I cannot believe supermarkets these days, it is insane the increases in prices, I’ve seen £5 for a tube of normal toothpaste and £6 for a tiny Pizza that is sometimes available for £3. How people on modest salaries survive I don’t know.
Quite often I’m starting to notice dark patterns in pricing where things you normally didn’t worry about will have randomly increased by £2-3 and you get the checkout and you’ve spent £25-30 on next to nothing.
I wonder if inequality increases caused by printing trillions of dollars during COVID are anything to do with this inflation? Could it be that making the rich endless more wealthy and increasing asset prices is bad for society?
How do we fix this? Some people think redistribution of the increases the wealthy have had over COVID back to the poor would be a good move, but is this all inequality?
For me the actual dark pattern in pricing is when prices remain fixed but quantity/volume really reduces. It's subtle on the aisle, but if you use online shopping it's blatant when the product you usually order is no longer available and it suggests an item that is identical in terms of the product it is and price, but has a glaring reduction in weight.
The fix is to produce more stuff. It's that simple. It might not be easy though. It would require us to focus on production, remove barriers, streamline regulations, encourage and actively celebrate production.
It seems these days we're ambivalent toward the production of stuff, or even antagonistic to it in many cases. So we have less stuff. Combine this with giving people more money and you get inflation.
> It seems these days we're ambivalent toward the production of stuff, or even antagonistic to it in many cases.
I cannot emphasize this enough. Wealthy Western nations have been wealthy for so long that people know how to cut up the pie in different sizes more so than they know how to bake more.
The negative moralizing of other people existing is genuinely out of control in California. From housing, to transportation, to climate change, to conservation, the major cities just causally like to pretend that if we can may other people go away, it'll solve our problems. It's thrown around causally like it's the state of nature, or an actual workable solution to anything.
I think the basis for this feeling is that people keep moving here. We feel it when traffic gets worse, etc... Not really sure IF there's a real solution. The more people there are, the worse things get in small spaces. We have an entire country that is mostly empty.
> I think the basis for this feeling is that people keep moving here. We feel it when traffic gets worse
A city in Japan would build new dense neighborhoods and a new commuter rail line to serve them. A city in California would refuse to build new homes nearby, so people are forced to live in a far-away suburb and commute 2 hours by car. Then Californians complain about increasing traffic congestion.
Construction zones in Japan have barriers erected around them with digital noise meters (in decibels). Painted next to the meters are the legal limits, and a phone number to call the authorities if they're exceeded. Try that in the U.S.!
Japan actually has about 3.25× California’s population. OTOH, California has a lot more land area that is, say, desert than Japan does, so there’s that (it also has a lot more that is controlled by a separate sovereign; 47.7% of California is federal land.)
The federally-owned land in California is mostly deserts and mountains.
Besides, even if we're generous and say that half of California is too mountainous to live in and another quarter is too desert-y to live in, leaving only a quarter of the state's area suitable for habitation, that leaves roughly 40 million people living in roughly 40,000 square miles, or about a thousand heads per square mile. That's comparable to Israel or Belgium in terms of population density, and certainly not as though people are packing into Kowloon.
Yeah, but you can't move to the empty space either. People will complain that's a desert and nobody should be allowed to live there cuz water. Or that its uninhabitable because the current population is distasteful to coastal sensibilities. Or it's too hot and humid or too cold and windy. Or whatever.
All you did is restate the same dichotomy. Complex systems in the real-world are almost always too complex for such a simplistic take.
For example, just enabling additional supply can create second order effects in terms of perverse incentives to overproduce creating all sorts of knock-on effects. We can stimulate the supply of corn and end up with distorted food markets and high-fructose corn syrup as a near-ubiquitous food additive. All I’m saying is we need to be mindful of these systemic effects and creating a false dichotomy tends to turn a blind eye towards them.
It’s interesting (and telling) that is what you inferred from that. You can replace corn with a non-subsidized commodity/service and the principle still holds.
Any mechanism with the explicit intent to increase supply is tantamount to a subsidy. Tax breaks are an informal “subsidy” to spur business, with a cost incurred by other societal goals. Decreasing environmental regulations are an informal subsidy to increase energy production with externalities borne by others. Etc etc. The broader point is that defining the utility function that captures these societal costs/benefits is complex and your false dichotomy misses all that nuance.
You’re an idiot, we should tax the wealthy, take half the money of people with £1bn+ (including the King) and pay off the national debt or force them to invest it in small businesses.
We should not equate rent seeking and genuine innovation as the same things.
There's no incentive to produce more stuff if you can just price gouge your current supply for equal or more profit with less manufacturing investment. Especially for necessities like electronics or food where your entire supply will be sold regardless.
You might say there's then an incentive to undercut, sure, but if you undercut too much you'll be left with no inventory as the rest of the manufacturers decide on fixed prices as a cartel (which has now become the norm in most industries). The trust busting has been nowhere to be seen in the last decades and the results are in.
Why not? Surely if you can get away with price gouging, then you would want to price gouge on more stuff, right? Of course, there are diminishing returns here, because as you produce more stuff, you might be able to gouge less and less. But certainly there must be some max-profit equilibrium higher than the current price, if you are already able to gouge.
Price gouging usually leads to producing more stuff, if it goes on long enough and you are allowed to produce more.
Healthcare is an example where this doesn't work, because you aren't allowed to produce more stuff. You can gouge all you want, but can't provide any additional quantity of services. (See: Certificate of Need laws in the US)
In many countries there is a tendency in healthcare to perform a lot of medically unnecessary or even harmful surgeries (back, hips,...) to make a larger profit. The optimal treatment would be cheaper and less profitable, so it is not chosen.
I think there are other factors that contribute to the uniqueness of healthcare. In the US, for example, it seems to be the one area where you aren't told the price before receiving the product/service. This obviously makes it easier to jack up the prices. Also, the urgent need often makes people insensitive to the price even if they knew it.
Hospitals kill people all the time. Especially elderly. Many treatments are invasive and cause complications. They won't catch the complication until it's too late, or now you have two compounding medical problems, and many elderly can't survive that. The medical bias is the sicker you are, the stronger intervention / medicine you need.
Supermarkets in my area have a near monopoly and don’t meaningfully compete anymore - they can charge whatever people will pay. It’s all owned by Kroger and the nearest non Kroger supermarket is a dozen miles away.
Grocery chains are notoriously low-margin businesses though. Maybe a few places are able to gouge, but as a whole, they cannot and still be low-margin as an industry.
If they doubled the price consistently, they would no longer be a low margin business. The fact that they are low margin is evidence that they are not gouging.
I think there's also a misperception of the public on a lot of items. Many of the dramatic price increases we see are deferred inflation from not raising prices (and subsequently eating the added supplier cost). We generally don't see steady 2-5% price increases every year, but rather large step increases every few years. Many of those step increases are catching up for the previous years where there was no increase.
FWIW, I'm not saying there isn't opportunism going on, but it's much less likely in low-margin commodity businesses.
How much are you willing to pay for the basic necessities of life, life land, shelter, food, water?
If the providers of those necessities possess a monopoly, either natural or through regulatory capture, humans will pay whatever they have to get those necessities. It is important for social prosperity to prevent extracting excess profits through monopolisation, either by destroying the monopoly or by taxing it and reducing other taxes on the individuals.
Commodities need to be produced as well. The more we produce, the more we will have. Giving people more money does not produce any additional bread or tomatoes.
But we didn’t give people more money, there was the largest in history redistribution of wealth from the poor to the rich. I really don’t believe supply is 100% the problem here and there’s just no need for 20% hikes on some goods. The compound interest on this is insane 1 -> 1.20 -> 1.44 -> 1.728 —> 2.0736 so more than doubling in cost every 5 years.
People seem to think inflation is temporary but it seems much more stubborn and central banks are very scared of it, hence rate rises when the banks might collapse.
We have to be careful about how we define our utility function. I'd argue that it's not as simple as just "producing more stuff" but rather being able to focus on producing "more of the right stuff." All production increase is not the same, unless your goal is just "more GDP." Rather, I think what a lot of this discussion alludes to is that more blind production does not necessarily lead to better quality of life (what we really care about in general).
> I wonder if inequality increases caused by printing trillions of dollars during COVID are anything to do with this inflation? Could it be that making the rich endless more wealthy and increasing asset prices is bad for society?
Making billionaires more wealthy doesn't affect inflation much because they are already consuming as much as they want. That money will just increase the price of stocks and bonds - whatever billionaires invest in.
Giving every average Joe a thousand more dollars will increase spending by nearly that amount per person and prices of goods will increase.
Giving money to people who need money is part of the solution, but the biggest part of the solution is making sure human productivity (GDP) is going to make things that make people's lives better.
Because all of europe is in the same or worse place? No matter how much remainers want to blame brexit for everything, it isnt’t always the case. Central europe is around or a few points less than the um while easter and western europe are higher
Central Europe: eggs price skyrocketed earlier this year (= supply shortage, aka “ran out”, due to bird flu prevention orders). Medical supplies shortage and running out of some medicines completely.
Trying to be positive in an ocean of poo, making your own tortillas is cheap, fast, kinda fun to do with kids and you can augment them for extra flavour. You can even batch prepare them in advance as long as they're not in contact with air.
Many of those are the same. Pizza dough : once a month take 30 minutes preparing 10 rolls and in the freezer.
By far the most abundant chemical in any modern human is dihydrogen monoxide, I'm not sure that any hydrocarbon you will find in a tortilla is really even a comparison.
Nah, it's just that the comment you're responding to is being insufferably pedantic. Your colloquial use of "chemicals" here is perfectly well understood.
While the colloquial is well understood and @jlengrand shouldn't feel bad about using the word "chemical" in this way, on a nerd forum like this I think it's valid pedantry — our bodies are massively complex chemical reactions, and half the stuff I've borne witness to people in my life complaining about are genuinely useful one way or another, for example by preserving the food or making it taste better.
I understand and appreciate that you want the terms used to be correct. I feel that the tone you used probably rubbed people the wrong way. Had you for example corrected me and given me the correct terms and definitions, I'm quite sure people would have appreciated the gesture. Actually, even up to now I'm not 100% sure what I should have used :). Additives, preservatives, ...?
BTW, interestingly in a previous life I studied chemistry... Only always in French
Exactly, I despise people who say things like "everything is made of chemicals" or "vegetables are carbohydrates" when they perfectly know exactly what I mean.
Flour and sugar based products are both absurdly high profit margin and the cause of the obesity pandemic (not a coincidence), you could make your own stuff for cheap, or just cut so the majority of flour based products from your diet - either option is a positive direction.
Interesting point. With high inflation and many professions being made obsolete by AI, cooking and baking authentic cultural foods at home may become the new obsession.
on a tangent, either buy fresh tortillas (the package should be very warm, almost hot) or make your own. Get some good tortillas and you'll want the others outlawed as a crime against humanity. I'm fairly anti-government but i would be ok if a law was passed in the fine state of Texas requiring all restaurants to make their own tortillas fresh when ordered.
