Noted Economist Explains What Is Really Driving Inflation

[skews13.]

The biggest culprit for rising prices that's not being talked about is the increasing economic concentration of the American economy in the hands of a relative few giant big corporations with the power to raise prices. If markets were competitive, companies would seek to keep their prices down in order to maintain customer loyalty and demand. When the prices of their supplies rose, they'd cut their profits before they raised prices to their customers, for fear that otherwise a competitor would grab those customers away.

But strange enough, this isn't happening. In fact, even in the face of supply constraints, corporations are raking in record profits. More than 80 percent of big (S&P 500) companies that have reported results this season have topped analysts' earnings forecasts, according to Refinitiv. Obviously, supply constraints have not eroded these profits. Corporations are simply passing the added costs on to their customers. Many are raising their prices even further, and pocketing even more.

How can this be? For a simple and obvious reason: Most don't have to worry about competitors grabbing their customers away. They have so much market power they can relax and continue to rake in big money. The underlying structural problem isn't that government is over-stimulating the economy. It's that big corporations are under competitive.

Noted economist explains what's 'really driving' inflation

The biggest culprit for rising prices that's not being talked about is the increasing economic concentration of the American economy in the hands of a relative few giant big corporations with the power to raise prices. If markets were competitive, companies would seek to keep their prices down...

www.rawstory.com

 

[ALiberalModerate]

The biggest culprit for rising prices that's not being talked about is the increasing economic concentration of the American economy in the hands of a relative few giant big corporations with the power to raise prices. If markets were competitive, companies would seek to keep their prices down in order to maintain customer loyalty and demand. When the prices of their supplies rose, they'd cut their profits before they raised prices to their customers, for fear that otherwise a competitor would grab those customers away.

But strange enough, this isn't happening. In fact, even in the face of supply constraints, corporations are raking in record profits. More than 80 percent of big (S&P 500) companies that have reported results this season have topped analysts' earnings forecasts, according to Refinitiv. Obviously, supply constraints have not eroded these profits. Corporations are simply passing the added costs on to their customers. Many are raising their prices even further, and pocketing even more.

How can this be? For a simple and obvious reason: Most don't have to worry about competitors grabbing their customers away. They have so much market power they can relax and continue to rake in big money. The underlying structural problem isn't that government is over-stimulating the economy. It's that big corporations are under competitive.

Noted economist explains what's 'really driving' inflation

The biggest culprit for rising prices that's not being talked about is the increasing economic concentration of the American economy in the hands of a relative few giant big corporations with the power to raise prices. If markets were competitive, companies would seek to keep their prices down...

www.rawstory.com

Amazon still has to compete against Walmart. There is more competition in our markets than some people think. What is driving inflation is high demand and restrictions on supply. A lot of people are swimming in money right now, yet we have worldwide supply chain issues and labor shortages. Of course that results in inflation.

 

[bluesmoke]

Fulltime employment reached an all-time high of 130.6M in 2019, then dropping to a pandemic caused low of 123.2M in 2020:

Number of full-time employees U.S. 2022 | Statista

The number of full-time employees returned to pre-pandemic levels in 2022 after a sharp decline in 2020.

www.statista.com

Since then, it has steadily risen to 128.3M as of Oct 2021. Increasing nearly every single month of 2021:

United States Employed Persons - May 2023 Data - 1948-2022 Historical - June Forecast

The number of employed persons in The United States decreased to 160721 Thousand in May of 2023 from 161031 Thousand in April of 2023. Employed Persons in the United States averaged 106542.10 Thousand from 1948 until 2023, reaching an all time high of 161031.00 Thousand in April of 2023 and a...

tradingeconomics.com

There are more severe labor shortages in particular sectors. However, the labor shortage appears rather temporary. And unemployment is at 4.6% as of Oct 2021:

Civilian unemployment rate

www.bls.gov

An unemployment rate of 4.6% is a rate any prez would be happy with.

According to the BLS, employee compensation rose 3.7% for the yr ending Sep 2021 whereas Producer Price Index went up 8.6%. Yet I hear complaining about labor cost driving inflation and that people are refusing to work. What's wrong with this picture?

