Greedflation: Corporate profiteering 'significantly' boosted global prices,study

An expense is always someone else’s profit. All inflation, all prices, everywhere, is the result of someone putting up their prices, trying to make as much money as they can.<p>If it’s not the retailers, it’s the wholesalers, the suppliers, the utility providers, the lenders, the executives, the land-owners, the unions and even finally the workers. All of them trying to make as much money as they can. All of them raising their prices whenever (and if) they can.<p>Greed is not an explanation, because greed is everywhere in the supply chain, right down to the bottom. The question shouldn’t be why they wanted to (since why wouldn’t they?), but why they could.<p>Examining which part of the supply chain put their prices up seems pointless unless it sheds light on why that part of the supply chain in particular <i>could</i> put their prices up.

What makes more sense?<p>(1) The majority of companies expected their input costs to rise so quickly increased prices to compensate, when they didn&#x27;t rise as much as expected they slowly lowered prices to remain competitive. Since nearly everyone was reading the market the same way, they weren&#x27;t punished for this.<p>(2) Companies became really greedy a few years ago, and increased prices just because they could. Recently they have been less greedy, and prices have come down.

The whole &quot;greedflation&quot; narrative still doesn&#x27;t seem plausible. Why wouldn&#x27;t one company reduce prices and capture the market share from the companies that artificially raised prices? In order for the &quot;greedflation&quot; to work, there must be some collusion in terms of price setting. This <i>does</i> happen in the market, but it&#x27;s illegal and governments do take action against price-fixing [1]. A much more plausible explanation is that the economy as a whole had a massive rebound after the pandemic, and the record profits are just a byproduct of that rebound.<p>1. An example from my State: <a href="https:&#x2F;&#x2F;www.atg.wa.gov&#x2F;news&#x2F;news-releases&#x2F;406-million-way-low-income-washingtonians-result-ag-ferguson-lawsuits#:~:text=Washington%20was%20the%20first%20state,by%20the%20price%2Dfixing%20conspiracy" rel="nofollow noreferrer">https:&#x2F;&#x2F;www.atg.wa.gov&#x2F;news&#x2F;news-releases&#x2F;406-million-way-lo...</a> It&#x27;s not always super high-profile, but lawsuits against anti-competitive practices happen all the time.

When inflation happens and then goes back down, prices remain high unless DEFLATION happens... this &quot;study&quot; and article are just proclaiming a specific anti-business worldview without actually looking at the true cause... most governments printed trillions of dollars of their currency during the pandemic and the currencies are forever worth less than they once were.

As someone in the industry my experience was sudden insanely high shipping &amp; container costs and an inability to get stuff out of port while storage fees added up. Of course prices for goods had to increase to support these sudden expense increases. You literally could not get containers at all at certain points during the pandemic.<p>My company, and I suspect others as well, were cautious about reducing prices as shipping costs eased. Which has contributed to their healthy margins but others are finally starting to lower their prices as well which is now causing us to do the same.

Because we all know corporations were keeping prices and profits low before COVID because it&#x27;s good for PR. After COVID they said screw the PR let&#x27;s be greedy now.

I wonder how many on the labour side would be willing to lower their wage for same work if prices actually came back down? Would you?<p>That then too is greedflation... Everyone is trying to maximise their profits. And keep them at same level when they can.

After tough years for corporate profits due to covid, is it too simple that this inflation is the corporates trying to claw back additional profit that was lost during those years?<p>It certainly seems likely

I think the easiest explanation is people rightly figured back during the pandemic lockdowns and wfh policies that people had more money than they usually did even in spite of some people losing their jobs. Gov spending was very high to be honest and people suddenly had somewhere between 1k to 2k extra cashflow. That kind of increase leads to every business trying to extract that as fast as they can.<p>If your business didn&#x27;t increase their costs during the last three years it&#x27;s a dying business.

This is another indication that we need to start breaking up large corporations. In a competitive market this wouldn&#x27;t fly. You would be out-priced by your competitors and go out of business. EG: Why buy chicken at $4&#x2F;lb from Tyson when you can buy it from 10 other companies for $1&#x2F;lb.<p>But when you are such a huge percentage of the market you can easily watch your competitors (If you have any) run out of stock and raise their prices as well. I hope this gives the FTC a ton of ammunition in their future legal battles. Although I&#x27;m not optimistic, considering they are less funded than the legal departments of the corporations they are going up against.

Whenever I come across this argument I don&#x27;t even know how to start attacking it because of how asinine it is.<p>If inflation is a product of corporate greed, do you concede that the fairly stable prices over the years have been a product of corporate benevolence? No, you won&#x27;t.<p>The only workable explanation, in Friedman&#x27;s words is that inflation is always and everywhere a monetary phenomenon. Any other explanation is economically illiterate.

Producers for consumer goods are consolidating left and right. No shit.<p>The FTC is responsible for this consolidation.

&quot;Greedflation&quot; is a new word to describe a by-product of supply and demand as old as capitalism itself. Companies raise prices when they can, and companies <i>hate</i> to lower profit and will never do so unless literally forced. They are money-hungry entities who will do anything for a profit, but they&#x27;ve been that way since the very idea of &quot;companies&quot; was in its infancy. And today&#x27;s companies <i>have</i> to make a certain amount of profit relative to their competitors, or they&#x27;ll get pushed out and go bankrupt.<p>There are 2 solutions to this problem: government interference and competition. IMO competition is what&#x27;s desperately needed, and regulation&#x2F;govt-funding to help the little guys with better ideas and lower profit margins compete with the big ones. When people stop buying from Walmart because their profit margins are too high, Walmart gets less total profit, and they can either lower their prices and&#x2F;or sell better products, or suffer and potentially go out of business. This is how capitalism is taught in grade school, this is how it&#x27;s supposed to work and actually benefit the common man, and the factors which make it not work are what we need to regulate and fund away.<p>* There&#x27;s also private funding and educating the general population to choose smaller companies over lower prices. And most companies <i>don&#x27;t</i> actually do everything they can to 100% maximize profit. However, I don&#x27;t think you can rely on these factors, because a lot of people aren&#x27;t really aware or motivated, and a lot of people don&#x27;t choose for others&#x27; or long-term benefits over their own short-term ones.

I feel like I&#x27;m going crazy reading this stuff.<p>Inflation is always greedflation. There&#x27;s more money chasing less stuff so they hike up the prices on the stuff to capture as much money as possible, and that is inflation. That is capitalism with an inelastic demand curve.<p>If there were more goods and more competition then prices would lower.<p>They&#x27;re always greedy, and if you keep spending they keep raising prices.

Why is this surprising? Higher rates mean businesses need to provide a higher return to stay competitive. You increase the cost of capital, businesses and people will adjust prices to adjust.

Perhaps it is good to have something that signals we are approaching or past carrying capacity, as a species without a natural predator.

Never let a good crisis go to waste.

Greedflation is a weird way of spelling capitalism.

Unsurprising, really. They were given cover to increase prices, so they did it. That is their duty as the operators of those corporations to the shareholders.