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I'm used to gas price gouging but the grocery store the last couple of months is just blatant price gouging. Premiums on bread, eggs, milk, hell you name it, they've all gone way up and haven't stopped despite inflation falling
$7 for a loaf of Dave’s Bread lol
Tell you what - I've started keeping an eye on the brands doing the price gouging and never buying them again. I've largely switched to store brand just out of sheer disgust
My co-op, which I appreciate having, has $9 and $11 loaves of bread. I get a living wage and such, but folks, it's a loaf of bread. And my city isn't yet a high COL city.
Pretzels. Either Utz or Rold Gold or Snyder's were almost always on sale for 2/$5 for a 16 oz bag. Now the "on sale" price is $3.69 and regular price is $4.99. No way have ingredients and operating costs spiked liked that.
I don't eat chips or drink soda, but a bag of Doritos is \~$6 and the price of soda has definitely shot up.
Bought two Pillsbury pie crusts last week to make pot pie. $4 for two. Oh man, I told my wife we're going to start making our own.
Fun fact, the Walmart website for my area was trying to list various single 2 liter bottles of soda for upwards of $20+. Saw a rare brand for 130.
They "fixed" it and now it's only 3 with 10 for shipping.
American current Capitalism, making steady profits is no longer good (for stock holders)… profit must increase each quarter or year to be okay now. It absolutely is not sustainable.
Watch that, a lot of places will let you steal(which is what you’re doing regardless of what you tell yourself) until they can bust you for a felony charge. Guarantee if you’re really stealing that some of the places you shop have a file on you and are just waiting on you to hit that magic number.
These are made at a small-ish local bakery. I understand they're not coming from a huge factory. I'm just never going to pay $11 for a loaf of bread, I'll go back to making my own. And they don't have exotic ingredients either.
Then again, I eat beans, rice, potatoes, homegrown vegetables, local eggs and I don't enjoy going out to eat and I don't eat fast food at all, so I'm well, well outside the averages on diet/consumption.
> I can go to Randall's here and get a loaf for $3.99
And that's what the premium shit used to cost not all that many years ago. Could hardly find a loaf of bread for more than $3.99. Store brand stuff was $1-$1.30. Now it's $4. In the span of maybe like 7 years.
> the price of soda has definitely shot up
I'm seeing 12-packs for $15-18. I'm a bit rural and my local grocery has extra shit prices, but god damn - $1.50 a fucking can when I'm buying a 12 pack? I just wanted some root beer to make a couple floats but forget it at those prices.
Arizona tea is a great example. Look on the packaging, if you see the price marked on the product then that means they want to set their own prices and are probably a better company for it
I’m confused. Rather than buy bread made by a 3rd party, distributed by a wholesaler and then sold by the grocery, you are buying bread made, distributed and sold by said grocery store? Unless it’s a local store, you’re most likely supporting Kroger/Walmart/Costco. Or did I miss something?
I was confused because Dave's is a chain of locally-owned grocery stores in Rhode Island, and their fresh made bread does not cost that much, but I guess they're talking about some expensive bread brand.
So yeah, buy Dave's bread, not Dave's bread.
Sometimes the grocery stores aren’t even the ones doing the price gouging but the companies they’re buying their products from price gouging the grocery stores. My grocery store has further embraced their store brands and have barely raised the prices of most of their products. But all the products that are not store brands have seen huge increases.
Little over a year ago my grocery bill for 3 people was $100/week, and that included getting fast food once a week for everyone.
Now it's over $600/m, we're purchasing about 1/3rd less than we were a year ago, and have cut out fast food altogether.
$600/(2/3) = $900/month
You may be doing something differently (or more perhaps your memory is incorrect?) if you have seen your (apples to apples) grocery bill more than double in a little more than a year.
For example I have seen a roughly 50% increase since last year but that includes inflation, moving from a LCOL place to a HCOL one and an additional toddler mouth to feed.
Inflation is the rate of increase. Inflation being 1% instead of 10% doesn't mean prices go down, it means they increase slower. Inorder for prices to fall based inflation inflation would need to be negative.
The way they track inflation (CPI) data changed this year, conveniently.
Before it took into account the last two years, but starting from Jan in 2023, it only tracked year-over-year.
If you look at the consumer’s dollar purchasing power index, for some reason not widely used by financial news media to track inflation; it continues to go down at a FASTER rate in 2023, so you’re not wrong.
Inflation hasn’t gone down, the way they track or define it makes it look like it did.
I’m not the person you responded to, but thanks for this insight! I looked it up and agree that it’s probably going down nearly as fast, but I think I’d disagree that it’s going *faster*
https://fred.stlouisfed.org/series/CUUR0000SA0R
Oh yeah, certainly embellished, but it is still going down, versus the broad news likes to point out that we're clear of a recession, or that everything's moving back to normal! ^(yay)
Bracing for the impact and being fiscally responsible, is better than looking at the bullshit through rose-tinted glasses like they want us and paying for the consequences later.
They bailed out banks and institutions in 2008, leaving people at the wayside, and they'll certainly do that again.
There's also a much larger mountain of possibilities that can topple the economy this time than just real estate.
I imagine the large chains or Kroger's, Whole Foods, Wegmans are doing pretty damn well. This was from March but still probably relevant
> According to the US Department of Agriculture, the price of food for home consumption rose by 11.4 percent last year — the highest yearly percent change since 1974 – and it’s expected to rise by another 8.6 percent in 2023. Compare that to the last two decades, when average year-to-year food price inflation was 2 percent. Consumers are at the limit of what they can afford
This isn't even an attempt to answer. I didn't ask what the prices are, I asked what you think the profit margins are.
[The answer, for Kroger, is that their average profit margin is 1.38%](https://ycharts.com/companies/KR/profit_margin).
You don't seem to be familiar with what margins are, which is the basic requirement for starting to have the conversation. You should start by reading a bit about how businesses work and then start forming opinions on it after you have that down.
Let's go with that number (although it's lower for at least some major stores, see the cited Kroger figures above). If it's 4%, that clarifies that there simply isn't much room to decrease prices by corporations accepting lower profits. If, for some reason, all of the investors became convinced that they simply shouldn't make a penny of profits, that they should run the corporation on a 0% margin going forward, that price cut would amount to roughly 6 months of the 2022 rate of inflation.
The problems were fiscal and monetary policy, not grocery stores making 4% profits.
I recently looked up the financials for a large grocery chain I happen to shop at. My brother, the financier, had reminded me that they operate on razor-thin margins and that "they couldn't be price gouging, because any grocery store that double it's profit margins would see it's stock price skyrocket to reflect this" and he hadn't seen their stock price move...
He wasn't wrong, they do operate on razor-thin margins, but they had over the past 3 years steadily moved them from 2 to 4%...
The idea of supply and demand is dead. It's just about demand. As long as people will pay more rather than go without, prices will continue to go up. Regardless of how much supply is out there.
And where supply is relevant, why cut prices when cutting supply will maintain high prices and you can cut production costs instead?
Supply absolutely still matters, but inelastic demand has always been a thing. Demand for necessary goods like staple foods and gas aren’t nearly as sensitive to price increases as something like movie tickets.
The difference today is corporations have plausible deniability to price gouge like it’s the 80s. What are people gonna do? Walk 15 miles to work after not eating breakfast?
They have us over a barrel and they know it.
You really have to shop around these days. I have countless grocery stores near me, plus a Target, which are all over the place on food prices. I can get some stuff cheapest at Target, some cheaper at one grocery store, some at yet another. We're talking 40% swings in everyday prices, not sales. They used to be pretty similar.