 

[ttwtt78640]

The biggest culprit for rising prices that's not being talked about is the increasing economic concentration of the American economy in the hands of a relative few giant big corporations with the power to raise prices. If markets were competitive, companies would seek to keep their prices down in order to maintain customer loyalty and demand. When the prices of their supplies rose, they'd cut their profits before they raised prices to their customers, for fear that otherwise a competitor would grab those customers away.

But strange enough, this isn't happening. In fact, even in the face of supply constraints, corporations are raking in record profits. More than 80 percent of big (S&P 500) companies that have reported results this season have topped analysts' earnings forecasts, according to Refinitiv. Obviously, supply constraints have not eroded these profits. Corporations are simply passing the added costs on to their customers. Many are raising their prices even further, and pocketing even more.

How can this be? For a simple and obvious reason: Most don't have to worry about competitors grabbing their customers away. They have so much market power they can relax and continue to rake in big money. The underlying structural problem isn't that government is over-stimulating the economy. It's that big corporations are under competitive.

Noted economist explains what's 'really driving' inflation

The biggest culprit for rising prices that's not being talked about is the increasing economic concentration of the American economy in the hands of a relative few giant big corporations with the power to raise prices. If markets were competitive, companies would seek to keep their prices down...

www.rawstory.com

That explains why housing and public school costs are going up faster than general consumer price inflation.

 

[OpportunityCost]

Fulltime employment reached an all-time high of 130.6M in 2019, then dropping to a pandemic caused low of 123.2M in 2020:

Number of full-time employees U.S. 2022 | Statista

The number of full-time employees returned to pre-pandemic levels in 2022 after a sharp decline in 2020.

www.statista.com

Since then, it has steadily risen to 128.3M as of Oct 2021. Increasing nearly every single month of 2021:

United States Employed Persons - May 2023 Data - 1948-2022 Historical - June Forecast

The number of employed persons in The United States decreased to 160721 Thousand in May of 2023 from 161031 Thousand in April of 2023. Employed Persons in the United States averaged 106542.10 Thousand from 1948 until 2023, reaching an all time high of 161031.00 Thousand in April of 2023 and a...

tradingeconomics.com

There are more severe labor shortages in particular sectors. However, the labor shortage appears rather temporary. And unemployment is at 4.6% as of Oct 2021:

Civilian unemployment rate

www.bls.gov

An unemployment rate of 4.6% is a rate any prez would be happy with.

According to the BLS, employee compensation rose 3.7% for the yr ending Sep 2021 whereas Producer Price Index went up 8.6%. Yet I hear complaining about labor cost driving inflation and that people are refusing to work. What's wrong with this picture?

Stop printing ****ing money.

 

[Kushinator]

Stop printing ****ing money.

It hasn't led to a surge in bank lending, and therefore your statement lacks merit.

 

[Mycroft]

The biggest culprit for rising prices that's not being talked about is the increasing economic concentration of the American economy in the hands of a relative few giant big corporations with the power to raise prices. If markets were competitive, companies would seek to keep their prices down in order to maintain customer loyalty and demand. When the prices of their supplies rose, they'd cut their profits before they raised prices to their customers, for fear that otherwise a competitor would grab those customers away.

But strange enough, this isn't happening. In fact, even in the face of supply constraints, corporations are raking in record profits. More than 80 percent of big (S&P 500) companies that have reported results this season have topped analysts' earnings forecasts, according to Refinitiv. Obviously, supply constraints have not eroded these profits. Corporations are simply passing the added costs on to their customers. Many are raising their prices even further, and pocketing even more.

How can this be? For a simple and obvious reason: Most don't have to worry about competitors grabbing their customers away. They have so much market power they can relax and continue to rake in big money. The underlying structural problem isn't that government is over-stimulating the economy. It's that big corporations are under competitive.

