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US Core inflation level lowest in 3 years

Discussion in 'Too Hot for Swamp Gas' started by citygator, Sep 29, 2023.

  1. l_boy

    l_boy 5500

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    So what is he trying to accomplish. He’s a well trained economist. He understands supply and demand. I guess it is all to try to advance a political narrative is not Democrats fault but is due to evil corporations (I am not saying per se it is democrats fault ). He is playing political games which he knows are bullshit.
     
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  2. BLING

    BLING GC Hall of Fame

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    There’s no doubt Reich is a political hack of an economist. As all the “economists” who are habitual TV talking heads tend to be. He’s almost like a left wing Art Laffer in terms of how predictable he is.

    But you ask “what is he trying to accomplish”. How about just dropping a data point? I think his analysis on this particular item is a bit lazy, but I don’t think it’s wrong to dig into the mechanics of inflation, especially in cases where “inflation” is actually just getting a greater GM% or for some brand name with perceived pricing power (rather than inflation in the raw materials, which is a truer economic inflation imo). Why is it wrong to call that out? Especially if there are bigger violators? At worst he’s just giving a data point. Maybe it’s ignored. Or maybe a few people dig into it and decide to go with a different brand? Informed decisions are all part of how a free market works! Right?

    As I said, this guys whole schtick is calling out corporations. Whether that’s CEO pay imbalance or now whatever he sees as “unjustified” inflation while picking apart some public financial statement. None of these things are currently tied to realistic policy “fixes”, but that doesn’t mean they shouldn’t be pointed out or discussed.
     
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  3. citygator

    citygator VIP Member

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    He is raising awareness that KC is profit taking from consumers because an informed consumer is a powerful force. It’s not illegal to make money. It’s also not illegal to tell consumers to go elsewhere.

    @BLING addresses some of your posts too.
     
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  4. dangolegators

    dangolegators GC Hall of Fame

    Apr 26, 2007
    He's pointing out that a corporation is taking advantage of its market power and a highly unelestic product. Why does that upset you so much?
     
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  5. l_boy

    l_boy 5500

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    What is the point of pointing out the obvious? The answer is he is advancing a political narrative, and given his profession and training he is being manipulative and even dishonest in doing so.

    While I find it annoying when city posts these things, he is not an economist so I can understand him wanting to buy the political narrative. Reich on the other hand should know better, at least if he wants to have credibility as an economist.
     
  6. dangolegators

    dangolegators GC Hall of Fame

    Apr 26, 2007
    Total condescending nonsense.
     
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  7. l_boy

    l_boy 5500

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    You asked my opinion and I stated it. Why do you feel the need to reply that way? I can only assume because you don’t have a substantive counter argument.

    Comparing the quarterly profit margin to the 3 month change in price is just silly on so many levels. I could say he is an idiot for doing so and has no understanding of how business or financial statements work, but I’m giving him the benefit of the doubt that he does understand it but is misrepresenting facts in order to advance a political narrative.
     
  8. docspor

    docspor GC Hall of Fame

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    increasing price does not affect demand. It affects quantity demanded.
     
  9. l_boy

    l_boy 5500

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    yes I understand that. Not a demand curve shift.
     
  10. l_boy

    l_boy 5500

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  11. citygator

    citygator VIP Member

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    Reich is a Dartmouth, Harvard educated Oxford Rhodes scholar

    Andrew Glover an economist at the Federal Reserve Bank of Kansas City who is an economics professor at UT - Austin and his phd from UMinn.

    Josh Bivens was an assistant professor of economics at Roosevelt University. He has a Ph.D. in economics from the New School for Social Research and a bachelor’s degree from the University of Maryland at College Park.

    Dino Palazzo is a chief economist with a Ph.D., Economics, New York University, M.Sc., Economics, Bocconi University, and a B.A., Economics, Bocconi University on the Fed Board

    Citygator has an advanced degree in linking supporting studies.

    You are an internet poster with an opinion who professor Doc had to correct your usage of demand and who has never posted a counter study on profits.

    Corporate Profits Contributed a Lot to Inflation in 2021 but Little in 2022—A Pattern Seen in Past Economic Recoveries - Federal Reserve Bank of Kansas City

    Corporate profits have contributed disproportionately to inflation. How should policymakers respond?