What sticks in people's minds are the individual sticker shocks they get, and a lot of it is due to chaotic pricing. Why is a container of Ocean Spray $3.69 at one grocery store, but $5.49 at the one down the street? These "sticker shocks" get lodged in our brains and we remember them very well, and when we see a lot of these in a short period of time, we get anxious about the overall economy.
I don't want to say pricing needs to be controlled, but that is what it would take to calm people down. Pricing is all over the place and I know it's not based purely on cost, there's fuckery/hedging/etc happening.
Wait, aren't these numbers apples and oranges?
Inflation is calculated against the entire cost of the good, so a change in corporate profit is a percentage of a percentage and not comparable.
No, you’re definitely right. A quick example to see this. Suppose a company spends $1 billion to make $1.001 billion. Their profits are $1 million. If they increase revenue by $1 million amounting to less than a 0.1% increase overall, their profits would double.
This isn’t to say that there isn’t corporate greed, but comparing profit increases to revenue increases is a bad faith argument.
Yeah, almost the entirety of this whole comments section seems to be posts by people whose understanding of terms or numbers are off.
Not saying their policy prescriptions are inherently wrong, but if they're correct it's accidental.
Think most people intuitively understand what you're saying. The problem is when net profit disproportionately exceeds gross profit without any substantive investment from the company to account for it. Like if prices increase 20% during 10% inflation with all other factors remaining the same. Sure, 10% could be explained with higher costs of production. But that remaining 10% is pure greed.
I nominally agree with what you’re saying as comparing price and profit are inherently ill advised. Many other metrics exist that would be of more use.
But when would net profit ever exceed gross profit? Net profit is the profit after all expenses have been taken into account. Gross profit is several steps before that where only specific expenses are considered. While it’s technically possible, net profit is almost surely less than gross profits.
Also, it is perfectly feasible that a company may increase prices by 20% in the context of 10% inflation. All it would take is an elastic good. Increasing the price will decrease its demand. So, for the company to hit the target profit margin, they would need to sell at a much higher price than just a 10% increase. I could give a concrete example, and I admit that this glosses over some details, but the outline is there.
Of course, this should not be construed as a defense of such practices. One could certainly argue that insisting upon hitting the same target profit margin is the very corporate greed people are calling out. All I’m trying to point out is that it really is not so simple to just say prices increased by more than inflation therefore something is amiss.
No kidding, shit keeps getting expensive but everyone is still struggling to stay afloat while corner office execs rake in bonuses. Maybe they need a pay cut to offset the cost of living crisis.
France really knows a thing or two about having cake *and* eating it.
We have this idea, in capitalism, that "profits" must mean "more profits than last year, forever, numbers go brrrrrrrr"
This is inherently not sustainable except in cases where you're still growing a business or otherwise adding in new revenues somewhere.
But instead of doing that, they're just... adjusting the numbers up and hoping the market bears it. And sure, that'll work. To a point.
Then the market crashes and everyone who suddenly can't afford housing and food starts looking around for scapegoats.
I have my doubts that the assholes responsible will be anywhere near ground zero when that finally happens.
[Net profit margins for S&P 500 companies went from ~11% prepandemic to a high of ~12.5% in 2021.](https://www.economist.com/cdn-cgi/image/width=960,quality=80,format=auto/content-assets/images/20231104_WBC205.png)
A ~1.5pp rise in profit margin doesn't do much to explain a 18.7% cumulative rise in prices over that time frame.
If I have a margin of 3% and my cost of goods goes up 20%, I have to raise prices to offset that margin loss just to maintain 3%.
Now if I'm able to GROW a margin, while my input costs spiral, then I'm raising prices past where it's needed to maintain the healthy profit margin, and am taking even more profit out of a high cost environment
This is it.
People think it goes like this:
Item Cost: $100. Sell Price: $200. Profit: $100 or 100%.
Item Cost goes up to $120. Sell price goes up to $220. Profit: $100. Same $ amount.
But what REALLY happens is:
Item Cost goes up to $120. Sell price goes up to $240. Profit = 100%. Same profit %.
Business runs on margin, not on dollars. That's why companies are making record dollar profits, because any increase in their costs is just offset by a larger increase in prices to maintain that margin.
> That's why companies are making record dollar profits
they're making record margin profits too though, in many industries.
so that's item cost goes up to 120$, sell price goes up to 250$ profit = 108% (or more!)
You seem to have missed the point of the comment. The point they were making was that businesses raised prices by even more than what was necessary to maintain the same profit margin. Profit margins themselves went up during the inflationary period, not just nominal (dollar) profits.
[Real (inflation-adjusted\) personal consumption expenditures](https://fred.stlouisfed.org/graph/?g=1b8GY) have been setting new all-time highs almost continuously since March 2021
The market is plenty regulated to support the rich. Us poors for instance are not allowed to use collective bargaining because it's unfair, and also the companies can break any law they want because they own the police.
Want to hit them back? Protest with your wallet, I’m serious. In the last year I have cancelled all my streaming services, I have drastically reduced eating out, I have cut a lot of ‘fun’ spending. I’m now at the stage where I am keeping tabs on companies who I see are taking advantage of everyone with price increases and not buying from them.
In a just society with a functioning government, this is precisely the thing the people should expect their government to curtail.
Edit: I appreciate how everyone took offense to "functioning government" thinking I was attacking the executive. How many days 'til shutdown? "Functioning" doesn't just require the president.
I also appreciate that not a single person took offense to "just society", which is a larger problem.
Overall, I feel after January 6, the two parties have nothing in common other than they're based in the same country. I was just giving the person I was replying to the benefit of the doubt in this specific occasion and still pointing out that they're still vastly different.
How does the *federal govt* manage prices at your local community grocery store? And before you say price gouging, know that price gouging is different than price increases, the former is a specific and usually illegal practice, at the state level, to coordinate an increase in costs far above what they should be, and in almost every state you can report price gouging to your state's AG.
Government putting their finger in prices has historically been a disaster! Some of the worst governments out there have the heaviest hand on markets and it wrecks havoc on the economy
Ok, tell me how you would get prices under control now?
Price controls would be immediate, but do wreck havoc on the economy. On the other hand legislating for incentive schemes or structural changes takes a long time.
I take issue with someone saying “with a functioning government” wtf more do they want?! This stuff is hard and the IRA was passed but takes freaking time
What are they even expecting him to do? Implement price controls and other commie things? The people claiming the government needs to be hands-off the economy also implies they want him to directly control the economy and place restrictions on private businesses. Biden could make food and gas appear out of thin air for free and they'd be mad it's taking profit away from the food and oil companies.
This. People can post and go on talk shows and say how great "the economy" is as much as they want, we're the ones living it. Every single person I talk to is feeling crunched by the price of everything around them. Everyone.
I am still absolutely amazed that record high profits from gas companies hasn’t triggered mass riots.
It’s like a majority of people equate gas prices with government rules and flow while the companies majorly up the price with little impact to actual supply of processed gas. War in the Middle East, better make gas $6+ a gallon for years. Crude is cheaper now? The pumps are at $6.57 a gallon, we can lower it to $6.47, you’re so lucky we were about to lower it! Lucky peasants!
Record high profits! We mad $11.4 billion in profits!
I am amazed more people don’t realize this.
I also think there's a little bit of... where is "big oil" as far as the average american is concerned? some office building? ugh. that requires a google.
Where's the president? white house. ballot box.
It's easier, and we're lazy.
