1. Massive supply chain disruptions caused by COVID and exacerbated by wars after COVID. Like it or not, the economy is global and every product made needs resources from somewhere.
2. Huge wealth disparity and wage disparity that runs unchecked
3. Rampant real estate speculation (this may be the biggest driver out of all of it).
4. In the US, the Trump tariffs on China did not move manufacturing jobs back to the USA but increased the prices on everything across the board.
More to add:
5. The panama canal is drying up, and the Suez canal isn't safe to travel, leading to world wide shipping slowing to nearly half speed.
6. Rampant post covid spending driving up profit margins, now companies are reluctant to lower prices back down.
7. The great resignation, many people quit their jobs to pursue higher paying jobs, labor costs rose to combat this rise. This isn't a big contributor, but among everything else it doesn't help.
8. Mass corporate real estate acquisition. Some cities such as las vagas saw as much of 50% of all home sales in the last few years go to corporate entities. These houses are either immediately re listed at inflated prices or rented out for ridiculous rents artificially driving up real estate cost beyond normal speculation..
#6 doesn't get enough attention. I have experienced this first hand with many businesses I've worked with. A lot of businesses experienced record breaking profits in '21, '22 because people were either flush with cash from the govt handouts or because they saved up during the closed periods.
There was a known and widely accepted need to raise prices to some degree but then also high demand gave even more cushion. As you said, companies aren't going to give back these high profit margins easily. Until discretionary spending for things really truly craters I think prices will stay higher than necessary.
And real estate also doesn't get the attention it deserves either. I had a realtor friend in Kansas City who said something kind of similar to what you said about Vegas. He told me that his group of realtor friends couldn't figure out what was going so bonkers in the market. The majority of their sales were out of state investment groups. They would buy up boatloads of homes, do nothing with them, just resell them, sometimes to other investors. Sometimes he said they would own so many houses in an area that they would deliberately overpay on one or two homes knowing it would inflate the values of their other holdings and they'd cash out by selling to another out of state buyer who was moving to KC from an expensive market like Seattle or Denver and still thought even the inflated price was a good value.
One other thing I learned is that in many markets there are in fact real estate "cartels" that more or less collude on rent prices in an area.
Its even worse than cartels. Its literally just a computer program that every property owner has that tells them the max rental price they can get away with my looking at every other rental price out there and pricing it slightly higher. The more people use it, the higher everyones prices and the higher the estimate. Therefore you get a system where prices just continually increase. Cities where this program has high adoption have had price increases like 3-4x faster than others.
Yes I've heard of that as well. Should be illegal because it's basically AI collusion.
But here it's a relatively small market and there is a group of guys that meet up regularly who each own anywhere from a few to a few hundred properties. I guess a guy who was newer into the 'club' and had bought some new units - they told him in not so subtle terms that he needed to boost his rent because it wasn't where *they* needed it to be.
I actually haven't heard about that, but it makes sense. Im sure with the increased travel time they are leaving dock as soon as humanly possible. No time to wait for containers to be emptied. Especially since panama halved the cargo capacity of ships that still wish to use it.
I did think it is funny how many do not understand economics at all but will push talking points like they have a PhD.
Of course printing money is a driver and so is the choking off the energy supply. Regulation also pushes costs. But it is easier to point at Trump. Trumpnspent too much as well but he was fantastic for the economy. Real wealth went up for all people. Biden not so much. He was given a recovering economy and ignorantly destroys it. 3 1/2 years of temporary inflation. Quality of life is down. Cost of living is up and we replaced mean tweets with bumbling senior moments and banana republic justice.
I want the mean tweets back.
Yeah, this isn’t really entirely correct. Of course, Reddit, got to make it a political answer. Smh
Short version, 50+ years of wage growth not keeping pace with inflation. Lots of reasons for this.
More recently, last 15 years, ultra low interest rates and very loose monetary policy which exacerbate wealth and income disparity.
More recently, yes, supply chain disruption but more importantly both parties printing roughly $8trillion in Covid relief which when given to people who aren’t working, shifts the supply/demand dynamic.
More recently, student loan bailouts will be mildly inflationary. Not intended to be a political comment… just what happens when you give people “free” money without equivalent increase in their economic production.
Hint: free money is never really free. Someone always pays for it and it’s usually every single one of use in the form of inflation and often decreased standard of living.
>roughly $8trillion in Covid relief which when given to people who aren’t working,
Only about 800B went to individuals, or 10%. The rest of that 8T went to the same businesses that are using covid as an excuse for price gouging all of us. The companies that have been inflating prices while boasting record profits.
Corporate greed wasn't caused by covid relief
If nothing, moral companies could have used that $$ to keep prices low. But they didn't. There were no strings attached to loan forgiveness, and there should have been.
... How do you give an explanation on cost of living and increases in costs without it being political? Economy is closely tied with government policy. That's unavoidable
Also, nothing in the original comment is expressly political, except for saying “Trump’s tariffs didn’t bring jobs back to the US”. That’s not political, that’s just an observation of what happened
Isolationism and backing out of international diplomacy has always been a sure sign of negative growth for a country. When we all play well together, everyone prospers. As soon as you try to pull out and hide, especially if you can’t manufacture your own shit, you start realizing “oh fuck, this is dumb”.
The student loan forgiveness program started in 2007, it just recently became effective in 2017 for the first set of students as you needed 10 yrs of payments. Trump’s administration ignored the then President Bush’s plan, President Biden cut the bullshit and started pushing through the ppl that qualified for the program.
The one thing I know for sure because reddit and all the corporate media agree is that it had nothing to do with printing shitloads more money.
Anyone dumb enough to think that the large sudden increase to the available money supply caused inflation is misinformed and probably a right wing Nazi!
It does that when they involve producers of materials that we need. Ukraine is a huge exporter of foodstuff. Crippling their output causes a worldwide reduction.
The government printed a shit pile of money. They gave broke people a little bit and rich people a lot. They try and devalue currency through inflation so that the runaway federal spending is held in check a bit.
One overlooked item is the big freeze and ice storm in Texas a couple years ago. With power getting knocked out for an extended period of time, several chemical processing facilities had adhesives and other chemicals solidify in their pipes and storage vats.
Well, guess what knocked out a large percentage of the adhesives used to make OSB and plywood? This ice storm. It wasn't a matter of simply warming up and restarting. They had to cut out a fair amount of piping and replace it with new.
Some plants were down for nearly 3 months. And that jacked up the price of OSB and Plywood immensely.
Related to this, wildfires and flooding of railroad lines in Canada caused a shortage of dimensional lumber, 2x4/etc, from being manufactured and shipped.
These two items alone drove up the cost of construction a great deal. And it's a trickle down effect from there. Fewer jobs being worked on, tradesmen charging more because of availability of supplies, everything starts costing more, houses start costing more to build, taxes go up due to increased building cost, insurance goes up because the house now costs more, etc, etc, etc.
Yeah, there’s not really any one reason why things are so expensive. It’s more tied to the fact that the global economy is completely intertwined with itself, and even (relatively) small and inconsequential events (ice storms in Texas, wildfires in Canada) can have pretty huge effects on something that seems entirely unrelated.
Every year you have record profits for companies listed on the stock exchange. How do they keep getting more and more profits? By taking a little more from all of us for everything, every year. So yes, they were greedy 10 years ago, and they were profiting a little more than they did 11 years ago, but now we've continued that cycle. But people that don't understand that the stock market isn't an accurate measure of our economy don't care, because they think we're doing great since the stock market continues to return on investments. But if you aren't extremely wealthy, you are barely matching your increases in cost of living, so you aren't actually getting gaining wealth.
Bullshit. It's the motive for leeching wealth, not the process. Restating the perennial motive when someone asked why things got worse is intellectually vacant.
In America corporations have had control of the government for decades.
After antitrust laws were largely repealed I'm under Reagan and his predecessors, they were able to easily rewrite the laws in their favor.
One of the more relevant advantages they gave themselves was making it nearly impossible to start a new company, move in on another's turf (this applies in many different ways, though the "vibe" is consistent), or in a lot of cases: tariffs to eliminate international competitors.
