Supply chains, worker wages and the price of energy has been blamed for the current bout of high inflation. But central bankers around the world are starting to clue in to something consumers have been aware of for a while — corporations just aren’t afraid to raise their prices anymore.
There is a word for it in economic and business circles, “consumer surplus”. When you have money that you could be willing, or forced, to part with business assholes call it comsumer surplus, like you have surplus money that belongs to them actually if only they could get you to give it to them.
Take that idea and apply it to consumer necessities, like housing or food, and you can see where the squeeze is coming from. The various businesses all at once have decided your money is their money and oligopolistic practices, and weak/ or difficult to deploy regulations let them get away with it.
We should apply it the other way: Tax Surplus. There’s a lot of valuation in companies in billionaires that could be taxed better.
I agree. Another economic concept is tax incidence, that is the term for who ultimately pays taxes. Conservatives like to pretend that all tax is paid by consumers, but this is a naive/trivial viewpoint because companies cannot set infinitely high prices, so tax may come from profit.
It’s true that increased taxes don’t always see the full incidence land on profit, but alot of it does because pockets aren’t endlessly deep so prices can’t be raised to offset all tax. I believe in using windfall taxes to prevent profit driven inflation.
They also like to pretend they care about balanced budgets and monetary supply. Guess what? Taxes both balance the budget AND they evaporate money from circulation, reducing actual inflation. They ignore that because taxes are the ONLY lever that is progressive; where we can spread the pain equitably, asking the wealthy individuals and corporations to pay the largest share. That’s a terrible idea /s
Ah yes, “we” let them and not regulators failing to regulated them.
(food companies all raise prices.)
“Well I’m not letting them get away with that, I’ll starve to death, that will teach them!”
(Electric companies raise prices)
“Screw you too! I’ll sit in the heat and darkness!”
(Gas companies raise prices)
“Ha! I’m already used to this from the last 2, I’ll just walk 4 hours to work and live with no heat in the northeast us! No prob!”
Yeah… We “let” this happen… Ffs…
To be fair I skimmed the article and I don’t see the: “we let them sentiment in it” … I think that may be a bit of editorial liberty.
The articles does seem to empathize with us:
Advice for consumers for much of the past year has boiled down to either trying to cut back on expenses, or increasing income, but Stanford says it’s misleading to put the onus on consumers to solve inflation, since they’re the ones bearing the disproportionate burden of it.
You realize we used to own most of those, right? And the public voted for politicians who sold them for next to nothing?
Through cheating and lying. Gerrymandering.
(food companies all raise prices.)
And then some smaller company goes, “wait a sec, you’re telling me I can increase my market share a bunch if I don’t raise prices? Cool, let’s do that. I can make a bunch of money on volume.” And then some other company does the same thing, and so on until they all do. UNLESS an input into that industry has gone up in price and they all have to raise just to stay afloat. Then we’re back to talking about inflation, supply chains, and money supply instead of companies just choosing to raise prices due to greed or something.
UNLESS the smaller set of players and lack of enforcement of toothless regulation allows them or even incentivizes them to engage in collusion and price fixing.
This is just the neoliberal way, we’re decades deep into the idea that all solutions to any problem must involve directing public funds into private hands, usually those of the wealthy.
At this point, the concept of allowing public-sector employees to use publicly-owned equipment to take publicly-owned materials and provide necessary services for the public who vote for and fund the government is tantamount to heresy. In their minds, money should only go one way, from the government, to a select few private hands. We have at least three generations of bureaucrats and politicians whose minds are so warped by this practice that they cannot conceive of any way to help people or really implement any policy without giving some private business a chance to run a profit off of it.
Think about it, try to come up with anything government has directly built since 1990. Not talking about subcontracted, or with “funding provided as a private/public partnership”, that the government has directly built and run. Used to be that the government would actually employ people to do things like GO Transit, or Ontario Place, or the LCBO, but that era is long, long passed.
