"Conventional wisdom" may be a term that's too innocuous. Cuz, you know, few if any beliefs adopted by the Right these days can be described as wise. I'm not speaking of all folks who fall under the umbrella of the Right. More specifically, it's those who used to be on the fringe and are now what can fairly be called mainstream conservatives. The ones who will reflexively dismiss the following study because it's a square peg that doesn't fit in the round hole labeled "It's All Biden's Fault." ‘Excess profits’ at big energy and consumer companies pushed up inflation, report claims LONDON — Major companies in the energy and food sectors amplified inflation in 2022 by passing on greater cost increases than needed to protect margins, according to a new report. British think tanks the Institute For Public Policy Research and Common Wealth said in a report Thursday that big firms made inflation “peak higher and remain more persistent,” particularly within the oil and gas, food production and commodities sectors. “We argue that market power by some corporations and in some sectors – including temporary market power emerging in the aftermath of the pandemic – amplified inflation,” the report said. The author’s analysis of financial reports from 1,350 companies listed in the U.K., U.S., Germany, Brazil and South Africa found nominal profits were on average 30% higher at the end of 2022 than at the end of 2019. This does not necessarily mean that overall profit margins have risen, but it does mean that higher prices have been shouldered by consumers, the authors said. 'Excess profits' at big energy and consumer companies pushed up inflation, report claims The report identified Shell, Exxon Mobil, Glencore and Kraft Heinz as among the firms that saw profits "far outpace" inflation. www.cnbc.com For the "It's All Biden's Fault" crowd Joe gets the blame for the post Ukraine invasion oil price spike but not record US oil production playing a role, however small, in me paying $2.55 at the pump in CO yesterday. They don't want to consider the massive supply chain disruptions from said invasion and COVID as contributors to inflation. Or the Fed's misread of what it thought was transitory inflation causing them to wait too long to initiate the tightening cycle resulting in a parabolic rise in interest rates. Because none of that fits in the round hole either. Political expediency calls for them not to examine factors other than government spending to make up for the affects of COVID. The view from the intellectual hidey hole in which they sit precludes an appreciation of nuance, complexity, while encouraging simplistic thinking. For them, all roads lead to Biden when it comes to any of the nation's ills.
Is Shoplifting Really Surging? Is the U.S. in the middle of a shoplifting wave? Target and other retail chains have warned of widespread theft. News outlets have amplified the story. On social media, people have posted videos of thieves looting stores. But the increase in shoplifting appears to be limited to a few cities, rather than being truly national. In most of the country, retail theft has been lower this year than it was a few years ago, according to police data. There are some exceptions, particularly New York City, where shoplifting has spiked. But outside New York, shoplifting incidents in major cities have fallen 7 percent since 2019, before the Covid pandemic. Why has the issue nonetheless received so much attention? Today’s newsletter tries to answer that question while taking a deeper look at recent shoplifting trends. https://www.nytimes.com/2023/11/29/briefing/shoplifting-data.html So...........shoplifting and the causes of inflation have been misrepresented by.........wait for it.........right wing media as part of the "It's All Biden's Fault" campaign.
https://www.msnbc.com/all Click on.....'They quietly did their job': Hayes on the truth about Biden’s economic
Can you explain what the "conventional wisdom" should be, other than subjective moral outrage over an excess of what profits "should" be? It seems as if they are putting the cart before the horse. Profits are not calculated ahead of expenses incurred and revenues obtained. They are the result of efficiently serving consumers at a price that is close to the equilibrium price. If corporations are simply able to raise profits at their leisure, then they would have done so ages ago rather than being so charitable. Is there something that changed that suddenly gives them the ability to raise prices without commensurate increases in costs and without chasing off more consumers? What could that be? Inflation is a rise in the general level of prices due to an increase in money supply. In the early stages of rising inflation, profits will tend to be higher, especially for these large corporations that have inventory, contract pricing for wholesale goods, and wages no yet being pushed up. Over time, wages, interest rates, raw material prices and other costs begin to go up as fast as or faster than final retail prices. Profit margins begin to narrow or to become increasingly uncertain for individual firms. The "stimulus" of inflation becomes a deterrent. Profits are also illusory to some extent; after all, the purchasing power of that profit is less than it use to be. If profits are up 10% and inflation is 10%, then there's no real profit. In fact, a lot of this "profit" is accounting fiction, or phantom profit. Remember that capitalist enterprises must maintain and replace equipment. They depreciate their assets on an accrued basis, and as inflation rises and revenues increase, they appear to have high profits because the depreciation remains the same. A $1 million factory built 20 years ago and written off at $50K/year over 20 years might make it look very profitable today and cause you must outrage over "excessive' or "unfair" profits, but when it comes time to replace the factory, they will be paying the inflated costs, which could be several millions compared to the $1 million 20 years ago. Since you propose to tax them out of the "unfair" profits in an inflationary environment created by your favored rulers, they must forgo rebuilding and instead capital infrastructure begins to fail and supply becomes restricted.
The purpose of pointing to the study was not so much to make a value judgement on the profits made by corporations. It was to display the ways in which they contributed to inflation. https://www.mediamatters.org/fox-ne...w-fox-news-has-misled-americans-biden-economy
And, the purpose of my post was to show that the researchers are incorrect and are putting the cart before the horse. Corporations don't set prices, and they don't set profits. However, they must do what they can to account for inflationary pressures because it very much affects their ability to continue in business when equipment must be replaced.
Am I missing the links in the first two articles? I like to actually read the study, rather than just take the media's perspective on the synopsis.
Of course, it's not all Bidens fault. He's just the ventriloquist dummy for those more realistically at fault. And the story.... is a load of fertilizer. I know you know that, just as I know you will deny knowing it. That's t
