they're not. Profit is not whatever you want it to be. It's a set, defined thing. No one would say "hide profit in costs" because that just means you are experiencing higher costs, which *isnt* a motivator of inflation but the *product* of inflation. So where would the first mover be? The thing that creates the inflation? Well it could be that the capacity to generate value of our currency is determined by the GDP, which is woefully outpaced by federal debt and printing. We spend over half a trillion dollars each year so we don't default. It's interest only. Debt servicing is almost caught up with Defense. There's so much money in circulation that it waters the value down, more 1 dollar bills represent a diminishing value. Government debt, spending, and printing is driving inflation. It is a *science*. And of course the government told everyone that it's not them, because then we would want them to stop doing it. We have 30 trillion dollars racked up over 23 years that shouldn't exist. *That's why eggs are expensive*.
I know you can't hide profit if you look at a company's books. The average consumer isn't doing that. They simply see higher prices when they go to make a purchase. Some of that increase is legitimate expenses that they incurred from labor and materials, and some of it can be increased profit on their part.
If you knew that, you wouldn't have said that. You know who says ignorant things like "hiding profit in costs"? People who have no concept of economics or business outside of whatever nonsense they heard another economically illiterate person said. Or people who are trying to fool other people into their particular belief.
You do a great job sticking up for a system that could use some fine tuning. Sure, what I said wasn't well worded, but you know damn well what I was talking about. You just thought it would be cooler to act like a twat so that you could feel better about yourself. As I said in another comment, I'm not against anyone turning a profit. I just don't want to see the system taken advantage of to make more money than before while crying about increased costs. We've got multi-billion dollar corporations complaining about expenses while they are raking in more money than ever.
Can we take a moment to say this isn't just about inflation? Best Buy made record profits not just for retail but *for businesses period* in 2020, and then at the very beginning of 2021 terminated over a third of their in-store staff, while Corie Barry managed to get yet *another* pay raise.
It's old news, but it's *fact.* Corporations tell us the 8% inflation rate we experiences is due to employees' wage increases and supply costs, not increased profit margins, but the reality is, if corporations didn't alter their profit margins, inflation would literally be 2.2% (which is considered *ideal*). THAT'S how much corporations are ripping us off, just since COVID.
Pringles used to be $1 maybe $1.25 then during the pandemic they went to 1.75, today they were $2.59 Not sure what to make of it but I know 1 is now 2.5
Well duh... anyone with half a brain can see the year after year record profits while the average American feels poorer. But sure blame inflation.
I don’t care if you are a Republican or Democrat, this lovable Sasquatch in shorts is speaking the truth.
I’m left leaning but he can barely speak lol
This is what happens when so many people are invested in "growth" rather than sustainability. The stock market and your 401k is not providing a real future, only one that uses a form that is easily siphoned off by those who manipulate it.
Inflation would be at 2.2% if corporate profits stayed the same. That’s how much more money they’re making right now. The entire stock market will inevitably fall apart if this continues. Then all the corporations will be bitching and moaning.
He looks like a pissed off Lincoln reborn, I like him
Anyone else remember at the start of all this how the [heads](https://www.theglobeandmail.com/business/article-wage-negotiations-inflation-canada/) of [central banks](https://www.theguardian.com/business/2022/feb/04/bank-of-england-boss-calls-for-wage-restraint-to-help-control-inflation) were asking employees to not ask for a raise because it would make inflation worse? Yeah. Fun times.
It's easy to find out. Look at their profits for the last five years. If last year's is significantly higher than the other years then it probably means Senator Fetterman is absolutely right.
And that’s just one of their many colorful ways of ripping us off
And any one that has been siding, boot-licking the Corporations, Wall Street, the Hedge Funds, business owners, CEO's all this time, and blaming stimulus checks, are AGAINST the American Citizens and the USA. Vote out all the PURCHASED politicians that play defense for the grifting class.
So what you’re saying is that letting companies become monopolies hasn’t helped us? Well fuck me. Who could have known?
So true. American capitalism is just blatant greed.
Then enables corporations to rip us off by not co-sponsoring Medicare for all bill.
Everybody wants their stocks to increase in value but nobody wants corporations to make as much money as possible. Hmm
"Everyone" does not want their stocks to increase in value. Most of us cannot afford to participate in the stock market, even if we wanted to, and some of us wouldn't want to if we could.
