Inflation is one thing, some items spiking into the stratosphere is entirely different.
One is caused by government, the other by citizens via supply/demand.
One is caused by government, the other by citizens via supply/demand.
leolab
Member
What???
Are you saying inflation is caused by government?
Inflation is caused by increased cost of producing goods or increased demand for goods enabling manufacturers to increase the price...government does NOT cause inflation, government can institute policies to manage inflation. Inflation is necessary and not bad unless it becomes out of control, it reflects an increase in salaries and potentially an increase in demand, both of which are currently in effect.
Not me, but Nobel prize winners in economics:
"Too much government spending, and too much government creation of money and nothing else." - Milton Friedman
farlymac
PF McFarland
I'm pretty sure Mr. Friedman didn't give that speech for free, or for a small speaker fee. 💲 There is some truth to it, but it's not the only truth. It's more like the government can cause inflation, but it's likely done for a good reason. Could the inflation that would be caused by all our oil imports being cut-off be blamed on the government? I think not.
PF
Coldkennels
Barnack-toting Brit.
Friedman was an ideological hack whose policies can be directly linked to a huge rise in poverty and wealth inequality across the globe.
Naomi Klein's Shock Doctrine - whether in book or documentary form - should be required reading/viewing for anyone espousing Friedman's ideas:
Also, studies of the current inflation show that huge amounts of corporate profiteering are largely to blame; I think it's responsible for something like 40% of inflation at the mo. This is a direct result of the sort of "free market" laissez-faire economics Friedman was such a fan of. Meanwhile, the economic policies of Keynes which were largely replaced by Friedman's devout followers involved a lot of Government control and stimulus - and this resulted in the longest period of stable and balanced economic growth that Capitalism has ever known.
wlewisiii
Just another hotel clerk
Most current inflation is corporate greed and nothing more.
Look for an example at corn flakes. Recent price increases have gone far beyond the cost increase of raw materials and/or transport of said materials. However they are right in line with the excessive profits of the companies making the cereals and the CEO's paychecks.
I could go into much more about Mr. Friedman but I don't think it's appropriate here.
Look for an example at corn flakes. Recent price increases have gone far beyond the cost increase of raw materials and/or transport of said materials. However they are right in line with the excessive profits of the companies making the cereals and the CEO's paychecks.
I could go into much more about Mr. Friedman but I don't think it's appropriate here.
Tim Murphy
Well-known
Dear wlewisiii,
Never mind corn flakes. I want to know why a 20% smaller carton of orange juice costs 100% more than it did 2 years, when it was still full sized? Orange juice came in half gallons not too long ago, now they are the same cartons and labels but 52 ounces.
I can accept paying more for something, but I have a hard time with the current double-whammy we are dealing with. I'm waiting with dread for the day when a carton of a dozen eggs only comes with 9 or 10 in it?
Getting back to cameras, I bought a Nikkormat FTN from Shopgoodwill not too long ago advertised as working. It cost me $ 60.00 and arrived in working condition, but with an inoperable light meter. Rather than quibble about the description I took solace in the immaculate 24mm f2.8 AIs lens with caps and hood that were attached to the junk camera.
That made the smaller OJ containers easier to swallow.
Regards,
Tim Murphy
Harrisburg PA
Certainly some price increases are not due to government, such as the common every day M6 that was $800-1000 in about 2010 and now is $2500. That is due to increased demand and fixed (or even slightly decreasing) supply. (Although no doubt some of the increase is due to less valuable currency.) That might be described as an ‘inflated’ price but it’s not ‘inflation.’
But when commodities and staples like bread and eggs are ~20-50% higher than four years ago (I.e., pre-pandemic) it’s not due to increased demand.
The us government is spending us into oblivion, printing more money makes existing money less valuable. Debt is increasing at an astonishing rate: $1T every 100 days:
www.cnbc.com
Things that can’t go on forever, won’t. Paraphrasing Herb Stein.
The commodities are really of fixed value, it’s the currency that is less valuable so it takes more currency to purchase them.
But when commodities and staples like bread and eggs are ~20-50% higher than four years ago (I.e., pre-pandemic) it’s not due to increased demand.
The us government is spending us into oblivion, printing more money makes existing money less valuable. Debt is increasing at an astonishing rate: $1T every 100 days:
The U.S. national debt is rising by $1 trillion about every 100 days
The nation's debt now stands at nearly $34.4 billion.
www.cnbc.com
Things that can’t go on forever, won’t. Paraphrasing Herb Stein.
