Greed Inflation

If everyone's self-interest ultimately benefits everyone somehow, I guess Hitler's self-interest was going to as well.

There, I finally evoked Godwin's Law and a little Ayn Rand.

The main difference in philosophies is related to efficiency of resources.


Capitalism conserves resources.

Non-Capitalism doesn't.

It's a very simple concept.


Greed can occur with any economic system (it's a human trait), but capitalism can rapidly correct an imbalance if a free-market is interfered with.

Quote: DoubleGold

The main difference in philosophies is related to efficiency of resources.


Capitalism conserves resources.

Non-Capitalism doesn't.

It's a very simple concept.


Greed can occur with any economic system (it's a human trait), but capitalism can rapidly correct an imbalance if a free-market is interfered with.

It can only correct rapidly with regulation, because too many products exist that aren't transparent. You want to avoid GMOs, your tomato has to be regulated so as to keep the seller from selling you a GMO tomato. You want to find out an airbag manufacturer has been selling cheap or defective airbags that blow shrapnel into your face, you don't want to wait around until it gets reported through word of mouth. Plus, assume, manufactures have done plenty of coverups hoping something hasn't been noticed, so maybe they don't get sued or can correct it before it gets widely publicized.

So, it's not simple.

The concept of ‘greed inflation’ makes no sense. It’s just another way to define capitalism. If I own SOOPOO’s pizza shop and can sell 100 pizzas a day for $20 at a total profit of $500, or 80 pizzas a day for $30 for a total profit of $800, it is NORMAL and EXPECTED to charge the $30 per pie. I opened SOOPOO’s pizza shop to make as much $$ as I can. I didn’t open SOOPOO’s pizza as some community service.

The government, in my opinion, should interfere only in monopolistic situations. SOOPOO’s pizza shop has to compete with RxWine’s Pita Palace, ams’ Yogurt Emporium, DRich’s Curry and Kabobs. The other factors should be allowed to correct. Or not.

Quote: rxwine

It can only correct rapidly with regulation, because too many products exist that aren't transparent. You want to avoid GMOs, your tomato has to be regulated so as to keep the seller from selling you a GMO tomato. You want to find out an airbag manufacturer has been selling cheap or defective airbags that blow shrapnel into your face, you don't want to wait around until it gets reported through word of mouth. Plus, assume, manufactures have done plenty of coverups hoping something hasn't been noticed, so maybe they don't get sued or can correct it before it gets widely publicized.

So, it's not simple.

I'm referring to resources, not specifically end products.

The commodities that are traded to produce the products.


If a person comes in trying to manipulate oil on the basis of climate change, like pushing electric cars all of the sudden through a $7,500 tax credit, then that screws up the energy market artificially.

It means buy oil and natural gas at a low because the market will correct after they stop manipulating under the guise of climate change.

Quote: rxwine

It can only correct rapidly with regulation, because too many products exist that aren't transparent. You want to avoid GMOs, your tomato has to be regulated so as to keep the seller from selling you a GMO tomato. You want to find out an airbag manufacturer has been selling cheap or defective airbags that blow shrapnel into your face, you don't want to wait around until it gets reported through word of mouth. Plus, assume, manufactures have done plenty of coverups hoping something hasn't been noticed, so maybe they don't get sued or can correct it before it gets widely publicized.

So, it's not simple.

The problem with government regs as always is who controls them. I personally couldn't give a shit if my tomato is GMO. Why do I have to pay for that regulation. Look at where vehicle costs are now, ever since Nader .gov has added on thousands of mandatory 'safety features' some with a very small, if any, increase in safety. During this run up vehicles have become more and more out of reach for many people. Most of those that can no longer afford a vehicle would gladly trade a small decrease in reliability/safety for the convenience of owning a vehicle.

Quote: SOOPOO

The concept of ‘greed inflation’ makes no sense. It’s just another way to define capitalism. If I own SOOPOO’s pizza shop and can sell 100 pizzas a day for $20 at a total profit of $500, or 80 pizzas a day for $30 for a total profit of $800, it is NORMAL and EXPECTED to charge the $30 per pie. I opened SOOPOO’s pizza shop to make as much $$ as I can. I didn’t open SOOPOO’s pizza as some community service.

The government, in my opinion, should interfere only in monopolistic situations. SOOPOO’s pizza shop has to compete with RxWine’s Pita Palace, ams’ Yogurt Emporium, DRich’s Curry and Kabobs. The other factors should be allowed to correct. Or not.

Well, the theme if it, is did corporations contribute to inflation raising prices to collect more profit than usual. Then the right blames Biden for ALL of it. The answer is yes.