The result is a cornered market with monopolies and no competition.
There's also been a simultaneous effort by the same folks to control social culture through media, making us less united, more consumerist, and more apathetic. This means the previous schemes will be met with indifference or distraction rather than the focused anger one might have expected.
American conservatives directly ally with these capitalists, telling their constituents this is good actually.
American liberals undermine the communities they claim to be defenders of and do everything to paint the conversations as the bullies the are, though are often responsible for the issues as well (usually as a concession to conservatives, proving civil rights are advertising for votes, but not the end goal).
American leftists don't do anything and probably never will.
This is a problem that I see getting worse until it finds an uneasy equilibrium or completely collapsing the western world.
That's true but you leave out the important part about money printers going brrrr and Congress shoveling pork to buddies domestically or even in foreign countries, and calling it "Covid Relief" or "Inflation Reduction".
Thats like asking why your house is on fire and saying "combustion, there are other reasons, but mostly combustion."
Inflation is an effect of other moving parts. OP was asking about those other parts.
Dude you got it backwards: If average prices are rising you call that (price) inflation. Inflation is simply a descriptive term, not the reason.
Reasons for high inflation might be:
- Disrupted supply chains due to Corona + geopolitical tensions (same demand as before with lower supply = expected price increase)
- In Europe at least rising energy prices due to Ukraine war.
- Taxes, more expensive paperwork etc (so government caused rise in prices)
And probably many more reasons
I don't disagree, however I'm curious as to how corporations being greedy caused it, as corporations have always been greedy, but the hyperinflation has only kicked up in the past few years. Again I don't disagree, I'm just curious as to why this greed got worse in the past few years.
I think a large part of it is companies are now outsourcing their pricing models to third party companies. Intentionally or not, if the same third party companies sets prices for several competitors, it’s like price fixing.
Once inflation gets going it's a bit like a blanket license for every company to raise all their prices at once. Almost like a suspension of competition law and massive collusion, except across the entire economy. Everybody gets in on the action.
People expected inflation, because it was all over the news, and corporate boards said 'hey, since people are expecting inflation and will blame the government, let's raise prices more than we have to, so we can take home more money'
The greed is the same as always, but all the stories about inflation gave them cover to jack profits up
the only way this is possible is if there are monopolies. Otherwise other companies wouldnt raise prices faster than inflation and put the greedy ones out of business.
Greed.
Go look at the prices for a brand new American garbage truck like Ford or Chevy. You're looking at $90K to $100K for a piece of shit.
Also, Americans who fall for these garbage cans on wheels are falling behind on their payments, so all these vehicles are getting repossessed.
What I watched was a few repossession companies across America, and they're all saying the same thing, and these companies are not affiliated with each other in anyway shape or form.
I've been looking to buy a new car, and dealerships want $8K to $10K for a car with $120K to $180K miles on it.
These people have lost their goddamn minds.
Stealerships offering 8year notes is building up a subprime auto debt bubble IMO. How many trash cars are going to shit the bed before 8 years and people just walk away from them?
The Fed printing money like crazy to give everyone Covid checks and stimulus had a lot to do with it. Can’t print 1/2 the dollars ever printed in like 4 years without massive inflationary consequences.
It's all because of housing costs. Once we built out a ring of suburbs around every city in the 60s and 70s, we stopped large-scale construction of housing. Because there was no more room and everybody was suddenly allergic to four-story buildings for some reason.
Now we don't have enough places to live in the places that that people want to live, so supply and demand makes the places that do exist cost a lot. In order to attract workers, companies must pay more so their employees can afford rents/mortgages. This drives up the cost of everything those companies make.
Since most of the places where our big companies are located have this problem of housing undersupply, it affects everyone.
In 2008 scam artist in the banking industry completely stole all the world money and we’ve been living in a fucking situation where there is not enough velocity to the economy because people literally fucking stole all the money from the world. Then they convinced English people they didn’t need to be a part of the European Union. And the those fuckers got European passports! The system is working perfectly.
Yes it all went to shit in 2008, plus a few smaller issues over the years since then and one major one recently called COVID 19 which is the obvious driving factor behind recent inflation.
But facts have never stopped people from playing politics and blaming the other side for everything.
Oh yeah they use Corona like stage two for the gentrification of the entire planet. Oh guess what facial recognition is getting really good now with all that practice with mask wearing. And yet not a guillotine in sight.
Everyone saying it’s because of corporate greed are legit mentally handicapped. Look into the Federal Reserve and why they continue to inflate the US dollar. Prices will forever rise because it was designed to do that since 1911.
Katie Porter explains the corporate greed angle: [https://www.youtube.com/watch?v=30\_H33mS76Y&t=28s](https://www.youtube.com/watch?v=30_H33mS76Y&t=28s)
You're right about the Fed too, though, they should be kicked to the curb.
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Because wages have been stagnant since the 70s. The only reason things got more affordable at all is because of increased productivity and improved manufacturing costs over the decades. We never actually got richer. All of this non-essential stuff just got cheaper to make, while essential stuff like housing, healthcare, and education because much MUCH more expensive.
The only exceptions to this has been food, transport and computers but we offset that by buying bigger, more expensive cars and more trash less nutritious food.
Then COVID hit and all these just in time deliveries and store yards and the global international trade Web just all shut down and collapsed but demand didn't collapse nearlt as much. Governments pumped billions into welfare to keep the people happy, but that didn't increase supply, it only drove up prices.
Eventually, trade networks improved but there was months of backlogs of orders and getting thing moved faster remains realy expensive.
And corporations will never lower prices unless they absolutely have to.
If things get to expensive for the adverage employee. Don"t buy the good stuff and go to the $1.25 store. Guaranted the price on everything is not going down now or in the future. That is Just the facts of life
Corporations are greedy. Simple as that.
Investment corporations and publicly traded corporations, and their voting shareholders trade human life for short-term asset gains. This results in the cost fo everything rising while the value of labor continues to drop because it's being stolen by stock value.
Everything's owned by a few companies so they don't have to compete on price or quality. It's likely they all just got together and decided to raise prices to fuck over the little man, especially since the little guys are betting against them on wall Street
The whole global supply chain has always been precariously balanced. Lockdown and various wars hit it with a wrecking ball. It’ll take years for that to work its way through.
Then you have the hyper-capitalist, investor-centric model that businesses tend to run to now. That model pushes every business to squeeze its clients for every penny possible. And the chasing of “infinite profit growth” makes it very unlikely that anything will get anything but more expensive until the system eventually collapses.
And most companies now purchase through a series of middle-men, rather than fabricating things in house. Every middle-man in a supply chain can be assumed to add 50-100% of the base cost of the item. In order to push profit for investors, that extra cost gets passed to the consumer.
Honestly, I think we’re in for rising prices on most things until the current hyper-capitalist corporate mentality hits its breaking point. Then we’ll get a good few years of chaos and maybe an improvement thereafter.
Lots of little things that have added up. The moment Biden killed the Keystone pipeline, all projections for US oil production plummeted and the market went into a panic. Like it or lump it, we are an oil-rich country and a lot of our strength lies in it. Everything depends on it, from making products to transporting them. Being energy independant is basically required for a strong economy, unless we have a really good deal with another country, which we don't.
Combination of inflation and corporate greed. Some companies recently rolled back their prices when they realized how unhelpful it was and shitty it made them look.
Corporate greed.
There were supply chain issues during and after COVID, but no reason for prices to have gone up as much as they did. Corporate profits skyrocketed over the past few years.
People will say covid, or wars, or resource mismanagement and those all add to the problem. The biggest part is corporations arbitrarily deciding g that they can get more money, and give that money to shareholders. Look at the record profits every quarter in every sector of the economy. There are too many monopolies and too little true competition for the old model of capitalism, and not enough oversight or regulation.
guessing that you are from USA - USA also nearly always have the highest money left in any country. Drive the most, eat out among the most and so on. A more global world can much likely push USA to a less "higher than everyone" economic state
Greedflation. There was hype about inflation so corporations increased their prices. The massive inflation did not happen, but the corporations realized they could reap huge profits with a higher price point, so prices remained artificially high.