The commodities are really of fixed value, it’s the currency that is less valuable so it takes more currency to purchase them.
Out to Lunch
Menteur
Aha, this probably explains why CEO pay in the USA increased by 1,322% in the period 1978-2020. What is difficult to understand, however, is that in 2020, they earned roughly 351 times more than an average worker. On a related matter, Friedman got a Nobel in Economics, as did Henry Kissinger -for Peace, which is equally hilarious. Cheers, OtL
Don’t really want to take this off-topic, but if we are to do so, at least post legitimate counter points that have some bearing on the discussion rather than simply call Nobel prize winners ‘hacks’ among other disparaging comments.
Coldkennels
Barnack-toting Brit.
Didn't Obama also get a Nobel Peace Prize despite basically doing nothing to earn it?
I believe I didn't just call him a hack - I also pointed out that his ideas are directly responsible for a wild surge in income inequality and mass poverty. Considering the inflation issue is largely to do with corporate greed (as also pointed out by OtL) - something enabled in part, if not in large, by economic policies Friedman advocated for, I think it's fair to criticise Friedman in this context.
Mos6502
Well-known
It's called price gouging.
"Cal-Maine Foods, the largest egg producer in the United States, reported revenue doubled and profit surged 718% last quarter because of sharply higher egg prices."
I suppose the government should go back to the days of price controls?
Keep in mind the egg industry has a long history of price fixing, and only a year ago were legally compelled to pay tens of millions of dollars in fines for doing so.
chuckroast
Established
No, it's called "government deficit spending leading to inflation". Once prices are inflated, there is no incentive for producers to reduce prices as inflation retreats unless consumers stop buying. You cannot have price stability when the largest economy in the world owes $30T in debt. That's also why the Clowns In Charge like going to war - it indirectly funds their vote buying with tax money.
Unless someone is actually using force or fraud, there is no such thing as "price gouging". Things are worth exactly (and only) what people will pay from (unless, like I said, they have a gun to their head or someone is cheating them).
Dogman
Mentor
OMG! Remember it was wage and price controls under Carter. The newspaper I worked for raised the price of the Sunday paper 100% but froze all the employees pay. Out of patriotism I suppose.
Anyway, I eagerly await the resolution of the world's financial condition. I have nothing to add. I understand nothing about the subject. Never have. I changed my major in college to avoid taking another economics class that I would surely fail again.
chuckroast
Established
This is a distraction peddled by the various Cause Pimps in the media and public. If you take the entirely of CEO compensation and add it up, it's not even a tiny ripple in the economy. (And if the shareholders don't like the CEO's work, they can fire him/her.)
Go look at public sector union costs.
Go look at the government net debt and rate at which it is growing.
Go look at the cost of neverending wars.
It's not CEO greed that's driving this. It is the public greed for "free" stuff to be paid for by other taxpayers. The various political swine don't have the guts to raise taxes on the people who want the "free" stuff, so they just print more money. It's all coming home to roost.
In case you think this is partisan, it's not.
GW Bush doubled the national debt in his 8 years - that is, he indebted the nation an incremental amount greater than all his predecessors combined.
Obama did the same thing - doubled the debt from what Bush left behind.
Trump was on the same pace. The only thing that stopped him from doubling the Obama debt was that he didn't get reelected.
Biden is also on exactly the same track, and possibly worse.
chuckroast
Established
Actually, the Economic Stabilization Act of 1970 was at the hands of Nixon. As incompetent as Carter was, we cannot blame this one on him. (And I voted for Carter, to my everlasting embarrassment.)
Out to Lunch
Menteur
Hmmm, you mean, like free or affordable healthcare?
Dogman
Mentor
Nixon ended the mandatory wage and price controls. But Carter was president at the time the voluntary wage and price controls were put into effect. No matter. I liked Carter even with his faults...never liked Nixon. I'll blame Nixon gladly.
chuckroast
Established
it's not "free'" or "affordable". It's a ponzi scheme intended to inject useless bureacrats into the medical system. More importantly, it increases prices.
I was born in a country that claims to have this and its a scam. US healthcare actually worked pretty well until the government decided to "help" - and prices skyrocketed. Same thing with college tuition. Adding political sewage to a medical system is not helpful.
There is no scheme of taking money from one person under threat and giving it to another that ever works, and there never has been one.
raydm6
Yay! Cameras! 🙈🙉🙊┌( ಠ_ಠ)┘ [◉"]
Archie Bunker Inflation