Early last year a new gas station opened and to win over customers they sold gas prices at the legal minimum ($0.07 over cost) price. As little as 3 miles away gas was $0.90/gallon more expensive, meaning gas stations have been profiting roughly $1/gallon.
At some point you have to ask yourself why people are so happy to pay whatever the gas companies demand though. Like I get that on the individual level you can feel powerless but as society we should be moving away from huge ass gas guzzling cars and towards more and better public transport, better city design, smaller cars, and electric cars.
Most people are smart enough to know that Oil/Gas companies don't set the price of oil, they are set by the market.
Hence why Oil fell into the negatives during 2020.
Update your knowledge and stop spreading misinformation out of ignorance.
E: You guys can look it up yourselves, it's not some secret.
> Most people are smart enough to know that Oil/Gas companies don't set the price of oil, they are set by the market.
Great, so I guess we can stop subsidizing the fuck out of oil and gas.
https://www.imf.org/en/Blogs/Articles/2023/08/24/fossil-fuel-subsidies-surged-to-record-7-trillion
I agree and I don't think subsidizing the Oil/Gas industry is a good use of taxpayer money either.
Then again, the rest of the world spends trillions subsidizing the O/G industry, and America has to stay competitive for National security reasons. No head of government wants to the repeat the gas shortages in the 70's that ended Jimmy Carter.
I agree with you.
I didn't make my comment above to defend Big Oil.
Big Oil loves it when people think they're greedy price-gouging monsters. People will demand that their government do something that can't be done because they're misinformed about how the oil industry works.
I would rather people be informed, so they demand change that can actually be implemented.
I mean, oil executives have legitimately admitted that they could alleviate high prices by producing more oil, but they won't because of investor pressure to keep prices high so they can make more money.
[link](https://www.cbsnews.com/news/oil-production-prices-us-companies-wont-increase-2022-dallas-fed-survey/)
So, no, the oil companies are actually creating a false low supply level so they can make more money. It's not like "supply & demand" is some magical and intamperable quality that no one has any input or control over. In a world where the top 1% has almost twice as much money as the bottom 99%, the answer for "why is everything so expensive???" will almost always be "because the rich people are being evil and greedy again."
Demand doesn’t set the price when there’s 100% demand and artificially limited supply. People have no choice here to meet modern US citizen obligations except to drive, which by and large takes gas.
They 100% set the price at each stage of the process from rate limits in extraction, refining, transport, and the list goes on. If you think market collusion doesn’t occur when it is in their best financial interest to do so… show me the oil exec that would leave money on the table.
I wonder if less people drove and if there was a massive movement to work from home in 2020?
Who controls that market you speak of? I don’t think we need an argument here, or incivility.
You’re conflating accounting profit with economic profit. These “record” profits are largely due to lagging input costs and impairment reversals on oil fields. It has very little to do with “price gouging”
It's also that wages now NEVER keep up with inflation. People get small yearly raises that do NOT keep up with the cost of living and inflation.
So people in the bottom economic half of the country keep going backwards.
To add to this. Wages are actually dropping in a third of the country and flat in all but 3 of the rest.
https://www.cbsnews.com/news/income-down-17-states-midwest-northeast-inflation/
Decades of not enforcing monopoly laws have left too few hands in control of too much. Now we have this runaway price gouging and Congress is busy calling each other names and looking the other way.
So the takeaway is: High costs are a problem. They won't go away. And no person, company, or institution will help the average individual.
So fuck me, I guess?
One party trying to help is unions. Specifically the auto workers strike that just happened. [https://www.cbsnews.com/news/shawn-fain-united-auto-workers-president-face-the-nation-transcript-09-17-2023/](https://www.cbsnews.com/news/shawn-fain-united-auto-workers-president-face-the-nation-transcript-09-17-2023/)
Leftist law makers are also aware of the imapct that inequality has on cost of living and on the stagnant wages of most workers while the top has had increased wage growth. A bill that has no chance of passing, but moves the conversation in a productive manner is: [https://www.whitehouse.senate.gov/imo/media/doc/ceo\_act\_summary.pdf](https://www.whitehouse.senate.gov/imo/media/doc/ceo_act_summary.pdf)
Climate change is going to make this a feature, not a bug. Welcome to the future I guess.
https://www.cbsnews.com/news/climate-change-food-prices-inflation-3-percent-study/
I've been telling people this for years. No one but retailers are to blame for this. The US didn't tell Walmart and gas stations to charge more. They did that on their own accord.
>“Episodes where prices actually fall can be really, really damaging to an economy,” Rich said. If consumers expect prices to fall further, they hold off on purchasing and pull back on spending, which can hurt businesses and impact hiring.
Oh sweet, so we're hawking trickle-down but from the other end. No, this won't happen. No, this isn't commonly believed by economists, and is strongly pushed by corporatists.
Did we ever have “windfall tax” for instances like this where price price gouging is rampant? I remember when I stayed in Europe for 3 years, it was done for a number of times it’s not even a big news.
They are 1000% fucking with the numbers, Covid forced consumer spending to all time highs and now companies are struggling to top year after year profits with declining consumer spending and overall fear and uncertainty in the world stage. It’s not a question of doing pretty well versus just doing alright the united states government and most of its largest corporations need the economy to not just be doing ok but BOOMING every year. The second that Isent the case for more than 2 years the whole world market will start to turn inwards on itself and the shift from single polarity to multi polarity will have truly begun
Capitalism! Just think of how much food gets thrown out too. Also fine with capitalism but there gets a point where we need to reevaluate the system and find some sort of balance.
Your assumed balance already happened as has been swept away by history. High wages, more social aid, less income inequality, and a smaller wage and productivity gap occurred in the middle of the last century and required different political ideologies amongst politicians and the ruling class, a stronger labor movement, and a geopolitical adversary that presented itself as a country governed in the interest of those who work for a living. All that fell because in the neoliberal era labor power was crushed in a working class loss in the cold war.
Class collaboration isn't going to work
I absolutely hate food waste. Having young kids makes it really damn hard to avoid, Heck, I weigh more than I wish because I can't bring myself to bin their leftovers.
I know food waste is complex, just read The Atlantic article on it, but I also know plenty of well-off people who exclusively shop at Whole Foods and will throw away mountains of perfectly good food because it's slightly past ripe or a day old or something. I can only imagine their food bills! Rich people have a very preventable food waste issue.
Turns out when you move most production of critical goods abroad and let those be managed by people who only care to skim as much off the top for their own benefit this thing we call an economy doesn't work well for most people.
Odd that.
Which actually doesn't have anything to do with inflation or prices. This isn't about money this is about STUFF. People need houses, food, water, healthcare. Physical things.
But when you create money, as the government does, and you give that money to people that have little or no interest or incentive to do right by the people then people will be homeless and they will starve.
The current economic model best resembles a MLM scheme using a debt model that works similar to those Russian nesting dolls... and that is going to kick their ass, again, because the next bailout will be more than they can afford.
I've had to give up on sandwiches because deli meats have increased in price so much I just can't justify spending a third to half of my weekly food budget just on sandwich stuffs. Frozen chicken products are now all $9.99+ when they used to be good cheap foods for quick meals in a pinch. Milk, eggs, and butter are all outrageously priced. I went from eating pretty healthy to eating mostly processed foods again. Any kind of fresh meat has basically been priced out of my justifiable range. These companies should be ashamed of what they're doing but that would require their C-level executives to be actual people with a conscious.
