There is no single cause for inflation, which reached an annual rate of 8.5% in March. That's the fastest increase in prices since 1981. There are continuing problems with supply chains, rising prices for raw materials, and limited supply. There is a tight job market, which increases costs for labor. And, in many sectors, there is pent-up demand from the pandemic.
This info needs to be national news through all media types and more than one story to reach the masses who are still blaming covid checks as reason for inflation.
Thank you for covering this! While some cost increases have very real and unavoidable origins, it’s been clear for some time that part of this is simply corporate greed, which has no bottom. They’re like the cursed sailors from Pirates if the Caribbean, with no way to satisfy their hunger.
The inflation we’re seeing today seems to be created out of thin air by opportunistic companies salivating at how tightly they can squeeze the consumer. There has to be something that can be done here.
And yet Republicans have just about everyone (including the talking heads on CNN) convinced that the rise in prices is all President Biden's fault..............
True. But never underestimate the ignorance of the public. Sadly, most people simply absorb info.....no critacal thinking, no questions, no willingness to become informed.
This is well written. CEO compensation in many organizations is an abuse of shareholders.
I vote against all compensation packages on the equities I own.
I think a ratio rule of 10 to 1 on all corporations would do much to breakdown our feudalistic system. That would not impose a limit but maintain an acceptable income spread for value added.
1) Unfortunately AriZona's resellers don't have the same principles. The Walgreen's next door to where I work charges $1.49 for the can. If AriZona is truly eating the cost, that means Walgreens is making 50 cents extra for no reason.
2) I think inflation is measured too broadly and that's what lets these companies raise prices and profits with nearly zero repercussion. They see the high inflation numbers and see it as an excuse to raise prices even if their specific operating costs are flat.
I talk politics with a lot of people and work in a local politician’s office. These facts are so helpful to pass along. And we can check this ourselves. Everyone needs to make this part of their discussions even among like-thinkers…it will still be overheard and passed along to some who need to hear it.
Your research is so valuable and educational. It it very much appreciated.
Thanks, Judd. It is infuriating that media 100% is on board with this inflation sham. And THANK YOU for that glimmer of hope at the end, with AZ Iced Tea... don't think I didn't notice! 😉
On the one hand, I find this just as disgusting as anyone else. On the other hand, unless any of what they’re doing is illegal, which it doesn’t seem to be, I believe this is the downside of Capitalism.
Producers/suppliers, based on what they're saying, seem to be facing a steep demand curve at the moment. So P increases have limited negative hit to Q sold. So, those P increases translate into nearly pure profit increases. (Unless they share that windfall with workers.)
It's not whether they've "gotten more greedy." That's a red herring. They've waltzed into a situation where they have more *opportunity* to capture higher profit share, at consumers' cost. And they're working that for all it's worth.
So questions: 1. What explains that steep demand curve, and 2. How to react to the pretty pathological result, institutionally?
The concentration of wealth is not heathy for our or any democratic society. The wealthy pursue their rational self interest for more wealth in the form of profits and investment returns with no guardrails to keep our capitalism and democracy healthy. According to the 2020 Census the total pre-tax net worth of US households was $150T spread over the 122,354,219 reported households that would be an average of $1,226,000 per household. However 89% of US households have far less than that average. In fact 50% of the HH have less than $121,000. The largest concentration of wealth is at the top 1% with an average HH net worth of $11M. Here are a couple ideas. I the following ideas in the hope of igniting discussion of means to bring back wealth equity while keeping our capitalist system. 1. Businesses need to elevate the value of their employees as an interest group in their companies. This can be done by tax policy that encourages the use of company wide employee profit sharing in the form or direct payments or stock distributions. This could be set as the first 10% of pre tax profits be paid to employees and management as profit sharing (or be taken as a tax penalty). This may help improve employee productivity too. Similarly, senior management and corporate board member rewards at such absurd levels can be discouraged by tax policy if the total value of that year's compensation (salary, benefits, incentives, stock, options and deferred compensation) in excess of a certain ratio to the average employee compensation is not allowed to be deducted as an expense to the business. That ratio could be something like 20:1. Investors will balk at huge senior level compensation packages that are fully taxed. These measures do not remove the opportunity for individual wealth generation, it simply uses tax policy to encourage the opportunity for more people to participate and less concentration of wealth and the power that comes with it.
So the introduction frames increased profits as a percent of what I assume is net revenue, but then the following paragraphs, at least the Amazon and Costco ones only include absolute numbers. Retailers saw huge increases in revenue in 2021 due to shifting consumer dollars, so one would assume that profits increased along with revenue. One cannot discern if they’re choosing option 3 if we only look at absolute numbers.
This info needs to be national news through all media types and more than one story to reach the masses who are still blaming covid checks as reason for inflation.
