Bozo_Casanova

But

And that’s fair

The crazy thing is that HIV was probably spilled over around 1920, when somebody cut themselves while butchering a sick ape, and the disease remained confined to low levels in Central Africa for 40 years, then Haiti and the carribean for another 10, and then made it to the US at JUST the right place and the right time and kaboom!

No Wes, no more.

One more thought on this topic, particularly for @Brisketexan @jimmyjazz @TwiceHorn and @Captainant - I am NOT giving the greed is good speech, or dismissing the role of avarice or the abuse of market power by producers and sellers during and following the covid crisis. No doubt there was some of that, as there is in any crisis. But those events are typically highly localized to particular places or products or both, and don't account for large scale monetary phenomena, and inflation qua inflation is a monetary phenomenon. I realize I'm taking on some ideological baggage by association when I say that. Obviously the work and words of Milton Friedman have been deployed by all kinds of bad actors for all kinds of bad shit, but contrary to the way it's used to mark yardage lines in politics, to say that inflation is a monetary phenomenon is not a value judgement but an empirical observation. It is simply damn-near impossible to find an example of economic inflation (ie a steady and sustained general rise in prices across the economy) that is not preceded and accompanied by a prior increase or debasement of the money supply. Including this one. Part of why this is difficult to discuss is a failure of language - we are selective about what we call "inflation." When our wages go up due to labor shortage, we don't generally think about that as inflation until the price of things responds to our newfound buying power. When the cost of housing and healthcare and college education go up because the money supply for those things is increased in the form of cheap debt, employer tax breaks and federal profit guarantees to lenders, we don't think about it as "inflation" even though those are very much steady and sustained increase in prices preceded and accompanied by a prior targeted increase in the money supply for those things specifically. And we don't, because (and @Captainant this is why I responded to your question the way I did) the money supply increase doesn't have to directly pass through our hands to have an inflationary effect. The monetary expansion doesn't have to offer us a choice or agency in order to have an inflationary effect on our lives. And, for the record, inflation isn't necessarily bad. A low level of inflation can be beneficial to the consumer, in that is lowers the effective cost of things that appreciate over time, and it generally means that the economy is speeding up. That's what I meant about people forgetting what a recovery felt like. 21-23 was the feeling of the economy returning to normal. So I keep using words like "liquidity" and "slosh" for a reason. If you pour a bunch of money into the economy, everything gets soaked. Over time that's expanded production of stuff we want. Near term, it means higher prices. Those aren't political choices or ideological positions. We do not make the political choice to get wet when we step out into the rain.

Ok, but part of our response to the anomaly was (among other things) a huge money supply expansion. And when the money supply expands in an environment of constrained supply inflation is the result, 100% of the time. It’s the same thing that has happened over a much longer time span with college education. The buying power was available, and therefore the demand was available at higher price points. Of course sellers discovered the higher resistance range. Discovery is the function of the market.

Not being intentionally obtuse, but I hear stuff like this and I don’t know what it means. What does it mean to say that sellers “used” Covid to raise prices?

Not just imagine/ once upon a time I was part of a team managing a product line that brought in a few billion a year at around $500 per unit. The difference is massive because you win by managing the stuff on the right side of the decimal and as you say, the launch is never over. Seriously, good luck.

One more point on all this- people throw around the term “price gouging” to describe a situation where they simply don’t like how much stuff they want costs but pay it anyway, but usually that’s just a price the market will bear. Real price gouging is almost impossible to pull off in anything but extreme circumstances, like the aftermath of a disaster where someone is the only player on scene with lumber, plywood, dehumidifiers, distilled water etc. And not for nothing, rising prices lower barriers to entry and in general make life harder for big corporate players, because they are an invitation to jump in. As usual, progressive leftists get lost in the trees of this forest because they are generally affluent enough to avoid any consequences for being wrong. The market power of large corporate producers is generally deployed to lower prices, not raise them. That’s where scale matters, and the proliferation of cheap shit is where the greatest damage has been done to our middle class.

Godspeed!

I am! Eggs are a highly price inelastic commodity, in short supply in 2022, produced by specialist operations. For that reason the price is highly responsive to supply shortfalls. The data tell the story.

What’s a good example of inflation caused by gouging, in your opinion?

Ok, but I think it’s important to distinguish between markets where price gouging is possible (price inelastic necessities where supplies are short of demand and limited and sellers are few) and markets where they aren’t, which is most of what yall are talking about. In most markets (burgers and fries, for example), producers simply don’t have that much power and when they find themselves in the position where the are pressured by cost they often go the other direction.

He’s doing a great job right now. If we could get this Joe Biden the convention, through the election and at another debate in September, he wins.

No. Our entire fiscal and monetary policy going back to 1983 has been stimulus. My view is that liquidity expansion created the conditions for inflation, and combined with pent-up demand and a supply shock created a predictable and short term surge of inflation that is pretty tame by the numbers but hurts more than it should because our middle class is so squeezed.

Excess buying power has to go somewhere, even when or especially when it’s disconnected from income. The 21-23 surge of inflation was the most predictable event in the history of our economy. The irony is that people were so used to an artificially flattened business cycle they forgot what recovery felt like and spent 2022 imagining dark clouds on the horizon that never rolled in.

Oh absolutely. Broadly speaking, that was a major target of stimulus. Before that the target was support for asset prices, especially real estate. And not for nothing, I don’t recall you complaining about record home prices while the average American was taking it in the shorts.

Agree except for the greed part- if the demand signal is telling them that prices are below what the market will support, what choice do they have? Fundamentally I think the problem here is the problem with the economy for most people- the slosh of stimulus injected liquidity disconnecting buying power from income, following four decades of labor not sharing in productivity gains.

Defend Texas Liberty pal Nick Fuentes is big mad

That call is hilarious. "What do they call that? An AR-15 or something? That's a big gun. Those are pretty tough guns, right?"

Never read that before. incredible. good post.

This whole discussion presumes a world where producers of goods with lots of differentiated substitutes, commodity inputs and robust competition are price makers. They aren't. The "overshoot" doesn't exist. If producers "overshoot" the price signal they aren't maximizing profit. In fact, you can get closer to maximizing profit and value by undershooting the price signal, and they know this, which is why the most common strategy for a market leader in that kind of market is to lower prices when their costs rise because it's an opportunity to consolidate leadership.

But what does that have to do with market pricing or capitalism? I think I’ve posted here before (and you would probably agree) that the greatest threat to American capitalism is not socialism, but rent-seeking by powerful incumbents. I see literally nothing in common between the power of a state-sanctioned monopoly producer of an inelastic product (a price maker) and fast food companies, who operate in a highly competitive environment with high elasticity.