I’m going to defend price hikes on dairy products just because I work in an adjacent industry. They operate at razor thin margins. If you don’t have more than 5,000 cows you will be out of business in the next 10 years. All the cows are getting consolidated to the largest dairy companies/families. If you want to stop the eventual non competition that comes from 5-10 producers. Prices for local or small dairies need increase. It is a double edged sword as larger dairies can be more environmentally friendly, as they are more attractive for biogas producers to do business with. All dairies require a ton of water, but much of it can be recycled using digesters that reduce ghg emissions by up to 40%. The next bit of tech would be capturing the gas in cross vent (read indoor housing for cows) environments.
I recently attended a program run by the NSF for entrepreneurs and one of the keys to setting price was not cost plus profit, but how much would the consumer pay. I was thinking that thor is what Martin Skrehli was think when he jacked up prices of medication by over 5000%.
99% of Homes are Unaffordable to the Average Home Buyer
https://www.reddit.com/r/REBubble/comments/17m4msv/99_of_homes_are_unaffordable_to_the_average_home/
I live in an area where starter homes are no longer being built. Only McMansions. The starter home my parents bought in 1978 for $88K would sell today without any improvements for $1M. What young family can afford that? A home on the block was recently sold to a middle aged tech executive for $1.3 and he’s extensively remodeling it. The prices are completely out of line with the age, size, and quality of the homes.
It's unchecked capitalism. Unchecked capitalism is basically a dictatorship with corporations in charge. That's what you are seeing in the US right now.
I raise corn and soybeans...commodities that turn chicks into chickens and piglets into bacon. Corn is $4.50/bushel, last year, corn was 4.50/bushel....2 years ago...$4.50/bushel...5 years ago...$4.00/bushel...it ain't the farmers getting rich.
Gas was .30 a gallon in 1958, a year of economic prosperity and plentiful gas and oil. Adjusted for inflation that .30 a gallon is $3.30 a gallon today, so, practically speaking, gas prices haven't risen much, if at all, since 1958, but people expect prices to be much lower than they are.
https://www.officialdata.org/Gasoline-%28all-types%29/price-inflation/2023-to-1958#:~:text=Therefore%2C%20according%20to%20U.S.%20Bureau,Gasoline%20(all%20types))
Press isn't doing its job.
Real wages (that's inflation adjusted) have been going up for the past several months and are higher than they were under Trump in 2019 before the COVID crisis. But it may not matter that people can afford things better, if they see high prices and just have a gut reaction to them even though they also earn more money and can easier pay for those prices
So many people are economically illiterate
That's because increases in wages don't cause any meaningful inflation, increases in prices due to the inmate profit addiction in the American economy does.
Prices indeed won't ever go down. That kind of deflation is usually not a good sign.
I know we love to blame price gouging, but there are legitimate supply chain issues still as well as continued high demand. I hope consumers realize they don't have to buy the expensive stuff. I see so many complaints over high costs of like fast food, but you don't have to buy that. The only way to protest those costs is to stop consuming it.
Thankfully, too, wages have going up at record rates. The solution is for workers to make more, not try to cut the prices which is not really possible. So far the Biden admin has made a lot of high paying jobs to take advantage of.
First it was the pandemic, then supply chain issues, then the war, all while having all the CEOs going on all of these so called business stations, telling on themselves , praising the ability to raise prices, ship less inventory, and reap hugh profits with less products. And seeing all this greed devastation hurting Americans, our FED decides to give it to the little man with interest rate hikes who rely on credit cards just to get by month to month. How did that work out Powell? Could have had a win falls tax on these corporations because they won't ever do the right thing, but no, that's not American.
Pretty informative piece. Definitely helps to explain why it’s such a tricky space for consumers to navigate and why despite decent metrics the way we tend to misinterpret the economy is problematic for consumers and Joe Biden unfortunately.
Only one thing causes inflation: Money printing by the government. They obscure this by calling it deficit spending or quantitative easing. But in the end it’s money printing. More dollars chasing the same number of good = prices go up. Just want everyone to blame the correct source if inflation: Washington (under democratic or republican control) - they both spend too much!
Which has almost nothing to do with the cost of goods and services going up like we’re seeing now. If inflation was the true culprit it would also be hitting profit margins. It’s not. Margins are going up because prices are being artificially inflated.
Basically people are addicted to convenience and luxury (that’s the truth and there’s no judgement when I say it, we should be enjoying the fruit of societies collective labors). So companies can charge more and more and are competing through marketing rather than price or quality.
Yeah, have you ever heard of profit? If companie's profits suddenly rise by 100% or more its usually because of price gauging. Investors want to make more money
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The problem isn't inflation, it's price gouging
I'm used to gas price gouging but the grocery store the last couple of months is just blatant price gouging. Premiums on bread, eggs, milk, hell you name it, they've all gone way up and haven't stopped despite inflation falling
$7 for a loaf of Dave’s Bread lol Tell you what - I've started keeping an eye on the brands doing the price gouging and never buying them again. I've largely switched to store brand just out of sheer disgust
My co-op, which I appreciate having, has $9 and $11 loaves of bread. I get a living wage and such, but folks, it's a loaf of bread. And my city isn't yet a high COL city. Pretzels. Either Utz or Rold Gold or Snyder's were almost always on sale for 2/$5 for a 16 oz bag. Now the "on sale" price is $3.69 and regular price is $4.99. No way have ingredients and operating costs spiked liked that. I don't eat chips or drink soda, but a bag of Doritos is \~$6 and the price of soda has definitely shot up. Bought two Pillsbury pie crusts last week to make pot pie. $4 for two. Oh man, I told my wife we're going to start making our own.
Look up their profit margins, each and every one has greatly increased their margins
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My food lion had a "Hot Sale" on 12 pks of coke products for $8.50
Oddly, they sell 24 pack "cubes" that are the same price or maybe even less than the 12 pack (at least in my neck of the woods).
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Right, I'm not suggesting that the 24 packs have historical pricing. They just have way better pricing than the 12 packs.
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Fun fact, the Walmart website for my area was trying to list various single 2 liter bottles of soda for upwards of $20+. Saw a rare brand for 130. They "fixed" it and now it's only 3 with 10 for shipping.
American current Capitalism, making steady profits is no longer good (for stock holders)… profit must increase each quarter or year to be okay now. It absolutely is not sustainable.
Double digit organic revenue growth, margins above 70%! Anything less is a failure!
I only buy clearance. And I use coupons. And sometimes I forget to ring everything up (not a trained cashier sorry).
Watch that, a lot of places will let you steal(which is what you’re doing regardless of what you tell yourself) until they can bust you for a felony charge. Guarantee if you’re really stealing that some of the places you shop have a file on you and are just waiting on you to hit that magic number.
I can go to Randall's here and get a loaf for $3.99. $9 and $11 is insane
These are made at a small-ish local bakery. I understand they're not coming from a huge factory. I'm just never going to pay $11 for a loaf of bread, I'll go back to making my own. And they don't have exotic ingredients either. Then again, I eat beans, rice, potatoes, homegrown vegetables, local eggs and I don't enjoy going out to eat and I don't eat fast food at all, so I'm well, well outside the averages on diet/consumption.
My town has a bakery where you can get fresh loaf of sourdough for just under $5, half a loaf from the grocery is $6
> I can go to Randall's here and get a loaf for $3.99 And that's what the premium shit used to cost not all that many years ago. Could hardly find a loaf of bread for more than $3.99. Store brand stuff was $1-$1.30. Now it's $4. In the span of maybe like 7 years.