Noted economist explains what's 'really driving' inflation

The biggest culprit for rising prices that's not being talked about is the increasing economic concentration of the American economy in the hands of a relative few giant big corporations with the power to raise prices. If markets were competitive, companies would seek to keep their prices down...

www.rawstory.com

Reich is correct, but he's not being honest about it. He is singling out only one part of the problem...the corporations. The corporations wouldn't be able to do what they do without a lot of help from financial institutions and politicians. So his solution...anti-trust laws...won't ever happen because the executive branch won't take aim at the corporations. Too many politicians are making too much money to let that happen.

For those who want to know what Reich ISN'T telling you, look here: https://theconservativetreehouse.co...ics-vs-joebamanomics-understanding-inflation/

btw, Trump was well aware of the Globalists and he was taking aim at them. That's why he HAD/HAS to be stopped. There are TRILLIONS at stake.

The ‘America First’ Trump-Trade Doctrine upset the entire construct of this multinational export/control dynamic. Team Trump focused exclusively on bilateral trade deals, with specific trade agreements targeted toward individual nations (not national corporations).

‘America-First’ is also specific policy at a granular product level looking out for the national interests of the United States, U.S. workers, U.S. companies and U.S. consumers.

Under President Trump’s Trade positions, balanced and fair trade with strong regulatory control over national assets, exfiltration of U.S. national wealth is essentially stopped.

This puts many current multinational corporations, globalists who previously took a stake-hold in the U.S. economy with intention to export the wealth, in a position of holding contracted interest of an asset they can no longer exploit.​

 

[OpportunityCost]

It hasn't led to a surge in bank lending, and therefore your statement lacks merit.

Because they went around bank lending and gave it away. Stimulus checks?

Your statement lacks a grasp on reality and therefore lacks merit.

 

[Good4Nothin]

The biggest culprit for rising prices that's not being talked about is the increasing economic concentration of the American economy in the hands of a relative few giant big corporations with the power to raise prices. If markets were competitive, companies would seek to keep their prices down in order to maintain customer loyalty and demand. When the prices of their supplies rose, they'd cut their profits before they raised prices to their customers, for fear that otherwise a competitor would grab those customers away.

But strange enough, this isn't happening. In fact, even in the face of supply constraints, corporations are raking in record profits. More than 80 percent of big (S&P 500) companies that have reported results this season have topped analysts' earnings forecasts, according to Refinitiv. Obviously, supply constraints have not eroded these profits. Corporations are simply passing the added costs on to their customers. Many are raising their prices even further, and pocketing even more.

How can this be? For a simple and obvious reason: Most don't have to worry about competitors grabbing their customers away. They have so much market power they can relax and continue to rake in big money. The underlying structural problem isn't that government is over-stimulating the economy. It's that big corporations are under competitive.

Noted economist explains what's 'really driving' inflation

The biggest culprit for rising prices that's not being talked about is the increasing economic concentration of the American economy in the hands of a relative few giant big corporations with the power to raise prices. If markets were competitive, companies would seek to keep their prices down...

www.rawstory.com

Government is over-stimulating the economy.

 

[Good4Nothin]

Amazon still has to compete against Walmart. There is more competition in our markets than some people think. What is driving inflation is high demand and restrictions on supply. A lot of people are swimming in money right now, yet we have worldwide supply chain issues and labor shortages. Of course that results in inflation.

Many trillions of dollars have been created by the Fed. You think that is harmless?

 

[Kushinator]

Because they went around bank lending and gave it away. Stimulus checks?

It would still show up in terms of velocity... the economy is hot, but the brunt of the inflationary pressure is due to a breakdown in supply chains. This is a global problem.

Your statement lacks a grasp on reality and therefore lacks merit.

Try again. Presidents face the brunt of the outcome good or bad. I get it... but that doesn't pass outside of news-driven sensationalism.

 

[jonny5]

The biggest culprit for rising prices that's not being talked about is the increasing economic concentration of the American economy in the hands of a relative few giant big corporations with the power to raise prices. If markets were competitive, companies would seek to keep their prices down in order to maintain customer loyalty and demand. When the prices of their supplies rose, they'd cut their profits before they raised prices to their customers, for fear that otherwise a competitor would grab those customers away.

