UNI88 wrote: ↑Mon Mar 04, 2024 2:51 pm
kalm wrote: ↑Mon Mar 04, 2024 2:20 pm
The Fed was first created was to avert banking panics which can be caused by several things, Covid being an example of one of them. Was the spigot left on too long? Perhaps. But not before further wealth concentration and inflated profits were had.
Perhaps? Try definitely.
Not all of the inflated profits were intentional. Companies raised prices based on their costs at the time and what they estimated they would be after inflation continued to rise. Some estimated high on accident and others took advantage of the situation.
If the government hadn't opened the spigot to many times the reasons behind price increases would have been more transparent.
Economics is a soft science from what I’ve been repeatedly told. So yes, perhaps.
When should the free money have ended? What would have happened to rent payments, home ownership, small businesses, the greater economy?
Like I mentioned earlier, inflation hasn’t seemed to hurt corporate profits. If it’s all the fault of Biden and free money, than those policies are good for the investor class and CEO’s.
The remarks of the Iron Mountain executives go straight to the question of who in the U.S. will pay to bring down the current high rates of inflation. Jerome Powell, the chair of the Federal Reserve, said straightforwardly in May that his goal was “to get wages down and then get inflation down.” In other words, Powell wants regular workers to make less money, which would lower labor costs for businesses, which presumably then would not raise prices as much as they have over the past several years.
The degree to which corporate profits have contributed to prices going up, and what to do about it, has been discussed by some Democrats in Congress and the Biden administration. Last year, President Joe Biden accused oil and gas companies of “anti-consumer behavior,” citing the fact that the two largest companies “are on track to nearly double their net income over 2019.” In May, Democrats introduced legislation to prohibit price gouging by authorizing the Federal Trade Commission and state attorneys general to enforce a federal ban on excessive price increases. But the general subject has only gotten modest traction in the media.
Almost every news story on inflation has pointed out that inflation is now at its highest rate in 40 years. Far less emphasis has been placed on the fact that corporate profits are currently at their highest rate in 72 years. The after-tax profits of nonfinancial corporations averaged about 5 percent of the U.S. gross domestic product from 1950 until 1980. They then dropped until shooting upward again during the 2000s. Currently they stand at above 8 percent of GDP. The 3 percentage point difference between 8 percent and the 5 percent average of the past constitutes over $600 billion a year that otherwise could go to workers or reduced prices.
https://theintercept.com/2022/09/28/inf ... -mountain/