I find comments like this weird, I never think about purchases that small. I honestly have no idea how much I pay for tortillas normally but $7 would not even be a blip on my mental radar
Jeff Bezos was interviewed in Pay Pal days after making many millions, and as they drove across the GGB, was asked why he was still driving his beat up honda - he said "Why, just because I have some money? Its still a good car!"
FF 2020: Jeff Bezos builds worlds most expensive yacht, and is having a municiple bridge dismantled so it can pass through, and local residents want to throw eggs at it as it passes by!
>FF 2020: Jeff Bezos builds worlds most expensive yacht, and is having a municiple bridge dismantled so it can pass through, and local residents want to throw eggs at it as it passes by!
As someone from the country you're referring to: this is an internet meme... The bridge that was dismantled is meant to be dismantled for such a thing.
Jeff Bezos did not and also cannot order bridges to be dismantled.
I think we're all reading the wrong message from that quote. It's supposed to look like the guy's humble but that's just the miser entrepreneur mindset. Spend as little money on luxuries, spend as much as possible on making more money. The CEO at the company I work at is the same way, drives absolute banger cars in an effort to save money or something. I think he ends up paying more in repairs than if he just bought a new one.
Can't seem to find it - but some time ago there was a short vid on why the price of bananas world wide was a good litmus on the shipping/economic trade - it went into detail on how banana prices could be used to measure certain stress points in global trade... I cant seem to find it though.
However, in looking for it I found this, which is kind of interesting:
>>"Are there more international laws on the trade of bananas than conventional weapons, like AK-47s?"
>>"The short answer is astonishingly, yes. The global trade in bananas or banana plants is governed by at least three binding global agreements and the non-binding, though strictly adhered to, Codex food code. The arms trade is not governed by any binding global agreements."
You're confusing the Arrested Development scene with this video probably: https://www.youtube.com/watch?v=A5RiYxGahps of Boris Johnson claiming to eat Gregg's all the time, but not knowing the price (which I could excuse him for; I have Gregg's now & then & I can only remember the price as being "maybe a little over 1£".
Even if you don't care about a few dollars, careless excess spending can drive prices up.
I don't care, really, whether the box of macaroni and cheese I buy is $0.35 or $1.69. But I'll tend to buy the cheaper, just because I don't want to contribute to the success of the higher price point. It's my fight for the common man.
All my efforts are completely negated when my wife goes shopping :(
I didnt grow up poor, and I have made "tech money" my entire career - but I very often check cent/oz on products - because I dont like being cheated at that level...
HOWEVER.
Annecdote:
I was at dinner in SF - and we were at a very nice restaurant, nice wine, food etc. My buddy was kvetching over buying this watch, which was something like $200 and was talking about how he wasnt sure if it was worth it...
I looked at him and said "We are spending over $200 on this bottle of wine tonight without blinking, which will be gone in moments - and youre kvetching over a $200 watch which will be around forever?"
> I very often check cent/oz on products - because I dont like being cheated at that level.
You have to do this in the cereal aisle! All the different-sized boxes of the same exact cereal have wildly different price-per-weight. And the largest-sized box is rarely the cheapest-per-weight!
what surprised me is how expensive plain Cheerios have become. My wife explained it as if I were stupid - they are mostly whole grains and very little garbage. All the other cereals have so much crap in them that the input price hasn't increased as much.
The grocery store near me sells a bigger box of multigrain Cheerios for less than the smaller box. The smaller box is on the eye level shelf, and the bigger box is on the bottom shelf, you have to bend down to get to it.
It has been like this for years. It is not just cheaper by unit, the whole box is just straight cheaper, but I can only assume people do not want to bend down? Even the prices are clearly visible from standing position.
Yep, it's common for the cheapest things to be on the bottom shelf as they make the store the least money. And the way to combat it - always choose something from the bottom shelf then look further up to see if there's something you would prefer.
I do the same - for some reason I agonize over purchases of "permanent" things like clothing, video games etc while not blinking an eye at spending the same on "temporary" things like restaurant meals or cocktails.
I grew up lower middle-class and for a long time my tech salary kept my mind off such things, which was nice. I wanted to forget about that whole situation.
But I recently stopped buying in corner shops because their prices are usually close to 50% higher than in large supermarkets and with food inflation it makes a difference in my budget.
I don’t think it’s “extreme privilege” to not notice a price increase of maybe $3? I could see it if you’re living in extreme poverty but anyone middle class and above shouldn’t waste mental energy on things like that
You don't have to live in "extreme poverty" to have to pay attention to every penny you use.
Expenses across the board have skyrocketed in the past year. Try and read some stories about what people living in colder, rural areas in Northern Europe (Scotland, Scandinavia, etc.) have had to deal with and you would start to get an idea.
If your rent suddenly increased by 30%, and winter heating bill tripled since last year and food costs 25% more than a year ago, then a lot of people with normally sufficient income would be having financial issues.
When a coffee costs $7 instead of $4, even if I could "afford it" is something any normal human being notices. Rich or poor. Being able to afford such change is a different story.
Do you not even look at your phone/credit card when you tap? Do you really just randomly pay things?
As an anecdote, I have a mentor/friend who made 500k+ from the 1990s to present day. He once told me in a nonchalant way, "there was a point in my life where I realized I could basically buy whatever I wanted." Hearing him say this was like a different language for me.
There were several years early in my childhood where macaroni and cheese was one of the main courses in family meals, because we didn't have much money. This was until my parents worked multiple jobs and promoted their way into respectable wealth - hearing my friend make that comment really stuck with me and I laugh whenever I'm reminded of it, like today.
Anyway, I agree with you totally. The OP comment doesn't seem like a normal thing for people to say and is rather tone deaf IMO. I could make ten times more than what I do now and would still notice yogurt being 80% more in our grocery. Luckily for me I don't have to budget when it comes to groceries, but I'm well aware of how much pain some people/families must be going through.
That is just single item, let's take buying something like 50 items a week and half of those go up by 3. So 75 more spend in week or 300 in a month. That is not exactly small amount for middle class.
It's certainly not limited to extreme poverty. I'd say the clear majority will show concern when a grocery item climbs $3.
While I wouldn't accuse you of showing "extreme privilege" for not noticing a $3 price increase... good on you for not needing to worry about that... I'm tempted to accuse you of it for thinking it's only the poor that would. That's a pretty glaring disconnect.
I also do not think about the prices of (most) individual items, because I don't want to devote that much of my memory to the constantly fluctuating prices of dozens of small-ticket purchases. BUT, I do track my average weekly grocery bill, which is much easier to do, and it's been going up alarmingly fast. Is that what you meant?
I think growing up in poverty definitely instilled a sense of 'keep a track of every dollar!'. The one good thing I did was, my income has gone up but my spending has not. So even though I could move up in terms of buying power, I have instead bough - a very little bit - of comfort via stability.
Two of the most well-known toothpaste brands in the UK are still selling their most 'basic' toothpastes for 100ml for £1, which I don't think is much of a rise on what it's been for the last few years (I think I used to get 125ml for that price).
People on modest salaries either don't spot the cheaper, just-as-good toothpaste that's not as prominent, they think that it's not as good as the ones with lists of all the great things they're supposed to do, or they aren't feeling the squeeze enough to seek it out.
If you drop into an independent chemist you might notice that sometimes the only toothpaste they stock is the 'basic' one, because their customers are price-sensitive, so that's all they'll buy.
Going rate for pizza is around 60p/100g, with a larger than average Aldi 'Meat Feast' pizza coming in at £2.19, which is 39p/100g.
Again, if you're on a 'modest salary', you pick the cheaper products or pick the supermarkets which only really sell the cheaper products.
I'm not saying that prices aren't going up, just that closer to the 'survival' line, there is much less room to increase prices, because people aren't at the point of choosing based on preference, so you can't rely on them switching to a slightly cheaper option from your artificially differentiated product line (yes, you, Colgate-Palmolive). They'll just be forced to stop buying your products altogether.
> most 'basic' toothpastes for 100ml for £1, which I don't think is much of a rise on what it's been for the last few years (I think I used to get 125ml for that price).
Going from 125mL to 100mL for the same price => 20% price inflation.
The proportion of my local supermarket given over to toothpaste is mind blowing. It's like the beginnings of some sort of Brontitallian Shoe Event Horizon.
For what is essentially just a mild abrasive plus fluoride, the baffling array of variations on a theme on display, mostly from the same few fmcg conglomerates anyway, is just ridiculous.
It’s probably a strategy. They overwhelm you with choice. So you end up with some simple heuristic like more expensive is better. Get something middle of the pack and you are still overpaying 200%.
Yes, which would seem around in line with inflation. I was replying to a comment talking about seeing toothpaste for £5, which gives the impression that perhaps the price of toothpaste has rocketed past that of inflation, which doesn’t appear to be the case.
There's other dimensions than the quality of the toothpaste. The dispenser provides a significantly better usability experience if you're willing to spend an extra $1. The cheapest toothpastes are screw caps that can fall on the floor and take a few moments take off and put on. The hinged pop open/closed interface is simpler.
The point was about the rise in prices across the spectrum of available products vs those that would be expected given inflation figures. But thanks for the tube tip!
> I’ve seen £5 for a tube of normal toothpaste and £6 for a tiny Pizza that is sometimes available for £3. How people on modest salaries survive I don’t know.
I took up cooking from scratch as a hobby a couple of decades ago. I highly recommend it.
After a bit of a learning curve, it's cheaper, tastier. and better for you than highly processed foodlike substances.
Firstly cooking from scratch is absolutely a life skill and nominally cheaper.
But food is also a class issue. Those with time to spare (ie rich) can indulge in for example "stuffing a mushroom" - Shirley Conran famously recanted twenty years of writing cookery lifestyle books exhorting women to become corden bleu cooks by saying life was to short to stuff a mushroom - and that is kind of my point.
I mean Gordon bloody Ramsey does not prepare food the way he tells you to in his cookbooks - it's too slow and inefficient.
All the recipies I love to cook - getting the temperature of the linguini just right before pouring over eggs and pecorino for carbonara for instance - is frankly, a nightmare nutrition wise (even if it's a hit kid wise) and a plate of chicken breast and five different veg and fruit for after is waaaay better - but how many recipients books will do that, how many blog posts extoll boiled peas.
Maybe we would learn from the staff of life - Bread. In the first weeks of lockdown, flour vanished from shelves - obviously because of a shortage but mostly because flour was diverted from domestic use to go to actual bakers and factories who could efficiently mass produce the staple of life that was then shipped to our supermarket shelves to eat. Yes there were bakers running triple shifts, logistic planners sleeping in the office and HVV drivers going every which way. But in the end feeding millions is like Gorden Ramsey says - if you do it like the instagram post says, you are doing it wrong
> Firstly cooking from scratch is absolutely a life skill and nominally cheaper.
> But food is also a class issue.
If we put these two beliefs together (and I think we're of similar minds), I think we should amend the first to be "meal planning and preparation is a life skill". Unfortunately the cooking craze over the past few decades has done nothing to improve, let alone restore, that life skill.
> I mean Gordon bloody Ramsey does not prepare food the way he tells you to in his cookbooks - it's too slow and inefficient.