And then there is the question of corporations acting in any interest of anything but profit. A successful argument iMO for the idea that they are participants in inflation.

Quote: kenarman

The problem with government regs as always is who controls them. I personally couldn't give a shit if my tomato is GMO. Why do I have to pay for that regulation. Look at where vehicle costs are now, ever since Nader .gov has added on thousands of mandatory 'safety features' some with a very small, if any, increase in safety. During this run up vehicles have become more and more out of reach for many people. Most of those that can no longer afford a vehicle would gladly trade a small decrease in reliability/safety for the convenience of owning a vehicle.

I'm not so sure you're not right about people being able to buy more defective cheaper products if they want to. My only caveat is it not harm anyone but them. That can be hard to accomplish.

Quote: rxwine

Greedflation’ caused more than half of last year’s inflation surge, study finds, as corporate profits remain at all-time highs

There is no 'Greedflation'.

The PPI Index measures inflation at the wholesale level. It measures the rate of inflation of goods and services before they reach consumers.

The CPI measures the change in prices paid by the consumer.

If corporations were gouging the consumers, the CPI should be significantly higher than the PPI.

PPI 2020 = .8 ....CPI = 1.4%
PPI 2021 = 9.7....CPI = 7.5%
PPI 2022 = 6.22%....CPI = 6.5%

'Stimulus checks caused the problem'

Quote: odiousgambit

snips

The journalist doesn't even try to defend this gratuitous and preposterous remark in parentheses, directed to us like we are children. Of course you can always claim that a certain company can get by with less profits. And you can believe that it's their civic duty to do so, too, if you are a completely devoted to socialism like I don't doubt in the slightest she is. The rest of us, children that we are I guess, realize that a company facing inflation in its costs will raise its prices ... or cut employees loose instead. (They pretty much have to)... see, I put that in parentheses to prove it

As for Paul Donovan, he is a nut who claimed in 2015 that "printing money never, ever, causes inflation". God knows what planet he lives on.

I don't disagree with the remark in parenthesis as, strictly speaking, they probably didn't need to raise prices. Certainly, if these companies saw record profits (as opposed to just revenues) on the year, then prices could have been something less than what they were and the companies would have been fine.

I'm not inclined to accept, "Greedflation," or, "Greedinflation," as just slang. It's a term designed to accomplish a very simple purpose, which is to paint a certain picture of the corporations in a person's head and control the narrative. That's why they're also using terms such as, "Shareholder giveaways," and, "Shareholder handouts," which is patently stupid because you have to be a shareholder (i.e. part owner) to get them and it's RoI.

Basically, suggesting that people are getting 'handouts' or 'giveaways' and to imply that it's undeserved money, but the money is totally deserved, because they made the investment in order to get those things.

As I said in my earlier post, the biggest problem is Government interjecting itself and artificially manipulating the market and changing outcomes. If you want corporations to behave sustainably, then there has to be some risk of them actually going under if they get too aggressive and it backfires. The concept of a corporation being, 'Too big to fail,' simply needs to be thrown out the window as harmful and misguided.

As far as taxation is concerned, the major corporations will always be fine as long as they have government protection and capacity to be bailed out. It's almost a marriage of Government and major corporations is what you end up with, or a sort of state-controlled (and sometimes sponsored) capitalism...which isn't exactly capitalism.

Which doesn't work and is actively negative for most people. They could tax corporations at 90% of profits, if they wanted to, and it still wouldn't matter as long as the corporations had control over their own pricing and limited-enough competition. The reason for that is that expenses relative to incomes + social safety nets (if applicable) continue to favor expenses. For example, let's compare a few years----we will go 2022, 2017 and 2012 (All Numbers will be adjusted to 2022)

https://www.statista.com/statistics/237203/average-expenditures-of-united-states-households/

https://www.multpl.com/us-median-income

https://www.multpl.com/us-average-income/table/by-year (Mean Average)

2022 Average Household Expenditures: 72,967
2022 Median Income: 74,580
2022 Mean Income: 106,400

Median Income as a Percentage of Mean Income: 70.09%
Average Household Expenditures as a Percentage of Median Income: 97.84%
Average Household Expenditures as a Percentage of Mean Income: 68.58%

2017 Adjusted (to 2022) Average Household Expenditures: 72,307.88
2017 Adjusted Median Income: 73,891.54
2017 Adjusted Mean Income: 103,838.19

Median Income as a Percentage of Mean Income: 71.16%
Average Household Expenditures as a Percentage of Median Income: 97.86%
Average Household Expenditures as a Percentage of Mean Income: 69.64%