Sorry, all they have time for is meat shoplifting, they just can’t fit it in. Weird!
And a study on where the rewards for price hikes go. Top CEO pay up 31% https://www.equilar.com/reports/90-highest-paid-ceos-2022-equilar-100.html?utm_source=join1440&utm_medium=email
Thank you for covering this! While some cost increases have very real and unavoidable origins, it’s been clear for some time that part of this is simply corporate greed, which has no bottom. They’re like the cursed sailors from Pirates if the Caribbean, with no way to satisfy their hunger.
The inflation we’re seeing today seems to be created out of thin air by opportunistic companies salivating at how tightly they can squeeze the consumer. There has to be something that can be done here.
i grow my own; that'll learn 'em.
And yet Republicans have just about everyone (including the talking heads on CNN) convinced that the rise in prices is all President Biden's fault..............
True. But never underestimate the ignorance of the public. Sadly, most people simply absorb info.....no critacal thinking, no questions, no willingness to become informed.
This is well written. CEO compensation in many organizations is an abuse of shareholders.
I vote against all compensation packages on the equities I own.
I think a ratio rule of 10 to 1 on all corporations would do much to breakdown our feudalistic system. That would not impose a limit but maintain an acceptable income spread for value added.
Two things:
1) Unfortunately AriZona's resellers don't have the same principles. The Walgreen's next door to where I work charges $1.49 for the can. If AriZona is truly eating the cost, that means Walgreens is making 50 cents extra for no reason.
2) I think inflation is measured too broadly and that's what lets these companies raise prices and profits with nearly zero repercussion. They see the high inflation numbers and see it as an excuse to raise prices even if their specific operating costs are flat.
Great report, Judd!
I talk politics with a lot of people and work in a local politician’s office. These facts are so helpful to pass along. And we can check this ourselves. Everyone needs to make this part of their discussions even among like-thinkers…it will still be overheard and passed along to some who need to hear it.
Your research is so valuable and educational. It it very much appreciated.
Thanks, Judd. It is infuriating that media 100% is on board with this inflation sham. And THANK YOU for that glimmer of hope at the end, with AZ Iced Tea... don't think I didn't notice! 😉
I'm sure it's mostly this opportunistic greed, but I'm also getting a bit of a "let them eat cake" vibe.
On the one hand, I find this just as disgusting as anyone else. On the other hand, unless any of what they’re doing is illegal, which it doesn’t seem to be, I believe this is the downside of Capitalism.
I just might start drinking AriZona iced tea!
CEOs imitating Martin Shkreli
Producers/suppliers, based on what they're saying, seem to be facing a steep demand curve at the moment. So P increases have limited negative hit to Q sold. So, those P increases translate into nearly pure profit increases. (Unless they share that windfall with workers.)
It's not whether they've "gotten more greedy." That's a red herring. They've waltzed into a situation where they have more *opportunity* to capture higher profit share, at consumers' cost. And they're working that for all it's worth.
So questions: 1. What explains that steep demand curve, and 2. How to react to the pretty pathological result, institutionally?
The concentration of wealth is not heathy for our or any democratic society. The wealthy pursue their rational self interest for more wealth in the form of profits and investment returns with no guardrails to keep our capitalism and democracy healthy. According to the 2020 Census the total pre-tax net worth of US households was $150T spread over the 122,354,219 reported households that would be an average of $1,226,000 per household. However 89% of US households have far less than that average. In fact 50% of the HH have less than $121,000. The largest concentration of wealth is at the top 1% with an average HH net worth of $11M. Here are a couple ideas. I the following ideas in the hope of igniting discussion of means to bring back wealth equity while keeping our capitalist system. 1. Businesses need to elevate the value of their employees as an interest group in their companies. This can be done by tax policy that encourages the use of company wide employee profit sharing in the form or direct payments or stock distributions. This could be set as the first 10% of pre tax profits be paid to employees and management as profit sharing (or be taken as a tax penalty). This may help improve employee productivity too. Similarly, senior management and corporate board member rewards at such absurd levels can be discouraged by tax policy if the total value of that year's compensation (salary, benefits, incentives, stock, options and deferred compensation) in excess of a certain ratio to the average employee compensation is not allowed to be deducted as an expense to the business. That ratio could be something like 20:1. Investors will balk at huge senior level compensation packages that are fully taxed. These measures do not remove the opportunity for individual wealth generation, it simply uses tax policy to encourage the opportunity for more people to participate and less concentration of wealth and the power that comes with it.
So the introduction frames increased profits as a percent of what I assume is net revenue, but then the following paragraphs, at least the Amazon and Costco ones only include absolute numbers. Retailers saw huge increases in revenue in 2021 due to shifting consumer dollars, so one would assume that profits increased along with revenue. One cannot discern if they’re choosing option 3 if we only look at absolute numbers.