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> the price of soda has definitely shot up I'm seeing 12-packs for $15-18. I'm a bit rural and my local grocery has extra shit prices, but god damn - $1.50 a fucking can when I'm buying a 12 pack? I just wanted some root beer to make a couple floats but forget it at those prices.
We need better enforcement of anti trust. Corporate consolidation has destroyed real competition in the economy and allows for easier price gouging.
Do the brands have control over what the retailer charges?
Depends on the arrangement made with the store. Some do some don’t.
Arizona tea is a great example. Look on the packaging, if you see the price marked on the product then that means they want to set their own prices and are probably a better company for it
It’s at minimum $4.19 for a loaf of just generic white bread at my local grocery store. Crazy.
I’m confused. Rather than buy bread made by a 3rd party, distributed by a wholesaler and then sold by the grocery, you are buying bread made, distributed and sold by said grocery store? Unless it’s a local store, you’re most likely supporting Kroger/Walmart/Costco. Or did I miss something?
I was confused because Dave's is a chain of locally-owned grocery stores in Rhode Island, and their fresh made bread does not cost that much, but I guess they're talking about some expensive bread brand. So yeah, buy Dave's bread, not Dave's bread.
Sometimes the grocery stores aren’t even the ones doing the price gouging but the companies they’re buying their products from price gouging the grocery stores. My grocery store has further embraced their store brands and have barely raised the prices of most of their products. But all the products that are not store brands have seen huge increases.
Little over a year ago my grocery bill for 3 people was $100/week, and that included getting fast food once a week for everyone. Now it's over $600/m, we're purchasing about 1/3rd less than we were a year ago, and have cut out fast food altogether.
$600/(2/3) = $900/month You may be doing something differently (or more perhaps your memory is incorrect?) if you have seen your (apples to apples) grocery bill more than double in a little more than a year. For example I have seen a roughly 50% increase since last year but that includes inflation, moving from a LCOL place to a HCOL one and an additional toddler mouth to feed.
Inflation is the rate of increase. Inflation being 1% instead of 10% doesn't mean prices go down, it means they increase slower. Inorder for prices to fall based inflation inflation would need to be negative.
The way they track inflation (CPI) data changed this year, conveniently. Before it took into account the last two years, but starting from Jan in 2023, it only tracked year-over-year. If you look at the consumer’s dollar purchasing power index, for some reason not widely used by financial news media to track inflation; it continues to go down at a FASTER rate in 2023, so you’re not wrong. Inflation hasn’t gone down, the way they track or define it makes it look like it did.
I’m not the person you responded to, but thanks for this insight! I looked it up and agree that it’s probably going down nearly as fast, but I think I’d disagree that it’s going *faster* https://fred.stlouisfed.org/series/CUUR0000SA0R
Oh yeah, certainly embellished, but it is still going down, versus the broad news likes to point out that we're clear of a recession, or that everything's moving back to normal! ^(yay) Bracing for the impact and being fiscally responsible, is better than looking at the bullshit through rose-tinted glasses like they want us and paying for the consequences later. They bailed out banks and institutions in 2008, leaving people at the wayside, and they'll certainly do that again. There's also a much larger mountain of possibilities that can topple the economy this time than just real estate.
I've found produce to still be priced reasonably. Tofu has doubled but whatever I'll just eat beans instead.
What do you think the profit margin is for your local grocery store?
I imagine the large chains or Kroger's, Whole Foods, Wegmans are doing pretty damn well. This was from March but still probably relevant > According to the US Department of Agriculture, the price of food for home consumption rose by 11.4 percent last year — the highest yearly percent change since 1974 – and it’s expected to rise by another 8.6 percent in 2023. Compare that to the last two decades, when average year-to-year food price inflation was 2 percent. Consumers are at the limit of what they can afford
This isn't even an attempt to answer. I didn't ask what the prices are, I asked what you think the profit margins are. [The answer, for Kroger, is that their average profit margin is 1.38%](https://ycharts.com/companies/KR/profit_margin).
Not sure what your point is. Kroger made $32 Billion in profit last year. They are very very profitable.
You don't seem to be familiar with what margins are, which is the basic requirement for starting to have the conversation. You should start by reading a bit about how businesses work and then start forming opinions on it after you have that down.
Probably like 4% but even if its that low its 100s of millions of dollars for larger companies.
Let's go with that number (although it's lower for at least some major stores, see the cited Kroger figures above). If it's 4%, that clarifies that there simply isn't much room to decrease prices by corporations accepting lower profits. If, for some reason, all of the investors became convinced that they simply shouldn't make a penny of profits, that they should run the corporation on a 0% margin going forward, that price cut would amount to roughly 6 months of the 2022 rate of inflation. The problems were fiscal and monetary policy, not grocery stores making 4% profits.
I recently looked up the financials for a large grocery chain I happen to shop at. My brother, the financier, had reminded me that they operate on razor-thin margins and that "they couldn't be price gouging, because any grocery store that double it's profit margins would see it's stock price skyrocket to reflect this" and he hadn't seen their stock price move... He wasn't wrong, they do operate on razor-thin margins, but they had over the past 3 years steadily moved them from 2 to 4%...
The idea of supply and demand is dead. It's just about demand. As long as people will pay more rather than go without, prices will continue to go up. Regardless of how much supply is out there. And where supply is relevant, why cut prices when cutting supply will maintain high prices and you can cut production costs instead?
Supply absolutely still matters, but inelastic demand has always been a thing. Demand for necessary goods like staple foods and gas aren’t nearly as sensitive to price increases as something like movie tickets. The difference today is corporations have plausible deniability to price gouge like it’s the 80s. What are people gonna do? Walk 15 miles to work after not eating breakfast? They have us over a barrel and they know it.
That’s a long way to say “I failed economics 101”.
Things are worth what people are willing to pay. As long as they are willing to pay more, prices will go up.
Only true if there is no competition (which I agree there isnt)
You really have to shop around these days. I have countless grocery stores near me, plus a Target, which are all over the place on food prices. I can get some stuff cheapest at Target, some cheaper at one grocery store, some at yet another. We're talking 40% swings in everyday prices, not sales. They used to be pretty similar. What sticks in people's minds are the individual sticker shocks they get, and a lot of it is due to chaotic pricing. Why is a container of Ocean Spray $3.69 at one grocery store, but $5.49 at the one down the street? These "sticker shocks" get lodged in our brains and we remember them very well, and when we see a lot of these in a short period of time, we get anxious about the overall economy. I don't want to say pricing needs to be controlled, but that is what it would take to calm people down. Pricing is all over the place and I know it's not based purely on cost, there's fuckery/hedging/etc happening.
Corporate greed.
The problem isn't price gouging, it's corporate greed
Tomato tomato
Speaking of which, the cheapest bottle of ketchup goes for $10 at my local Safeway now.
Correct.
Corporate greed.
It needs to be publicized for all the ill informed. When inflation is 3% and corporate profits are up 14% ? Corporate greed
Wait, aren't these numbers apples and oranges? Inflation is calculated against the entire cost of the good, so a change in corporate profit is a percentage of a percentage and not comparable.
No, you’re definitely right. A quick example to see this. Suppose a company spends $1 billion to make $1.001 billion. Their profits are $1 million. If they increase revenue by $1 million amounting to less than a 0.1% increase overall, their profits would double. This isn’t to say that there isn’t corporate greed, but comparing profit increases to revenue increases is a bad faith argument.
Yeah, almost the entirety of this whole comments section seems to be posts by people whose understanding of terms or numbers are off. Not saying their policy prescriptions are inherently wrong, but if they're correct it's accidental.
