Greedflation

Could have made all that at home for <$10, and if my experiences with Buffalo Wild Wings is any indicator it would taste much better just making it at home (literally every time I’ve been there the chicken was rediculously dry and over cooked, even by fast food standards). To me that chain is an example of if I’m being more choosy of where I eat out, it’s basically off the menu. Used to only go there to watch sports anyway, so it’s been a few years.

That being said, whenever or wherever we eat out we are paying for the service and convenience. All this service industry stuff is comfortably within the realm of free markets. Plenty of choices and nobody is entitled to be “served”. Are some companies padding their margins? Probably. But at least they are actually paying the kids/workers more too. The only thing that irks me is the idea some of these companies actually steal tips from their workers, that not all of the tip money goes straight to the staff.

 

Having run my own franchise businesses before with multiple physical stores, I’ll say this… while the name was a nationally known brand, my corporation was essentially a mom and pop. People just assumed my locations were owned by the corporation or a mega multimillionaire. The biggest driver to cost is the building lease and payroll. Those two things kill businesses. I had to jack up the prices significantly (which looked like greed) just to break even. My wife fought me on increasing the price, but looking at the numbers I had no choice.

When I finally figured out how to run the business better, I was able to extract more revenue, but let me tell you there is very little margin for error. The minute you slack up or let the employees chill, you will be losing money that week. We bled money the first 6 months then got better gradually. By the end we were making money, but I ended up selling it all for a decent profit three years later. It wasn’t that enjoyable.

 

They arent doing the research and technology for our benefit, its to sell for a profit (which they are taking more of by inflating costs). I would be so bold to say as the vast majority of that R&D does very little to benefit humanity, it is designed to serve the needs of the people that run corporations, which often means finding new and novel ways to save money on labor costs (i.e. killing jobs). I don't care if Raytheon is cutting new ground in killing and surveilence technology, Phizer has a new pill that gives you an even better boner, McDonalds has a plant burger that tastes like real beef, or Apple has a new phone that has 50 more p of pixels in the camera. Lots of R&D goes toward finding new markets and inventing "needs," and not say making insulin cheaper, there's no money in that. There are definitely ways to fund R&D for things that actually benefit people that dont involve catering to corporations.

 

Not sure there is one. Certainly nothing feasible. Rich people make the laws in this country.

 

I mean, you just pulled a bunch of examples of stuff that doesn't directly benefit humanity. How many do I need to list that do to counter that? For every boner pill there are countless life saving advancement. Weird take, tbh.

 

I’ll follow up to my above post…

Employees want top dollar for less productivity. A lot of time they don’t care whether the business makes money as long as they get paid. You go out of business… they just go to the next job. Some really do care though.

Landlords are mostly awful. Don’t want to fix anything and want their money on time every month. Pandemic hit and they couldn’t care less that money wasn’t coming in. We were not in this together. They jack up the rents by 3-5% every year… it’s in the contract.

Of the two, landlords are far worse. They pretty much soak up all your profit and force you to have to run super efficiently to break even. I think if my lease had been half of what it was, it would have been comfortable to own the business. But, property owners have an idea in their mind of what their building is worth and they set the market together. They’d rather burn out new businesses every two years than have a successful one at a lower price. That’s the way it is, unfortunately.

 

I didn't say there weren't, but would you claim that the majority of them do? Like if its 99% crap, and 1% lifesaving (to people who can afford it mind you) that's acceptable? That's the other problem here, all these 'wonderful' advances go to those who can pay the most for them. If Peter Thiel lives to 150 thanks to medical breakthroughs and people are still dying in the streets of preventable causes in a for profit healthcare system, who is that benefiting? We are giving goodies to corporations, and then letting them have control of both the profits and the technology.

 

Yet, you probably typed this on your IPHONE. You’ve probably eaten a few mass produced fast food burgers.

At some point that R&D benefits you, the consumer. Even if at times it seems iterative (iPhone design stagnation) or it’s products are frivolously marketed (boner pills).

For me I’d say cutting out fast food and “big food” would be way easier than big tech as I already 99% do that. Going to 100% would be no big deal. I don’t think I could take tech out of my life. Medicine to me is more “nice to know the innovation is there, hopefully I don’t need it, knock on wood” type deal. But I’m sure people receiving actual novel treatments appreciate that R&D.

 

Maybe an iPhone benefits me individually (I would say its a double edged sword), but does it benefit the slave kid making parts for $2/hour under the supervision of an authoritarian government? The guy mining lithium for pennies? Of course we never look at the broader social costs in this system because they are hidden from view, just the convenience to a set of individuals who can afford the product. Just another thing Marx was right about:

Commodity fetishism - Wikipedia

 

Wrote a 25 page paper in college about how sweatshops are actually good for 3rd world economoes when the alternative is essentially nothing. I'm not saying slave labor is good, or the situations are ideal, but $2 an hour in some places is good money and saves families.