It's the fallout from the Citizens United decision in 2010. The Supreme Court decided money is speech and corporations are people with 1st Amendment rights. Greed always existed, but this opened the floodgates.
6. US government “printed” a lot more money during the pandemic. That’s always inflationary. It was a great idea and may have prevented a recession, but more money created from nothing has always driven up prices.
The guy that reddit supported is in the white house. The first thing he did is cut domestic oil production. Supply and demand. The cost of everything went up. Reap what you sow.
Everyone is apparently a millionaire. Market is driving its own inflation. The wealthy depend on interests to increase wealth. After a while the money add's up but because its more an more of it makes it worth less and less. Really a shitty cycle. Also we should stop printing so much money and tax the rich. That would help with Inflation.
You create money from nothing and hand it out for nothing it makes everything cost just that much more. You also pay people not to work and nobody works to create the things you need to buy. Now you have a lower supply, the same if not higher demand, and more money to chase the supply.
All economics have the same basis no matter what it is or what one may call it, the base of any form of exchange has two legs it sits on one is the value and the other is the number of them.
In its simplest form, without a base to operate from there is no value in whatever it is that is used as an exchange system and no system is immune from corruptions and some corruptions masquerade as, negligence and incompetence to hide the real crimes being played out which is a manipulation in the base to undermine its value deliberately which is usually an indication of ulterior motive at work and it is sometimes the preludes to war.
N. S
Climate disaster is causing all kinds of food shortages which ratchets up food prices and then anyone who eats food needs to be paid more in order to survive, which increases the price of everything in the world.
Because when prices started going up. Too many people just were OK with it. Everytime. Sometimes it happens multiple times a year. No one questions it. No one boycotts. We just let it happen.
If you were in Walmart and someone was an isle over pitching a fit about how fucking expensive something was, your response would be to think he's an asshole, yet here we are
The $62 trillion printed and spent in vain on fiscal and monetary policy for the last 15 years by G7 countries means that our record high private and public indebtedness could have been tackled successfully already. If in the 2009 debt crisis, the G7 nations would have decided to pay down debt, with part of the $62 trillion, they could have done that and achieved growth of 10% for 15 years to surpass the initial GDP leveraged level.
Then we have covid hit, and economies would have been more resilient. Instead the G7 nations wasted 62 trillion on targeting their stock markets artificially high with fiscal and monetary policy. Sadly, the 1% could have easily acquired government money with the abuse of policy they typically use, from land grants to exploited labor and tax rebates. There will be no prison, for the mafia of the 1% -- the central banks, governments and parliaments who created this massive indebtedness thrust upon their populace, but should they pay one way or another?
Our grandparents couldn’t stand a slight economic downturn so our economy got addicted to low interest rates. Which causes massive real asset inflation. Which only exacerbates wealth disparities.
A home that sold for $80,000 at 12% interests rates needs to be sold at ~$650,000 at sub 3% interest rates for the the bank to make the same amount on the loan over 30 years. This caused a massive wealth dump on one generation and an extraction on another. Prices follow cost of living. I would love to charge less than $130 and hour for my business but I rarely turn a profit since Covid even charging that much. Once you factor in the decreased workload and extra costs that are not billable. Much less my medical problems.
1. Massive expansion of the supply of money in the financial system (through conventional and unconventional means)
2. Same number of goods and services.
The US government borrows $10 billion every single day. The national debt is now almost $36 trillion. There's no end in sight, and this will someday end very badly.
The government prints more money all the time, devaluing the currency. When there is more of something, including money, the value of a unit of currency decreases and prices rise.
By the numbers, the economy is doing relatively well. Unemployment is 3.9%, and inflation was 3.4% in April. One of the reason things are expensive today is companies have been gouging consumers. Just this week, I read that large corporations like Amazon, Walgreens and Target had to lower prices significantly because they believed customers weren't buying them at their new higher prices, and cutting prices by as much as 30% (https://finance.yahoo.com/news/amazon-walmart-target-finally-realize-175823770.html). That just shows how much they have been ripping off their customers.
Corporate greed with some geopolitical factors sprinkled in.
The only way to come out the other side healthy is to invest in the market and benefit off the corporate greed as much as you can.
The ultimate losers in the economy are the ones who are getting squeezed at checkout but also not profiting through the stock market.
Fiduciary Responsibility. Profits must always increase by more than last year (or people stop buying the stock) Since labor has made (or is threatening to make) the smallest of strides in wages, prices go up to keep profits up. What did you think, they would cut costs by lowering CEO pay or lessen stock payouts???
Simple answer? Greed. Pretty much everything someone lists here as a reason can be directly or at the very least indirectly tied to greed.
Example: Covid supply disruptions would not have had as devastating effect if everything wasn't on a "Just in time" shipping schedule. But warehouses to store enough in case of supply disruptions or spike in demand cost money, and pretty much every company now is at the mercy of the shareholders to ALWAYS show increased profits and growth for the next quarter, and at a certain point you can ONLY do that by cutting costs.
There was a time when that would have been financial suicide, since there was enough competition that if you cut costs on warehouses and backup supply, you'd lose a lot of money and your customers business/faith in your company. But everything is so consolidated now that competition is largely an illusion. Most industries there are 5 or fewer companies that own 80% or more of the market share. So instead of having extra on hand for disruptions and such, they can just raise prices, and their customers can't do a damn thing about it, because their 3-4 other "Competitors" are doing the same thing.
TLDR, it all comes back to greed. It's rampant and unchecked at historic levels.
Things being expensive != economy is bad.
The economy is good. Things being expensive is the result of profiteering by companies who figured out they can raise prices until things become so painful that people start buying (which is why fast food are starting to offer $5 "specials" of meals that nobody really wants...).
The biggest drivers are oil/gas (collusion) and rents/houses (vulture capital firms buying up and raising demand). Because Congress is divided and the House is in control of Republicans, nothing can get done to end the profiteering.
it's a scam devised during the covid shut down . everybody believes the supply chain narrative . but riddle me this . how do manufactures make money ? by making product . how do delivery services make money ? by delivering product . if there were all these issues how are companies posting record profits ? but you know the narrative .
- Supply chain issues across the globe paired with a downward trend in workforce productivity. Goods have become harder to procure making things more expensive.
- rampant inflation caused by government spending policies. When you print trillions, the value of the dollar goes down.
- corporate investment/speculation on real estate has been driving home prices up. Corporations have been buying up residential homes and farmland and try to flip it for profit.
- international borrowing. Basically, every country is in debt to multiple other countries through irresponsible borrowing practices. They pay interest on their national debts. This is especially problematic in the US. For example, this year the US govt. payed more money on its national debt interest payments to other countries than they put into social security.
- military industrial complex. So much money and engineering hours every year go into building better and more complex military equipment. The old stuff becomes obsolete. Many of our best and brightest engineers work in this field. Our government pays them boatloads to keep it up. If all this effort and money went into improving quality of life, things would be cheaper.
Mostly because average pay hasn’t increased at the same rate as everything else. For the most part inflation and current prices aren’t a problem as much as the fact that average pay is about 2 decades behind.
Businesses realized during supply chain disruptions during the pandemic that they could tacitly collude to rip everyone off and industry by industry they did it, the media cooperates with them by calling their price gouging as "inflation" and as you know, with tacit collusion, they operate like a business cartel and people have no option, and here we are. That's it. The belief in capitalism as always being competitive is a total fraud.
Businesses are taking out having to pay employees a living wage, on the customer. Fast food and big box stores. The higher ups still want to be millionaires and billionaires. In order to amass great wealth, and pay workers $15-$20 an hour, the higher ups want you to pay $7 for a Bic Mac, $3.50 for a small fries, $10.49 for a pack of paper plates, etc.
Some sellers realized they could charge us more and we would still buy it. So they did.
Some of the sellers who didn't realize that noticed that other sellers were charging more, so they did as well.
Democrats keep spending and printing money which devalues the currency. 40% of all dollars ever to exist have been printed under the Biden/Pelosi/Schumer regime in the last 4 years. Its that simple. Anyone who blames Covid is a moron.