Here I disagree. Someone like Gordon Ramsey possesses incredible knife and other preparatory and cooking skills. To use an analogy, he may not run a sub 4 minute mile every time he goes for a run, but even his leisurely runs would exhibit abilities that would seem extraordinary yet appear effortless on his part to most people.
That said, as a successful restaurateur Ramsey likely has meal planning skills at least as impeccable as his culinary skills. And meal planning is the most critical aspect to successful, economical home cooking. People seem to think the reason for failure is difficulty in preparation and cooking, thus the popularity of slow cookers, instant pots, etc. But such gadgets address the wrong set of problems. (The emphasis on recipes is misplaced for similar reasons.)
FWIW, I have horrible meal planning skills. Developing a good sense for how to mix and match ingredients is one important aspect; among other reasons, so you can reuse ingredients across multiple meals in a week. Relatedly, learning specific styles of cuisines and their rules also helps--French, Spanish, and Italian cooking all commonly use what in Spanish-influenced cuisine is called a sofrito. But there are many other dimensions to meal planning.
On that note, anyone know of good meal planning books or resources?
I bought a couple of the Budget Bytes (https://shop.budgetbytes.com) meal plans a while back. They're not fantastic if you're outside of North America, but I was able to make them work. Haute cuisine it ain't, but if you're looking for a starting point I recommend them.
I also recommend starting to put your favourite recipes into a recipe app (I use Paprika, available on most platforms). Even add simple stuff like Yogurt and Fruit Breakfast. Then you can use the app's built-in meal planner and grocery list generator.
If you're not shy of a few swear words, Nat's What I Reckon has some great recipes that are straightforward. Here's link to his bolognese - https://www.youtube.com/watch?v=Sw_Ze9zIafM
I don't think "randomly increasing prices" counts as a dark pattern. It's just a plain and simple economic pattern.
The only reason some companies are able to get away with this is because too many people shop mindlessly without checking prices.
The solution is for everyone to pay attention to prices when we shop: the brands who jump their prices up will have 0 customers.
I'm not saying it's easy, and perhaps grocery store price labelling isn't maximally effective, but when we shop frugally, we actually benefit not only ourselves, but each other.
I'm not defending their actions, but they're exploiting the underlying broken and usurious financial system that is using fiat money that can be printed at will. The system is working as designed.
Living in the UK, yes food prices are rising. But I work for an NGO whose main focus is in East Africa and I've been tracking food inflation there and seeing 200-400% jumps over the past three years.
Perfect storm of the lack of available fertilizer, wheat shortage and poor growing seasons over the past five years is hitting everyone. I don't see it geetting better until the world adjusts; swapping to alternative crops and producing nitrogen fertilizer at country level.
Funny that you mention nitrogen fertilizer, here in Belgium there is a minor agricultural crisis going on due to the ag sector needing to reduce nitrogen emissions.
The core problem is too much nitrogen absolutely destroying the native plants in Natura 2000 areas that always had very low nitrogen levels. You can be the most knowledgeable farmer in the world but that won't change the fact that intensive nitrogen (ammonia) emissions will annihilate the native plants in these protected areas, let alone outside them.
I would be funny if it wasn't horrifying. We're all shooting ourselves on the foot while other countries can only dream of achieving the industrial, technological and economical progress we've made. Deindustrialization 30,40,50 years ago was a side effect. But destroying our own energy infrastructure, industry, and now even agricultural sector? This is totally mad, and despite turning a blind eye this will come back to bites us, hopefully sooner rather than later so we can still undo some of the damage within 20 years.
Which one is "shooting ourselves in the foot"? Pumping more nitrogen fertilizer in the environment or cutting it?
I think it depends who is "we" and what's the timeline for shooting ourselves in the foot, short term or long term.
In both cases it sucks. I have a preference for the better long term strategy, at least I don't have the impression or driving into a wall (or I feel like we trying to swerve/break).
Some day it's hard not to feel overwhelmed, looking at the global prospective. Keeping our planet habitable will require us to:
* Sacrifice individual benefit for the common good
* Trust each other
* Think long term (like multiple generations)
All things humanity has a horrible track record at.
That does not put me in an optimistic mood.
On the up side, if we kill everything including ourselves maybe in millions of years the next intelligent race will find remnants of our apocalypse and learn from it? =)
Pumping nitrogen into the ground produces food. As for the long or short term question, we're amputating our foot because we predict that a minor cut will be infected. Knowing what you don't know is the key here. Right now no one can predict how the world will look like in 5 years. War, disease, new weapons, new disruptive technologies being developed. Whatever the temperature and sea level change will be, it'll be the least of my concerns for a good few decades.
Are you saying “no one can predict what effect nitrogen will have on our environment long term”? Because there is a broad consensus on the impact I believe:
Or are you saying “maybe there will be a cheap technology to clean up the environment in the future”? Which seems to be a very risky bet.
I’m not saying I have a simple solution, we do need crops, lots of them, there’s no question. But nitrogen pollution can’t be simply dismissed, we need to find a solution halfway: reduce nitrogen pollution but keep sufficient crop yields.
I agree, the problem is fairly global. So UK specific explanations are unlikely to have much validity. Some punters myopically only considering UK features (such as brexit) is misleading.
Inflation (in general, not food inflation specifically) in the UK is worse than in, say, Germany and France. The reasons for that are specific to the UK, and they do include Brexit. I think it's not myopic to point that out. We shouldn't give a free pass to people who have wreaked economic havoc to the UK just because there are some geopolitical factors that happen to wreak even worse havoc at the same time.
Absolutely not. But Belgium, Sweden, Denmark, Czechia, all have comparable or worse inflation. Brexit was and continues to be a shit show, but the UK isn't uniquely in trouble here.
Question isn’t how Brexit UK compares to other countries, question is how it compared to hypothetical UK without Brexit. The government is spending a lot of money keeping inflation down through the energy price cap.
In general there seems to be a weird zeitgeist of negative exceptionalism in the UK at the moment.
Not sure why but generally journos seem to write about issues like they are only hitting the UK when a simple google search shows they aren’t.
It does come across like a weird concerted effort to paint the UK as collapsing since leaving the EU. The majority of journos seem to be able to write only negatively about UK current affairs unless you read something like The Express who are delusional in their own right.
Most recent ones I can think of are the failed space launch and British volt going under.
These were both highly ambitious projects that had a high chance of failure, especially the space launch. It’s unlikely you’re going to get your first launch right, famously it takes many attempts.
When both of these happened journalists seemed to revel in the failure. It was very odd to see.
I understand with these two examples a lot of it has to do with government/brexiteer chest thumping which shon a spotlight on them. However it was still odd to see.
I think this then trickles down to places like HN (who’s membership generally has a bias towards remain) who also see an opportunity to revel in it.
This is odd as well because I can see why Britons or Europeans would be passionate about membership in a regional trade bloc, Americans who get really passionate about it confuse me. As a Briton I didn’t really care when America left NAFTA.
This is assuming the majority of people on HN are American but based on time zones and when articles are posted I’m probably wrong.
Edit:
This is a UK based publication writing about Groceries in the UK which is why it’s so specific. Your comment just spurred something I’ve been thinking recently.
> In general there seems to be a weird zeitgeist of negative exceptionalism in the UK at the moment.
Especially on Hacker News. I tend to avoid UK-based posts on here because the content is fairly predictable: the UK is going to shit and Brexit is to blame, repeated ad nauseam in the absence of any evidence that it's true. If I wanted thoughtless UK doom mongering, I'd read the Guardian or the NYT.
Yeah I do the same. It seems to permeate into everything, even positives.
UK announcing research into x: comments will probably be negative and about how it’s a boondoggle.
UK company doing exciting stuff like fusion or quantum: comments will probably be negative and about how it’s a boondoggle.
It’s tiring.
Edit:
That being said it does lead to hilarious moments where I’ll read the Guardian and see a headline like “The NHS won’t make it to Christmas (for real this time) but it doesn’t matter because we’ll all be dead by then because of Brexit” and then I’ll see the Express in my corner shop with a headline like “Brexit HERO Boris makes Ursula von der Leyen CRY when he announced new BRITISH MOON BASE”
- Governemtn forecast 4% lower GDP than without Brexit
- UK car industry significant decline in output since 2015 (around 30% IIRC)
- People who immigrated here for work (and have the right to stay) are choosing to leave
- Low investment compared to comparable regions / countries
- Turmoil around NI
- Banking migrating to Europe and New York in particular
- Trade deals not materialising
It’s not what “project fear” warned us of, but it’s certainly not good. Many of these effects are playing out across years so haven’t really hit home for people yet.
It's because there are narratives to follow, sides to pick. There's no room for facts by themselves, they have to fit some story your pack has bought into.
Right, left, middle, or anarchy, it's all the same; you're part of a herd.
I see a huge difference between people online and normal people.
Obviously we are going through a tough time at the moment. While there are some things unique to the UK (such as the nurses and junior doctors strike), for the most part what we are experiencing is common to most of Europe and often even the USA. I mean look at France - Paris is drowning in rubbish due to bin strikes and protesters are setting things on fire - yet if anything that seems to be being covered as something positive for them. People taking back power and exerting their rights. Last time that happened here, though, it was treated as an almost apocalyptic event and emblemic of Broken Britain. Sure the Paris strikes are ostensibly about pensions, but really they're about more than that.
By default, Brits tend to lean toward the negative side. I think even before Brexit/Tories/etc. most British people would broadly have considered the UK to be a bit shit, and generally complain more than they say anything positive. However, when measured, the UK is in the top 10 countries on a huge number of metrics and isn't particulary awful at anything. I do find the general negativity a bit tiresome, but it's not entirely a bad thing. That negativity is probably partly behind why we have managed to become and remain such a successful and stable country for so long.
Online, though, British people seem to be incredibly negative in a way that I've rarely experienced in person. I figure one reason why people online are so unflinchingly negative about the UK is that online Brits seem to lean very hard left and we're now on our 13th year of Tory leadership. I'm pretty lefty myself, but an awful lot of the chronically online UK types are literally Trots and Tankies (who are, nevertheless, pro-remain #FBPE, despite the contradiction between those views). Look at, e.g. Corbyn's online popularity versus his real (un)popularity with the electoral base. Or how the Tories actually generally get a similar popular vote to Labour, but online it's hard to find a single person who expresses any support for them.
I also think the UK generally gets its news about Europe from US news sources, especially when it comes to economic policy and comparisons. The US news (especially NYT and such) love to paint the US as a capitalist hellscape compared to the utopia of Continental Europe and the Nordics in particular. In reality, of course, the EU and Nordics are a lot more complicated than that, and in socioeconomic terms we're a lot closer to Europe in most ways than we are to the US, but that doesn't seem to feed through so people draw the same comparisons that are popular in US papers. You also get that with the NHS vs USA's system, as though those are the only two options.
Indeed it is not much different here in [redacted].
To answer your question: "Not sure why the UK is being singled out."
The answer to me is simply that it is a UK website www.grocerygazette.co.uk
There are plenty of similar stories about the same kind of inflation here in [redacted] such as [redacted].
With Hacker News being predominately English speaking I suspect plays into why we see more US and UK (and other English speaking countries) related posts vs non-English speaking.
