Plenty of sectors are seeing record profits, such as energy. It's simply price gouging.

With as large of economic disturbance we have seen in the last 3 years, you will find examples of almost anything. However, I can assure you as some who was in manufacturing during this period, it was not just price gouging. There were true shortages up and down the supply chain, supplier quotes that used to be good for 30 days were good for 24hrs, and distributors that thought they had plenty of stock found themselves cleaned out by companies panic buying. It was incredibly hard to run a supply chain and for smaller companies, almost impossible to predict the cost of good sold (COGS). If you can't predict the cost to make something, you better raise the price enough to be sure you don't lose money. Many companies had to hire extra people just to track price changes and manage the supply chains. Building anything efficiently was crazy hard. On top of that, in certain markets, people were spending like crazy which made it very hard to stay stocked.

This whole idea of "simply price gouging" is completely inaccurate for many industries.

Given that the purchasing power of money is constantly decreasing, why would you not expect to see record profits, especially after the most annual inflation in decades?

Changes in profit margin would be the relevant metric to see if a business has gained or lost pricing power.

Correction. oil and gas. Solar and wind aren't seeing record profits - though they are seeing record installa.

Hard to ship Solar And wind overseas where the need is

Do solar panels not fit in shipping containers?

Manufacturing solar panels is an entirely different industry from running a solar farm.

Right and shipping them is yet another industry

Maybe I don't understand the point you're trying to make

Back when the inflation hoopla started I watched the newshour desk (Amna, looking at you) very poorly hype it up. They had economists on to talk about it and they shrugged it off as corporate profiteering. You can always tell when they don't want to hear the truth. I yelled out the answer a few minutes before the economist did.

They didn't invite her on to talk again. For some reason they just froth at the mouth at the prospect of systemic inflation. They will grab the reigns of the culture war and flog it mercilessly to the finish line but will never call out corporate collusion against workers nor the abuse of consumers lest Facebook or Walmart ease up on the "donations."

> for capital to regain some leverage they lost and crack the whip. Which, to be fair, at least in the tech sector was probably warranted.

Capital has way more, by a large margin, leverage than labor. Big technology companies were far from have less leverage that tech workers. Why do you think that it is fair that a reduction in that difference is ended?

I don’t think this comment was about capital and labor, but instead between capital and management. Maybe there is a better phrase. Finance capital and business?

The idea is that capital has had very little control the operations of business over the past 10 years, due to low interest rates. This leads to businesses that don’t make money continuing to grow, and bubble conditions, is more or less the idea. I’ve also seen this idea of the Millennial Lifestyle Subsidy also being related to interest rates.

Management are the (mostly-unwitting) foot soldiers for capital. Generally they either come from capital already, or are labor attempting to jump into the capital class.

The petite-bougeoise [1] as they were once known

[1]https://www.oxfordreference.com/display/10.1093/oi/authority...

> Inflation was up largely due to Covid issues

I don't know why people still believe this. Supply chain issues account for 2-3% of inflation immediately after COVID restrictions eased. The other 6-7% is corporate profiteering off of the perception of supply chain issues. You can see this clearly from the record profits being reported.

Corporate profits are an effect, not a cause. And you’d expect profits to hit records after 20% cumulative inflation + not being able to hire enough people to expand the business.

I don’t buy the supply chain argument much either, but I think the huge economic stimulus from the Fed and government + many people dying or exiting the workforce led to both wage inflation (pretty glaringly obvious looking at eg fast food pay, also in the amount of HC expansion in big tech, etc) and more dollars chasing goods/services that did not increase as quickly as the money supply.

The total stimulus was less than $3000 for most people and last provided a year ago. How can someone not work just getting that?

Ok, now add all the money infused to the economy because of PPP and 0% interest rates, QE (did you know the Fed bought almost as many MBS during COVID as during the GFC?), rent forgiveness, and enhanced unemployment. All that money doesn’t just affect the person that receives it, it increases the monetary supply and flows throughout the entire economy

I’m not saying people weren’t working because of the 3k stimulus or enhanced UE at all. I’m saying that those policies, along with many others, created inflation. When people have more money while the economy produces the same (or less) amount of goods/services you get inflation

"I’m saying that those policies, along with many others, created inflation. "

What matters is what had the most effect, you also only mentioned the stimulus in your original comment.

