The Inflation Thread 2021-22

[Ceetar]

A lot of that stimulus went to rich businesses and the rich owners bought yachts while cutting hours/salaries and raising prices because #covid provided justification.

another thing much of the media seems to be ignoring, but definitely plays into all this, is the labor uprising and unionizing going on. The fascist party continues to push that paying people living wages is bad, so their labor-busting tactics include messaging that paying a living wage or treating workers better means they have to raise prices (again while purchasing another yacht or trip to space)

[Johnny Lunchbucket]

The other thing I'll say is to echo a point made above was the tech revolution that made supply chains more efficient pre-covid had indeed made prices difficult to inflate. Nobody seems to have recognized this but a major reason Whole Foods got sold to Amazon wasn't that Amazon was acquiring some juggernaut but that Whole Foods was getting its ass kicked because food prices were flat or deflating for years so businesses just scaled up and up and up because the greater scale the bigger the benefits of tech to support the ability to gain back pricing power. It's just a cauldron of shit now

[Frayed Knot]

Factors contributing to this current spate of inflation
- pent-up demand being released after two years of lockdowns, lack of travel, etc.
- gov't stimulus money sent out during Covid both to businesses and to people, not all of it wisely
- high fuel costs. Between production being cut during Covid and now the Russia/Ukraine mess, supply is low just as demand is skyrocketing and high fuel costs
affect the cost of virtually everything
- wages. The $15/hr target was reached more by market forces than by mandate but it's gotten there (and higher in many cases) which increases costs across the board
- slow Fed response. Low interest rates have been the norm for so long now that it was as if some came to expect them to continue forever. So not only didn't they not
anticipate a change but were then slow to act even as it was actually happening. Inflation? Umpossible ... that's some relic from the 1970s which doesn't exist anymore.

[Lefty Specialist]

One more. Companies taking advantage to raise prices. Companies are selling less but making more money, for example the auto companies. Same for fuel costs. There's gouging going on.

[metsmarathon]

so... capitalism is happening.

what would really help consumer costs is to put more corporations in charge of more aspects of the economy, because they basically exist entirely to drive profits higher, not prices downward.

[Frayed Knot]

One more. Companies taking advantage to raise prices. Companies are selling less but making more money, for example the auto companies.
Same for fuel costs. There's gouging going on.

Sure, but those things also have the built-in correction mechanisms of competition and reduced demand.
They'll stop charges higher prices when either consumers decide to stop paying them or when one of their
competitors sees or anticipates reduced demand by lowering prices first.
These things don't happen instantly but they'll always happen eventually.

[Johnny Lunchbucket]

Competition in most industries ain't what it used to be and in some, they barely exist.

and consolidation has been rewarded not only with massive scale and influence but with tax cuts that were bigger (and permanent) for companies vs. what regular people got, which was enacted so as to sunset.

[Bob Alpacadaca]

A lot of that stimulus went to rich businesses and the rich owners bought yachts while cutting hours/salaries and raising prices because #covid provided justification.

another thing much of the media seems to be ignoring, but definitely plays into all this, is the labor uprising and unionizing going on. The fascist party continues to push that paying people living wages is bad, so their labor-busting tactics include messaging that paying a living wage or treating workers better means they have to raise prices (again while purchasing another yacht or trip to space)

A lot of it went to companies that were shut down due to the pandemic and needed the money to keep paying the bills and avoid bankruptcy. What is your source for that yacht nonsense, another Facebook Simpson meme?

[Ceetar]

used $420,000 of those loan proceeds to buy a beach front vacation home in Dauphin Island, Alabama

https://www.justice.gov/usao-mdpa/pr/we ... lief-fraud

Foad Darakhshan received over $1.5 million of the overall proceeds of the scheme. The group used the proceeds to invest in the stock market, fund a home construction project, travel to Cancun, purchase a vehicle, and pay for other personal expenses.

https://www.justice.gov/usao-edva/pr/me ... -sentenced

using the money at the Seminole Hard Rock Hotel and Casino, and to purchase luxury items including a Ferrari

https://www.complex.com/music/pretty-ri ... -loan-scam

Among the ripest targets for the cybertheft have been jobless programs. The federal government cannot say for sure how much of the more than $900 billion in pandemic-related unemployment relief has been stolen, but credible estimates range from $87 billion to $400 billion — at least half of which went to foreign criminals, law enforcement officials say.

https://www.nbcnews.com/news/us-news/ea ... d-n1276789

[Frayed Knot]

Competition in most industries ain't what it used to be and in some, they barely exist.

In the auto industry it's certainly better now than in the days where your choice was something from one of the 'big three' plus the occasional
European boutique seller, mostly English or German. Now there are choices from all over Europe, then came Japan, and now multiple entries
from South Korea, before even getting into upstarts like Tesla.
And I can walk to four supermarkets.

[Bob Alpacadaca]

Those are people who abused the system and were caught. Are you saying that was the norm?