And of course people do love to point out where the UK is suffering these days to put a Brexit spin on it (whether fair or not) as it gets them clicks. Much like a famous or young person dying is almost always reported as "died suddenly" these days regardless of nature of death as it gets clicks with all the anti-vax crowd.
Isn't the reason because the lingua franca of HN is English? If people were posting articles in other languages, there'd be a more representative set of criticism.
I'm curious why the values aren't identical to within rounding errors for countries like the Netherlands and Belgium which are nearly the same size, in essentially the same location, and don't have different amounts of welfare like north/south Korea or USA/MX.
Can't be that one has tech or purchasing power that the other doesn't, or that food needs to travel a lot further, and I would also not expect vastly different foreign relations (also because EU, but also because the countries are so similar in beliefs and histories).
And similar for slightly different but still nearby and similar countries like Germany, Luxemburg, and the UK. Anyone know what causes these differences?
Edit: to answer your question, I wouldn't look for meaning behind that but rather assume that a limited scope article is a lot easier to write than a broadly scoped one. In the ~global context of HN, the headline then sounds like they're singled out.
A shortage of low-cost labour on which the UK has long been (perhaps too) reliant, and reduced inefficiency (= higher cost of) the import process.
Or, in a word, Brexit.
Everywhere is getting inflation. Supply chain disruption, Ukraine war and a dash of climate change (hasn't really bitten yet compared to the other two). Britain seems to be getting about 5% more than everywhere else.
But the core reason for those shortages were poor weather in Spain etc where the produce is grown, I'd be surprised if the EU didn't have the same issues.
I wouldn't be surprised if those countries such as Spain reduced the amount available for export so that they can meet demand for local markets though, but capitalism would dictate that they sell to the highest bidder instead.
Its not average for Europe. Aside from Germany, rest of Europe is at around ~10%.
The UK is being singled out because its not able to import the groceries it used to do before Brexit now - there has been a low yield crop season in most parts of Europe and the domestic demand for groceries has literally exhausted the supply that can be exported. Since the UK is out of the Eu, its not possible to access the Eu domestic supply anymore and it has to wait for what remains for export.
The argument was about inflation, not food inflation alone. Even if only food prices are considered, one can say that its hard to trust UK's numbers in anything since the Tories that are ruling there have very funny ways of measuring things. Like how they recently have declared that homeowners were actually 'creating and also consuming rent services' and bumped the UK's GDP a fair bit.
Even we gloss over it and trust the UK's own numbers, the Eu inflation in February would have been driven by mostly Germany with ~24% inflation compared to the ~10% most of the major countries have.
...
However it still does not make any difference since prices are irrelevant if there simply arent groceries and they are being rationed. That was the point.
You're either completely misunderstanding all of the figures you're reading, or you're arguing in bad faith. This has already been explained to you by others, this is my last message to you.
Either food inflation or general inflation, the UK has similar rates to the rest of Europe.
The Tories are not in charge of deciding the inflation rate in the UK, it's from the Office for National Statistics and all the financial lenders would be very quick to voice their disagreement if they thought otherwise. Suggesting that the values coming from the UK are fake is an extraordinary claim which you have no evidence of.
Germany has a general inflation rate of 8.7%, this is below the EU average. They are not driving it up.
Groceries were rationed because UK supermarkets refused to buy them at spot-prices. The UK had a shortage of peppers while Sweden etc had peppers at 10€/kg.
> The UK is absolutely capable of tapping EU supply,
I don't understand what are you trying to falsify. CNBC or their news about the UK not being able to import as it used to from the Eu.
"...James Walton, chief economist at the Institute of Grocery Distribution, told CNBC: “The U.K. is highly reliant on imports of fresh produce at all times of year, especially in winter — the EU accounts for much of this import volume. If there are shortfalls in production in the EU, then it would make sense that EU producers would serve their local demand first. This leaves less available for export to the U.K...”"
Having a 'free' trade deal does not mean that you will get priority over the domestic buyer as an outsider.
> I'm eating Spanish cherry tomatoes as I type
Your personal experience does not constitute a statistic.
I (we?) were discussing food inflation, but generalised inflation is higher in the UK - 10.4% Vs EU of 9.9%.Not a massive difference.
You said the UK, due to Brexit:
> Since the UK is out of the Eu, its not possible to access the Eu domestic supply anymore
Which is just plain not true. Deprioritised, sure, but not unable. A lot of people take the Daily Mail seriously (including other news outlets too) when they say stuff like we can't get tomatoes. It just meant I went to the other shop across the road instead.
Media narrative obviously. This looks like a story about the war’s effects on energy and resources. Better to redirect people’s anger so they they don’t lose their appetite for the proxy war.
A good if overly simplistic model of inflation & recession etc... is building a rocket in the game Factorio
The rocket isn't necessarily intrinsically useful for everyone but is important because it is the thing that pulls forward all the demand for the all the commodities and all the intermediate production.
Without the rocket there would be no factories, no jobs, no meaning. The factory MUST run to keep everyone's livelihoods going even though the rocket isn't relevant day to day. It also incentivizes things like innovation, efficiency, etc...
However, building TWO rockets at the same time puts such a resource demand that there start to be shortages and breakdowns. Parts of the factory start shutting down. People are left jobless. One of the most serious is if the factory breakdown cascades to the power system (e.g. money) which causes the entire factory to breakdown.
It's a tough job to figure out how to restart the factory incrementally. Meanwhile everyone is left jobless while this is being debugged.
So there's a balance between how many rockets have to be simultaneously built. If there's too little demand, the factories are idle. Capital rots and there are less jobs. If there's too much demand, then shortages and price spikes will cause an even more serious breakdown.
What gold/bitcoin/austrian philosophers understand is that the price of money HAS to reflect market reality. E.g. in a Factorio game all bottlenecks are important to production but if you mess up the energy bottleneck, then the whole thing breaks down. Having a hack like "manually move a few tons a coal every hour" and forgetting it once is catastrophic. The market conditions have been manipulated with buffer.
The Fed & other central banks are usually concerned primarily with the layers of production that affect the most people. E.g. food and gas are critical. However when the "power supply" is threatened they need to start doing things like bailing out banks even if it seems insane to be focusing on this when people can't afford food.
Meanwhile in Sweden the CEO of ICA, the largest supermarket chain in the country (53% of the market) said yesterday: "It is actually the consumer who controls what they are prepared to pay for a product. In the end, it is they who decide." https://omni.se/icas-vd-det-ar-kunderna-som-avgor-matpriset/...
The consumer decides what they are prepared to pay for a product, unless the demand is inelastic. And for food overall, the demand is inelastic. Consumers cannot just say "food is too expensive for me, so I think I'm going to to go without it this month".
They can choose between the individual products they buy, so it wouldn't be a problem if just some food items got expensive. But the price of food overall is inflating.
> They can choose between the individual products they buy, so it wouldn't be a problem if just some food items got expensive. But the price of food overall is inflating.
That is a false binary. You can still buy flour (or naan or pita), cheese and tomato sauce instead of pre-made pizzas, sacrificing your time against rising food costs. You can buy lentils instead of steak, sacrificing your preferences against rising food costs. Or you can travel further to a warehouse store and buy in bulk...
When enough people act empowered in the face of adversity, we don't have to sweat "greedflation". Retailers will learn their lesson.
Yes, I understand rising prices make life worse. But don't let anyone tell you there's nothing you can do about it. Learn to cook, change stores, eat differently, maybe even move.
"My Pizza Pops went up 25%, I am powerless in the face of inflation!" Just no.
If flour, cheese, and tomato sauce also go up 25% what the shit is gained from your entire post? The people at the bottom of this still have issues buying food.
Ok so as an another commenter mentionned:
1. Spare time to cook food from scratch is a class thing. Most peeps have to work stupid hours.
2. To go to a warehouse and buy wholesale, you need #1 and make sure your petrol cost offset the savings which imho is absolutely unreasonable.
Correct. Almost all flour-containing goods have a cheap version which is cheaper than making from scratch. Buying bread flour and making bread is usually a net economic negative, it's just something that people do for fun.
The exception is maybe if you've got a good Indian supermarket and can buy at the 10-20kg range, then churn out a lot of chapattis.
Demand for food overall is inelastic, but the demand for specific foodstuffs is elastic. The measure of inflation we're discussing is across all foodstuffs.
And to add to that, these companies hide addictive processed sugars and additives in such you that can be psychologically if not physically dependent on things without realizing it.
This is an interesting point. It's definitely easy to switch to cheaper calories. Candy bars have high calorie counts and are cheap. Even today in the UK, you could buy 2000 kcal worth of candy bars for about £1.60.
And the inflation will push some people toward such food choices. Maybe not that extreme, but switching to cheaper food generally means eating less nutritious food (unless you were over-spending), which is awful.
Being pushed into single-digits spending on food daily isn't outside the realm of reality. £10 a day is about £305 a month. This is a lot of money for some vulnerable groups, like large single parent families, retirees, students, some young adults, and similar.
The inflation also harms people's diets in a several ways: you must buy less food or less nutritious food for the same amount of money, and you have less money for food as other expenses have inflated. What is worse, less healthy food demand has long-term consequences to do with its supply going down and prices going up further.
What kind of candy bars are those? That's like 10 candy bars. A US Hershey bar is only 220 calories which is pretty standard for a candy bar. The real MVP for calories at minimum price is peanut butter. A bottle of Walmart peanut butter apparently goes for $2.18 currently and is 2880 calories total.
I've been thinking about this for many years. I really think flour is the best ratio of calories to dollar. However, I've been unable to satisfactorily quantify the energy and time costs into equivalents.
In Germany I'm able to buy 1kg of flour for about 50 euro cents at Edeka. I don't know how much bread that makes, but it is A LOT. I'm certain that it is significantly more than 2880 calories.
Flour is clearly the winner vs. peanut butter when comparing price per calories. At Walmart.com it is $2.12 for a 5lb (2.26kg) bag which is about 8250 calories. But yeah, processing that into bread (home energy cost and time cost) is tough to calculate and probably depends on your situation.
Still there are in-between options - pasta for instance is more bang for your buck than peanut butter and is much easier to prep yourself than bread.
It's interesting this conversation evolved into one about the most cost-effective sources of calories. Unintentionally, it serves as a poignant reflection of how things are going in our times. Many people will need to consider cost of calories seriously soon, many already do so.
Cheaper food is cheaper for a reason. The human body doesn’t just require calories. You need other nutrients too: protein, fat, vitamins and minerals. Usual advice is to eat a balanced diet, but that is expensive. Even eggs are expensive.
If everybody starts eating even more trash than usual then that will cost the government more in healthcare costs.
You can eat a balanced diet just off of canned food and rice. The fact that people expect to be able to eat fresh bell peppers in the middle of winter is the issue.
Eating seasonal and preserved foods is how we survived before the age of refrigeration and global logistics chains and maybe we should reconsider what is normal.
> Eating seasonal and preserved foods is how we survived before the age of refrigeration and global logistics chains and maybe we should reconsider what is normal.
That we survived doesn't mean we had a balanced diet.