But strange enough, this isn't happening. In fact, even in the face of supply constraints, corporations are raking in record profits. More than 80 percent of big (S&P 500) companies that have reported results this season have topped analysts' earnings forecasts, according to Refinitiv. Obviously, supply constraints have not eroded these profits. Corporations are simply passing the added costs on to their customers. Many are raising their prices even further, and pocketing even more.

How can this be? For a simple and obvious reason: Most don't have to worry about competitors grabbing their customers away. They have so much market power they can relax and continue to rake in big money. The underlying structural problem isn't that government is over-stimulating the economy. It's that big corporations are under competitive.

No its pretty clear that adding 8 trillion in borrowing to the economy, while production decreases, causes inflation. Its literally textbook. Robert Reich is a socialist and so his opinions are always the same, trying to justify socialism.

 

[What if...?]

No its pretty clear that adding 8 trillion in borrowing to the economy, while production decreases, causes inflation. Its literally textbook. Robert Reich is a socialist and so his opinions are always the same, trying to justify socialism.

But it kept the economy "primed". No money, no purchases, no orders, no shipping, etc. The whole thing grinds to a halt and it's really hard to get it started again.

 

[ALiberalModerate]

Many trillions of dollars have been created by the Fed. You think that is harmless?

I think the bigger problem is that we recovered from the pandemic economically much faster than many of the nations that supply the goods and services we consume.

 

[Mithros]

The biggest culprit for rising prices that's not being talked about is the increasing economic concentration of the American economy in the hands of a relative few giant big corporations with the power to raise prices. If markets were competitive, companies would seek to keep their prices down in order to maintain customer loyalty and demand. When the prices of their supplies rose, they'd cut their profits before they raised prices to their customers, for fear that otherwise a competitor would grab those customers away.

But strange enough, this isn't happening. In fact, even in the face of supply constraints, corporations are raking in record profits. More than 80 percent of big (S&P 500) companies that have reported results this season have topped analysts' earnings forecasts, according to Refinitiv. Obviously, supply constraints have not eroded these profits. Corporations are simply passing the added costs on to their customers. Many are raising their prices even further, and pocketing even more.

How can this be? For a simple and obvious reason: Most don't have to worry about competitors grabbing their customers away. They have so much market power they can relax and continue to rake in big money. The underlying structural problem isn't that government is over-stimulating the economy. It's that big corporations are under competitive.

Noted economist explains what's 'really driving' inflation

The biggest culprit for rising prices that's not being talked about is the increasing economic concentration of the American economy in the hands of a relative few giant big corporations with the power to raise prices. If markets were competitive, companies would seek to keep their prices down...

www.rawstory.com

The dollar isn't losing value. It traded at .82 Euros in Jan 2020 and now trades at .87 Euros. That's a 6% increase in relative value.

The reasons behind the price increases are pretty obvious, even if the solutions aren't.\

• Covid Covid Covid.
• People are purchasing fewer services (restaurants, travel, etc) because of Covid fears. Instead they're using that money to buy additional goods.
• Lack of Truck Drivers - A strong labor market means people can choose not to take the job with a crappy work life balance. Training for many of these high turnover jobs took a hug hit in 2020. And the war against immigrants has led to a reduction in the people most likely to take and hold these jobs.
• Chinese production continues to decline and the cost of Chinese goods continues to rise. Couple that with the massive increase in shipping costs due to backlogs and the costs of goods increase.
• Everything we buy relies on a global supply chain, and every item produced is dependent on the slowest dependent in it's supply chain. All of that adds up.

Fewer goods + more demand means higher prices. It's like we're at all at a restaurant that suddenly can't make as much food. No amount of qualitative easing or economic trickery is going to increase the amount of mashed potatoes. Long term we need to focus on automation and in-sourcing. But short term? I mean we'll blame the chefs, but I don't think there's really anything that anyone can do.

 

[Kushinator]

But it kept the economy "primed". No money, no purchases, no orders, no shipping, etc. The whole thing grinds to a halt and it's really hard to get it started again.

We didn't let it grind to a halt and it's still very hard to get it started again....

 

[Good4Nothin]

Some of us knew when QE started in 2008 it would eventually cause inflation. Then QE skyrocketed in 2020, and people were still saying it won't cause inflation. And now we have inflation and they're finding every excuse in the book for it, except the real reason -- QE.