Again, not saying I like sweatshops, but they offer a net benefit compared to the alternative.

 

Capitalism does like its slave labor, and even modern corporatized capitalism will seek out slave labor wherever it can find it, no doubt about that. In effect that’s what our trade with China has been. China giving 1st world countries a supply of (in effect) slaves to work the factories at lower cost.

I think that’s just as much an indictment on the communist system (or at least the CCP) as it is on capitalism. Instead of protecting their workers, or see wages normalize in a fair trade environment, they willingly supply them as defacto slaves in forced labor conditions. I guess we’ll have to ask the Chinese commies how that arrangement ever aligned with Marx.

 

My neighbor at the time got wind of a local Walmart putting out a shipment of TP. They had limits at the time, one pack of 18 or 24, don't really recall but it was one of the big ones. He had three older kids, not sure exact ages but maybe all adults. They all drove. So he loaded up the five of them (wife also), rallied his nearby family and neighbors including texting me to see if I wanted to join the convoy, and they all went and bought a pack each. He ended up with something like 15 of these packs. He sold the outing as "Go get you some TP", but he paid for it all at the store and put it all in his truck. When he got home, he unloaded it all in the garage and then offered to sell it to all the non-household members at crazy prices. Apparently there was an absurd race to his house because they took multiple vehicles. He was trying to beat everyone home in order to get it all in his garage before anyone else arrived. It of course caused a big uproar. Other neighbors told me he and the posse neighbors were screaming at each other for an hour. He texted me a few days later asking if I needed to buy any from him. I had already heard about all this so I didn't even respond. No idea what the price was but guaranteed it wasn't retail. But that was the sort of thing going on in those days. This dude has worked for Raytheon for decades and lives large.

 

If they weren't a net benefit, no one would work in them voluntarily.

 

Yup. I know people who make a lot of money in their day jobs who still buy trifling things like a video game console or sneakers just to resell and make $300 from upcharge of some poor dude who just wants something nice for his kids. They go out of their way to buy it first and therefore create an artificial demand. The money they make off of the sale is insignificant to their lifestyle but they can't help themselves.

During the pandemic, we wanted a Nintendo Switch for the kids while they were locked inside. I refused to pay $600-700 to a reseller for a $200 gaming console. I easily could have afforded it, but the idea disgusted me. Waited it out and my wife eventually got one from Target by luck on the day they were restocking. Most of the time, the resellers would be there and clean them out immediately.

 

Nothing says living the baller life more than using and then betraying your own neighbors so you can… *checks notes*… scalp rolls of toilet paper.

Thats peak Trump ‘Murica right there.

 

That article sez nothing. has no definition for excess profits except that price increases exceeded cost increases. What typically causes that? Oh yeah, increases in demand. That's the consumer side. Under what principle does one assume that price should have some linear relationship with cost? Think Swift tix, was she profiteering when the price of her tix were $1500 on the secondary mkt? Sellers charge what the mkt will bear.

If mkt power is the explanation, what changed in that regard since pre-inflation? & what changed in that regard in the last few months (were there huge global break-ups of corps that I have heard not about?)? & what are they doing about it now? Mkt power is a real issue, but I know of next to nothing that has been done about in the last 3 years, do you?

Where's the evidence? I bet for pretty much every industry, there was been no sig change in the Herfindahl-Hirschman Index (HHI) over the last 3 years.

 

Answer is to expose the dastardly companies so people are educated and can focus their ire on what is causing price increases. Customers can alter their habits more quickly to make companies suffer more quickly.

Companies got away with it because people blamed stimulus and didn’t wield their purchasing power because they didn’t know they could.

 

An informed customer is a powerful customer. You readily run to a simple model of supply and demand when it is more complex than that.

JCPenny famously ended sale prices and went to their everyday price which bombed worse than new coke. The price didn’t change just the suggestion that customers were getting a discount. People are weird.

 

You've been hammering the supply side story of over a year now. BTW, the article is making a supply & demand argument. The supply curve is a cost curve.

Fun fact. A cause of an increase in demand? Expected inflation. That will cause prices & profits to increase all by itself.

 

Since the greedflationists are incapable of constructing an arg, I'll help you. One of the costs of a more concentrated industry is that collusion - implicit or explicit - is easier. Hence, firms could collude on higher prices than truer competition would produce. These "agreements" are typically short-lived due to lack of enforcement mechanisms & the temptation to deviate (see OPEC which has FAR better tools & explicitly colludes & yet struggle). Further, inflation (rising costs) is a public signal. A public signal can be used as a coordination device. Another reason above eq. prices are hard to maintain is that competition comes in when there are excess gains to be made....mkt concentration can increase the barriers to entry which can make that correction less effective. This arg would allow for corps to contribute to inflation in the short-run. You're welcome.