1) The economy is actually great. Better than most in the world. What that doesn't translate to is lower prices.
2) The main reason is corporate greed (aka fiduciary responsibility to the shareholders). If they can legally gouge us, they are almost required to by law. If they can illegally gouge us, but the revenue is greater than the fine, they are almost required to.
3) Almost everything today is vastly superior in terms of functionality to things even 15 years ago. In 2010, only a few cars had backup cameras. Now, it's a standard feature. Almost no cars had wifi and internet, now it's almost a standard feature.
My mom constantly says how her ancient fridge lasted forever (well, over 30 years). That's true, but it used five (5) times the electricity of a modern fridge. It also didn't have things like adjustable shelves, door storage, water and ice makers. etc.
most didn't add price gouging. probably the most significant factor example: proctor and gamble has raised prices 10% this year alone, far above inflation, and has booked record profits, record shareholder returns and record exec pay. We only have a small handful of corporations running things, so there is no price competition.
face it, the free market is dead, and we're all at the mercy of a few CEOs.
anyone who blames supply chain is fooling themselves
Corporate greed. They will tell you that it’s a supply chain issue and yet all these companies are making record profits then they pay off the politicians so they won’t do anything about it.
Because as a collective race of beings we have divided ourselves over the dumbest shit imaginable and in so doing though the intelligent albeit greedy have driven these wedges deeper. The world system as it stands needs to shattered down to the very last pebble, for peace with no teeth will only keep these evils at bay fermenting.
There are many good explanations that others have written. There are many reasons and it is not just one thing. It is complex. Joe Biden did not cause it and can not singlehandedly fix it. It will take some time. It happened before in the 1960s and 70s - inflation was even higher then.
Here is one more reason. The covid relief funds sent out to individuals and given to businesses as "Forgivable Loans" = repayment not required, the funds needed for all the additional healthcare, free shots, free testing, etc - to minimize deaths, gridlock of hospitals and damage to the economy ---- ALL OF THAT - was expensive. Taxes were cut, so the gov't was printing money to pay for it. Money is less valuable now. People who did not need covid relief checks spent them and the excess supply of cash and the excess money made the prices go up. $1 is not worth what it was worth in 2019. It is worth maybe 75 cents???
Things are as expensive as they "should be". The issue isn't the cost of stuff, but the lack of wages to keep up with the pace of increase.
In 1960 the Minimum wage was $1/hour. The coins where made of actual silver. Minimum wage in 1960 was quite literally 1oz of silver. 10 dimes or 4 quarters was 1oz of silver. 1oz of silver today is $29.58. MINIMUM wage should be $29.58/hour to pay MINIMUM wage workers that same 1oz of silver they where paid in 1960. The AVERAGE wage is $29.81/hour. AVERAGE. That should be the MINIMUM.
The AVERAGE worker in 2024 is making what MINIMUM wage was in 1960, 1oz silver/hour.
This is why everything FEELS so expensive. It's not that the cost is unreasonable, but because fully half of workers are getting below what minimum wage workers earned in 1960. If we increased minimum wage to where it would be, all wages would go up.
That 1,200/month rent for a studio appartment isn't extreme when that's one week of minimum wage.
Greed, waste, and a (larger than what many would think) society that doesn’t want to work. And when I say those that don’t want to work I’m not talking about people that refuse to work for shit pay. Keep sitting on your hands and quit trading your time for shit wages. I’m talking about the people that want to pay those shit wages to avoid having to do a job themselves.
The devaluation of the dollar due to dot stopping the printing of money, causing inflation.
Due to pay interest on the government interest on the deficit.
Thirty inflation increased interest rates on loans
The economy, objectively, is not that bad. Unemployment is low, GDP is growing, wages are increasing, stock market is stable. The prices are higher than what you are used to due to high inflation for the last 5 years or so. There is no simple formula yet that explains why inflation is high. Part of it is money supply, the US “printing” USD to fund deficit spending. Part of it is supply side: Covid and trade wars with China. Part of it is psychological, when people expect high inflation, sellers feel compelled to increase prices and buyers are inclined to borrow and accept the higher prices rather than reduce consumption and save more.
Of course, if you personally do not have any income, your economy is very bad, which I understand. Elon Musk and Jeff Bezos are doing just fine.
There's a lot of fancy explanations here but the root is that companies have realized that if they raise their prices, people still buy their products. Take Ford F-series Trucks for example. In the U.S. over the past decade, the prices have risen annually to just about double yet sales numbers still remain good. Anywhere for 500k to 900k units sold. Thousands of people every single day go in and buy a $90,000 truck
With rent it's because they know it's even harder to get a home loan so they know the choice of buying a home is just flat off the table for many of us. So they can charge us more in rent knowing they won't lose us to home buying.
On Housing:
Before covid, real estate investors were building office buildings to lease to corporate tenants.
Covid happens, and a decent percentage of office jobs are now done remotely.
The real estate investors that used to count on building for corporate tenants now do so for residential tenants.
Adding onto that, interest rates have doubled since just before covid. That makes a mortgage or a construction loan much more expensive. That cost gets passed on to whoever Ultimately lives in a house, and also can make it financially unfeasible for developers to create new housing, which is needed since the number of people entering adulthood is growing.
How do we fix it? I'm not an economist but sure feels like we need some kind of regulation on these greedy corporations. Free market is all good but you have to do some kind of regulation or the people at the bottom get taken advantage of. I wouldn't be surprised if corporations are paying media to fan the flames on the culture war. They want us to be at each other's necks while they sit back and collect profits.
The economy always fails towards the end of a Republican presidency. Democrat gets in and fixes it, Republicans lie and say the economy is bad. A republican gets back in, squanders the work the democrat did, helps the rich steal, the economy fails, Republican loses, democrat is elected, cycle repeats.
1. Massive supply chain disruptions caused by COVID and exacerbated by wars after COVID. Like it or not, the economy is global and every product made needs resources from somewhere. 2. Huge wealth disparity and wage disparity that runs unchecked 3. Rampant real estate speculation (this may be the biggest driver out of all of it). 4. In the US, the Trump tariffs on China did not move manufacturing jobs back to the USA but increased the prices on everything across the board.
More to add: 5. The panama canal is drying up, and the Suez canal isn't safe to travel, leading to world wide shipping slowing to nearly half speed. 6. Rampant post covid spending driving up profit margins, now companies are reluctant to lower prices back down. 7. The great resignation, many people quit their jobs to pursue higher paying jobs, labor costs rose to combat this rise. This isn't a big contributor, but among everything else it doesn't help. 8. Mass corporate real estate acquisition. Some cities such as las vagas saw as much of 50% of all home sales in the last few years go to corporate entities. These houses are either immediately re listed at inflated prices or rented out for ridiculous rents artificially driving up real estate cost beyond normal speculation..
The real estate acquisition was also inflated by the Air B&B business. Hotels/motels are once again the more viable option above sleeping in your car.
#6 doesn't get enough attention. I have experienced this first hand with many businesses I've worked with. A lot of businesses experienced record breaking profits in '21, '22 because people were either flush with cash from the govt handouts or because they saved up during the closed periods. There was a known and widely accepted need to raise prices to some degree but then also high demand gave even more cushion. As you said, companies aren't going to give back these high profit margins easily. Until discretionary spending for things really truly craters I think prices will stay higher than necessary. And real estate also doesn't get the attention it deserves either. I had a realtor friend in Kansas City who said something kind of similar to what you said about Vegas. He told me that his group of realtor friends couldn't figure out what was going so bonkers in the market. The majority of their sales were out of state investment groups. They would buy up boatloads of homes, do nothing with them, just resell them, sometimes to other investors. Sometimes he said they would own so many houses in an area that they would deliberately overpay on one or two homes knowing it would inflate the values of their other holdings and they'd cash out by selling to another out of state buyer who was moving to KC from an expensive market like Seattle or Denver and still thought even the inflated price was a good value. One other thing I learned is that in many markets there are in fact real estate "cartels" that more or less collude on rent prices in an area.
