It really does look like this was an opportunity for capital to regain some leverage they lost and crack the whip. Which, to be fair, at least in the tech sector was probably warranted. But not really what the Fed should be enabling.
Capital has way more, by a large margin, leverage than labor. Big technology companies were far from have less leverage that tech workers. Why do you think that it is fair that a reduction in that difference is ended?
The idea is that capital has had very little control the operations of business over the past 10 years, due to low interest rates. This leads to businesses that don’t make money continuing to grow, and bubble conditions, is more or less the idea. I’ve also seen this idea of the Millennial Lifestyle Subsidy also being related to interest rates.
The petite-bougeoise [1] as they were once known
[1]https://www.oxfordreference.com/display/10.1093/oi/authority...
I don't know why people still believe this. Supply chain issues account for 2-3% of inflation immediately after COVID restrictions eased. The other 6-7% is corporate profiteering off of the perception of supply chain issues. You can see this clearly from the record profits being reported.
They didn't invite her on to talk again. For some reason they just froth at the mouth at the prospect of systemic inflation. They will grab the reigns of the culture war and flog it mercilessly to the finish line but will never call out corporate collusion against workers nor the abuse of consumers lest Facebook or Walmart ease up on the "donations."
Cuz it seems like rate hikes are pretty much the only working lever the dumb mindless machine has.
If that means my burger goes up a dollar, I’m fine with that.
I don’t buy the supply chain argument much either, but I think the huge economic stimulus from the Fed and government + many people dying or exiting the workforce led to both wage inflation (pretty glaringly obvious looking at eg fast food pay, also in the amount of HC expansion in big tech, etc) and more dollars chasing goods/services that did not increase as quickly as the money supply.
I’m not saying people weren’t working because of the 3k stimulus or enhanced UE at all. I’m saying that those policies, along with many others, created inflation. When people have more money while the economy produces the same (or less) amount of goods/services you get inflation
What matters is what had the most effect, you also only mentioned the stimulus in your original comment.
Regardless, I stand by my assertion that these policies are the cause that led to effects like low unemployment, inflation, and increased corporate profits. The people only pointing to corporations are just picking who they want to be responsible.
Edit: and Congress has agency to impose price controls. It's been done before when profiteering became a problem.
In what world is the massive, multiple waves of stimulus just completely unrelated but instead it’s those greedy corporations who are for some reason no longer bound by price competition.
There is no way in hell 2 months' worth of extra income in 2020 has anything to do with 3 years' worth of inflation.
Also, payments to individuals and families accounted for only 30% or so of total Covid stimulus! But entities which are not people still spend money! Both on goods, services, and on salaries paid to people who then spend that money on goods and services.
It just seems crazy to me to say “no way, it has nothing to do with the $5 trillion dollar stimulus.”
2) Huge numbers of people lost their jobs or had their incomes reduced by significant amounts in 2020 due to the pandemic. Framing it as "people got an extra 16% and that was it" is hopelessly oversimplifying the situation. Thus, I cannot put any credence in the idea that the fact that both of those were about 16% is anything more than a coincidence.
3) Again, the duration of the inflation is not in any way commensurate with the duration of the stimulus. The last payment was in...what was it? March 2021? and now nearly 2 years later there's still "inflation" and people are talking about it as if it's primarily caused by those two tiny little stimulus checks.
It just seems crazy to me to say "sure, that tiny bit of stimulus was the entire reason for several years of inflation; corporate greed has nothing whatsoever to do with it."
2) I agree it's a vast oversimplification, but the point is that money was put in and prices went up. They went up by an amount surprisingly similar to the amount of additional cash available. It's totally an oversimplification, but do you have a better explanation? Like your theory is that corporations are greedy? Sure. Are they greedier than they were before? Are the checks on their greed - competition and consumer reluctance to buy higher cost products - suddenly absent?
3) For a possible explanation of the duration, I would direct your attention to: https://www.reddit.com/r/wallstreetbets/comments/zd4ppn/hous... Essentially regular people, on average, still have a lot more cash than they had before the pandemic. Generally speaking I'd say this is great but the fact is that this cash is not associated with any productivity increases, we have the same amount of stuff, but more cash.
So prices go up.
2) I did propose a better explanation: Coincidence. Two data points that look similar, in a situation like this, is not enough to make coincidence particularly unlikely.
3) The most likely explanation for that seems to be that, because of the pandemic, we're not doing a lot of the things we were normally doing before. My family certainly isn't: we haven't taken a vacation since winter 2019, and we've cut out many of our previous habits that a) cost money, and b) put us more at risk for COVID. Now, I believe my family is fairly far toward one end of that spectrum, but I also believe there are enough people who have cut out at least some stuff (and not put it back yet) that it is, at least, a highly likely explanation for the phenomenon you cite there.
It's not unrelated, it's part of the 2-3% I mentioned. The out of control inflation we've actually seen is driven by corporate profiteering and is seen in the data:
This whole idea of "simply price gouging" is completely inaccurate for many industries.
Changes in profit margin would be the relevant metric to see if a business has gained or lost pricing power.
Maybe I don't understand the point you're trying to make
They didn't invite her on to talk again. For some reason they just froth at the mouth at the prospect of systemic inflation. They will grab the reigns of the culture war and flog it mercilessly to the finish line but will never call out corporate collusion against workers nor the abuse of consumers lest Facebook or Walmart ease up on the "donations."
Railroad workers had to strike to get a single sick day. Across the board American labor has been getting flogged for years. Maybe Google's people should be flogged a little, but not because of the financial balance.
In fact the capital class lobbied hard for China being admitted to the WTO pushed hardest by Kissinger, NAFTA [1] and other legislation and restructuring to make offshoring easier in order to suppress both wages and labor power.
This was Ross Perot's entire platform [2]:
“You implement that NAFTA, the Mexican trade agreement, where they pay people a dollar an hour, have no health care, no retirement, no pollution controls,” Perot said during the second presidential debate in October 1992, “and you’re going to hear a giant sucking sound of jobs being pulled out of this country.”"
[1] https://www.nytimes.com/roomfordebate/2013/11/24/what-weve-l...
[2] https://theconversation.com/the-giant-sucking-sound-of-nafta...