Now do the reverse, think about all the things that used to be publicly owned but have now been given away to some billionaire. Air Canada, Petro Canada, Potash Corp, Highway 407, Telus, Hydro One. The list is huge, and a lot of these are very profitable. Imagine if we still owned them? Imagine what we could do re: climate change if we still owned Petro Canada and Hydro One? Or what our internet services might look like if we owned Telus? We gave away billions of dollars of value and significant strategic assets, mortgaging our future.
In addition to the direct costs of all the money that could have been put back into the budget (or the cost savings provided to the average taxpayer by not requiring that these companies take massive profit margins), we are also losing government capabilities: think about all the people, all the equipment, all the buildings and services that used to be directly delivered but now are parasitized by rent-seeking private companies looking to extract as much value as they can from us before we die. Think about old-age homes, hospital services, corporate landlords that hold the lease on former government buildings, contractors paid instead of municipal works departments.
The government won’t act because it would mean admitting that the neoliberal ideology that’s made a small number of people very rich was wrong.
This video covers the UK, but it’s all similar: https://www.youtube.com/watch?v=58t-YH7DURk
Here is an alternative Piped link(s):
https://www.piped.video/watch?v=58t-YH7DURk
Piped is a privacy-respecting open-source alternative frontend to YouTube.
I’m open-source; check me out at GitHub.
Yeah, like I said, non regulation. Those that have the power to screw us all over, did. But don’t worry, unregulated capitalism has fucked this planet. It’s done.
Don’t fret, we still haven’t gotten the final moneyshot.
It’s crazy how many people refer to this shit as “inflation” I could be wrong (wouldn’t be the first time lol) but I think Inflation generally refers to cost increases due to the economy sucking shit.
This isn’t that.
This is companies and landlords and service providers gouging us everywhere they can because the government is doing nothing to stop it, and the companies are laughing in their piles of money while they watch the average idiot call it “inflation” instead of “corporate greed” or succinctly, “greedflation”.
The complacency of people to just accept this and blame it on normal inflation is bonkers. Companies are reporting record profits - how could that be possible under true inflation‽‽
It’s time to fix our broken fucking tax brackets and start swinging at the money-filled pinatas already!
Governments aren’t doing nothing, they are facilitating it all. Because at the end of the day, corporations own them.
Here’s a fun anecdote. Apple, Warner Bros (HBO), and Google built an enormous new mega office complex in Culver City LA, that combined has like 6,000 employees or something. It’s absolutely massive and has destroyed the infrastructure of that area since basically none of the employees live in the area and they all drive in. It just opened last year.
All three raised the prices for their streaming services this year. But yeah, I’m sure it’s just inflation.
The TL;DR historically is that rises in wages led to more spending which increased demand and caused inflation. That’s an incredible oversimplification obviously, but that’s the meat and potatoes of it. People have more money to spend, companies can charge more, your individual dollars become worth less and less over time.
Nowadays with wages stagnating (even reducing in some situations) and immigration being so prevelant we have a situation of more people having less to spend but overall more money being injected into the economy having a similar inflationary impact.
Don’t misread what I wrote and think I am blaming immigration for the current situation, it is entirely the regulatory bodies who dropped the ball by encouraging immigration with no proper economic plan to handle the consequences.
Nowadays with wages stagnating (even reducing in some situations) and immigration being so prevelant we have a situation of more people having less to spend but overall more money being injected into the economy having a similar inflationary impact.
Which is why raising interest rates is not going to fix things. People don’t have a surplus of wealth so disincentivizing borrowing/spending isn’t going to work.
Bell showed up at my door with a two year plan that’s 1/3 of what I pay Shaw/Rogers now. Pretty much identical services but 35 instead of 98, plus another 10 off my wife’s cell phone for bundling.
It’s going to be a pain to move the dozens of WiFi devices over, maybe a day or so but for $1000… I’ll find the time.
The salesman told me old people on my block are turning it down because they don’t want change. One guy was paying 300/MTH for his bundle and would have saved 2/3 of that.
People need to be less lazy. That’s what will create market pressure. Hustle for your money.
Fuck Bell, ill go without an internet connection before I pay them.
And Rogers is a better option for you? Cuz around here, Bell is much better service.