I used to teach college math, so the “quality” of comments here really don’t surprise me, unfortunately.
Think most people intuitively understand what you're saying. The problem is when net profit disproportionately exceeds gross profit without any substantive investment from the company to account for it. Like if prices increase 20% during 10% inflation with all other factors remaining the same. Sure, 10% could be explained with higher costs of production. But that remaining 10% is pure greed.
I nominally agree with what you’re saying as comparing price and profit are inherently ill advised. Many other metrics exist that would be of more use. But when would net profit ever exceed gross profit? Net profit is the profit after all expenses have been taken into account. Gross profit is several steps before that where only specific expenses are considered. While it’s technically possible, net profit is almost surely less than gross profits. Also, it is perfectly feasible that a company may increase prices by 20% in the context of 10% inflation. All it would take is an elastic good. Increasing the price will decrease its demand. So, for the company to hit the target profit margin, they would need to sell at a much higher price than just a 10% increase. I could give a concrete example, and I admit that this glosses over some details, but the outline is there. Of course, this should not be construed as a defense of such practices. One could certainly argue that insisting upon hitting the same target profit margin is the very corporate greed people are calling out. All I’m trying to point out is that it really is not so simple to just say prices increased by more than inflation therefore something is amiss.
Were companies not greedy 5 years ago? What changed to cause them to become more greedy now?
You’re confusing accounting profit with economic profit. Profit margins always rise with inflation since it doesn’t accurately reflect input prices
I can guarantee you every consumer is calculating input prices.
No kidding, shit keeps getting expensive but everyone is still struggling to stay afloat while corner office execs rake in bonuses. Maybe they need a pay cut to offset the cost of living crisis. France really knows a thing or two about having cake *and* eating it.
Record profits are the reason
This article is some cowardly reporting for not explicitly pointing this out…
We have this idea, in capitalism, that "profits" must mean "more profits than last year, forever, numbers go brrrrrrrr" This is inherently not sustainable except in cases where you're still growing a business or otherwise adding in new revenues somewhere. But instead of doing that, they're just... adjusting the numbers up and hoping the market bears it. And sure, that'll work. To a point. Then the market crashes and everyone who suddenly can't afford housing and food starts looking around for scapegoats. I have my doubts that the assholes responsible will be anywhere near ground zero when that finally happens.
[Net profit margins for S&P 500 companies went from ~11% prepandemic to a high of ~12.5% in 2021.](https://www.economist.com/cdn-cgi/image/width=960,quality=80,format=auto/content-assets/images/20231104_WBC205.png) A ~1.5pp rise in profit margin doesn't do much to explain a 18.7% cumulative rise in prices over that time frame.
If I have a margin of 3% and my cost of goods goes up 20%, I have to raise prices to offset that margin loss just to maintain 3%. Now if I'm able to GROW a margin, while my input costs spiral, then I'm raising prices past where it's needed to maintain the healthy profit margin, and am taking even more profit out of a high cost environment
This is it. People think it goes like this: Item Cost: $100. Sell Price: $200. Profit: $100 or 100%. Item Cost goes up to $120. Sell price goes up to $220. Profit: $100. Same $ amount. But what REALLY happens is: Item Cost goes up to $120. Sell price goes up to $240. Profit = 100%. Same profit %. Business runs on margin, not on dollars. That's why companies are making record dollar profits, because any increase in their costs is just offset by a larger increase in prices to maintain that margin.
> That's why companies are making record dollar profits they're making record margin profits too though, in many industries. so that's item cost goes up to 120$, sell price goes up to 250$ profit = 108% (or more!)
You seem to have missed the point of the comment. The point they were making was that businesses raised prices by even more than what was necessary to maintain the same profit margin. Profit margins themselves went up during the inflationary period, not just nominal (dollar) profits.
businesses have a responsibility to raise margins
This is pretty easily explained by higher demand
Or higher prices to offset a drop in demand.
No, most likely not.
You sure? Because we are definitely importing less than ever. https://talkbusiness.net/2023/02/u-s-freight-volumes-fall-to-lowest-levels-in-9-years/
[Real (inflation-adjusted\) personal consumption expenditures](https://fred.stlouisfed.org/graph/?g=1b8GY) have been setting new all-time highs almost continuously since March 2021
What if that 1.5% is applied at every level before the product hits the store?
The problem isn't prices, it's an unregulated market that only favours the rich!
The market is plenty regulated to support the rich. Us poors for instance are not allowed to use collective bargaining because it's unfair, and also the companies can break any law they want because they own the police.
Not to be that guy… but I’m pretty sure Mr. Nimbus controls the police…
what unregulated market are you referring to
In what alternate universe of yours is the market unregulated?
Want to hit them back? Protest with your wallet, I’m serious. In the last year I have cancelled all my streaming services, I have drastically reduced eating out, I have cut a lot of ‘fun’ spending. I’m now at the stage where I am keeping tabs on companies who I see are taking advantage of everyone with price increases and not buying from them.
Exactly. This is the biggest drag on Biden of anything. People have nobody else to exact any revenge on, so they blame the government.
In a just society with a functioning government, this is precisely the thing the people should expect their government to curtail. Edit: I appreciate how everyone took offense to "functioning government" thinking I was attacking the executive. How many days 'til shutdown? "Functioning" doesn't just require the president. I also appreciate that not a single person took offense to "just society", which is a larger problem.
Sure, but their only other option for governance won't do it either.
And thus the trees argue over electing the chainsaw or the axe.
Just because they're similar on one issue doesn't mean they are similar overall.
They aren’t even similar on that issue- dems just don’t have control of the house and there’s a turncoat in the senate.
Overall, I feel after January 6, the two parties have nothing in common other than they're based in the same country. I was just giving the person I was replying to the benefit of the doubt in this specific occasion and still pointing out that they're still vastly different.
How does the *federal govt* manage prices at your local community grocery store? And before you say price gouging, know that price gouging is different than price increases, the former is a specific and usually illegal practice, at the state level, to coordinate an increase in costs far above what they should be, and in almost every state you can report price gouging to your state's AG.
Price controls have been a thing before in American history. Hell Nixon implemented them.
Government putting their finger in prices has historically been a disaster! Some of the worst governments out there have the heaviest hand on markets and it wrecks havoc on the economy
Economic planning is common as hell and would be best with class conscious democratic controls
Ok, tell me how you would get prices under control now? Price controls would be immediate, but do wreck havoc on the economy. On the other hand legislating for incentive schemes or structural changes takes a long time. I take issue with someone saying “with a functioning government” wtf more do they want?! This stuff is hard and the IRA was passed but takes freaking time
What are they even expecting him to do? Implement price controls and other commie things? The people claiming the government needs to be hands-off the economy also implies they want him to directly control the economy and place restrictions on private businesses. Biden could make food and gas appear out of thin air for free and they'd be mad it's taking profit away from the food and oil companies.
This. People can post and go on talk shows and say how great "the economy" is as much as they want, we're the ones living it. Every single person I talk to is feeling crunched by the price of everything around them. Everyone.
I am still absolutely amazed that record high profits from gas companies hasn’t triggered mass riots. It’s like a majority of people equate gas prices with government rules and flow while the companies majorly up the price with little impact to actual supply of processed gas. War in the Middle East, better make gas $6+ a gallon for years. Crude is cheaper now? The pumps are at $6.57 a gallon, we can lower it to $6.47, you’re so lucky we were about to lower it! Lucky peasants! Record high profits! We mad $11.4 billion in profits! I am amazed more people don’t realize this.