Expecting everyone to just give up meat and bread for rice and beans is nonsense. And eating too many calories is unhealthy, but who are you to decide. You're blaming the victim.
If the prices on hotdogs are like what I've seen at the store, no it is not. They're not priced quite like a steak, but it's close. And then you got the buns which are also like $5 for a 8-pack of the cheap store brand ones.
A lot of the basic foodstuffs -- dry beans, grains, milk, eggs, flour -- have all gone up in price significantly. I've seen prices double over the last two years on some of these.
You don't have to buy the buns lol. I remember using sliced bread instead of the buns because it's cheaper if you only use 1 slice to wrap the meat. I still see the $1.99 for a loaf of wonder bread or whatever it's called. That's plenty of slices for plenty of hot dogs lol.
They've gone up in price, but they still retain their status as the cheapest meat. The people who aren't buying steak are buying something else instead.
In fact, I believe that the price of hot dogs have gone up more than the price of steak has. Yet people are still buying more hot dogs and less steak.
Looking at the conditions that "beef" is raised in - feedlots specifically - the price for beef is way too low. Of course it should be raised by laws requiring better living conditions for the animals, not by the operations staying the same but making more profit. Same for all kinds of meat really. I happily eat meat, and of the more pricey variety and not the cheapest I can get, but I'm willing to pay the price (and I'm not earning much) if the animals are treated better.
If that also leads to meat being a side dish instead of the main dish more often that's probably for the better for overall population health too AFAIK.
I was buying a piece of tenderloin in Costco once a week. In a short time the average price went from about $150 to $200. I could still afford it but something in me cringe so I stopped buying it. That is in Canada
Ground beef prices at Costco went up a boat load as well. Costco only sells things at most a 2% markup so Costco prices are a pretty good metric for inflation.
I've been off beef for a long time now (family of 5). My grocery bill is $2k/month and my kids are still young. I can't imagine what it'll be when they're all teenagers.
> Consumers cannot just say "food is too expensive for me, so I think I'm going to to go without it this month".
One could be temporarily elastic, e.g. thaw meats from the freezer, eat shelf-stable food from the pantry. And in a few weeks, prices could be different and they do tend to bounce around week to week.
No, "inelastic demand" is a specific term in economics. It means that demand for a product does not change much or at all depending on its price. Think about bathroom tissue, tobacco and diesel. Whether the price goes up 20% or down 20%, about the same amount of the product will be sold.
Elastic demand is the opposite. Some products have elastic demand, like luxuries and durables. An expensive car trim might be very price-sensitive because it is a luxury product. People will buy much fewer of those in austere times. They may buy fewer washing machines, too, because these products are durables. They are often bought "as an upgrade" or when one broke but could be repaired for cheaper.
It's how rich Western Europeans say that the poor will revolt unless socialism. It references something some French princess allegedly said who, when told the peasants don't have bread to eat, replied that they should eat cake instead. Some claim it as a sign of the royal disconnect that lead to the French Revolution.
Apparently suggesting they buy raw ingredients instead of processed foods is the same as suggesting they eat cake if they don't have flour to make bread, because nobody likes the idea that consumers can adjust their choices.
b) making food from raw ingredients is cheaper than buying (at least some of the ingredients) pre-made. Again, it isn't for a surprising number of foods because, you know, economies of scale. Prime example is bread.
It is for a lot though. You can buy a kilogram of rice (or even larger amounts, price didn't move at all in Northern Germany), or you can buy the 2-minute-microwave-stuff (price did move). You can buy 2kg of potatoes for the price of 750g french fries. You can buy soup ingredients or you can buy canned soup etc etc.
Why do you think economies of scale wouldn't happen at the potato-selling business? Are they buying and selling individual potatoes?
We can go back and forth listing every single food under the sun, but the fact if the matter remains: food prices have gone up. Including for "ingredients".
It's easy to dismiss your opponent with "but rice and potatoes aren't more expensive". Well, I don't only eat rice and potatoes, and prices for other stuff like meat and milk has gone up.
There is something called price elasticity of demand, which is how much demand reacts to changes in price.
Here we're discussing food... People have to eat so demand for food, at least staples, does not change much when prices rise as long as people can afford to pay (and by and large currently they can).
It should also be noted that in developed countries the price of food has collapsed as a proportion of people's income over the last 100 years. So the reality is that even if prices double demand will probably not change much apart from some arbitrages (go to cheaper brands/supermarkets, drop in demand of a few luxury items and non food items).
I hope that continues to be an option. In my neighborhood, they finally changed the signage from a merger that happened a while ago. I now have two Safeways within a mile of my house with the next closest grocer being a high end store 4 miles away and a discount grocer 6 miles away.
I fully expect one or both of those stores to be absorbed by the Safeway/Albertsons/Kroger monolith in the next few years.
Also note that Lidl droppeded its prices and the others came out "predicting" lower prices just hours after Svantesson (finance minister) came out of that meeting with the oligopoly and complained about the lack of competition. I think they got the message, but will it be enough? I doubt it.
The supermarkets in the UK engage in price fixing so consumer can only decide so much when each supermarket has the same price and smaller shops are priced out of the market.
In the UK where big business dominate, the competition is illusory and regulators turn the blind eye.
In an ironic way, the consumers decided to leave the EU and expose the UK to higher inflation. Though much of the world has been seeing severe inflation at this time, it would have probably been better if the UK had access to a broader food market.
The UK still has access to those markets. The problem is not that we can't import goods, but that there are fewer goods to import and they are being sold at higher prices.
For example, in January, food inflation in France was 14.8% and in the UK it was slightly lower at 13.3% and the OECD rate was 15.2%. It's not a Brexit problem; it's a production problem.
It's not a problem caused by brexit; it's just a problem made less severe by zero-trade barriers with the countries you're importing food from.
The UK is one of the most import-dependent nations in europe, and the world; it's easy to give good reasons to suppose had the UK been in the EU it would have seen below-average inflation.
When food starts to run out, governments serve their own people first. This is also true for the EU. If there's not enough to go around, the UK simply won't get to buy any.
That's true, except when food starts to run out, the French government will serve the French people, the Spanish government will serve the Spanish people, and so on. You're nuts if you think the Spanish are going to ship food they desperately need to Hungary because they're both in the EU.
Isn't that exactly what's happening with energy right now? I live next to a hydro plant that isn't even maxed at capacity and my electricity bill is like 8x what it used to be, simply because they "have to" sell energy at the whole EU market because someone somewhere desperately needs it.
The inflation for these products came from the EU, the reason why prices for tomatoes went up is because Dutch farmers have been paying significantly higher energy costs (some supermarkets chose to hold no stock instead of paying these prices too).
"Meanwhile" means there isn't any particular connection, but replying in disagreement is very common and on social media it's often assumed if ambiguous.
This seems to happen all the time. Someone is just trying to make conversation (like me, here) and people try really hard to see in what way they were attacked by the comment.
Can I just point out that my comment wasn't an outright contradiction either, people just assumed it must have been one (correctly, in this case) since it would have been a rather pointless observation otherwise.
The summary is that productivity is down, money supply is way up. The value of money, in particular, the strength of the US Dollar is backed, fundamentally, by the strength of US and US productivity. The problem is that the money printed did not sufficiently go into factors that increased productivity (relative to the money printed) and instead contributed to an asset bubble and consumption (relative to investment in productive capacity).
Unfortunately, the Fed has to raise rates to reduce the money supply (increase the cost of borrowing) which puts downward pressure on productivity. This is not a foregone conclusion but is the likely outcome, hence the need to "do more with less" mantra of tech.
So while the money supply will decrease, the real question is will the money supply decrease relative to productivity. Otherwise, we are basically in for a stagflationary period unless technologies like LLMs produce a step-function increase in productivity and efficiency.
The problem is there is also an inverse relationship between productivity gains due to technology and effort. Meaning technology makes life easier, so people work less, effectively resulting in the same overall output, unless economic conditions dictate otherwise. In which case, inflation may not be a bad thing in the very near short term, provided we can produce our way out of it, which may be possible if LLM technologies result in new industries and job opportunities. (However current thinking indicates the opposite, jobs will likely be eliminated as a result of LLM technologies.
Most food packaging is made with aluminium. Aluminium is down 30% YoY but up 50% in the past 3 years. It's been a wild ride for manufacturers and they increased prices to handle this. Same with energy, the average cost is 50% up from ~3 years ago. Not just electricity that powers up the factories, but the oil for everything logistics.
If you're Unilever/P&G/Nestlé, what do you do? You start cutting costs (less/worse materials - that's called skimpflation), total production volumes or less volume per product (shrinkflation). You also are not as inclined as before to give out promotions and benefits. The good old "pay 1 take 2" is now "pay 1 take half". Retailers get squeezed because they can't just pass the whole price raise down to the end customer, so they suck it up a little and get less profits. They also had more operational costs, so they get screwed (mostly the people working there). The smaller ones may shut down or get M&A'd, the big ones survive.
To make matters worse, the world is simply unpredictable right now. Post-covid you would expect some categories would go up (deodorants, for example), but then you have a war in Ukraine and a global rise in interest rates. When managers can't predict they go with the worst-case scenarios in their pricing strategies, reinforcing all that's bad.
Personally, I'm saving what I can, investing in inflation-indexed bonds and the occasional "buy the dip" for some select stocks, freezing cooked foods with a month in advance, and being very cautious with any job movements. I hope I'm wrong but I believe that will be the way to go for at least a year, if not more.
There is a 2007 book by john Michael Greer - "The Long Descent: A User's Guide to the End of the Industrial Age". It was the first in 10 books on the subject of industrial decline over the course of a few centuries.
I wish so badly that he was wrong about these things, but every day it looks a little more like he got an absolute home run on this topic.
The only other advice I would give to people is, if there is something you need to buy now and you can - do it! Key word here is 'need'. I have been buying in bulk for years now and switching over to equipment that will last a long time. It doesn't mean you will be 100% fine but you can ride the dips as they come.
Yes. People need to own their own homes, especially Millennials who are struggling to do this (and Zoomers will, too) because not only has pension age been going up while Millennials have been growing up, but the amount hasn't really changed for the better either (pension age should go down and amount goes up and a sign of economic progress).
Which means that pensioners NEED to own their own homes instead of paying rent because the entire system is still designed around that fact. I'm sure it's possible to be renting as a pensioner but it's not ideal at all.
People should own their own homes. People should be restricted to owning only a single home. Homes should be easily transferrable and prices should be heavily restricted/controlled. But that'll never happen, it's too late for that as a lot of false value has already been extracted from them so people who own homes with overblown prices have paid that amount. It's the ones that paid nothing for their house and now see it worth .5-1mn that need a forced reality check. Otherwise houses are just poker chips for rich people; I live in London and even in the outer areas new apartments are being built with each apartment going for 700k-1mn£...for a fucking apartment.
There's a lot of arguments about the mechanisms of inflation, and its various symptoms, but surely the root cause of inflation is elevated energy prices?
I mean energy underpins the price of everything else in an economy, especially production and transportation, which in turn affects the price of groceries. I guess as far as groceries go there's also a significant labor component, but still, it must surely be the cost of energy as the principal driver of inflation?
