The fun thing about HN is I hear all sorts of unique economic theories not found in any econ book.
P.S. If the wealthy (or everyone else) needs more money, and just raising prices will work, why don't they do that anyway? The answer is Supply & Demand, it's the Law, and is in every econ textbook.
Ever heard of a company called Apple?
They raise prices all the time because they can.
Same with AT&T, or banks ATM Fees, or gas prices.
Right now gas prices are at an all time high, and so are gas profits.
> The answer is Supply & Demand, it's the Law, and is in every econ textbook.
Also, that's Econ 101. Which isn't quite reality, it's idealized for simplicity because it is an introduction to macroeconomics. But I don't want to digress into Austrian vs. Modern theory because neither of us will do justice to that.
Definitely not an all time high, but yes a rapid increase. According to a quick quarterly chart I pulled up, a barrel of oil was last over $100 in June 2014. It spent most of the period 2010-2014 above $80 (it's currently $86). I remember paying > $5/gallon at the pump back then. I see a peak in June 2008 at $140.
Profits are also now coming down, at least according to Exxon's report today:
"(Bloomberg) - Exxon Mobil Corp. gave an early snapshot of its earnings for the third quarter, during which refining margins shrank while profits from natural gas kept climbing. "The largest US energy company said in a filing Tuesday that margins within its energy-products segment, which includes oil refining, were as much as $2.9 billion lower compared with the second quarter. That segment posted $5.3 billion in net income in the three months through June."
Why don't they raise the iphone to $10,000?
> Right now gas prices are at an all time high, and so are gas profits.
Have you ever noticed gas pump prices going down? I'm curious as to your explanation for that? Do you notice that pump prices change on a daily basis? What's your explanation for that?
However, the cheapest iphone 14 is 799..
You may be right about laptops/desktops though.
companies are constantly raising prices to hit the highest price point customers will tolerate. Normally, when prices get too high too quickly consumers eventually get sticker shock and start to feel ripped off so they stop buying the overpriced good (assuming they have the option), so companies lower prices by a very small amount and a new generation of consumers come into the world where the almost too high price is "normal" since it's all they've known and the whole process repeats and prices just climb and climb which is why everything when your great great grandmother was alive cost a nickle but today you pay using stacks of bills.
Right now though things are pretty messed up because every company had an excuse that let them jack prices up without customers blaming them. Companies said "Supply issues! Don't be mad at us! We're all in this together!" and consumers begrudgingly accepted excessively priced goods because "that's just how it is, extraordinary circumstances" and a generation of consumers now sees those excessive prices are normal. Some companies continue to limit supply, dragging their feet ramping production back up, because they're making money hand over fist and pulling in record profits while consumers are forced to scale back and watch their standard of living decline. Now companies are saying "Don't blame us, it's this damn inflation!" and since consumers are expecting it, they can continue to jack up prices while continuing to make money hand over fist. They don't ever want to lower prices and accept a little less so prices must continue to go up and up just like before, but now it's happening at a rate they couldn't have gotten away with previously.
Companies could accept making a little less profit and lower prices and inflation would drop. They don't want to though because for them greed is the whole of the law and anything less than higher profits and endless growth is failure. Consumers could help by refusing to buy the things they love and have spent their whole lives becoming accustomed to, but they're still traumatized from a global pandemic, they're desperate for normalcy and the goods they were forced to do without for 2+ years and in denial about the fact that their lifestyle is declining and things are only going to get worse.
In economics circles inflation is generally considered a tax on the poor who only hold cash and whose wages are slower to rise vs price inflation.
You should be. I doubt the rich hold any dollars at all. They invest it all. There aren't any Scrooge McDuck cash vaults.
(Criminals often do hold lots of cash, and they try to get rid of it by laundering it.)