Sorry, jargon misunderstanding. All of those policies are stimulatory. I figured people would understand that “economic stimulus from the Fed + government” referred to all stimulus, not just the personal checks from the government

Regardless, I stand by my assertion that these policies are the cause that led to effects like low unemployment, inflation, and increased corporate profits. The people only pointing to corporations are just picking who they want to be responsible.

Back when the inflation hoopla started I watched the newshour desk (Amna, looking at you) very poorly hype it up. They had economists on to talk about it and they shrugged it off as corporate profiteering. You can always tell when they don't want to hear the truth. I yelled out the answer a few minutes before the economist did.

They didn't invite her on to talk again. For some reason they just froth at the mouth at the prospect of systemic inflation. They will grab the reigns of the culture war and flog it mercilessly to the finish line but will never call out corporate collusion against workers nor the abuse of consumers lest Facebook or Walmart ease up on the "donations."

Agree with all of this, and it's even worse because collusion is not necessary. The profiteering requires no coordination at all. Just the narrative of inflation alone creates the smokescreen for individual corporations to all do this in lockstep without needing to so much as make eyes at each other across a tradeshow floor. Perfect deniability.

So what do you guys want more rate hikes till when?

Cuz it seems like rate hikes are pretty much the only working lever the dumb mindless machine has.

I want my fellow person to earn a living wage for a working day, no matter the work and a safety net for when we all fall on bad times.

If that means my burger goes up a dollar, I’m fine with that.

that is one of the few levers the Fed has. Congress not acting is the real problem.

Why would you say it's they and not the tremendous amount of money pumped into the economy through COVID programs and artificially low interest rates?

That money is included in the 2-3% I mentioned, the remainder is showing up on the corporate balance sheets as profits because they jacked up prices. For instance, see:

https://youtu.be/udITRL9-t08

If A causes B which causes C then it can be said that A caused C.

Only if A necessarily causes B which then necessarily causes C. That is not the case, CEOs have agency to choose not to gouge their customers, aka C.

Edit: and Congress has agency to impose price controls. It's been done before when profiteering became a problem.

The “corporate profiteering” thesis is so blatantly motivated that it shocks me that this is treated as a serious hypothesis.

In what world is the massive, multiple waves of stimulus just completely unrelated but instead it’s those greedy corporations who are for some reason no longer bound by price competition.

The stimulus that actually reached people was tiny. It was, what, 2 $2k checks or something? That's about 2 months' worth of income.

There is no way in hell 2 months' worth of extra income in 2020 has anything to do with 3 years' worth of inflation.

Just noticing that 2 months worth of extra income is a 16% increase. Prices between 2020 and 2022 went up by, on average, 16%.

Also, payments to individuals and families accounted for only 30% or so of total Covid stimulus! But entities which are not people still spend money! Both on goods, services, and on salaries paid to people who then spend that money on goods and services.

It just seems crazy to me to say “no way, it has nothing to do with the $5 trillion dollar stimulus.”

1) I don't recall the details of the aggregate amount of stimulus, but the total stimulus was not the payments to regular people. That was actually only a tiny fraction of it. Most of it went to businesses of various sorts.

2) Huge numbers of people lost their jobs or had their incomes reduced by significant amounts in 2020 due to the pandemic. Framing it as "people got an extra 16% and that was it" is hopelessly oversimplifying the situation. Thus, I cannot put any credence in the idea that the fact that both of those were about 16% is anything more than a coincidence.

3) Again, the duration of the inflation is not in any way commensurate with the duration of the stimulus. The last payment was in...what was it? March 2021? and now nearly 2 years later there's still "inflation" and people are talking about it as if it's primarily caused by those two tiny little stimulus checks.

It just seems crazy to me to say "sure, that tiny bit of stimulus was the entire reason for several years of inflation; corporate greed has nothing whatsoever to do with it."