Im on Techsavvy, the last independent ISP in Ontario until they get pushed out of the market.
Whose lines are they renting?
Everyone’s, in my area they are on Cogeco’s fiber (changes to coax at your house). They also use Bell’s copper lines and Rogers coax network.
So now would be a good time to consider switching to a more secure WiFi password, but I just wanted to let you know in case you’re not aware that the password on the ISP router can be changed.
If you set your new Bell router to the same SSID and password as the old Shaw one your devices will not need to be touched and will connect as if nothing happened.
So one of my issues is I changed the PW and can’t remember what I changed it to LoL. Every damned PW id ever consider isn’t working.
Not a smrt move by yours truly.
Do you use an Android phone? If so you can get the PW out of the WiFi settings. Other OSs have that capability as well, check and see if that’s an option.
I do have an android…any help linking me to how to do this? Not so experienced on this side of things.
Thanks!
Go to Settings > Network & internet > Internet, select the saved network and press the gear icon, and then click on the Share button. This will display a QR code and the password in plain text.
On Samsung Galaxy devices, you cannot see the password in plain text. However, you can access the QR code, which can easily be read through the camera app or a QR code scanner app. Go to Settings > Connections > Wi-Fi, select the saved network and press the gear icon, and then click on the Share button. This will display a QR code.
The number of times I’ve scanned QR codes screenshotted from the same device. So annoying. So “secure”.
Collectively agreeing to raising prices is anti-competitive collusion and illegal.
Collectively raising prices is anti-competitive coordination and legal.
Pandemic and supply shocks is a perfect excuse to do the latter.
Good luck to whoever is trying to solve this.
Doesn’t help when there’s really no competition in many areas. They are oligopolies.
This is the real problem. Companies had always and always will raise prices as much as they can, that should be a surprise to anybody, but how much they can raise them depends on the demand and the competition they have. We dont have healthy competition here in Canada for a lot of sectors. You want better prices? Break down monopolies, open the market to more foreign companies and enforce real consequences for collusion.
Part of this is due to sprawly car infrastructure and lack of density. In Vancouver, there are small immigrant run grocers where the price has barely gone up at all. Persia Foods, Kim’s, etc.
At the peak of car culture, there were independent or small-chain grocery stores in every small city, town, or neighbourhood. You don’t need that much density to support a grocery store. They went away because the richer stores bought out competitors or drove them out of business, with the realization that removing some competition ad being the biggest fish in the pond left them in the position to dictate prices, both with suppliers, and with consumers.
This is a fundamental issue with our economic system. Everyone talks about competition in the market, and how the lack of it is the problem, but they all ignore the part where competitions are meant to be won, and this is what it looks like when winners start to be crowned.
I agree that there is more than one factor, but disagree that car culture is not one of them.
What is this mythical historical period of the “peak of car culture”? That’s today. Fewer people walk or cycle today than they did in the 50s, 60s, 70s, 80s or 90s. We’re barely reversing course just recently. There are more big box stores and strip malls than in the past, which concentrates the market and doesn’t allow small competitors. Some significant portion of the blame goes to our shitty suburban sprawl city design.
I think you mean the advent of car culture.
Our current system relies on the economic externality of relying on private vehicles and private transportation on local infrastructure to artificially lower the transportation costs for grocery logistics. It’s much cheaper to run an 18-wheeler to a large grocery store on the edge of suburbia than running box trucks all over town. It doesn’t actually lower food costs, because people pay a large fraction of their income to that private transportation so that they can access that super-grocer, and then the grocer seems to jack up the price of food anyway.
There’s a solution: legally mandating price ceilings. Good luck getting through Congress but the solution to market coordination can’t be market forces.
We don’t have a congress in Canada, so it would be impossible.
Oh he was talking about America on an article about Canada in a Canadian community. Because he doesn’t read articles, just posts uninformed hot takes that he expects everyone to agree with.
I did the same thing, but it’s because we’re all seeing the same things as far as cost increases and governments sitting on their hands.
Couldn’t your parliament enact such price caps?
Yes they absolutely could.