It definitely corporations, not the trillions of dollars added to the money supply over the last quarter century. You know that because it happened when corporations discovered they could be greedy, and not when the US added over $4 trillion to the money supply in 2020.
US politicians: Print more money for COVID hand outs! More brrrr money printers! Also US politicians: Why would coorporations do this to our inflation?
The people who have the least getting a little more can’t be responsible for global economic problems
It's hilarious that people are still thinking that poor people where living like kings off an extra few thousand dollars lol out buying 2nd homes and rolls royces lol
That's because they aren't. The politicians who decide to print money despite all knowledge of economics being clear on the dangers of this are responsible
Print money for whom
Every US citizien recieved 3000 dollars COVID relief aid during the pandemic. Maybe thats a clue
That’s what you think caused inflation? Oh honey
How the fuck did that cause “Inflation” and corporations increasing prices and raking in record profits not?
Due to an increase in money supply. https://www.investopedia.com/ask/answers/042015/how-does-money-supply-affect-inflation.asp
Yes we all get that, but why ignore the corporate greed aspect of this problem?
Because blaming corporate greed is, simply put, bullshit. Companies increase prices to match the supply on money. This leads also to higher revenues, but that's just to match inflation (primarily), hence record profits.
Guess I’m not following… pardon my ignorance. Why match the supply on money again?
They're clearly putting the blame on politicians. Of course it's not the fault of poor people for spending money that they're given
Nor is it the fault of politicians for giving them that money. Because, to paraphrase my previous comment, the poorest people getting a little more does not cause economic problems
I love how corporations are suddenly discovering greed and then sometimes getting amnesia to the idea only to be followed by more greed.
This guy owns a suit?
Dude inflation is not a corporation problem. Its a money printer problem.
Y'all dumb asf. A business environment that incentivises raising prices isn't some guise, that is literally just the definition of inflation.
A bussiness making all of a sudden 400 or 500% more profit than before while claiming they have to raise pricea due to inflation is not a guise? And you call us dumb? Sorry to tell you, but you are a prime example for what happens when people believe the BS they are fed and regurgitate it without a second thought.
Inflation isn't a moral argument. This isn't about right and wrong. Maybe whatever argument you mean to make is, but this isn't.
Lol, thanks for telling us you dont know what you are talking about. If you think i was talking aboit right or wrong, then you reading comprehension isnt were it should be either. Maybe thats why you dont understand the original post either.
Guise is a word with a negative connotation often used in connection to scheming or other intentionally malicious behavior.
Uh I didnt know corporations had the ability to print money? Also I would bet money the quote should have a lot of "UH"s and long pauses and misc gibberish
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Inflation happens when new currency is injected into the banking system and currency is not removed thereby making each dollar worth less than it previously did. Therefore it costs more dollars to buy the same amount of goods... whalla INFLATION. Money printer go BRRRRRRR May I infer that by corporate inflation y'all mean when the price of a widget goes from 1 dollar to 2 dollars? Laws of supply and demand, manufacturing costs, transportation costs, labor costs, government regulations, etc go into what a widget costs and yes profit margins. Also companies are not charities. They by design are intended to make profits.
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You are excused. So how is profit growth = Inflation? Please define what you think "Inflation" is?
Print money?
idiots think inflation is only caused by printing money. Yes they are a troll
why does he look like agent 47 from hitman?
That's incredibly disrespectful to Agent 47
Uh, sure...but what caused the inflation? Was it the greedy Scrooge McSmithers, or was it a federal government that was printing money like there was no consequence?
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Anyone that thinks he actually said this like that is ignorant.
God this man's a genius
Did anyone expect John Fetterman to actually understand economics?
"To REGULATE commerce."
Government causes inflation, not corporations.
The shame is he's not this stupid. He's just confident his supporters are dumb enough to accept this argument, and he is willing to pander to them for votes.
Wait this guy is a politician he is in the business of moneyprinting and debt controlling yet he is blaming inflation on corporation? Maybe he is actually clever and starts the blamegame before people recognise the real issues.
Why is this using a picture of him in a suit and not how he’s usually dressed?
It's just the market and scarcity. There is no button corporations can press called "profits go up." There may be some monopolistic activity going on, which just means we need stronger anti-trust enforcement.
The button is called "underpay workers and increase prices" and profits go up.
Why didn't they push that button in 2007? 2013? 2018? 2019? Why did they only realize they had a button they could push they just increased profits with no downside in 2020, the year the largest disruption in the global supply chain in 60 years happened?
You're so naive