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Comment by ericmcer | Hacker News Reader

Controlling inflation will hopefully be the main discussion around the next election, I am tired of watching the political theater around small side-issues and then paying $8 for milk and $6 for peanut butter. Why is our labor becoming worth less in real goods? Why is life expectancy decreasing? Can politicians address issues that affect every single person every day?

I make good money in tech but it still feels like more than 4k/mo (in California) is what you need just to cover rent and basics (car, internet, phone, groceries, etc.). I have no idea how people working minimum wage jobs are surviving.

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> Controlling inflation will hopefully be the main discussion around the next election

You're conflating inflation with market gouging. Why would your local grocery store drop the price of milk? What's the incentive? You probably haven't stopped buying milk, I bet none of your neighbors have stopped buying milk. In most of the country you have at most 2 grocery chains that are probably mega-chains, and they have no incentive to compete with each other.

What you're seeing at this point isn't inflation, it's market gouging and unless you're onboard with the government either breaking up these oligopoly's or setting market prices, nobody running for office is going to be able to "fix it".

https://www.forbes.com/sites/errolschweizer/2021/03/18/anti-...

A "free market" cannot function without competition and we've spent the last 50+ years allowing and encouraging market consolidation. The results are as expected

We were not supposed to have the market consolidation that we've had. The FTC has been asleep at the wheel, probably because it's members are investing in companies that they are hoping to be bought out by Kraft, Nestle, Pepsi, etc...

The definition of inflation is "a general increase in prices"; it doesn't matter why that's happening. Do you think that stores weren't trying to sell products for the highest-possible price previously?

Price-gouging is not what we're seeing here - there's no supply constraint. What we're seeing is just the market price.

> there's no supply constraint

Where else are most Americans going to get milk than their local grocery store monopolies or duopolies?

A supply constraint means there's an inability to bring sufficient new stocks of the product to the market. Think: N95 masks during Covid, or gasoline in the run-up to a hurricane.

Selling toilet paper for $15 a roll when shelves are empty is price-gouging, selling eggs for 5% more than last year isn't.

>What we're seeing is just the market price.

There is no market price when there is no competition. You cannot have a free market without competition.

That might be more true in some markets, but grocery stores are competitive, low margin businesses. There are lots of farms, too, and food comes from all over the world.

As we saw during the pandemic and with the start of the war in Ukraine, price increases often come after major supply disruptions or sudden increases in demand. Markets often don’t do well at adjusting after big surprises. There can be multi-year lags.

You're not wrong, but what you're describing is referred to as "seller-side inflation" or "excuseflation."

Article from a year ago: https://www.bloomberg.com/news/articles/2023-03-09/how-excus...

> A "free market" cannot function without competition and we've spent the last 50+ years allowing and encouraging market consolidation.

Perhaps the worst market for consolidation is political parties, neither of which seem serious about any form of antitrust enforcement.

Given the amount of polarization, it seems like very few voters will switch sides based on economics. Maybe it will affect turnout, though?

US life expectancy is going up again. [1] The pandemic is over and drug overdoses leveled off.

[1] https://www.politico.com/news/2024/03/21/cdc-us-life-expecta...

> Why is our labor becoming worth less in real goods?

I don't think this has been true in general for a while, although it was true 2021-2022[0].

It may of course be true for you, I don't know your income!

[0] https://www.statista.com/statistics/1351276/wage-growth-vs-i...

Life expectancy decreasing seems to have an obvious answer. We just had a pandemic.

So you want deflation?

Some deflation, at least in basic commodities and energy, would probably be a long-term net positive for the US economy.

Of course. Everyone does.

The Japanese, who actually had it, didn't seem to think it was so great.

not true: https://foreignpolicy.com/2024/01/15/japan-economy-inflation...

The article says that negative real wage growth is what's making people unhappy, not inflation; much of it is spent discussing that deflation is actually a problem.

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