Rep. AOC Exposes Price Gouging underlying 'Inflation'

[MiloMorai]

 

[Ssnake]

Does the guy being "questioned" have any other job than to confirm whatever she's saying?

This isn't questioning, a dialogue, an inquiry. It's a scripted dialog.

 

So, other than "expert" confirmation of leading questions and generalizations (four companies have a combined market share of 53%, make that 60%, make that "there's no competition"; same with Walmart and Amazon, together at 24% of retail volume, again "there's no competition").

Is there an actual point in all this drivel that's worth watching the remaining seven minutes?

[rmgill]

AOC and confirmation bias? Say it ain't so. 

[DKTanker]

Only commenting on the topic headline.  Only economic idiots would put forward the absurd argument that "price gouging" causes inflation.  This without getting into the discussion about "price gouging" being the most rational method of distributing scarce commodities.

[Wobbly Head]

Price gouging is a symptom of inflation not a root cause. Given how the politicians don't want the people to discuss what is really causing inflation, bad government policy. They need a scapegoat that they think people will believe. The issue is now how dumb they think you are with the excuses they are coming up with.

[Rick]

A.O.C. says more about the voters who elected her. And their low economic I.Q.

[DB]

As with most economic things, the causes and effects ratchet each other so it's not really appropriate to say "x started y" without noting this positive feedback loop. As DKT hinted, it's generally self-correcting as the people who are hiking the prices generally can't control the external inputs that alleviate the underlying supply to demand imbalance - see oil prices and how fracking and shale oil extraction become competitive as the price increases and investment ultimately drives the extraction costs down.

Until the in-demand resource actually runs out, of course.

[Stargrunt6]

He made sure to refer to her title,  "Rep." Meanwhile, we all refer to every pol by their last name or initials.   That hagiography is showing ...

[Skywalkre]

Not the reason behind inflation... but certainly one of many reasons.

For those who won't bother to watch it...

- Several CxOs have actually come out and said in various earnings calls that they use inflation as an excuse to raise prices as much as possible since consumers expect it.
- As such, profits from many companies are higher than the added expenses due to all the other reasons (supply side and payroll for example) causing inflation.
- This one surprised me - so many sectors in the economy are controlled by a small number of mega-corporations.  It seems pretty clear these corporations are working together to fix prices.  Sounds like something the Fed should go after... but good luck with that happening.

Edited April 20, 2022 by Skywalkre

[rmgill]

 

43 minutes ago, Skywalkre said:

Not the reason behind inflation... but certainly one of many reasons.

- Several CxOs have actually come out and said in various earnings calls that they use inflation as an excuse to raise prices as much as possible since consumers expect it.

You know what one of the factors of price changes is that they reflect not just what's being forced but what's also projected. Futures markets reflect that. This cuts both ways. About 10 years ago Flying J had to go into one of the Bankruptcy Chapters due to having bought diesel at a larger futures price. They were predicting higher prices so they bought at the available high price in bulk. The prices went the other way, they were left holding fuel they could not afford to sell at the price and had to take a VERY large bath on it. 

43 minutes ago, Skywalkre said:

- As such, profits from many companies are higher than the added expenses due to all the other reasons (supply side and payroll for example) causing inflation.

They're going to lag pay behind the inflationary rate. This is to be expected. 

43 minutes ago, Skywalkre said:

- This one surprised me - so many sectors in the economy are controlled by a small number of mega-corporations.  It seems pretty clear these corporations are working together to fix prices.  Sounds like something the Fed should go after... but good luck with that happening.

If there's specific examples of price fixing, there's  ways to check. However this is FAR more speculative than the folks who you ridicule endlessly who pointed to things that smelled of voter fraud. It'd be nice if you had some more evidence than just Prices are high and PBS's accusations. 

 

[DKTanker]

5 minutes ago, Skywalkre said:

Not the reason behind inflation... but certainly one of many reasons.

PBS?  You're citing Leftist propaganda?  If corporations are the reason for inflation...well, that tells people your level of economic acumen.  The raising of prices isn't the cause of inflation, it is the response to inflation.  And inflation is....too much money chasing too few goods.