 

[Kushinator]

Some of us knew when QE started in 2008 it would eventually cause inflation.

It didn't cause inflation in 2009 onward.

Then QE skyrocketed in 2020, and people were still saying it won't cause inflation. And now we have inflation and they're finding every excuse in the book for it, except the real reason -- QE.

False. It's about supply chains....

 

[Good4Nothin]

It didn't cause inflation in 2009 onward.

False. It's about supply chains....

QE did not cause inflation until recently, because other factors prevented it.

False? HAHA. And you know this how? Because you don't want to think it's the QE?

 

[H B Lowrey]

The biggest culprit for rising prices that's not being talked about is the increasing economic concentration of the American economy in the hands of a relative few giant big corporations with the power to raise prices. If markets were competitive, companies would seek to keep their prices down in order to maintain customer loyalty and demand. When the prices of their supplies rose, they'd cut their profits before they raised prices to their customers, for fear that otherwise a competitor would grab those customers away.

But strange enough, this isn't happening. In fact, even in the face of supply constraints, corporations are raking in record profits. More than 80 percent of big (S&P 500) companies that have reported results this season have topped analysts' earnings forecasts, according to Refinitiv. Obviously, supply constraints have not eroded these profits. Corporations are simply passing the added costs on to their customers. Many are raising their prices even further, and pocketing even more.

How can this be? For a simple and obvious reason: Most don't have to worry about competitors grabbing their customers away. They have so much market power they can relax and continue to rake in big money. The underlying structural problem isn't that government is over-stimulating the economy. It's that big corporations are under competitive.

Noted economist explains what's 'really driving' inflation

The biggest culprit for rising prices that's not being talked about is the increasing economic concentration of the American economy in the hands of a relative few giant big corporations with the power to raise prices. If markets were competitive, companies would seek to keep their prices down...

www.rawstory.com

Privatized gains versus socialized losses for the Wall Street bankster class
Internalized profits versus externalized risk and expense for the job creator class
Socialism for the aristocracy versus laissez-faire capitalism for the masses

 

[H B Lowrey]

Some of us knew when QE started in 2008 it would eventually cause inflation. Then QE skyrocketed in 2020, and people were still saying it won't cause inflation. And now we have inflation and they're finding every excuse in the book for it, except the real reason -- QE.

And Wall Street and the captains of capital clamored for it. COVID didn't help, or rather our "management" of the pandemic didn't.

 

[Kushinator]

QE did not cause inflation until recently, because other factors prevented it.

Meaningless statement.

False? HAHA. And you know this how? Because you don't want to think it's the QE?

I'm not ignorant of economic reasoning. For years it has been accepted without question that monetary stimulus isn't as powerful a tool as fiscal stimulus when it comes to boosting aggregate demand... and this is your argument (unbeknownst to you). QE has a measurable impact on asset prices, simply because the Fed is purchasing assets (mostly Treasury Securities and some federally insured mortgage bonds to a degree well above what's necessary to keep the overnight federal funds rate close to zero. The result is medium to long term balance sheet expansion at the Fed. While it effectively does create enough liquidity to ensure asset prices do not plummet, this isn't doesn't have the same effect power impact as government giving people money or purchasing goods / services from the private sector.

It was fiscal policy that countered a pandemic aggregate demand shock, thereby softening the economic blow. Now the economy is booming! Nominal GDP growth for calendar year 2021 is at 7.9% through the first three quarters.

This is what a strong recovery looks like... you get some inflation.

 

[highroller]

Stop printing ****ing money.

How is that going to stop oligarchs with monopoly pricing powers?

 

[highroller]

It didn't cause inflation in 2009 onward.

False. It's about supply chains....

It’s the “Peter Schiff” principle. Predict something until it happens and then claim that you called it. He man has been predicting inflation for 30 years.

 

[H B Lowrey]

It’s the “Peter Schiff” principle. Predict something until it happens and then claim that you called it. He man has been predicting inflation for 30 years.

Prices haven't risen over time for the past 6 decades, at the very least? Aren't we discussing short term blips here?