[Ceetar]

Feds: 75% of $800 billion didn’t reach employees

https://www.gmtoday.com/the_freeman/bus ... ef939.html

[kcmets]

Breaking out the big guns! The Waukesha County Freeman... lol

[Johnny Lunchbucket]

Competition in most industries ain't what it used to be and in some, they barely exist.

In the auto industry it's certainly better now than in the days where your choice was something from one of the 'big three' plus the occasional
European boutique seller, mostly English or German. Now there are choices from all over Europe, then came Japan, and now multiple entries
from South Korea, before even getting into upstarts like Tesla.
And I can walk to four supermarkets.

Supermarkets are unusually fragmented and local as big businesses go and there's still big imbalances developing, because even a strong regional chain is like 10x smaller than the biggest guys today, and more and more share goes to fewer and fewer players every year, even without big mergers (not to mention the distributors they use are bigger and fewer in number, and the amount of stuff in the store is owned by fewer and fewer guys). It's been unstoppable, even though local guys will always exist and hardly the first industry they'd bust up.

I was thinking more along the lines of Google, Facebook, Amazon, etc

Oh I also agree at some point somebody blinks. The issue is it doesn't look like higher costs are going to stop coming very soon, so when? Demand has actually held up well as I noted before but its obvious were headed to that point

[Frayed Knot]

Supermarkets are unusually fragmented and local as big businesses go and there's still big imbalances developing, because even a strong regional chain is like 10x smaller than the biggest guys today, and more and more share goes to fewer and fewer players every year, even without big mergers (not to mention the distributors they use are bigger and fewer in number, and the amount of stuff in the store is owned by fewer and fewer guys). It's been unstoppable, even though local guys will always exist and hardly the first industry they'd bust up.

But yoiu're talking macro where I'm thinking micro. The variety gives me the opportunity to shop for bargains and not Have to pay what one store is asking
when I know it's cheaper within a half mile. Plus I Know that with on-line food shopping now a thing, that customers will place orders with several stores at
the same time for specific items in each and then pick them up in succession to take advantage of either favorite brands or better prices. iow, not only still
lots of competition but now even easier to take advantage of it. One of the secrets to competition working better is better information and that's now
better than ever. I can know what X costs at different stores before I leave the house as opposed to the old days waiting for multiple weekly flyers to arrive
in the mail or via a newspaper insert.

I was thinking more along the lines of Google, Facebook, Amazon, etc

Sure. Those are also businesses that didn't exist until relatively recently. Are forced break-ups in the future if they're seen to be abusing their positions? I dunno.

Oh I also agree at some point somebody blinks. The issue is it doesn't look like higher costs are going to stop coming very soon, so when? Demand has actually held up well as I noted before but its obvious were headed to that point

For every sign that points toward recession and contraction economists will find others that don't and sustaining demand coupled with higher wages/employment
are definitely part of the latter.

[Edgy MD]

So, one thing folks mostly agree on is that we've allowed anti-trust regulation and enforcement to soften, and cartels and monopolies to take over large sectors of the economy? Is this correct?

[Frayed Knot]

I have no idea.
The last big bust-up I recall was probably ATT in the early '80s
The last mega-merger allowed? Exxon/Mobil in the mid-'90s maybe

[Johnny Lunchbucket]

Well my own take is, one of the things driving consolidation is better preparedness to confront companies like Google or Amazon which may be better mousetraps but have managed to get hooks in so many different businesses and themselves have bought up many of their capabilities as they grew, cutting off potential competitors. So Amazon bought a robotic warehouse company now leads the world in ecommerce and the robotics to assemble delivery efficiently, dominates bookselling and e-readers, et etc. And the web services are so profitable they can run nearly every other biz at a huge loss if they want but the competition cannot in theirs so they have to be ruthless about size and scale. Like I said there will always be local stores in part because they take a long time to die but the direction is still more with less which has always been the case I guess just more acute and widespread now. Again I'm an idiot but that just seems right

[Johnny Lunchbucket]

Competition in most industries ain't what it used to be and in some, they barely exist.

In the auto industry it's certainly better now than in the days where your choice was something from one of the 'big three' plus the occasional
European boutique seller, mostly English or German. Now there are choices from all over Europe, then came Japan, and now multiple entries
from South Korea, before even getting into upstarts like Tesla.

I'm gonna push back at this for a minute, only because I sometimes fantasize about buying a new car and happen to live near several car dealerships, so I literally think about just walking in and buying a new Subaru every time I walk to the supermarket because I have to walk buy he dealer to get there--even though the act of walking to the supermarket should remind me--I don't even need my current car.

Anyway... cars. There's Tesla (lol-like I do anything to support that creep except maybe invest the $$ his cars cost into the company--that had been a good idea) and boutiquey, expensive-y imports and such (Porsche, Mercedes BMWs etc-- all way out of most people's price range but "small" market/luxury enough to survive today.

Then you've got GM and Ford and Chyrsler, like we always had. Does Crysler still exist? I think it does). Those brands have fewer "sub brands" today, which I think is meaningful when it comes to $$ choices and styles. Like, Mercury and Oldsmobile and Lincoln and Plymouth and Pontiac and Saturn and whatever they represented seem to have all vanished.

