Profit = Sale Price – Costs
We all know that, so when the claim is made that the extreme price increases we’ve seen over the past decade are due to organic inflation (production costs rising), that would mean that profits must have declined or even been eliminated to necessitate such an increase.
However, all through the past decade, the average profit for US firms have been high – some years record breaking. The average net profit for US firms is around 10%, when it was closer to 6% about 50 years ago. It’s only been trending up.
If profits have almost doubled, it’s just a lie that this is organic inflation. It’s merely the lazy wealthy class trying to leech off us without working and solely off passive income.
Who do people blindly accept price increases in the US by saying “well, costs are going up, it’s inflation,” when profits for US firms are far higher now than the 50 yr avg? It’s greed, not inflation.
byu/Niceotropic ineconomy
Posted by Niceotropic
10 Comments
Is there anything that counters greed? Or do people have a right to be greedy with impunity?
Sales price = what you can get based on supply and demand. Good luck trying to change things feeble human.
Why does it have to be one or the other, when it can be both? The question would be, which portion is assignable to corporate greed and which proportion is due to government fiscal mismanagement?
Maybe the answer is, it’s the government’s fault, because they work for the “lazy wealthy class”. And so, then, the question is why, and maybe because if we’re confined to two choices, we’re stuck with a false choice.
Greedflation. Plenty of people “don’t accept” it.
[Chicken or the egg](https://www.kansascityfed.org/research/economic-review/how-much-have-record-corporate-profits-contributed-to-recent-inflation/)
TLDR: FED research in 2021 shows corporate price hikes leading to greater profit contributed to more than 50% of inflation in that year
People blindly accept because it’s a factor. Utilizing inflation as a means to raise prices well above rates because people need to buy certain products (groceries for example) only causes you to further experience decreasing purchasing power of the dollar you earn.
A change in the average net profit margin doesn’t necessarily imply anything about greed. Different industries have different profit margins, and the industries with higher margins (tech, financial services, pharmaceuticals) make up a higher portion of the US economy today than they did 50 years ago, when low margin manufacturing made up a much bigger share of the economy.
Yet, I always see cars manufactured in 2005-2009 idling in the McDonald’s drive through line. Americans have no sense or spine. Keep paying high prices for utter shit, the prices will remain high for utter shit.
There is no such thing as organic inflation. Monetary inflation has been a congressional mandate since central banking. People who blindly accept it have been led to believe it is organic. The others blame the political party of their choice or corporations when in reality it is all three. So what do we do, sue the federal government and the oligarchs who own it? Stop buying necessities? Break out the guillotines? Live a life of quiet desperation?
People accept price increases as they believe we have well functioning and efficient free markets
So if the price of groceries went up in the US it’s probably cause they went up everywhere and competition would bring it down if it could
People do not understand Oligopoly power and other barriers that can distort the market to be inefficient
Most people are also trained to see government regulation and intervention as bad so oddly enough Govt regulation for consumer protection I’d argue are weaker than ever globally while at the same time govt regulations for corporate protection are higher.
It’s the only game in town