[rmgill]

Naah, it's that the evil corporations are raising prices in anticipation of the effects of inflation. That's evil. Just like it's evil to buy supplies in anticipation of a problem like a shortage of food or anything else. But somehow I doubt that PBS will actually object to the donors, even corporations, who pay them money. 

This comment was brought to you by the letter F and the number 0. 

[Ssnake]

As a contributing factor it can't be dismissed. The point though is, trying to run a profit is not only "not evil", it's a prerequisite in a market-oriented economy. And I would certainly expect from any half-way competent company to raise prices if they are in a market position to do so. That "inflation is coming" is a great excuse to hide behind should surprise exactly nobody, just like unions will insist on substantially higher pay ... because, inflation.

And that, then, is what makes inflation and why it's hard for the central banks to control it, because if half of the inflation game is that if people expect it to happen, it will happen, and both the Fed and ECB have had the the quantitative easing pedal firmly floored for way too long to let people believe that they will or can squash inflation quickly. Ergo, it happens and will continue to happen.

[rmgill]

It's a market force that people will bear. Futures prices are reflected in that. That's the human nature. I think it would be argued that trying to control human nature through laws and legal penalties is going to be what is evil itself. Mind you some of the market forces will ALSO be to restrain your own prices so as to garner the most customers for the amount of goods you have. So just raising prices because you're evil and twirl your mustache ends is just silly. I've clearly seen within the same area different prices for fuel among different gas stations with a spread of ¢40. This was in central Auburn vs the commercial district over between Opelika and Auburn. There's clearly an incentive in the area with lower prices to have lower prices and not just raise them to match what the neighboring area over in Opelika did.

Machine learning/AI is also going to be setting these prices as well at larger corporate levels as the computers will be trying to analyze the market forces and price them. I know this is happening in at least one part of the Hotel industry. So, this can easily be a matter of coincidental behaviors that SEEM coordinated but it is in fact several sets of computers and analytics wonks coming to the same conclusion across several corporations. For a Hotel Chain, to use a specific example, they can track what their prices should be to maximize their room use AND income for the rooms. During a big high demand event, like say Dragon Con, they are of course going to be encouraged to maximise their room rates up just short of pissing off regular customers. This is to be expected and it's not 'evil'. 

[Skywalkre]

On 4/19/2022 at 6:13 PM, rmgill said:

You know what one of the factors of price changes is that they reflect not just what's being forced but what's also projected. Futures markets reflect that.

Funny... you think the CxOs in that vid I linked would have just said this if this was the case rather than going with the cover that they're simply raising prices because they can get away with it...

[Skywalkre]

On 4/19/2022 at 6:25 PM, DKTanker said:

PBS?  You're citing Leftist propaganda?  If corporations are the reason for inflation...well, that tells people your level of economic acumen.  The raising of prices isn't the cause of inflation, it is the response to inflation.  And inflation is....too much money chasing too few goods.

My level of economic acumen is way above your level of reading comprehension... it was pretty clear in my post and in the vid I linked (the NewsHour, either in that same broadcast or the day before, had a lengthy piece explaining a lot of the other common reasons for inflation) that this wasn't the reason but one of many for prices going up.

[Skywalkre]

On 4/19/2022 at 11:12 PM, Ssnake said:

As a contributing factor it can't be dismissed. The point though is, trying to run a profit is not only "not evil", it's a prerequisite in a market-oriented economy. And I would certainly expect from any half-way competent company to raise prices if they are in a market position to do so. That "inflation is coming" is a great excuse to hide behind should surprise exactly nobody, just like unions will insist on substantially higher pay ... because, inflation.

And that, then, is what makes inflation and why it's hard for the central banks to control it, because if half of the inflation game is that if people expect it to happen, it will happen, and both the Fed and ECB have had the the quantitative easing pedal firmly floored for way too long to let people believe that they will or can squash inflation quickly. Ergo, it happens and will continue to happen.

The thing that was concerning from that vid was this notion that many elements of the economy have shrunk to just a small number of corporations and the notion that they may be controlling prices together.  I'm reminded of discussion on here a few years ago regarding whether or not Trump's efforts to reign in regulations would help businesses.  I found the blog of a Libertarian economist who had made several posts stating that the research was showing regulations were largely irrelevant to new/small businesses succeeding... but rather the real issue was this same one - too many areas of the economy had consolidated into just a few companies controlling said area and these companies stymied competition.  It's kind of basic economics... if you have a product and all your competition has raised prices but you don't have to... wouldn't you keep them low to gain market share?

