This article is part of TPM Cafe, TPM’s home for opinion and news analysis. It first appeared on our publisher Joe Ragazzo’s newsletter, Rhapsody. There’s a term floating around called “greedflation,” which refers to the possibility that corporations may be using the…
Thank you for this. I have long thought that it was obvious – rational, if you will – that sellers would take advantage of rising costs to increase margins. I did it myself when I was in retail: If I had an item that I expected a margin of 20% on and my cost went up by four cents, did I raise the price by five cents? No, I probably raised it ten cents, to keep the last number a 9. So why wouldn’t that be happening across other sectors? Of course it would. I just didn’t have a word for it, and now I do: greedflation.
There are several clips of them admitting to using inflation to raise prices to make large profits, then as discussed the numbers back up whats happening. The media over hyped inflation which allowed for corporations to raise prices.
My then 20 YO nephew used to claim if wages increased the price of things would go up dramatically to offset the difference, and I disagreed with him.
In retrospect he was correct.
Let’s not forget that inflation gives the conservative money men, and their media mouthpieces, a cudgel with which to beat up on Biden with the intent of killing his prospects of a 2nd term. The end result, of course, is a Rethuglican administration that benefits them.
I am generally in agreement with this well written opinion. However, I would like to make 3 points: 1. Inflation is a really, really tricky subject! Decades ago I got raked over the coals by the company economist over a report on inflation I had been asked to write as a public affairs analyst. I did my best, but I had to admit that the economist was right that I didn’t truly understand the causes. 2. Inflation profiteering, while perhaps not coordinated, is no doubt occurring. 3. Lowering wages may longer be the main objective of modern capitalists. Workforces in major companies are being streamlined to a degree that I suspect that holding down wages is no longer the main goal of the management class. What they seem to want, more than anything else, is increased control over their workers.
The oil companies have been doing this since forever so why wouldn’t everybody else jump on the gravy train.
And they get government subsidies to boot.
We read extracts of Wealth of Nations in high school, but the words (inconveniency?) and the reference to parchment, made it seem like something from another planet. In contrast, learning about stuff like “externalities” in the Coase section was useful in understanding much of the Kern country economy.
Okay, so rising prices are “natural” but rising wages are the cause of bad, bad, very bad inflation. Similarly, an increase in the unemployment rate is good for the stock market and by extension, good for business… because potential workers have less leverage to demand higher wages.
Look at the rising profits and see who benefits.
It boils down to “market power”, who has it and who doesn’t. Individual end consumers don’t have much —there are no “buying consortiums” making deals with mass sellers (except maybe food co-ops). And those with more power can take more advantage of any and all “crises” — covid, inflation — to extract even more than usual. Especially when media (a mass seller itself) goes along by hyping crises.
Follow the Money.
Anyone who still believes in the “rational market” and has been conscious for a few short years is ignorant, willfully being probable.
The almost entire financial and corporate industry structure is based on smash and grab, good times and bad. Sustainability is a cute buzzword without meaning nearly everywhere. White collar crime has the golden rule (he who has the gold makes the rules) to help them skate.
The pundits are on corporate media telling us it all works out. Look at the “mild” concessions from the debt limit negotiations to see once again the price the 90-99% have to pay to avert another fictional disaster to further fatten the MOTU’s pockets.
To be crystal clear, the problem is economics itself, the problem is when it crystallizes into dogma, which can then be used to uphold exploitative systems of labor.
I think there’s a “not” missing, it makes more sense as “the problem is not economics itself.”
Capitalism Won: why wonder? We have returned to the days before unions.
And if those same companies control/own the media?
Yeah, thanks for pointing out. Fixed that.
Eugenics. It has always undergirded modern capitalist society. John D. Rockefeller and Henry Ford were very vocal in their support of this erroneous and immoral theory. Not much has changed in the 21st century. “Diversity, Equity and Inclusion” is used as a branding tool while the principles of modern capitalism remain buttressed by a belief that some humans are less worthy of life. The pandemic exposed how society normalizes eugenics, normalizing greed-flation feels pretty inevitable.
Every three years our UFCW local would negotiate a new contract. The old contract would expire in May and we would wait all summer for a new one. After much drama and media attention the contract would be settled around October between back to school and Holoween. There would be a big sales weekend (where it was usually slow business) just before the contract was miraculously concluded.
The whole kerfuffle was scripted.
This budget kerfuffle was also scripted.
Everyone wants to blame the President (or congratulate the President, depending on the party) for the excessive rise in oil prices.
No one wants to look at the profits gained by the oil companies. Rarely do they ever sustain losses.
Why are profit margins rising more than wages? Because people at companies who decide what things cost are ensuring that is the case.
Everything in one neat package.