Thanks for raising this. Totally.
I think most of the user base here is US centric but from what I can see from the side of the pond is that the biggest worry is that increasing interest rates will do shit all because the deep root of the problem is energy, brexit and all kinds of terrible policies that the Torry governement has been inflicting on the country to become ‘self sufficient’ which had such deep and brand new ramifications our economy that we are actually just making shit up hoping it works. Economists can’t rely on previous data anymore as we’re basically starting ‘brand new’.
There seems to be a widely accepted and unchallenged consensus that political power is unable to address inflation. Maybe it ain't necessarily so? In 1971 Nixon froze prices and wages by executive order. But these days the political world seems oddly submissive to whatever the market wants to do.
> There seems to be a widely accepted and unchallenged consensus that political power is unable to address inflation.
Political power can address inflation, and it can mitigate the effects of inflation on the less well off. These are, however, often opposed goals.
E.g., massive taxes on the working class with no added spending would kill demand-driven inflation, but also make the non-rich worse off.
OTOH, downward redistribution by spending (possibly coupled with high end taxes) would mitigate the low-end effects of inflation, but increase the magnitude of conaumer price inflation.
> In 1971 Nixon froze prices and wages by executive orde
Price controls create black markets, but usually do not control effective prices.
That was not my point, but thanks for pointing out a paragraph in the source that I provided. I do notice a few 'citations needed' in the relevant clauses. Even so, if Nixon's policies resulted in failure that's not a reason for politicians today to just throw their hands in the air and declare that nothing can be done politically because "market dictates".
When you noodle around in the market "to do what's right", you end up creating a new set of problems down the road when the expectation of getting bailed out becomes part of the market's future calculations.
See: FED keeping rates low for over a decade leading to complacency at banks who assume if things get really bad, FED will pivot rate hikes and they'll get bailed out again.
Well, if the one measure you point out as what the government could do today led to worse outcomes, then I do think they should abstain from that kind of interference in the future. I don't think price controls have worked anywhere.
I believe that we can make a small dent on this problem if we improve the technology that runs greenhouses. (My bias: I work for a startup that is working on this and I'm kind of obsessed with the industry.)
Here is what current greenhouse tech looks like: a human (called a grower) uses their intuition to adjust hundreds of settings that parameterise what the actuators should do in different circumstances. For example, 20 settings might parameterise a 'ventilation setpoint line', which determines what air temperature the vents should start opening at given a measurement of the solar radiation intensity from a weather station. All the different actuators (heating pipes, vents, screens, misting systems, irrigation systems) have their own set of heuristics that need to be adjusted by hand..then beneath that a low-level control layer (e.g., PI control) manipulating individual motors/valves.
It's crazy but the grower has to manually adjust the settings as the weather, energy prices and crop state changes. With better software/automation we can improve the control of the environment within the greenhouse and thereby increase yields [kg/m^2] and minimise energy costs.
If the farmers are producing more tomatoes per m^2 for the same input costs they can afford to sell them to consumers (via supermarkets) at lower prices and still make money. It won't solve all the problems but would be a step in the right direction.
Plants don't really give a shit. Implementing a convoluted tech solution in greenhouses for an additional 5% efficiency will never pay back for itself.
> (My bias: I work for a startup that is working on this and I'm kind of obsessed with the industry.)
I suggest you actually learn more about growing plants than optimizing 20 different atmospheric and HVAC parameters. Many of these recent startups folded because they couldn't figure out that growing lettuce indoors hydroponically doesn't actually make anyone any money.
> I suggest you actually learn more about growing plants
We have people with decades of experience operating 70+ Ha of greenhouses in the team, so I don't think a lack of knowledge about the industry or plants is an issue. Perhaps my comment gave you the wrong impression about us.
> they couldn't figure out that growing lettuce indoors hydroponically doesn't actually make anyone any money.
It is quite easy to refute that statement that nobody can make money growing lettuce indoors by looking at Gotham Greens, or Revol Greens (https://www.revolgreens.com/). What is true is there are a number of agtech startups who raised a lot of money, did not really know what they were doing and imploded, I can agree with you on that.
I'm not sure exactly what you mean by 'efficiency', so I am assuming you mean yield. Have you ever looked at the income statement for a commercial greenhouse? From the data we've seen from operators inside the industry a 5% increase in yield roughly double your profits (consider that the costs for energy, labour, supplies is fairly fixed, so increases in revenue then flow down to the bottom line).
Yes, if you mean how much profit does the farmer make I think you are spot on.
Pricing fluctuates with the season, variety but from the data I've seen a farmer in the US might sell to the distributor at $2/kg, but after paying all their costs (packaging, labour, energy, supplies, depreciation) the pre-tax profit might be around $0.16/kg - so 8%, and that's probably a pretty good year! It's a low margin, high volume kind of business.
I think summer 2023 is likely to have more protests than 2020:
- Food prices are highly correlated with societal discontent. Need bread, circuses alone insufficient.
- 2024 election cycle is starting to ramp up, society will be thinking more politically.
- We're having a warm spring - could be a hot year. Tempers flare more easily in higher temperatures.
- Looks like we're heading into a recession. As the fed fights inflation, peoples investment savings will drop in value, making the middle class feel less secure.
Is this at least partially Brexit related? For comparison, the US has seen food go up by around 10% over the same time period, which is pretty high but also far from 18%.
Last year we spent two weeks in Iceland. I do remember, 10+ years ago, paying the same for 2 (two!) onions as you did for 1kg in Germany over there. Last year, we were not shocked at all, actually we paid less then we did in Germany, not much but still. Turned out Icelands grocery prices were roughly on par with France, and a tad lower than Germany at the time.
So, German groccery prices did a lot of catching up since at least a hear. Slow enough so that you don't realize unless you are living on tight budget. That being said, since salaries in Germany tend to be higher than in France, the average German consumer is still a bit better off (ignoring housing or rent, and using a broad brush here).
The war im Ukraine did caise all kinds of issues, as did Covid. All ghinhs considered so, the developed world did reasonably well so far so. If food prices increaseore so, governments will have to intervene, as lower income families will have a hard time between increased energy and food prices.
Nearly all inflation is tied to inflation in cost of energy. Food is especially related to energy cost, since the core cost of modern food creation is the cost of fertilizer and operating artificial growing environments (greenhouses, metered and pre-mixed feed waters). Energy is going up, so food is going up, this impacts Europe more than the US, because they operate in different energy markets. More generally, for almost all goods, the cost of transport went up, both because of the cost of energy, and because of challenges with logistics during the pandemic that have not fully subsided.
Energy costs are the primary driving factors for the cost of nearly all aspects of modern life.
It feels Europe is becoming increasingly poor and unsafe, and the situation in the UK has worsened quite a bit since the start of Brexit.
Anecdotally, seems there's a lot of British and European expats here in the Valley and they don't seem too keen on returning. We've been getting a lot of international applicants (but work from home was supposed to mean Europeans could avoid moving to the "dangerous" US but work for American companies?).
Brexit was 6 years or so ago. Then we had 3 years of trying to reverse it, then Covid, then Ukraine and, to top that, a Govt that decides fracking for gas is unacceptable and then goes and imports fracked gas from the US.
Maybe best to sum things up as a run of bad luck compounded with gross incompetence?
Everything becomes less safe when inflation is on the rise. Every country has a different inflation formula (alongside the effects of "shadow inflation"), thus you can't compare 10% in country X with 18% in country Y. We're all in the same shit.
_Probably_, but German food inflation is running about 22%, and the UK is pretty comparable with most of Europe, so Brexit is probably a minor effect at best.
Can’t seem to find data to backup this observation, so leaning on anekdata instead - when traveling in EU, food prices seemed a lot lower than US. If this is true, an equivalent nominal increase would translate to a higher percent increase. For example, if the good costs $10 in US and $5 in UK, both see an increase of $1 (let’s say due to some shared factor like energy cost), then US would report 10% increase and UK 20%.
War has nothing to do with that, at least not war in a classical sense. Economic or total war that some countries are involved in can be considered as a major reason.
Are any countries other than maybe Ukraine engaging in total war? I'm not sure even Russia's mobilized to a degree that the term's applicable (though, maybe, in their case—but anyone other than the two principles in the war? Definitely not)
And Ukraine's hesitance/inability to strike war-relevant civilian targets in Russia (say, bridges and factories) more than very-sporadically makes the term a bit iffy even for them. Hell, even Russia's been more restrained than what the term usually suggests, as far as the brutality of attacks, if only barely.
It basically means "complete mobilization of a state & society toward a war effort, coupled with a willingness to engage any target regarded as having any war relevance whatsoever, no matter where or what the target is". Hallmarks are mass conscription, rationing, large-scale conversion of civilian production capacity to making war materiel, and leveling cities on purpose (not just as a side-effect of fighting over them).
My understanding is the Russia and Ukraine both contribute meaningful portions of the global food supply. Wouldn't destabilizing these two countries affect food prices globally?
Yes, this is well known and has been tracked in the finance and economic press. Just as an example, both grain production and transport (due to disturbances in rails and shipping) were both effected directly and indirectly which had significant impacts in Africa.
Every country in Europe is feeling the effects of the war in Ukraine but the UK seems to be dealing with it the worst. There's clearly an extra layer going on there.
How do you figure? From the numbers posted by others in these comments it seems UK inflation is pretty much mid-table compared with the rest of Europe: https://i.redd.it/8hbhiqhowjpa1.png
Fair enough, I was only thinking about inflation resulting from the war. You are right about the other things, and Brexit is undoubtedly a factor there.
Naw. Stupid people are only happy until they face the consequences of their stupidity. I'll take being right and derive my happiness elsewhere because internet validation is a chump's game.
A lot of the inflation on food is increasingly feeling like businesses cashing in. For instance my old go to brand of breed increased by over 50% months ago.
I'm having trouble understanding how much of food shrinkflation is down to actual costs going up versus exploiting the current market dynamics to squeeze more profit.
I understand it's probably a mix of both, but it's hard to tell the relative proportion as a consumer.
They didn't have the pricing power/their customers didn't have the tolerance for rising prices/coordinated action and corporate consolidation means prices are going up and it doesn't matter what your choices are.
Circumstances materially changed over the last few years, and inflation is a great time for profit taking as we're seeing, which reinforces the inflation. In a competitive environment the excess profit-taking should start pulling back eventually, but in the meantime the prices are going to the moon.
I don't think there was a magical point in consolidation that let them increase the price of eggs ad hoc. Or a magic 'greed' button that they refused to hit before now. Why not just make it $30 an egg?
> They didn't have the pricing power/their customers didn't have the tolerance for rising prices/
Just for everyone's sanity, it's WAY easier to believe that there are underlying market conditions that should be addressed and not worry too much about retailers. They are just doing marginal pricing. If there is a shortage on eggs, it's better for everyone that they price eggs so they stay on the shelves than to price them as if nothing is happening and then people panic because they can never find them anymore.
The profits may be up, but the revenue is still down overall.
The linked study didn't really make that claim. All it really showed was that only a small portion of inflation was returned in the form of wages. It didn't really attempt to figure out the reasons for the profits.