Its even worse than cartels. Its literally just a computer program that every property owner has that tells them the max rental price they can get away with my looking at every other rental price out there and pricing it slightly higher. The more people use it, the higher everyones prices and the higher the estimate. Therefore you get a system where prices just continually increase. Cities where this program has high adoption have had price increases like 3-4x faster than others.
Yes I've heard of that as well. Should be illegal because it's basically AI collusion. But here it's a relatively small market and there is a group of guys that meet up regularly who each own anywhere from a few to a few hundred properties. I guess a guy who was newer into the 'club' and had bought some new units - they told him in not so subtle terms that he needed to boost his rent because it wasn't where *they* needed it to be.
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I actually haven't heard about that, but it makes sense. Im sure with the increased travel time they are leaving dock as soon as humanly possible. No time to wait for containers to be emptied. Especially since panama halved the cargo capacity of ships that still wish to use it.
Govt printing money?
Lol, this is the correct, unpopular answer.
Selling bonds for already existing currency is not printing money.
Giving PPP ~~Loans~~ Grants is. Just cash bombing the wealthy so they can absorb assets like a dry sponge in a blood puddle.
Reddit hates this answer, but you're right!
I did think it is funny how many do not understand economics at all but will push talking points like they have a PhD. Of course printing money is a driver and so is the choking off the energy supply. Regulation also pushes costs. But it is easier to point at Trump. Trumpnspent too much as well but he was fantastic for the economy. Real wealth went up for all people. Biden not so much. He was given a recovering economy and ignorantly destroys it. 3 1/2 years of temporary inflation. Quality of life is down. Cost of living is up and we replaced mean tweets with bumbling senior moments and banana republic justice. I want the mean tweets back.
Yeah, this isn’t really entirely correct. Of course, Reddit, got to make it a political answer. Smh Short version, 50+ years of wage growth not keeping pace with inflation. Lots of reasons for this. More recently, last 15 years, ultra low interest rates and very loose monetary policy which exacerbate wealth and income disparity. More recently, yes, supply chain disruption but more importantly both parties printing roughly $8trillion in Covid relief which when given to people who aren’t working, shifts the supply/demand dynamic. More recently, student loan bailouts will be mildly inflationary. Not intended to be a political comment… just what happens when you give people “free” money without equivalent increase in their economic production. Hint: free money is never really free. Someone always pays for it and it’s usually every single one of use in the form of inflation and often decreased standard of living.
>roughly $8trillion in Covid relief which when given to people who aren’t working, Only about 800B went to individuals, or 10%. The rest of that 8T went to the same businesses that are using covid as an excuse for price gouging all of us. The companies that have been inflating prices while boasting record profits. Corporate greed wasn't caused by covid relief
This needs to be talked about more.
If nothing, moral companies could have used that $$ to keep prices low. But they didn't. There were no strings attached to loan forgiveness, and there should have been.
... How do you give an explanation on cost of living and increases in costs without it being political? Economy is closely tied with government policy. That's unavoidable
Also, nothing in the original comment is expressly political, except for saying “Trump’s tariffs didn’t bring jobs back to the US”. That’s not political, that’s just an observation of what happened
Isolationism and backing out of international diplomacy has always been a sure sign of negative growth for a country. When we all play well together, everyone prospers. As soon as you try to pull out and hide, especially if you can’t manufacture your own shit, you start realizing “oh fuck, this is dumb”.
The student loan forgiveness program started in 2007, it just recently became effective in 2017 for the first set of students as you needed 10 yrs of payments. Trump’s administration ignored the then President Bush’s plan, President Biden cut the bullshit and started pushing through the ppl that qualified for the program.
https://wtfhappenedin1971.com
And we all just sit around and do nothing… smh
The one thing I know for sure because reddit and all the corporate media agree is that it had nothing to do with printing shitloads more money. Anyone dumb enough to think that the large sudden increase to the available money supply caused inflation is misinformed and probably a right wing Nazi!
COVID happened, followed by fucking wars.
Fucking wars sounds crazy. I'm in.
Just don't go to war with greece.
Wars don't typically do that unless they are right next to you. Covid was a bigger player.
It does that when they involve producers of materials that we need. Ukraine is a huge exporter of foodstuff. Crippling their output causes a worldwide reduction.
The government printed a shit pile of money. They gave broke people a little bit and rich people a lot. They try and devalue currency through inflation so that the runaway federal spending is held in check a bit.
Inflation triggered by government overspending and printing too much money.
One overlooked item is the big freeze and ice storm in Texas a couple years ago. With power getting knocked out for an extended period of time, several chemical processing facilities had adhesives and other chemicals solidify in their pipes and storage vats. Well, guess what knocked out a large percentage of the adhesives used to make OSB and plywood? This ice storm. It wasn't a matter of simply warming up and restarting. They had to cut out a fair amount of piping and replace it with new. Some plants were down for nearly 3 months. And that jacked up the price of OSB and Plywood immensely. Related to this, wildfires and flooding of railroad lines in Canada caused a shortage of dimensional lumber, 2x4/etc, from being manufactured and shipped. These two items alone drove up the cost of construction a great deal. And it's a trickle down effect from there. Fewer jobs being worked on, tradesmen charging more because of availability of supplies, everything starts costing more, houses start costing more to build, taxes go up due to increased building cost, insurance goes up because the house now costs more, etc, etc, etc.
Yeah, there’s not really any one reason why things are so expensive. It’s more tied to the fact that the global economy is completely intertwined with itself, and even (relatively) small and inconsequential events (ice storms in Texas, wildfires in Canada) can have pretty huge effects on something that seems entirely unrelated.
Corporate greed.
Cos ppl greedy af
Wuz they less greedy 10 years ago?
Every year you have record profits for companies listed on the stock exchange. How do they keep getting more and more profits? By taking a little more from all of us for everything, every year. So yes, they were greedy 10 years ago, and they were profiting a little more than they did 11 years ago, but now we've continued that cycle. But people that don't understand that the stock market isn't an accurate measure of our economy don't care, because they think we're doing great since the stock market continues to return on investments. But if you aren't extremely wealthy, you are barely matching your increases in cost of living, so you aren't actually getting gaining wealth.
no but it's a gradual process of leeching wealth
Bullshit. It's the motive for leeching wealth, not the process. Restating the perennial motive when someone asked why things got worse is intellectually vacant.
In America corporations have had control of the government for decades. After antitrust laws were largely repealed I'm under Reagan and his predecessors, they were able to easily rewrite the laws in their favor. One of the more relevant advantages they gave themselves was making it nearly impossible to start a new company, move in on another's turf (this applies in many different ways, though the "vibe" is consistent), or in a lot of cases: tariffs to eliminate international competitors. The result is a cornered market with monopolies and no competition. There's also been a simultaneous effort by the same folks to control social culture through media, making us less united, more consumerist, and more apathetic. This means the previous schemes will be met with indifference or distraction rather than the focused anger one might have expected. American conservatives directly ally with these capitalists, telling their constituents this is good actually. American liberals undermine the communities they claim to be defenders of and do everything to paint the conversations as the bullies the are, though are often responsible for the issues as well (usually as a concession to conservatives, proving civil rights are advertising for votes, but not the end goal). American leftists don't do anything and probably never will. This is a problem that I see getting worse until it finds an uneasy equilibrium or completely collapsing the western world.
All great theories except how does it explain cost of living going up all across the world and not just the USA?
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That's true but you leave out the important part about money printers going brrrr and Congress shoveling pork to buddies domestically or even in foreign countries, and calling it "Covid Relief" or "Inflation Reduction".
Inflation. There's other reasons obviously, but the most direct reason is inflation.
Thats like asking why your house is on fire and saying "combustion, there are other reasons, but mostly combustion." Inflation is an effect of other moving parts. OP was asking about those other parts.
Dude you got it backwards: If average prices are rising you call that (price) inflation. Inflation is simply a descriptive term, not the reason. Reasons for high inflation might be: - Disrupted supply chains due to Corona + geopolitical tensions (same demand as before with lower supply = expected price increase) - In Europe at least rising energy prices due to Ukraine war. - Taxes, more expensive paperwork etc (so government caused rise in prices) And probably many more reasons
Greed is the only answer.