There’s a solution: legally mandating price ceilings
This populist idea has been done many times and it always leads to the same outcome: businesses stop stocking unprofitable items.
Learn from history, people.
The ceiling would have to still be profitable. And if this is a thing people need but can’t afford while profitable, the government should provide it.
People need to learn from history and realize corporations exist to serve the people and at the people’s pleasure. You have to apply for a corporation and a we’ve seen with Trump, can be dissolved. Which should really happen a lot more often.
That leads to unexpected consequences of them. Shrinkflation, strong-arming suppliers even more, etc. And then adminstrating/enforcing against infractions just becomes prohibitive to maintain.
Maybe. But we already do this for a lot of things. Drugs is the most well-known. If we know what the production cost is (and the government can just request that info), we can set the price ceiling to ensure the profit floor still exists. This is pretty common in government contracts: % profit.
There’s a solution to price controls: bread lines
We already have those. It’s called EBT/food stamps, and we just outsource it to local grocers and philanthropy food banks.
It can be a vicious cycle. Someone raises price for whatever reason. Their competitors see that and think “well, if it works for them, it’ll work for us”. Their suppliers see the price rise and want a share of it, so raise theirs too. New players entering the market will likely set prices based off competition, even if the competition has actually set inflated prices. Eventually even companies that wouldn’t want to raise prices arbitrarily has to because it’s now inflation and their costs have risen.
Even without direct colusion, many companies still end up all following each other.
There are half as many publicly traded corporations now as there were 20 years ago. It’s not actually that we let them
Parliament is doing nothing and will do nothing. It’s up to us.
It’s up to us.
Locally, I’ve been seeing restaurants closing at a rate of 1-2 per week for the last several months.
Which I take as an early indicator that businesses are starting to feel the pinch.
Restaurants should be one of the first business types to feel the impacts of an economic slowdown since they are entirely discressionary spending for the vast majority of people.
Our local pro sports teams are also complaining about low attendance this season, which is happening for the same reason that people aren’t eating out as much.
They’re not doing nothing, they’re actively making things worse by enacting policies which push towards the concentrating industry-power in a small number of players.
Consumers “aren’t pushing back” because there’s no fucking competition and nowhere to go to when the company you do business with starts acting shitty
Never vote for conservatives or neo liberal policies
This article makes Tiff look a lot like a corporate shill in government clothes. Blame labor until the corporate theft is over and then start to recognize it for what it is.
Uh have you been paying attention over the last year? He’s not just a shill, he’s a tool.
I have not, no. American here.
This is why I no longer go to loblaws-family stores.
Soo… Sobey’s then?
Yes, my regular shop is a Food Basics.
This is the best summary I could come up with:
When asked how much of Canada’s current inflationary problem can be blamed on price hikes above and beyond companies’ cost increases, Macklem said, “I don’t think we can put a number on it,” but other central bankers have been far more willing.
Paul Donovan, a London-based economist with Swiss bank UBS, says the scenario described above is what’s known as “profit-led inflation” and he’s been waving red flags about it for most of the past year.
While it has exposed itself to varying degrees in various places around the world, the one condition it requires is a strong narrative: consumers have to believe en masse that price increases are justified, or they won’t accept them.
“Consumers in the U.K. have shown themselves less willing to believe the narrative of why prices were rising, and supermarkets are eager not to alienate customers and so seek to shore up loyalty through the privileged discount scheme.”
Jim Stanford, an economist and director at the Centre for Future Work, says its refreshing to see central bankers start to acknowledge that corporate profits have played a disproportionate role in inflation, because for too long Canada’s economic discourse has been trying to put the blame on anything but that.
I’ve heard that advice from a dozen people [but] I think it’s unreasonable to expect that somehow consumers have to solve the problem by becoming bargain hunters and spending half their week looking at grocery store leaflets."
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I’ve noticed here in the US that all restaurants have been getting more expensive yet worse in quality. You can get a good anything anymore without paying insane prices.
And even for typically expensive prices, you get fairly mediocre food.
Neoliberal policy is fucked. It’s rather telling that China’s economic environment is more conducive to startups and innovation than Canada’s.
