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Comment by narcraft | Hacker News Reader

The cause of rain is the ground getting wet

This kind of reply is uninteresting and unhelpful.

These statements about inflation drivers are surprising (to some) and highly relevant because they counter corporate and conservative propaganda.

We now know that government assistance isn't the main villain in the brutal inflation spikes of the last few years, and we need voters to understand that too.

I think it's fair to call my comment unhelpful because my point wasn't to suggest that the article's contents were unsurprising, but rather to criticize the HN title and provoke further reflection on causation. The article doesn't explicitly suggest that profits are the largest driver (which I interpret as cause) of inflation, but it does use the word drivers for categories in a graph, which I think is unfortunate wording. The data are consistent with corporate profits being the largest category of the bunch where inflation is realized rather than necessarily suggesting that it's the largest cause of inflation. An explanation citing corporate profits as the root cause of inflation would lose the ability to predict when inflation is most likely to occur (e.g. after periods of loose monetary policy combined with large fiscal stimulus)

> my point wasn't to suggest that the article's contents were unsurprising, but rather to criticize the HN title and provoke further reflection on causation

If that's what you wanted to do, you should have done that. A single glib sentence with no content in it isn't enough to "provoke further reflection on causation".

In textbook macro, if you have a shock to aggregate demand, then (ceteris paribus) the result is an increase in inflation and an increase in profits. That doesn't mean that profits are the cause.

So it may be an uninteresting or unhelpful way to put it, but I think he accurately summarizes how many people who have studied economics would think about it.

> So it may be an uninteresting or unhelpful way to put it, but I think he accurately summarizes how many people who have studied economics would think about it.

OK, but again: this is not the narrative that is being pushed by corporations and conservatives. You can say, "Oh, hey, this is just textbook economics," but the vast majority of people have never studied one sentence of economics and are being actively lied to.

"corporate and conservative propaganda"

Most center-left economists are pretty dismissive of the idea that inflation is a corporate-profits-driven phenomenon too.

I'd argue that there always must be something else at play in addition to greed. Greed is a given and the driver of the economy. Companies don't suddenly decide that maybe they should increase profits. So it's imperative to understand why they were able to increase profit margins without competition taking their market share. IMO that tells us what intervention is needed. The ideal market is companies at a constant knife fight with each other.

There is no competition! There is like three companies on the shelf - hawking 12 different "brands".

I'd argue that there doesn't have to be any secret reason. You say that greed "is a given" as an argument that there must be something mysterious going on, but raising prices when you can get away with it is no less a given.

https://news.ycombinator.com/item?id=36483676

The mystery is why you can get away with it. Bezos famously said "your margin is my opportunity". Why is there no Jeffrey Bezos waiting to pounce on the opportunity?

What do you say that those left of centre are blaming inflation on then?

Supply shocks, increasing corporate profit margins (i.e. unnecessary price increases that don't reflect increased costs), long periods of free money (<3% interest rates)

"Our team's lies are good, the other team's lies are bad."

This kind of comment is also unhelpful because it assumes the conclusion. This chart only shows that both profit and inflation went up. There is no indicator that profit caused inflation.

> We now know that government assistance isn't the main villain in the brutal inflation spikes of the last few years, and we need voters to understand that too.

This is terribly wrong since government spending is directly associated to money printing, and you know what? That causes inflation.

You already know that since that’s basic economics, but simply your content is 100% politically biased therefore even more wrong than before.

I assume they said "government assistance" because they are limiting the idea of government spending to just giving money to help poor people. If they had said "government spending" in general, their point would be indefensible.

As the sibling pointed out, I very intentionally said government assistance and not government spending.

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