    Corporate Profits in the aftermath of COVID-19
     
    Last edited: Nov 20, 2023
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  12. duggers_dad

    duggers_dad GC Hall of Fame

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    As of June, the bottom 80% of households by income, when adjusted for inflation, had lower bank deposits and other liquid assets compared to their status in March 2020. The decline marks a significant shift from the initial phases of the pandemic, where various factors, including government financial support and restricted spending opportunities during lockdowns, led to an accumulation of excess savings.


    The Bottom 80% Has Gotten Significantly Poorer Since the Pandemic Began - LewRockwell
     
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  13. citygator

    citygator VIP Member

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    That is because the top has all the money. Maybe we need some redistribution policies to keep the wealthy from accumulating everything? The median saving account is $5,300… and if you are under 50 that number is like $3,500. Saying that very low number is lower by $250 isn’t that telling. Debt service as a percent of disposable income is though.

    Richest 20% of Americans Still Have Excess Pandemic Savings

    Household Debt Service Payments as a Percent of Disposable Personal Income
     
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  14. tarponbro

    tarponbro All American

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    Did you think prices would go down once corporate America had any kind of excuse to justify raising prices to consumers? Remember this, they have duties to maximize profits for their shareholders.
     
  15. l_boy

    l_boy 5500

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    sigh.

    I know full well that Reich has an Ivy League education. That’s the whole point. He knows that his posts are disingenuous. Corporate profits are not the causes of inflation, they are the result. Ultimately prices will seek equilibrium - and are affected by the changing supply curve (Covid issues), changing demand curve (excess money supply from stimulus spending ) and the elasticity of demand, among other things.

    Have you ever looked at the price of gas? It jumps around a lot based on those things. The cost of the historical inventory is not changing that much day to day. The gas in the underground tanks didn’t just get 20 cents a gallon more expensive from one day to the next.

    Also inventory is costed in historical costs of manufacturing where are price is based upon current supply and demand.

    Reich and the other star studded economists surely understand this but ignore it because they are pushing a political agenda. I don’t know what your excuse is.
     
  16. citygator

    citygator VIP Member

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    Funny. I offer economists studies that you have yet to dispute and instead you offer more I_boy opinions. I like your googled basics of demand though. ha ha. Good one.

    If you would have googled a little deeper you'd find that in the short run price elasticity is much lower than the long run where the econ 101 basics you googled work - which are happening. In the long run you are seeing prices moderate and even come down as those long run impacts on quantity from price increases are starting to take hold. But in the short run companies grabbed the upside of short term price increases and a smaller than normal impact to quantity creating profit. I'd argue that also present in the covid impacted market was an unspoken collusion between competitors on pricing which restricted the consumers substitution options but I havent seen anything on that. I even linked a study showing that this is observable in other recoveries. But.. if I-boy says its all a lie, i guess I'll have to weigh that with all the information.
     
  17. l_boy

    l_boy 5500

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    I don’t profess to be an economist but I had several classes decades ago and what I believe to be a decent understanding of the subject, as well as working decades in corporate American in finance and accounting. Reich and company are clearly advocating an agenda, and he even advocated for price controls which have been proven not to work. You could find plenty of other economists who would not frame it the way they have. Larry Summers for example.

    I’ve tried at great length to explain the nuance here and why what they are presenting is not a complete picture but I understand from your perspective the ideological attraction of thinking that evil corporations are causing inflation is too great to pass on.
     
  18. danmanne65

    danmanne65 GC Hall of Fame

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    Walmart said they are expecting lower prices almost across the board. Maybe as soon as Christmas.
     
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  19. Gatoragman

    Gatoragman GC Hall of Fame

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    You two are funny!!!!
    You quote some renounced economists and Iboy quotes, not why they are wrong but maybe their intentions and you follow with a crack on his econ 101. Then turn right around make a unfounded statement about your belief and even follow with you haven't seen any evidence of it.
     
  20. l_boy

    l_boy 5500

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    Here are a bunch of different sources that profess varying degrees of skepticism of the whole inflation = corporate greed narrative, including Larry Summers, Robert Shiller, the economist, and to a partial degree Paul Krugman.

    Are greedy corporations causing inflation?



    Opinion | Inflation Is Not a Simple Story About Greedy Corporations (Published 2022)



    Economist Jason Furman Explains How Inflation Snuck Up on Us and What's Ahead in 2022

    Progressives blame ‘corporate greed’ for inflation. Does that explanation hold up?

    Krugman holds a view somewhere in the middle



     
    Last edited: Nov 20, 2023