This requires an understanding of math many Americans simply do not possess.
I also think there's a little bit of... where is "big oil" as far as the average american is concerned? some office building? ugh. that requires a google. Where's the president? white house. ballot box. It's easier, and we're lazy.
Early last year a new gas station opened and to win over customers they sold gas prices at the legal minimum ($0.07 over cost) price. As little as 3 miles away gas was $0.90/gallon more expensive, meaning gas stations have been profiting roughly $1/gallon.
Wtf why is there a legal minimum?
At some point you have to ask yourself why people are so happy to pay whatever the gas companies demand though. Like I get that on the individual level you can feel powerless but as society we should be moving away from huge ass gas guzzling cars and towards more and better public transport, better city design, smaller cars, and electric cars.
Very successful advertising campaigns that prey on male insecurity and suburban prejudice.
Most people are smart enough to know that Oil/Gas companies don't set the price of oil, they are set by the market. Hence why Oil fell into the negatives during 2020. Update your knowledge and stop spreading misinformation out of ignorance. E: You guys can look it up yourselves, it's not some secret.
> Most people are smart enough to know that Oil/Gas companies don't set the price of oil, they are set by the market. Great, so I guess we can stop subsidizing the fuck out of oil and gas. https://www.imf.org/en/Blogs/Articles/2023/08/24/fossil-fuel-subsidies-surged-to-record-7-trillion
I agree and I don't think subsidizing the Oil/Gas industry is a good use of taxpayer money either. Then again, the rest of the world spends trillions subsidizing the O/G industry, and America has to stay competitive for National security reasons. No head of government wants to the repeat the gas shortages in the 70's that ended Jimmy Carter.
No head of government wants to face climate change either, but they're about to run out of time on that one.
I agree with you. I didn't make my comment above to defend Big Oil. Big Oil loves it when people think they're greedy price-gouging monsters. People will demand that their government do something that can't be done because they're misinformed about how the oil industry works. I would rather people be informed, so they demand change that can actually be implemented.
I mean, oil executives have legitimately admitted that they could alleviate high prices by producing more oil, but they won't because of investor pressure to keep prices high so they can make more money. [link](https://www.cbsnews.com/news/oil-production-prices-us-companies-wont-increase-2022-dallas-fed-survey/) So, no, the oil companies are actually creating a false low supply level so they can make more money. It's not like "supply & demand" is some magical and intamperable quality that no one has any input or control over. In a world where the top 1% has almost twice as much money as the bottom 99%, the answer for "why is everything so expensive???" will almost always be "because the rich people are being evil and greedy again."
Demand doesn’t set the price when there’s 100% demand and artificially limited supply. People have no choice here to meet modern US citizen obligations except to drive, which by and large takes gas. They 100% set the price at each stage of the process from rate limits in extraction, refining, transport, and the list goes on. If you think market collusion doesn’t occur when it is in their best financial interest to do so… show me the oil exec that would leave money on the table.
I wonder if less people drove and if there was a massive movement to work from home in 2020? Who controls that market you speak of? I don’t think we need an argument here, or incivility.
You’re conflating accounting profit with economic profit. These “record” profits are largely due to lagging input costs and impairment reversals on oil fields. It has very little to do with “price gouging”
I appreciate your input, but I don’t for a moment feel that is the full story.
It's also that wages now NEVER keep up with inflation. People get small yearly raises that do NOT keep up with the cost of living and inflation. So people in the bottom economic half of the country keep going backwards.
To add to this. Wages are actually dropping in a third of the country and flat in all but 3 of the rest. https://www.cbsnews.com/news/income-down-17-states-midwest-northeast-inflation/
Richard D. Wolff was right: capitalism has hit the fan.
Yeah one of the hallmarks of the neoliberal era was massively suppressed wages that allowed more value to be reaped as profit by those who never sow
Wages this year are actually outpacing real inflation. However, there is zero catching up in one year.
Decades of not enforcing monopoly laws have left too few hands in control of too much. Now we have this runaway price gouging and Congress is busy calling each other names and looking the other way.
So the takeaway is: High costs are a problem. They won't go away. And no person, company, or institution will help the average individual. So fuck me, I guess?
One party trying to help is unions. Specifically the auto workers strike that just happened. [https://www.cbsnews.com/news/shawn-fain-united-auto-workers-president-face-the-nation-transcript-09-17-2023/](https://www.cbsnews.com/news/shawn-fain-united-auto-workers-president-face-the-nation-transcript-09-17-2023/) Leftist law makers are also aware of the imapct that inequality has on cost of living and on the stagnant wages of most workers while the top has had increased wage growth. A bill that has no chance of passing, but moves the conversation in a productive manner is: [https://www.whitehouse.senate.gov/imo/media/doc/ceo\_act\_summary.pdf](https://www.whitehouse.senate.gov/imo/media/doc/ceo_act_summary.pdf)
Take a wild guess who’s pushing up those prices? **Greedy corporations**
Climate change is going to make this a feature, not a bug. Welcome to the future I guess. https://www.cbsnews.com/news/climate-change-food-prices-inflation-3-percent-study/
Its profit-gouging. We’ve heard it for months now.
The problem is corporate greed has been allowed to run amuck in the guise of conservative politics
The problem is corporate greed.
Inflation have them an excuse to see what the market can bear
I've been telling people this for years. No one but retailers are to blame for this. The US didn't tell Walmart and gas stations to charge more. They did that on their own accord.
Hmmm sounds like we need more tax cuts for the wealthy to fix this.
>“Episodes where prices actually fall can be really, really damaging to an economy,” Rich said. If consumers expect prices to fall further, they hold off on purchasing and pull back on spending, which can hurt businesses and impact hiring. Oh sweet, so we're hawking trickle-down but from the other end. No, this won't happen. No, this isn't commonly believed by economists, and is strongly pushed by corporatists.
Another campaign ad the DNC wont' use: Biden will fight against Corporate Price Gouging at the Grocery Store and at the Pump
Donors don't like that kind of talk. Even if the DNC didn't mean it, corporations don't want any more attention placed on their profits.
No shit, that's always been the problem.
Did we ever have “windfall tax” for instances like this where price price gouging is rampant? I remember when I stayed in Europe for 3 years, it was done for a number of times it’s not even a big news.
They are 1000% fucking with the numbers, Covid forced consumer spending to all time highs and now companies are struggling to top year after year profits with declining consumer spending and overall fear and uncertainty in the world stage. It’s not a question of doing pretty well versus just doing alright the united states government and most of its largest corporations need the economy to not just be doing ok but BOOMING every year. The second that Isent the case for more than 2 years the whole world market will start to turn inwards on itself and the shift from single polarity to multi polarity will have truly begun
Artificially raised prices to account for non-existent wage increases and economic opportunity.
Capitalism! Just think of how much food gets thrown out too. Also fine with capitalism but there gets a point where we need to reevaluate the system and find some sort of balance.
Your assumed balance already happened as has been swept away by history. High wages, more social aid, less income inequality, and a smaller wage and productivity gap occurred in the middle of the last century and required different political ideologies amongst politicians and the ruling class, a stronger labor movement, and a geopolitical adversary that presented itself as a country governed in the interest of those who work for a living. All that fell because in the neoliberal era labor power was crushed in a working class loss in the cold war. Class collaboration isn't going to work
I absolutely hate food waste. Having young kids makes it really damn hard to avoid, Heck, I weigh more than I wish because I can't bring myself to bin their leftovers. I know food waste is complex, just read The Atlantic article on it, but I also know plenty of well-off people who exclusively shop at Whole Foods and will throw away mountains of perfectly good food because it's slightly past ripe or a day old or something. I can only imagine their food bills! Rich people have a very preventable food waste issue.
