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Comment by mminer237 | Hacker News Reader

It's still 6% inflation even if you take out food and energy: https://www.bls.gov/charts/consumer-price-index/consumer-pri...

Obviously Russia is making it worse, but I think it's naïve and simplistic to say monetary policy has nothing to do with it. I would still argue monetary policy must comprise a slight majority of the blame.

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Don't forget very handsome and ever-rising corporate profits. They've been taking advantage of headlines to raise prices, reduce quality/quantity and cut expenses.

This is nonsense.

Unless there is a monopoly, companies have to offer the lowest / best deal or they go out of business quickly.

Food and many other industries are extremely competitive and there is no wiggle room to just raise prices and laugh at poor people.

If transportation is 50% of your products price (end to end); and fuel cost doubles, then you have to raise prices 50% just to break even.

This is true. Large plastic tanks, like 3-5k gallon ones for water storage doubled and potentially heading for tripling in prices because of this simple fact: You can only put like 3-5 on a truck that has to drive from very far away. It makes it so that if your state does not mold plastic, then you are directly paying for the fuel of that truck.

I'd say a cartel works about as well as a monopoly. I think you're right about food, but you can get vertical(? - I can never remember vertical or horizontal) integrations at some points like it seems we have with beef - lots of people can grow cows, but if a cartel gets control of the processing plants, they can squeeze the market at both ends.

> Unless there is a monopoly, companies have to offer the lowest / best deal or they go out of business quickly.

I don't know why you think companies like competition more than they like profits. Companies raise their prices in lockstep a lot: sometimes it is coordinated, mostly its not. Despite your faith in perfect competition: established companies do not want a race to the bottom - which is a classic iterated prisoner's dilemma scenario.

Bet most of those rely on heavy regulations of the government to prevent competition.

A number of things raise the bar: CapEx, regulations, or even high marketing costs (e.g. if one wants to compete against Coca-cola/Pepsi: making flavoured water isn't hard, over-regulated or expensive, but customer acquisition in that space is expensive).

Incumbents rarely want to rock the boat against other, similar-sized incumbents.

Far from nonsense. Oil is controlled by a global cartel. Everything in your supermarket is made by "brands" owned by a handful of companies, produced from raw materials made usually by a handful of producers. They've each carved up the world between them and sit on unprecedented pricing power. How is the US food market competitive? I also note you didn't actually challenge the fact that US corporate profits rose after the pandemic, with fatter margins despite rising costs.

Corporates are trying to buffer up for the incoming recession. If they have no cash reserves they will go bankrupt.

Sure. Shareholder interests and all that. But regardless of the reason why companies might be fattening up (come on, do you really believe they'd leave money on the table even in the best of times?), the fact is they're doing this at the expense of American households. That doesn't make it hunky-dory. And to bring it back to the original topic, that too is inflationary.

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