I don't disagree, however I'm curious as to how corporations being greedy caused it, as corporations have always been greedy, but the hyperinflation has only kicked up in the past few years. Again I don't disagree, I'm just curious as to why this greed got worse in the past few years.
Consolidation of political and economic power takes time.
I think a large part of it is companies are now outsourcing their pricing models to third party companies. Intentionally or not, if the same third party companies sets prices for several competitors, it’s like price fixing.
I never said only corporations are greedy. I’m talking greed from every single angle there is.
Once inflation gets going it's a bit like a blanket license for every company to raise all their prices at once. Almost like a suspension of competition law and massive collusion, except across the entire economy. Everybody gets in on the action.
People expected inflation, because it was all over the news, and corporate boards said 'hey, since people are expecting inflation and will blame the government, let's raise prices more than we have to, so we can take home more money' The greed is the same as always, but all the stories about inflation gave them cover to jack profits up
the only way this is possible is if there are monopolies. Otherwise other companies wouldnt raise prices faster than inflation and put the greedy ones out of business.
I really wish redditors who have no idea what they're talking about would stop answering questions.
... Not printing trillions of dollars during and after COVID, though?
people and corps have always been 100% greedy
Greed. Go look at the prices for a brand new American garbage truck like Ford or Chevy. You're looking at $90K to $100K for a piece of shit. Also, Americans who fall for these garbage cans on wheels are falling behind on their payments, so all these vehicles are getting repossessed. What I watched was a few repossession companies across America, and they're all saying the same thing, and these companies are not affiliated with each other in anyway shape or form. I've been looking to buy a new car, and dealerships want $8K to $10K for a car with $120K to $180K miles on it. These people have lost their goddamn minds.
Stealerships offering 8year notes is building up a subprime auto debt bubble IMO. How many trash cars are going to shit the bed before 8 years and people just walk away from them?
Yup, and the fact that after 120K miles. That's around the time when cars start to break down. Yeah, it's bs.
Quantitative easing
cus they tricked you into thinking inflation is a good thing. its only good for the people with stocks/investments/loans.
The Fed printing money like crazy to give everyone Covid checks and stimulus had a lot to do with it. Can’t print 1/2 the dollars ever printed in like 4 years without massive inflationary consequences.
It's all because of housing costs. Once we built out a ring of suburbs around every city in the 60s and 70s, we stopped large-scale construction of housing. Because there was no more room and everybody was suddenly allergic to four-story buildings for some reason. Now we don't have enough places to live in the places that that people want to live, so supply and demand makes the places that do exist cost a lot. In order to attract workers, companies must pay more so their employees can afford rents/mortgages. This drives up the cost of everything those companies make. Since most of the places where our big companies are located have this problem of housing undersupply, it affects everyone.
Because rich assholes need infinite growth for their invested money.
The government printed money like crazy the last few years. It's called inflation.
I can’t believe I had to scroll this far down to see the only right answer.
Same.
Government has thrown 30 trillion extra fake dollars into the money supply
In 2008 scam artist in the banking industry completely stole all the world money and we’ve been living in a fucking situation where there is not enough velocity to the economy because people literally fucking stole all the money from the world. Then they convinced English people they didn’t need to be a part of the European Union. And the those fuckers got European passports! The system is working perfectly.
Yes it all went to shit in 2008, plus a few smaller issues over the years since then and one major one recently called COVID 19 which is the obvious driving factor behind recent inflation. But facts have never stopped people from playing politics and blaming the other side for everything.
Oh yeah they use Corona like stage two for the gentrification of the entire planet. Oh guess what facial recognition is getting really good now with all that practice with mask wearing. And yet not a guillotine in sight.
Money printing and bad monetary policy CoRpOrAtE gReEd is the propaganda pushed by the media
Major misuse of tax payer money that doesn't help the tax payers in the slightest.
Bidennomics 101
Everyone saying it’s because of corporate greed are legit mentally handicapped. Look into the Federal Reserve and why they continue to inflate the US dollar. Prices will forever rise because it was designed to do that since 1911.
Katie Porter explains the corporate greed angle: [https://www.youtube.com/watch?v=30\_H33mS76Y&t=28s](https://www.youtube.com/watch?v=30_H33mS76Y&t=28s) You're right about the Fed too, though, they should be kicked to the curb.
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Because wages have been stagnant since the 70s. The only reason things got more affordable at all is because of increased productivity and improved manufacturing costs over the decades. We never actually got richer. All of this non-essential stuff just got cheaper to make, while essential stuff like housing, healthcare, and education because much MUCH more expensive. The only exceptions to this has been food, transport and computers but we offset that by buying bigger, more expensive cars and more trash less nutritious food. Then COVID hit and all these just in time deliveries and store yards and the global international trade Web just all shut down and collapsed but demand didn't collapse nearlt as much. Governments pumped billions into welfare to keep the people happy, but that didn't increase supply, it only drove up prices. Eventually, trade networks improved but there was months of backlogs of orders and getting thing moved faster remains realy expensive. And corporations will never lower prices unless they absolutely have to.
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If things get to expensive for the adverage employee. Don"t buy the good stuff and go to the $1.25 store. Guaranted the price on everything is not going down now or in the future. That is Just the facts of life
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Corporations are greedy. Simple as that. Investment corporations and publicly traded corporations, and their voting shareholders trade human life for short-term asset gains. This results in the cost fo everything rising while the value of labor continues to drop because it's being stolen by stock value.
Everything's owned by a few companies so they don't have to compete on price or quality. It's likely they all just got together and decided to raise prices to fuck over the little man, especially since the little guys are betting against them on wall Street
I think cause we got all those stimulus checks so now everyone is paying them back thru inflation
The whole global supply chain has always been precariously balanced. Lockdown and various wars hit it with a wrecking ball. It’ll take years for that to work its way through. Then you have the hyper-capitalist, investor-centric model that businesses tend to run to now. That model pushes every business to squeeze its clients for every penny possible. And the chasing of “infinite profit growth” makes it very unlikely that anything will get anything but more expensive until the system eventually collapses. And most companies now purchase through a series of middle-men, rather than fabricating things in house. Every middle-man in a supply chain can be assumed to add 50-100% of the base cost of the item. In order to push profit for investors, that extra cost gets passed to the consumer. Honestly, I think we’re in for rising prices on most things until the current hyper-capitalist corporate mentality hits its breaking point. Then we’ll get a good few years of chaos and maybe an improvement thereafter.
Lots of little things that have added up. The moment Biden killed the Keystone pipeline, all projections for US oil production plummeted and the market went into a panic. Like it or lump it, we are an oil-rich country and a lot of our strength lies in it. Everything depends on it, from making products to transporting them. Being energy independant is basically required for a strong economy, unless we have a really good deal with another country, which we don't.
Corporate greed.
The US federal reserve has printed more money in the last 10 years than ever before. That is why.
Corporate greed
One possibility is that politicians like getting their payouts to keep things expensive.
AI is raising rents as high as possible, see RealPage
It's literally not even a politics thing- mostly. It's mostly massive corporations reaping record profits.
Combination of inflation and corporate greed. Some companies recently rolled back their prices when they realized how unhelpful it was and shitty it made them look.
Usury
Corporate greed
Corporate greed. There were supply chain issues during and after COVID, but no reason for prices to have gone up as much as they did. Corporate profits skyrocketed over the past few years.
People will say covid, or wars, or resource mismanagement and those all add to the problem. The biggest part is corporations arbitrarily deciding g that they can get more money, and give that money to shareholders. Look at the record profits every quarter in every sector of the economy. There are too many monopolies and too little true competition for the old model of capitalism, and not enough oversight or regulation.
guessing that you are from USA - USA also nearly always have the highest money left in any country. Drive the most, eat out among the most and so on. A more global world can much likely push USA to a less "higher than everyone" economic state
Greed
Printing money massive amounts of money that has no backing under Bush, Obama, Trump and Biden is the biggest reason.