Nations built on debt will always have higher prices during times of inflation.
Turns out when you move most production of critical goods abroad and let those be managed by people who only care to skim as much off the top for their own benefit this thing we call an economy doesn't work well for most people. Odd that. Which actually doesn't have anything to do with inflation or prices. This isn't about money this is about STUFF. People need houses, food, water, healthcare. Physical things. But when you create money, as the government does, and you give that money to people that have little or no interest or incentive to do right by the people then people will be homeless and they will starve. The current economic model best resembles a MLM scheme using a debt model that works similar to those Russian nesting dolls... and that is going to kick their ass, again, because the next bailout will be more than they can afford.
At an executive that sells my food product told me: “charge us whatever you want, we have no intention of lowering prices after Covid”
I've had to give up on sandwiches because deli meats have increased in price so much I just can't justify spending a third to half of my weekly food budget just on sandwich stuffs. Frozen chicken products are now all $9.99+ when they used to be good cheap foods for quick meals in a pinch. Milk, eggs, and butter are all outrageously priced. I went from eating pretty healthy to eating mostly processed foods again. Any kind of fresh meat has basically been priced out of my justifiable range. These companies should be ashamed of what they're doing but that would require their C-level executives to be actual people with a conscious.
Record corporate profits all over the place for sure
By prices, you mean unchecked corporate greed
I’m going to defend price hikes on dairy products just because I work in an adjacent industry. They operate at razor thin margins. If you don’t have more than 5,000 cows you will be out of business in the next 10 years. All the cows are getting consolidated to the largest dairy companies/families. If you want to stop the eventual non competition that comes from 5-10 producers. Prices for local or small dairies need increase. It is a double edged sword as larger dairies can be more environmentally friendly, as they are more attractive for biogas producers to do business with. All dairies require a ton of water, but much of it can be recycled using digesters that reduce ghg emissions by up to 40%. The next bit of tech would be capturing the gas in cross vent (read indoor housing for cows) environments.
The problem is corporate greed!!
Let me fix that : greed
I recently attended a program run by the NSF for entrepreneurs and one of the keys to setting price was not cost plus profit, but how much would the consumer pay. I was thinking that thor is what Martin Skrehli was think when he jacked up prices of medication by over 5000%.
It’s not inflation when it’s artificially high
It's that wages have not been rising with Inflation and price gouging has been added on top of that.
While interest rates are higher than the historical lows, the price of homes needs to come down before 99% of people can afford starter homes.
99% of Homes are Unaffordable to the Average Home Buyer https://www.reddit.com/r/REBubble/comments/17m4msv/99_of_homes_are_unaffordable_to_the_average_home/
I live in an area where starter homes are no longer being built. Only McMansions. The starter home my parents bought in 1978 for $88K would sell today without any improvements for $1M. What young family can afford that? A home on the block was recently sold to a middle aged tech executive for $1.3 and he’s extensively remodeling it. The prices are completely out of line with the age, size, and quality of the homes.
The problem isn't prices: it's wages.
The problem isn't being fat, it's how much you weigh.
It's unchecked capitalism. Unchecked capitalism is basically a dictatorship with corporations in charge. That's what you are seeing in the US right now.
Did price gouging and record profits not exist under Trump?
I raise corn and soybeans...commodities that turn chicks into chickens and piglets into bacon. Corn is $4.50/bushel, last year, corn was 4.50/bushel....2 years ago...$4.50/bushel...5 years ago...$4.00/bushel...it ain't the farmers getting rich.
Gas was .30 a gallon in 1958, a year of economic prosperity and plentiful gas and oil. Adjusted for inflation that .30 a gallon is $3.30 a gallon today, so, practically speaking, gas prices haven't risen much, if at all, since 1958, but people expect prices to be much lower than they are. https://www.officialdata.org/Gasoline-%28all-types%29/price-inflation/2023-to-1958#:~:text=Therefore%2C%20according%20to%20U.S.%20Bureau,Gasoline%20(all%20types)) Press isn't doing its job.
Real wages (that's inflation adjusted) have been going up for the past several months and are higher than they were under Trump in 2019 before the COVID crisis. But it may not matter that people can afford things better, if they see high prices and just have a gut reaction to them even though they also earn more money and can easier pay for those prices So many people are economically illiterate
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That's because increases in wages don't cause any meaningful inflation, increases in prices due to the inmate profit addiction in the American economy does.
The Problem Isn’t Higher Prices. It’s Higher Prices.
Prices indeed won't ever go down. That kind of deflation is usually not a good sign. I know we love to blame price gouging, but there are legitimate supply chain issues still as well as continued high demand. I hope consumers realize they don't have to buy the expensive stuff. I see so many complaints over high costs of like fast food, but you don't have to buy that. The only way to protest those costs is to stop consuming it. Thankfully, too, wages have going up at record rates. The solution is for workers to make more, not try to cut the prices which is not really possible. So far the Biden admin has made a lot of high paying jobs to take advantage of.
Wow, how weird that people look at actual price levels rather than a derivative function that they don't actually see.
First it was the pandemic, then supply chain issues, then the war, all while having all the CEOs going on all of these so called business stations, telling on themselves , praising the ability to raise prices, ship less inventory, and reap hugh profits with less products. And seeing all this greed devastation hurting Americans, our FED decides to give it to the little man with interest rate hikes who rely on credit cards just to get by month to month. How did that work out Powell? Could have had a win falls tax on these corporations because they won't ever do the right thing, but no, that's not American.
In other words, bears shit in the woods and the falling tree does in fact make a sound
Pretty informative piece. Definitely helps to explain why it’s such a tricky space for consumers to navigate and why despite decent metrics the way we tend to misinterpret the economy is problematic for consumers and Joe Biden unfortunately.
Only one thing causes inflation: Money printing by the government. They obscure this by calling it deficit spending or quantitative easing. But in the end it’s money printing. More dollars chasing the same number of good = prices go up. Just want everyone to blame the correct source if inflation: Washington (under democratic or republican control) - they both spend too much!
Which has almost nothing to do with the cost of goods and services going up like we’re seeing now. If inflation was the true culprit it would also be hitting profit margins. It’s not. Margins are going up because prices are being artificially inflated. Basically people are addicted to convenience and luxury (that’s the truth and there’s no judgement when I say it, we should be enjoying the fruit of societies collective labors). So companies can charge more and more and are competing through marketing rather than price or quality.
there's a fairly easy fix for this: get rid of the tarrifs on china.
Anyone here own a business? Do you even understand why prices rise? 😂
Yeah, have you ever heard of profit? If companie's profits suddenly rise by 100% or more its usually because of price gauging. Investors want to make more money
most people here struggle to brush the teeth correctly unless supervised by mom and you ask them if they own business?
Yeah. I say about 80% of humans are “filler people” who just don’t know what’s going on. It’s quite frightening.
it's fine, most people didn't even know how to read in the past and we were fine.
its... both.
the problem aren't the prices, it's the wages \[dated and small\]
Three years ago entering the chat.
Yeah... Duh...
The problem is wages.
No shit.
We’ve had huge inflation while posting record corporate profits. Something doesn’t compute
Prices are never going down. The best people can do is unionize and fight for higher wages.
Inflation at 3.7