I don't know why people get so hung up on this though: If you have less stuff to sell, and fewer employees to sell it, your profit margins are going to be higher! That doesn't mean though that you are maximizing your revenue potential. Which is probably why despite all of these reports of "record profits" you are not seeing exploding stock evaluations.
Also, it doesn't hurt that inflation is always going to be favorable to retailers. You buy inventory at the pre-inflation price and sell it at the post-inflation price. Even if you just price to keep up with inflation, you are going to report "record profits" every quarter just by nature of inflation.
>I don't think there was a magical point in consolidation that let them increase the price of eggs ad hoc. Or a magic 'greed' button that they refused to hit before now. Why not just make it $30 an egg?
I'm not sure this can be approached from a rational examination of economic premises alone. You raise good questions. However political economy also should be considered.
Let us imagine for a moment that this narrative is being advanced to deflect from government largess in the economy. Under this scenario court economists have an interest in protecting the regime, while the regime and academic institutions generally have a symbiotic relationship. If these incentives make sense, the narrative can be better understood in this political context.
Unfortunately this hypothesis suggests that there is very little we can say here without this discussion devolving into the regular flames we see on this topic.
This is exactly it. Companies will actually go quite into the red on particular products to avoid a price increase "before everyone else" if they can survive else wise.
There cannot be anyway Arizona Ice Tea is making the same profit today on their .99 cans that they were in 1992.
And at some point that has to break unless they become a charity subsidizing aluminum-clad tea.
When "the break" happens they almost always overshoot; it's easier to offer a 'discount' later if necessary.
Long story short: they reduce costs (thinner cans, no need for heavy marketing because fixed price is the marketing) and aren't greedy, playing the long game.
Free market economics means that if absurd profits are being had, then new people coming to the game will offer slightly cheaper prices.
A price were willing occur until surviving companies are making minimal amount of profits.
Related is if someone figures out how to produce the same amount for less effort/cost.
If someone is making absurd profits for long periods, then usually some major factor such as government regulations is preventing new players from entering the market.
> Free market economics means that if absurd profits are being had, then new people coming to the game will offer slightly cheaper prices.
Supermarkets are expensive but still not expensive enough for someone to bootstrap an operation to elbow themselves into the market as a new player and expect to still make profit.
> A price were willing occur until surviving companies are making minimal amount of profits.
> Related is if someone figures out how to produce the same amount for less effort/cost.
Existing supermarket chains have massive delivery networks and associated efficiency, already have
- the real estate and
- all the internals of a retail store and
- the associated warehousing set up,
- all the personnel who know their way around the store and where everything goes (which is a huge part of the efficiency of distributing the wares in the store),
- "brand" recognition of the store (Aldi, Tesco, Walmart, ...)
which means the new competitors would very likely have to massively loss-lead at a time when the already-established market participants are making more profit than before.
> If someone is making absurd profits for long periods, then usually some major factor such as government regulations is preventing new players from entering the market.
Selling foodstuffs especially is an area of business where a huge chunk of regulations are absolutely justified and it's not like all of the food singled out because of expired shelf life ("MHD"/"Mindesthaltbarkeitsdatum") is getting thrown into the garbage (at least here in Germany).
I currently work in a supermarket and have done so in a different chain before this one and from what I know most damaged or "expired" food is getting written off and then either set aside in the appropriate temperature store-room for the "Tafel" (food bank) OR if it's really unfit/unsafe for consumption (moldy, completely interrupted cold chain [1] or obvious signs of spoilage like bloated food packaging) it gets thrown into the garbage.
Raving about "free markets" from ones ivory tower is all well and good but the reality is that because of corporate consolidations and necessity-for-living many economic sectors are effectively locked down by (implicit) cartels, either because it's cost-prohibitive to even enter - let alone succeed in - that market or because the actual necessary infrastructure has been divied up between the current market participants (think USA and their local mono-/duopolies of ISPs).
[1]: For example when we find items which should be kept cool or frozen in other areas of the market having been taken and left there by customers who obviously don't care (like that one time I found fresh fish with its plastic bag bloated to bursting in a warm section of the market during summer time, thankfully the packaging wasn't damaged or it wouldn't have been pretty).
Mass inflation is a convenient excuse for profiteering. Similar shit happened in Germany with the DM => EUR switchover, yielding the nickname "Teuro" ("expensive euro").
The core problem is that Western countries have collectively decided to dial back anti-trust enforcement that could have stepped in.
One hypothesis I have is that as food and labor costs have increased, people eat out less and generate more store traffic. Those shoppers are stuck with the decision to cook and their demand on a per store basis is more inelastic.
At least where I am this is the case. Milk and milk products are at record highs, with some products nearly double what they were at the beginning of last year. Yet the milk companies actually cut how much they pay producers. Prices for energy and fuel are around the same as the end of 2021.
Energy price in EU is at pre-war levels, as far as I know, for some months now. It definitely must be something else. I live in a country where everybody eats bread every day, and the price increase has been around ~80% over the span of a year. The price of flour has risen by around ~15-20% with all the "Ukraine is a major grain exporter" uncertainty since the beginning of the war. Corporate profits are unprecedented, so it cannot be anything else but pure greed.
I've switched to buying the bargain bin discounter stuff. It's such a transparent pretense to raise prices while raking in profits that I don't want to give it to them.
I think parent is talking about the US COVID bills that provided liquidity to the stock market and checks to households.
Did UK also do something like that?
We are also still seeing supply chain problems here that started during COVID. Consumption didn't cease during COVID, but production did, so there is a massive backlog. Not speaking retail consumption, but industrial and government orgs also consume resources like equipment, machines, etc. And those assets are seeing persistent backlogs, especially domestic production as US is fully employed and no room to increase production.
I'm not sure how much of a point there is in treating this inflation as region-specific when the economy is clearly globalized to the point where anything affects everything and most countries are also seeing it.
The UK made its own relief checks, as did all EU countries afaik, but to a much smaller degree than the US. Some only to students or as free meal/vacation vouchers.
At this point, I feel like people are rising prices because everyone else is rising prices because “inflation.” Literally my wife raised her prices for haircuts simply because everyone else was and she was getting comments that she was too inexpensive.
Yes, there's absolutely a well-established phenomena that expected inflation will cause realized inflation. That's why the Fed (and likely other central banks) have to "break" inflation by showing they will get it back to 2% no matter what. If people believe inflation will be 2% the next couple years, it will help cause inflation be 2% the next couple years due to not causing the treadmill of price increases.
> This saw select fruit and vegetables rationed in UK supermarkets, due to shortages caused by bad weather conditions in the South of Europe and Northern Africa and many growers having to cut back due to rising costs of heating greenhouses.
Besides the obvious degradation of the energy and fertilizer markets from the war in Ukraine, the collapsed Pound is probably the biggest factor here.
Uh, how does one source produce except through imports? A weak Pound will make it more expensive.
Even for things that can be domestically produced, like greenhouse tomatoes, they will still be more expensive even if they are now competitive with imports. And for items like rice and couscous you're not really going to be able to domestically produce them anyway.
The pound isn't particularly weak against the Euro. The shortages are because supermarkets won't pay for spot-prices, they'd rather just have little to no stock in the short-term.
The Economist ran a story the other week on the topic of food costs talking about how the tomato can be looked at as a type of energy store & how British supermarkets differ from other European supermarket chains by rationing out veg rather than increasing pricing. [0] This was to say the "shortages" were more of a quirk of the British market rather than purely due to Brexit.
the way inflation is measured I think is accurate for a certain type of economic measurements, but it's not the intuition that consumers have about inflation. It's a moving average to ask "prices this month are what percent over what they were this month a year ago?"
because if prices shot up 20% last July, and then stopped going up August and onward, the measure is going to say that inflation this month is still at 20% over last year, but consumers have already got used to the new price level in the shops. At the same time, Joe Average is likely to be ready to grumble about prices all the time, so hearing that inflation is still at 20% will reinforce a sense that isn't really accurate.
I'm not saying economists are not measuring the right things, I'm saying that the way the stories are played in the press requires some digging or interpretation.
I'm more than a bit irritated that the inflation news push out just the annual number and do not show how the acrual CPI index has developed. As an example, euro area headline inflation has been practically zero since october [1], and yet only thing you see in the news and ECB commentaries is the YoY number scaremongering.
This is my experience too. I don't know where the CPI ever gets its data. But Inflation is clearly over 100% for restaurants in California. Literally in the last 3 years.
a) The CPI includes many more things than just restaurants. Unless you spend 100% of your income on restaurants, focusing on that specifically isn't very informative.
b) There's no way that inflation is "over 100%" in restaurants in California. For example, a carnitas Chipotle burrito is currently $10. In 2018, five years ago, I ordered the same thing for $8 (I have all the records of my purchases). That is only 4.5% annual inflation over that time period (25% total). I don't feel like checking other restaurants, but I suspect if you actually look at data and not your intuition it will agree with this.
I can also echo this. The prices of groceries that I'm buying doubled in price in the last year. Some even tripled. I'm not sure where are they pulling low double digits in my country, but that's just not my experience.
Is that in the UK? I live in NY and I feel like inflation is something happening to other people. I guess I don't watch prices very closely, but things seems just as annoyingly expensive as they did 3-4 years ago without any really noticeable difference.
This is just further evidence that whatever problems the US has, things consistently keep being worse elsewhere, whether it's inflation (like in the UK or Germany, such as food and energy prices), unrest (like the protests in France), natural disasters (Turkey earthquake), etc. As much as both sides lament about the decline of freedoms and overreach of 'the state', in EL Salvador tens of thousands of people have been rounded up and arrested--due process be damned.
America continues to occupy a privileged position in the world of stability and prosperity despite always feeling on the precipice of civil war, unrest, or crisis--but that never quite gets there. What could have been a major banking crisis 2 weeks ago was averted by more coordination between policy makers, and of course, lot's of liquidity.
How long will it last? I don't know, but I don't want to bet against it either.
The interesting thing about food is that most people in the country probably spend 10x on food than what they really need to (including eating/drinking out). We pay for convenience and luxury, but if push comes to shove there’s a lot of economising to be had.
Demand for food is inelastic, so it makes sense that companies are raising prices as high as possible since people still have to eat. Generally this leads to price competition from other food brands, but when single companies own dozens/hundreds of food brands it’s easy to act like a cartel and keep prices high.
It's both increased wholesale food costs and price gouging. Profits have never been higher all along the board. Everyone in the chain is "passing the cost on" and also taking a little extra cut.
gouging is an incredibly unhelpful context in a macroeconomic sense. In cases of shorter term scarcity (e.g. toilet paper during early covid), you can have instances of gouging. But over a longer-term period where prices are calibrating to demand/supply dynamics, price increases simply reflect the shifting balance between supply and demand.
Should we be concerned about why there are shifts in demand/supply? Sure.(In the case of food, part of this is driven by the UA war and likely other trends in food productive)?
But it is eminently unhelpful to simply attribute increases to 'gouging' and expect that to be the final say.