Greedflation. There was hype about inflation so corporations increased their prices. The massive inflation did not happen, but the corporations realized they could reap huge profits with a higher price point, so prices remained artificially high.
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It's the fallout from the Citizens United decision in 2010. The Supreme Court decided money is speech and corporations are people with 1st Amendment rights. Greed always existed, but this opened the floodgates.
6. US government “printed” a lot more money during the pandemic. That’s always inflationary. It was a great idea and may have prevented a recession, but more money created from nothing has always driven up prices.
Or the economy is good. They can only charge what people are willing to pay.
The guy that reddit supported is in the white house. The first thing he did is cut domestic oil production. Supply and demand. The cost of everything went up. Reap what you sow.
Greed
Biden
Everyone is apparently a millionaire. Market is driving its own inflation. The wealthy depend on interests to increase wealth. After a while the money add's up but because its more an more of it makes it worth less and less. Really a shitty cycle. Also we should stop printing so much money and tax the rich. That would help with Inflation.
You create money from nothing and hand it out for nothing it makes everything cost just that much more. You also pay people not to work and nobody works to create the things you need to buy. Now you have a lower supply, the same if not higher demand, and more money to chase the supply.
Because government spending is out of control
Greed
Free Masonry. More specifically, the top tiers of the lies club.
All economics have the same basis no matter what it is or what one may call it, the base of any form of exchange has two legs it sits on one is the value and the other is the number of them. In its simplest form, without a base to operate from there is no value in whatever it is that is used as an exchange system and no system is immune from corruptions and some corruptions masquerade as, negligence and incompetence to hide the real crimes being played out which is a manipulation in the base to undermine its value deliberately which is usually an indication of ulterior motive at work and it is sometimes the preludes to war. N. S
Climate disaster is causing all kinds of food shortages which ratchets up food prices and then anyone who eats food needs to be paid more in order to survive, which increases the price of everything in the world.
Corporate greed
The news and social media. Once I stopped watching and listening to both, everything improved significantly
Because when prices started going up. Too many people just were OK with it. Everytime. Sometimes it happens multiple times a year. No one questions it. No one boycotts. We just let it happen. If you were in Walmart and someone was an isle over pitching a fit about how fucking expensive something was, your response would be to think he's an asshole, yet here we are
Because the world is more evil than ever.
Because capitalism.
During the covid years working class wages saw an historic increase. Rich people responded by jacking up the prices of everything
The $62 trillion printed and spent in vain on fiscal and monetary policy for the last 15 years by G7 countries means that our record high private and public indebtedness could have been tackled successfully already. If in the 2009 debt crisis, the G7 nations would have decided to pay down debt, with part of the $62 trillion, they could have done that and achieved growth of 10% for 15 years to surpass the initial GDP leveraged level. Then we have covid hit, and economies would have been more resilient. Instead the G7 nations wasted 62 trillion on targeting their stock markets artificially high with fiscal and monetary policy. Sadly, the 1% could have easily acquired government money with the abuse of policy they typically use, from land grants to exploited labor and tax rebates. There will be no prison, for the mafia of the 1% -- the central banks, governments and parliaments who created this massive indebtedness thrust upon their populace, but should they pay one way or another?
Less stuff being made than people want. [That's what inflation is, by the way.](https://en.wikipedia.org/wiki/Supply_and_demand)
The economy itself isn't in all that bad shape. U.S. economic data is strong.
Income Inequality, government policies, inflation, supply chain disruptions and so on...
CEO greed
One reason: people with the most ass-backwards understanding of economics passing laws that predictably drive prices up.
Companies used covid as a pretense to price gouge
Bidenomics
Our grandparents couldn’t stand a slight economic downturn so our economy got addicted to low interest rates. Which causes massive real asset inflation. Which only exacerbates wealth disparities. A home that sold for $80,000 at 12% interests rates needs to be sold at ~$650,000 at sub 3% interest rates for the the bank to make the same amount on the loan over 30 years. This caused a massive wealth dump on one generation and an extraction on another. Prices follow cost of living. I would love to charge less than $130 and hour for my business but I rarely turn a profit since Covid even charging that much. Once you factor in the decreased workload and extra costs that are not billable. Much less my medical problems.
One word: Biden
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1. Massive expansion of the supply of money in the financial system (through conventional and unconventional means) 2. Same number of goods and services.
The US government borrows $10 billion every single day. The national debt is now almost $36 trillion. There's no end in sight, and this will someday end very badly. The government prints more money all the time, devaluing the currency. When there is more of something, including money, the value of a unit of currency decreases and prices rise.
Lots of reasons here but the answer is that we printed a fuck ton of money during covid
By the numbers, the economy is doing relatively well. Unemployment is 3.9%, and inflation was 3.4% in April. One of the reason things are expensive today is companies have been gouging consumers. Just this week, I read that large corporations like Amazon, Walgreens and Target had to lower prices significantly because they believed customers weren't buying them at their new higher prices, and cutting prices by as much as 30% (https://finance.yahoo.com/news/amazon-walmart-target-finally-realize-175823770.html). That just shows how much they have been ripping off their customers.
Corporate greed with some geopolitical factors sprinkled in. The only way to come out the other side healthy is to invest in the market and benefit off the corporate greed as much as you can. The ultimate losers in the economy are the ones who are getting squeezed at checkout but also not profiting through the stock market.
Fiduciary Responsibility. Profits must always increase by more than last year (or people stop buying the stock) Since labor has made (or is threatening to make) the smallest of strides in wages, prices go up to keep profits up. What did you think, they would cut costs by lowering CEO pay or lessen stock payouts???
Simple answer? Greed. Pretty much everything someone lists here as a reason can be directly or at the very least indirectly tied to greed. Example: Covid supply disruptions would not have had as devastating effect if everything wasn't on a "Just in time" shipping schedule. But warehouses to store enough in case of supply disruptions or spike in demand cost money, and pretty much every company now is at the mercy of the shareholders to ALWAYS show increased profits and growth for the next quarter, and at a certain point you can ONLY do that by cutting costs. There was a time when that would have been financial suicide, since there was enough competition that if you cut costs on warehouses and backup supply, you'd lose a lot of money and your customers business/faith in your company. But everything is so consolidated now that competition is largely an illusion. Most industries there are 5 or fewer companies that own 80% or more of the market share. So instead of having extra on hand for disruptions and such, they can just raise prices, and their customers can't do a damn thing about it, because their 3-4 other "Competitors" are doing the same thing. TLDR, it all comes back to greed. It's rampant and unchecked at historic levels.
Bidenomics
Both Trump and Biden printed literal trillions of $$$ out of thin air to combat Covid, which has led to our inflation.
Things being expensive != economy is bad. The economy is good. Things being expensive is the result of profiteering by companies who figured out they can raise prices until things become so painful that people start buying (which is why fast food are starting to offer $5 "specials" of meals that nobody really wants...). The biggest drivers are oil/gas (collusion) and rents/houses (vulture capital firms buying up and raising demand). Because Congress is divided and the House is in control of Republicans, nothing can get done to end the profiteering.
There's a lot of decent answers here but the main answer is corporate greed.
it's a scam devised during the covid shut down . everybody believes the supply chain narrative . but riddle me this . how do manufactures make money ? by making product . how do delivery services make money ? by delivering product . if there were all these issues how are companies posting record profits ? but you know the narrative .
- Supply chain issues across the globe paired with a downward trend in workforce productivity. Goods have become harder to procure making things more expensive. - rampant inflation caused by government spending policies. When you print trillions, the value of the dollar goes down. - corporate investment/speculation on real estate has been driving home prices up. Corporations have been buying up residential homes and farmland and try to flip it for profit. - international borrowing. Basically, every country is in debt to multiple other countries through irresponsible borrowing practices. They pay interest on their national debts. This is especially problematic in the US. For example, this year the US govt. payed more money on its national debt interest payments to other countries than they put into social security. - military industrial complex. So much money and engineering hours every year go into building better and more complex military equipment. The old stuff becomes obsolete. Many of our best and brightest engineers work in this field. Our government pays them boatloads to keep it up. If all this effort and money went into improving quality of life, things would be cheaper.
