Getting increasingly expensive to be poor in this country.
That would be deflation.
Inflation of 10% means something that was $100 goes to $110, if inflation goes back to 1% for the next year that $100 thing will be $111.10 next year.
It always goes up ... and it compounds.
A costco sized bag of potato chips is now $11. Systemic economic factors only account for a fraction of that price hike in my appraisal.
The idea that them dropping their price to a more reasonable $7 would be 'deflation' is overapplying economic theory terms. Pruning branches on one tree isn't deforestation.
I feel like there is a certain breed of capitalist who took econ 101 and is deluded into thinking any backpressure of corporate greed is risking a 'deflationary spiral'.
It would not make sense to drop the price to $7 if they're selling out at $11, business just doesn't work that way, and frankly neither do people. Would you offer to take a lower salary despite being offered more?
But inflation allows numbers to keep going up while hiding the fact that you can get less with those bigger numbers. People will be glad they're finally making $15/hr or $20/hr without realizing that it may not be as good as what they had before just because everything is more expensive.
Meanwhile, politicians can blame "greed" while ignoring that it's caused by them printing money as a way to deflect blame for the stealth taxes.
Heating vs cooling of inflation is the acceleration, not the velocity of prices.
Corporate greed is mathematically synonymous with corporate non-competitiveness. Rather than dismissing this possibility a priori, maybe there are reasons why companies used to be more aggressive with their price competition, but aren't anymore?
One possibility that comes to my mind is a concentration of ownership in index funds, possibly interacting with rising interest rates at high stock valuations. If 40% of your voting shares are controlled by a fund manager who also controls 40% of your competitor (as well as the rest of the index), that will be a loud voice on your board pushing against cut-throat competition. He'll tell you, and your competitors across the index, that you all need to get your earnings up to protect your stock price because P/E ratios are falling amidst rising bond yields, and that the way to do this is for the whole index to increase prices until consumption starts to decline, where profits peak, rather than fighting with each other over market share.
Makes a lot of sense to me.
You wouldn’t buy it because you’d decide your money could be better spent on another snack. It’s not like competition suddenly stopped existing the last couple of years and of Hydrox could swoop in from the grave and start taking that sweet sweet Oreo money they would.
You can argue about being below trends or whatever, fine. But it's factually wrong to say Americans are worse off today than they were in the past.