Then, the Big 3 Japan (Honda, Toyota, Nissan), today, like the Ford-GM-Chrysler of the East

Then, the new Korean guys (Hyundai, Kia), who in a way, serve a role the Japan brands used to serve, being cheaper and with better extras (used to be gas mileage, today for some reason it's warranty)

Then, VW. I think it's only European brand that's affordably "mainstream." (I'm not sure what Mini Cooper is, but maybe I should count them). And like Suburu, which pretty much only makes trucks that pretend they're cars today.

Pretty sure, all those brands--and the subbrands within- all existed when we ALSO had
Isuzu and Suzuki and Mitsubishi and Daewoo and Saab, just to name those I can recall.

And, pretty much anything a normal person can afford from the survivors, comes in so few styles
1. Trucks
2. Trucks Disguised As Cars
3. Boring Sedans
4. Boring Sedans Disguised As Jeeps

It seems to me, the automobile world is smaller and a lot less interesting than it used to be

[MFS62]

Tell me about it.
I learned to drive in my dad's Packard and owned a Buick, Plymouth and several models of cars that still exist but the models don't (Dodge Aspen, Ford Tauri (two Tauruses)).
Oh, and a Mazda, too (I think you missed that one).

Later

[Ceetar]

And, pretty much anything a normal person can afford from the survivors, comes in so few styles
1. Trucks
2. Trucks Disguised As Cars
3. Boring Sedans
4. Boring Sedans Disguised As Jeeps

It seems to me, the automobile world is smaller and a lot less interesting than it used to be

I dunno if it's less interesting, but I've never been a car guy. I think "Millennials" in general tend to be less "car people" than previous generations though, so maybe some of it's just that. I think a lot of those companies you mentioned are more consolidated than that too.

I think you're over simplifying though.

1. HUGE SUV/Minivans for lugging stuff. Not truck stuff, like soccer goals and 3 tubas and beach chairs.
2. Trucks. Both the more functional "I gotta lug all my construction stuff to the job site, haul a trailer, my boat, etc" and the less functional ones for people that think they want a truck but would actually be fine with a trunk.
3. mid-size/crossover type SUVs for families that want some of the ability of 1, but also want to be able to fit into the spaces at the grocery store.
4. Boring Sedans. Normal "car" sized cars. Ford Tauruses. etc.
5. Functional or Eco type cars. Your Priuses and Ford Leafs as well as your bargain Kias and what not. Get from point A to point B.
6. Specialty. Jeeps, Teslas, etc. These are the ones people buy because they want the _vehicle_ itself, not because of what they need it for.

I have a 3 and 4 from Mazda. Again, I'm not a car guy, but I don't think the cars I remember seeing in the 80s and 90s are cooler than they are today. Though maybe cars have just lost some of their sex appeal in general?

[Frayed Knot]

There are fewer 'sub brands' from the American big three because, over a couple of decades, they fell from 90+% of the U.S. market to well under half on account of being replaced by European & east Asian brands.
Part of that was bad business planning by the big three, part was Europe and east Asia being in shambles in mid-20th--century. The U.S. companies had very little competition for a time and acted as if it would stay like that forever.

Bottom line: there are more car companies from more different areas of the world available to the American consumer now than there were in past decades.
Not being a fan of what they're offering is a different kettle of fish but it's not from a lack of competition.

[Johnny Lunchbucket]

Well, yes and no. Because, and this gets back to the macro thing, at some level the reason there's so little choice of style is linked at some level to the industry's need to do anything they do "big," meaning, in this case, actually big but also, big in a sense that it's not finciancially or profitability feasible to be creative or innovative except if you're working on an 80,000 Tesla

[Ceetar]

also, and I don't know the exact deets here, but the parts that go _in_ the car aren't like, exclusive to Ford or anything. There are less engines, or less nav systems, etc than there are car companies.

[Frayed Knot]

But none of that is anything new.
GM sold cars under Cadillac, Buick, Oldsmobile, Pontiac, and Chevrolet (descending order of prestige). So there'd be essentially one chassis in each size they'd sell (compact, mid-size, etc) meaning that the only difference in the five cars sold under five names were the features in each. The basic bones were the same making it more like the illusion of difference.
Ditto Ford [Ford, Mercury, Lincoln]
and also Chrysler [Dodge = basic, Chrysler = luxury]

And cars made in this country during the '60s & '70s were shit ("Unsafe at any Speed" acc to Ralph Nadar) precisely because they had so little competition. By the late '50s they had essentially taken the design of cars away from the engineers and turned it over to the design dept for more bells & whistles [more chrome, bigger tail fins!!] and they stayed that way until imports from Japan, Sweden, & Germany (beyond just the VW 'Bug') started kicking the Big Three's ass. But as brutal as that was for Detroit, and for the union workers who thought they'd have jobs for life, it was the best thing to happen for the American consumers AND it forced the B3 to start making better cars.