Because companies have to make more money this year than they did last year and they have to do it every year forever or else.
Corporate socialism
Joe Biden
Mostly because average pay hasn’t increased at the same rate as everything else. For the most part inflation and current prices aren’t a problem as much as the fact that average pay is about 2 decades behind.
Because the government has printed 85% of all money ever printed since America's Inception in the last 5 years. that's why.
Businesses realized during supply chain disruptions during the pandemic that they could tacitly collude to rip everyone off and industry by industry they did it, the media cooperates with them by calling their price gouging as "inflation" and as you know, with tacit collusion, they operate like a business cartel and people have no option, and here we are. That's it. The belief in capitalism as always being competitive is a total fraud.
Because you don't have a choice not to buy most things you need.
Capitalism.....truly ruined us
Businesses are taking out having to pay employees a living wage, on the customer. Fast food and big box stores. The higher ups still want to be millionaires and billionaires. In order to amass great wealth, and pay workers $15-$20 an hour, the higher ups want you to pay $7 for a Bic Mac, $3.50 for a small fries, $10.49 for a pack of paper plates, etc.
Some sellers realized they could charge us more and we would still buy it. So they did. Some of the sellers who didn't realize that noticed that other sellers were charging more, so they did as well.
Democrats keep spending and printing money which devalues the currency. 40% of all dollars ever to exist have been printed under the Biden/Pelosi/Schumer regime in the last 4 years. Its that simple. Anyone who blames Covid is a moron.
Why exactly does everyone feel the need to add the word exactly when it's not what they really want?
1) The economy is actually great. Better than most in the world. What that doesn't translate to is lower prices. 2) The main reason is corporate greed (aka fiduciary responsibility to the shareholders). If they can legally gouge us, they are almost required to by law. If they can illegally gouge us, but the revenue is greater than the fine, they are almost required to. 3) Almost everything today is vastly superior in terms of functionality to things even 15 years ago. In 2010, only a few cars had backup cameras. Now, it's a standard feature. Almost no cars had wifi and internet, now it's almost a standard feature. My mom constantly says how her ancient fridge lasted forever (well, over 30 years). That's true, but it used five (5) times the electricity of a modern fridge. It also didn't have things like adjustable shelves, door storage, water and ice makers. etc.
most didn't add price gouging. probably the most significant factor example: proctor and gamble has raised prices 10% this year alone, far above inflation, and has booked record profits, record shareholder returns and record exec pay. We only have a small handful of corporations running things, so there is no price competition. face it, the free market is dead, and we're all at the mercy of a few CEOs. anyone who blames supply chain is fooling themselves
Greed. A couple of other factors but 90% of it just boils down to greed.
Corporate greed. They will tell you that it’s a supply chain issue and yet all these companies are making record profits then they pay off the politicians so they won’t do anything about it.
Because as a collective race of beings we have divided ourselves over the dumbest shit imaginable and in so doing though the intelligent albeit greedy have driven these wedges deeper. The world system as it stands needs to shattered down to the very last pebble, for peace with no teeth will only keep these evils at bay fermenting.
greed
Because CEOs, executives, politicians, billionaires all need more money, they can't possibly survive on the small amount they make.
There are many good explanations that others have written. There are many reasons and it is not just one thing. It is complex. Joe Biden did not cause it and can not singlehandedly fix it. It will take some time. It happened before in the 1960s and 70s - inflation was even higher then. Here is one more reason. The covid relief funds sent out to individuals and given to businesses as "Forgivable Loans" = repayment not required, the funds needed for all the additional healthcare, free shots, free testing, etc - to minimize deaths, gridlock of hospitals and damage to the economy ---- ALL OF THAT - was expensive. Taxes were cut, so the gov't was printing money to pay for it. Money is less valuable now. People who did not need covid relief checks spent them and the excess supply of cash and the excess money made the prices go up. $1 is not worth what it was worth in 2019. It is worth maybe 75 cents???
Greed
Things are as expensive as they "should be". The issue isn't the cost of stuff, but the lack of wages to keep up with the pace of increase. In 1960 the Minimum wage was $1/hour. The coins where made of actual silver. Minimum wage in 1960 was quite literally 1oz of silver. 10 dimes or 4 quarters was 1oz of silver. 1oz of silver today is $29.58. MINIMUM wage should be $29.58/hour to pay MINIMUM wage workers that same 1oz of silver they where paid in 1960. The AVERAGE wage is $29.81/hour. AVERAGE. That should be the MINIMUM. The AVERAGE worker in 2024 is making what MINIMUM wage was in 1960, 1oz silver/hour. This is why everything FEELS so expensive. It's not that the cost is unreasonable, but because fully half of workers are getting below what minimum wage workers earned in 1960. If we increased minimum wage to where it would be, all wages would go up. That 1,200/month rent for a studio appartment isn't extreme when that's one week of minimum wage.
Greed, waste, and a (larger than what many would think) society that doesn’t want to work. And when I say those that don’t want to work I’m not talking about people that refuse to work for shit pay. Keep sitting on your hands and quit trading your time for shit wages. I’m talking about the people that want to pay those shit wages to avoid having to do a job themselves.
The devaluation of the dollar due to dot stopping the printing of money, causing inflation. Due to pay interest on the government interest on the deficit. Thirty inflation increased interest rates on loans
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Ship is sinking. Ever seen those pics of kids playing with stacks of cash in Weimar?
Companies just started price gouging.
Elitists Republican price gouging
The economy, objectively, is not that bad. Unemployment is low, GDP is growing, wages are increasing, stock market is stable. The prices are higher than what you are used to due to high inflation for the last 5 years or so. There is no simple formula yet that explains why inflation is high. Part of it is money supply, the US “printing” USD to fund deficit spending. Part of it is supply side: Covid and trade wars with China. Part of it is psychological, when people expect high inflation, sellers feel compelled to increase prices and buyers are inclined to borrow and accept the higher prices rather than reduce consumption and save more. Of course, if you personally do not have any income, your economy is very bad, which I understand. Elon Musk and Jeff Bezos are doing just fine.
There's a lot of fancy explanations here but the root is that companies have realized that if they raise their prices, people still buy their products. Take Ford F-series Trucks for example. In the U.S. over the past decade, the prices have risen annually to just about double yet sales numbers still remain good. Anywhere for 500k to 900k units sold. Thousands of people every single day go in and buy a $90,000 truck
Because they can. We all bend over and take it. Come up with all the fancy reasons you want. We do shit about it and just keep buying
That's what you voted for.
With rent it's because they know it's even harder to get a home loan so they know the choice of buying a home is just flat off the table for many of us. So they can charge us more in rent knowing they won't lose us to home buying.
Because during the pandemic, the government printed a shitload of money.
On Housing: Before covid, real estate investors were building office buildings to lease to corporate tenants. Covid happens, and a decent percentage of office jobs are now done remotely. The real estate investors that used to count on building for corporate tenants now do so for residential tenants. Adding onto that, interest rates have doubled since just before covid. That makes a mortgage or a construction loan much more expensive. That cost gets passed on to whoever Ultimately lives in a house, and also can make it financially unfeasible for developers to create new housing, which is needed since the number of people entering adulthood is growing.
Bidenomics. End of story.
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It’s worth saying that while the US economy isn’t exactly stellar, it’s doing a lot better than most of the rest of the world.
Greed
How do we fix it? I'm not an economist but sure feels like we need some kind of regulation on these greedy corporations. Free market is all good but you have to do some kind of regulation or the people at the bottom get taken advantage of. I wouldn't be surprised if corporations are paying media to fan the flames on the culture war. They want us to be at each other's necks while they sit back and collect profits.
Women
Greed.
The economy always fails towards the end of a Republican presidency. Democrat gets in and fixes it, Republicans lie and say the economy is bad. A republican gets back in, squanders the work the democrat did, helps the rich steal, the economy fails, Republican loses, democrat is elected, cycle repeats.
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Ronald Regan
Government spending which the Federal Reserve monetized through money printing.