[rmgill]

7 hours ago, Skywalkre said:

Funny... you think the CxOs in that vid I linked would have just said this if this was the case rather than going with the cover that they're simply raising prices because they can get away with it...

To some degree they can. If you could raise your pay rate because your employer would pay it would you or would you stand pat at the lower price you're at now for your labor? 

First off define what price gouging actually is. Because it's a loaded term in fact. Like Disinformation or what not. Prices follow supply and demand. High demand/Low supply you'll see prices go up. Inflation is such a spiral as well. 

Lets look at other examples. 
Do universities price gouge because they can charge what they do and do so in response to the market forces? 
 

Edited May 4, 2022 by rmgill

[Rick]

Watch the Phil Donahue interview of Milton Friedman on greed. I don't follow social media, but I believe Thomas Sowell has accurate information on inflation vs P.B.S.

From folks who actually understand economics:

https://www.heritage.org/markets-and-finance/report/inflation-policymakers-should-stop-driving-it-and-start-fighting-it
 

[Tim the Tank Nut]

In the last few weeks the slowdown has hit us.  Prices reached the tipping point and sales are reflecting that.

Same-same in furniture sales and heating and air although heating and air may be supply difficulties as much as pricing.  I don't think they crash is going to wait til November.

What the guy in Twister said: "it's coming now"

[Skywalkre]

On 5/3/2022 at 10:37 PM, rmgill said:

To some degree they can. If you could raise your pay rate because your employer would pay it would you or would you stand pat at the lower price you're at now for your labor? 

First off define what price gouging actually is. Because it's a loaded term in fact. Like Disinformation or what not. Prices follow supply and demand. High demand/Low supply you'll see prices go up. Inflation is such a spiral as well. 

Lets look at other examples. 
Do universities price gouge because they can charge what they do and do so in response to the market forces? 
 

You wrote all of that and still didn't address the point I made.  😆

[Skywalkre]

On 5/4/2022 at 1:59 AM, Rick said:

Watch the Phil Donahue interview of Milton Friedman on greed. I don't follow social media, but I believe Thomas Sowell has accurate information on inflation vs P.B.S.

Curious... did you watch the vid I linked?  It's interesting to see folks immediately label PBS as 'propaganda' and look at my one post as the only thing PBS is stating as the reason for inflation despite the fact the video does no such thing nor do I state that.  The NewsHour has had several pieces over the last few weeks covering inflation which most of you wouldn't have any disagreements with... if you actually watched it.

[MiloMorai]

19 minutes ago, Skywalkre said:

You wrote all of that and still didn't address the point I made.  😆

He rarely does, usually going off on some wild tangent strawman.

[rmgill]

6 hours ago, Skywalkre said:

You wrote all of that and still didn't address the point I made.  😆

You don't think that PBS might have taken just what they wanted for justification in the news story? You think PBS News Hour is concerned with fairness and basic concepts of economics? The ONLY bit of economics they care about is that which gets their donors more money for the annual PBS Beg-A-Thons. 

Except I did address it, but it sailed over your head. 

Ok, great they got some CEOs saying, yes they can raise prices just because they can. WELCOME TO SUPPLY AND DEMAND!

If you could raise the pay with your boss because you could would you? If you could do so MORE with inflation, would you? Would you turn down a pay rate commensurate with the inflationary rate? 

Edited May 6, 2022 by rmgill

[Rick]

9 hours ago, Skywalkre said:

Curious... did you watch the vid I linked?  It's interesting to see folks immediately label PBS as 'propaganda' and look at my one post as the only thing PBS is stating as the reason for inflation despite the fact the video does no such thing nor do I state that.  The NewsHour has had several pieces over the last few weeks covering inflation which most of you wouldn't have any disagreements with... if you actually watched it.

Yes I did. Did you read the information I provided by people who understand economics?

Here is another one relating to the P.B.S. story. 

https://www.forbes.com/sites/paulroderickgregory/2013/09/10/robert-reichs-f-minus-in-economics-false-facts-false-theories/?sh=2a914aa4507a