2012 Adjusted (to 2022) Average Household Expenditures: 66,497.23
2012 Adjusted Median Income: 65,951.90
2012 Adjusted Mean Income: 92,134.85

Median Income as a Percentage of Mean Income: 71.58%
Average Household Expenditures as a Percentage of Median Income: 100.83%
Average Household Expenditures as a Percentage of Mean Income: 72.17%

What we see here is that Median Average Income continues to fall behind as a percentage of the Mean Average (in 1990, for example, Median was 80.06% of Mean Average Income; in 1980, Median was 84.07% of Mean), which is to say that the wealthy keep pulling away from the Median Household; the average income continues to increase because the rich continue to get richer.

Essentially, what happens is that, even with the various forms of wage intervention that the Government does, the rich continue to get richer and the middle class increasingly evaporates.

This is evidenced by the fact that the Median Household Income continues to become a lower percentage relative to the Mean Household Income. In terms of Household Expenditures, Household Expenditures always seem to remain, very close to a dollar-for-dollar basis, the same as Median Income.

In short, most people have no room for improvement. What Government policies have arguably succeeded in doing is that they have brought up the, 'Floor,' living standard to be something better than it used to be; however, they have not done so to the detriment of the wealthy, they have done so to the detriment of an increasingly evaporating middle class.

When the wages for the lowest-income earners are increased (often by way of Government intervention), what we see is that wages for moderate income earners tend not to increase to quite the same percentage. Looking at our adjusted numbers, in terms of adjusted income growth, Median income is 100.93% of what it was in 2022 relative to 2017 and Mean Income is 102.5% in 2022 relative to what it was in 2017.

However, it's not so much that the middle-income wage earners are making more, but rather, the bottom-tier wage earners are making more; as a result, they are simply not pulling the median income DOWN as much as they once might have.

In the meantime, people making actual middle incomes aren't really gaining any ground. Again, when we pull the lowest wage earners up, they still fail to make anything close to the average household annual expenditures...and everything we're looking at ignores taxation anyway where actual middle income earners also tend to pay more in taxes.

The only thing that our current policies and economic environment accomplishes is making what it means to be in poverty something slightly better than it used to be. However, our policies are not doing this at the expense of the very wealthy, but rather, are doing so at the expense of an increasingly eroding and evaporating middle class. Eventually, there will be the poor and the rich with very few people in between those two things. After factoring in taxation, the average household annual expenditures ARE WELL OVER what a median household actually brings in (as cash) in the first place.

The main thing that could change this current trajectory is simply lower prices and lower taxation, across-the-board. The best way to have corporations effectuate lower prices is by not increasing their expenses due to government intervention as these same corporations will increase prices (when they can) well in excess of anticipated increases to expenses. If the costs that go into delivering the final product or service to consumer are lower, then the price to consumer should also end up being lower.

Anyway, when we compare the gap between the Median Household Income to the Mean Household Income and see that the Median is an ever decreasing percentage of the Mean, despite ever increasing average hourly earnings:

https://fred.stlouisfed.org/series/CES0500000003

The only conclusion that can be drawn is that we are sacrificing the middle class (both in percentage of population and quality of life) in order to bring up the bottom. Ironically, average hourly earnings (for such situated employees) have more than kept up with inflation, though the rapid inflation of the last few years did somewhat close that gap.

Here's a simple chart that illustrates this point and compares 1971 to 2021:

https://www.pewresearch.org/short-reads/2022/04/20/how-the-american-middle-class-has-changed-in-the-past-five-decades/

1971: Lower Income: 25% Middle Income: 61% Upper Income: 14%

2021: Lower Income: 29% Middle Income: 50% Upper Income: 21%

Put another way, in the Government's purported efforts to eliminate the divide between haves and have nots, the Government has succeeded only in increasing that divide. All additions to the Have Nots and Haves have come at the expense of what was once the, 'Have Somes,' which is an increasingly deteriorating category of people.

Basically, any improvements to the living standards of those who are considered poor (by way of wage increases and social safety nets) have come not at the expense of the rich (as the Democrats purport they are supposed to), but rather, at the expense of the middle class.

If we do not adjust our economic policies to favor and promote small businesses and continue to bailout major corporations who, by all rights, should fail (and them remaining in the market makes it more difficult for a new, and perhaps better, competitor to enter the market) then this trend will only continue.

In other words, those who decry that the middle class is being strangled are right. They might be a bit more melodramatic than is actually the case and they might think this is a quicker process than is actually the case, but they are right.