1) Yes but those business spent that money! On stuff, or services, or people! And spending drives prices up!

2) I agree it's a vast oversimplification, but the point is that money was put in and prices went up. They went up by an amount surprisingly similar to the amount of additional cash available. It's totally an oversimplification, but do you have a better explanation? Like your theory is that corporations are greedy? Sure. Are they greedier than they were before? Are the checks on their greed - competition and consumer reluctance to buy higher cost products - suddenly absent?

3) For a possible explanation of the duration, I would direct your attention to: https://www.reddit.com/r/wallstreetbets/comments/zd4ppn/hous... Essentially regular people, on average, still have a lot more cash than they had before the pandemic. Generally speaking I'd say this is great but the fact is that this cash is not associated with any productivity increases, we have the same amount of stuff, but more cash.

So prices go up.

1) Sure, but that stimulus is not the money that went directly to people. I'm not entirely clear on whether you were making the distinction previously, but far too many people (some deliberately, most, I think, not) blur that line, and talk about the total stimulus when referring to the number (because it's big) and when referring to societal effects (because they're measurable)—but then turn around and talk about the individual stimulus payments as if they were all or a majority of that when talking about how we shouldn't just be handing out money to people, etc.

2) I did propose a better explanation: Coincidence. Two data points that look similar, in a situation like this, is not enough to make coincidence particularly unlikely.

3) The most likely explanation for that seems to be that, because of the pandemic, we're not doing a lot of the things we were normally doing before. My family certainly isn't: we haven't taken a vacation since winter 2019, and we've cut out many of our previous habits that a) cost money, and b) put us more at risk for COVID. Now, I believe my family is fairly far toward one end of that spectrum, but I also believe there are enough people who have cut out at least some stuff (and not put it back yet) that it is, at least, a highly likely explanation for the phenomenon you cite there.

> In what world is the massive, multiple waves of stimulus just completely unrelated but instead it’s those greedy corporations who are for some reason no longer bound by price competition.

It's not unrelated, it's part of the 2-3% I mentioned. The out of control inflation we've actually seen is driven by corporate profiteering and is seen in the data:

https://youtu.be/udITRL9-t08

>> It really does look like this was an opportunity for capital to regain some leverage they lost and crack the whip. Which, to be fair, at least in the tech sector was probably warranted. But not really what the Fed should be enabling.

Railroad workers had to strike to get a single sick day. Across the board American labor has been getting flogged for years. Maybe Google's people should be flogged a little, but not because of the financial balance.

Let's not wish any workers to be "flogged." Google workers deserve their pay and others deserve more. What happens to them happens to me. Don't take the "divide and conquer" bait.

It gets me that there are so many people on HN against labor, then I remind myself that the site exists due to founding tech companies and that there are folks on here that just want a bigger whip.

Or some of us see echoes of Detroit 1950 in today's tech industry.

I'm curious which specific aspects you are referring to that have echos?

Companies that dominated their sector, got fat and lazy, and then were disrupted by foreign competition.

At this point I think it's clear to say this is not correct.

In fact the capital class lobbied hard for China being admitted to the WTO pushed hardest by Kissinger, NAFTA [1] and other legislation and restructuring to make offshoring easier in order to suppress both wages and labor power.

This was Ross Perot's entire platform [2]:

“You implement that NAFTA, the Mexican trade agreement, where they pay people a dollar an hour, have no health care, no retirement, no pollution controls,” Perot said during the second presidential debate in October 1992, “and you’re going to hear a giant sucking sound of jobs being pulled out of this country.”"

[1] https://www.nytimes.com/roomfordebate/2013/11/24/what-weve-l...

[2] https://theconversation.com/the-giant-sucking-sound-of-nafta...

The car companies were crushed by the Japanese decades before NAFTA.

It’s interesting that you seem to think that’s a fault of labor and not a fault of management. There are folks on here that go straight to blaming the workers as if management can do no wrong as they themselves are presumably part of the management class or aim to be. You can have workers push for better treatment without pointing to threats of foreign competition to stop progress.