In the US, M2 increased 70% in 2 years. Of course prices are going up. Anything less than a 70% increase means companies have a ways to go to catch up.
and i don’t think you’d expect it to. the increased supply needs to hit the market first. depending on how that money is distributed, that could take a long time. also remember that QE has been central fiscal policy in the UK and US since basically 2007. and it’s safe to say that concentration of this wealth is.. very high.
> has UK M2 declining [..]
it becomes a bit more sobering when you look at the full scale on that graph (when the y-axis starts from 0). it’s a metaphorical deck-chair-thrown-off-of-the-titanic amount of decrease.
The contention was that the rich always want high inflation to stiff the poor. I’m just pointing out that’s not berm the case for, I said 20 years, but it’s actually been 30.
Yes we have high inflation now, but that’s just been a plain old cockup. The massive inflation reduction act stimulus for example.
I'm not sure about 70%, I can only see 33% in open sources, but either figure is huge and now everyone is with Pikachu face and blames everything but helicopter money.
Increased prices and price gouging are not the same thing. If production costs are up, and they are up, then prices can go up without anyone making any more money. You have to actually look at why prices are going up.
The other factor is that rising prices often mean an increased need for investment by producers. That investment capital has to come from somewhere, so what look like increased profits based on current cost structures can actually be entirely justified if the company then needs to invest that money in order to get production volumes up and cope with increased capital costs.
I don't know enough about the food industry to be able to say which of these is happening, in which sector or country, but these are much more complex issues that the knee jerk reactions here imply. What I can say is, it seems to me that if the reduced supply from Ukraine and Russia is going to be made up, somebody somewhere is gong to have to ramp up food production an awful lot, and I can't imagine that's going to be cheap.
> Increased prices and price gouging are not the same thing
Considering that's the explicit context of this comment thread, obviously, the difference is exactly what we're talking about here.
> I don't know enough about the food industry to be able to say which of these is happening, in which sector or country, but these are much more complex issues that the knee jerk reactions here imply.
That's what I mean about sparing a company's feelings. You have no material objections, but it's important we not use the word "gouging" for companies whose profits are rising considerably faster than inflation and it's consumers being hurt. Tone policing is the least important (and least interesting) part of this conversation.
I think the point is a little finer than you think. Yes, profits are up, but can you necessarily conclude from that single fact that the issue is price gouging? In a scenario where every company is trying to maximize profit, "price gouging" cannot explain why prices are increasing now in particular. Other things can, such as the elements pointed above. In an industry with a lot of competition, I find it much more productive to discuss what are the macroeconomic elements that cause inflation than whether the selfishness of corporations has increased recently.
Increased prices (and sufficient demand to justify the price increase - e.g, overall profit increase) is part of the interaction between demand and supply. Sure, demand for food is inelastic, but there are plenty of different suppliers at each level of the supply chain (different food brands, different grocery stores, etc.) who are individually acting to support the price search function (via individual profit maximization).
Price is a signal of scarcity. Food is more scarce due to supply chain issues, therefore food is more expensive. Is that bad? Sure, let's address the supply chain issues, overall macroeconomic inflation and, uh, other disruptions (incl. the UA war).
Unless you are specifically alleging direct conspiracy between food producers to raise prices (e.g., monopolistic action), (also already an illegal thing), there doesn't seem to be a clear call to action here.
if any given step in the value chain is increasing their prices beyond what is necessary to cover increases in costs (they are), that additional margin purely for the purpose of wanting more money is, imo, pretty shameless when it's hurting so many people down the line
Those are nominal profits, everyone is trying to take "an extra cut" to stay ahead of inflation. Grocery has razor thin margins to begin with and the usual direction of prices is downward. Inflation will absolutely put a grocer out of business if they can't stay ahead of rising prices.
After tax profit margins for grocery retailers in the US range from 1-3%, some places like Whole Foods approach 5%. Gross margins are higher, but net margins are what determine whether or not you go out of business.
I've seen a convincing argument that this is energy price inflation being passed on down the pipe. Certainly for out-of-season foods grown in greenhouses, leading to the UK tomato shortage of last month. (Anyone else see "max 3 per customer" on various fresh fruit and veg?)
>Profits have never been higher all along the board. Everyone in the chain is "passing the cost on" and also taking a little extra cut.
This feels correct, but if that were the case, if companies are generating record profits, why aren't we seeing that reflected in stock prices? At the very least, why isn't price / earning ratios cratering?
the dollars are lower as a result of their actions increasing profits
they only need to increase prices to deal with the increase in costs, and profits represent an increase above and beyond that necessary amount, which in economic terms is "not cool, dude"
All well and good except for the fact that these companies have gone on the record in their earning calls to say this is just them squeezing the end consumer as much as they can. But go ahead and makeup some false justification to defend them against the truth of their own words.
Dude, did you even read my post? Yes that is happening in the US, I said as much. In the UK, profits are down. For the most part in both cases, I'm sure there are exceptions.
I appreciate the feedback, but I think it's unhelpful to dismiss what I said as "lazy". I have an economics background and am certainly not a "blame corporations" reactionary.
Companies are smart. When news gets spread far and wide about a shortage of eggs or other products due to disease or wars or "supply chain issues", they leap to take advantage of this consumer consciousness by increasing their prices, knowing the consumer will blame the larger macro factor and not the company. This has been well-documented, even in cases where the supply chain issues didn't actually impact the company that raised prices.
The best way to understand what's happening is via corporate earnings calls. They're upfront with their strategy when talking to investors.
Sure, but firms reacting normally to consumer price inelasticity during supply shocks is not exactly noteworthy. The noteworthy thing here is that there are supply shocks on so many different fronts at once.
I don't deny that corporations will try to make a buck taking advantage of favorable price-over-volume plays when they can, but I think it's crazy that people think during a global energy and fertilizer shortage Walmart just decided to throw out all of their low-price volume corporate strategy just to screw customers over egg prices.
I'd expect decent firms to not try to gouge customers who are already hurting at the time when they most are, but maybe "normal" means "sociopathic" in the context of amoral unrestricted capitalism
You’d be surprised at how few importers actually provide most of the imported foodstuffs in the U.K. - Lamex and IPL for instance. Brexit has made importing untenable for a lot of smaller operations due to the red tape, and many have moved their buying to import agencies or domestic wholesalers.
There are quite a few significant supply bottlenecks in the U.K. food supply chain, from supermarkets to wholesalers to importers, and they do allow for price fixing - demonstrably so in the case of supermarkets and domestic produce.
Not to veer off into the psychology of it, but there's just such an overwhelming desire by most people to place blame for any misfortune on some intentional human behavior.
It's the root of conspiracy theories - it's much easier and nicer to think there's some cartoon villain somewhere making your life miserable; it's much harder to admit that the world is just annoying and painful.
Also with a "big evil" you can tell yourself that removing that evil would solve everything.
A lot of times, the villainy is really the collective self-interest of thousand of people in a supply chain or open market. No one is going to willingly pay more or sell for less than they can get at any step of the way.
I use housing as a good example since it's been a major driver of inflation and most houses are sold peer to peer on the open market. If you're selling your house and you see comparable houses selling for $900K, but you only need $750K to earn enough profit to buy your next house, what are you going to do? Sell for the lowest price you can afford? Or sell for the highest price you can get? You'd sell for the highest price. And that same calculation gets played out at every level of every transaction in every corner of the global marketplace. Yet nobody would think of themselves as being a villain for doing it. Or be accused of gouging.
From that comes NIMBY; everyone agrees that something should be done but nobody wants to do it. We really don't like be presented with 'we cause things too.'
The house sale is a perfect example, and is something to meditate on. (One solution is 'competition' such as making sure new houses are being built, other companies can produce food, etc.)
I see a lot of millenial/gen z commenters complaining that the previous generations were able to build wealth by buying affordable homes and watching them appreciate faster than inflation. And they want in on the same deal. It's simply not possible. For one, we haven't built housing to keep pace with population growth which skews supply and demand. NIMBYs are a big reason why. Secondly, in order for a home to be a valuable investment, it must by definition become less affordable for the next generation. Otherwise, it's not increasing the wealth of the owner. The only sustainable option is to match supply to demand such that houses pace or even lag inflation which makes them no longer be a viable store of wealth and instead remain affordable and available to everyone. The Boomers got a sweet deal and realistically, no one should ever get that deal again.
Well, also, we know from behavioral economics that people behave their most irrationally when they try to perceive value.
When a store runs out of flour, people don't get as mad at the store as if they raised the prices but keeps flour on the shelf. Despite the fact that having an expensive option for flour always leaves you better off than having no option.
After Hurricane Katrina there were some prominent examples of people being arrested under anti-scalping laws for trying to haul in food and generators from other areas to sell.
It's always the case. Someone, somewhere, is taking the opportunity to put prices up. It might be in some cases that it's triggered by a shortage, but they're still putting prices up because they can.
I'm not sure how this cartel like behaviour works in the UK where every major supermarket has its own range of competing products - and then there is the likes of Aldi that is 90% stocked with brand lookalike knock offs?
There are currently competing narratives in the UK about food prices - greedy supermarkets v poor farmers and the same people complaining then say they shop at Aldi because it's cheaper.
Food is still cheap - it represents a small percentage of people's income. However, in the UK, we are beginning to see that food produced without the benefit of slave labour is somewhat less cheaper than it used to be.
> Food is still cheap - it represents a small percentage of people's income.
If you look at it as an average for the population, sure. But that masks the real issue, which is that it hits poor people the hardest because spending on food doesn't scale proportionally with income.
Acting like "food" is a company is absurd, there is a ton of competition and substitution in the market, no one actor has the capacity to influence "food" prices in general. If they did, then were they just being altruistic three years ago by not raising prices?
This isn't how the market works in the UK, or anywhere close to it (because distribution is heavily consolidated).
The main change has been energy prices (it is complex because supermarkets stopped selling some products, so the price recorded is not what consumers experienced because the product largely wasn't available).
Also, just generally, that isn't how demand for food works either. It isn't elastic, there are substitutes for every product. The main factor driving differences between countries is usually the structure of the food supply chain and exposure to trade.
I doubt it. I've read that Americans throw away 40% of their food. Obesity rates suggest people eat far more than they need to. And there are major choices in what to eat - cheap vs expensive calories.
Obesity reates in the US, from my observation, are a compound effect of the unavailability of affordable, healthy ingredients (fruits, vegetables) and cultural factors (a custom of never cooking healthy meals, for instance rice and vegetables, instead of consuming carb-heavy burgers and sugary milk shakes and coke at fast food outlets).
Friends in the US drove school buses during the day and worked at Wendy's at night, only to give back a substantial part of what they earned to Wendy's to cover their dinner there. They didn't even realize what slavery they were caught up in.
Hmm. Napkin math assuming its 40 gallons of sugared soda at a reasonable 20g per 8oz serving is 640 servings, 12800g of sugar, 51200 calories, or 14.6 lbs of empty nutrients on average a year if it all got replaced by calorie-free sweetener.
How much is 40 gallons? 426 12 oz cans of soda, 35.5 dozen cans, or 256 20oz bottles of soda.
I wonder if the bad quality of the majority of tap water has an effect on soda consumption. How much less soda would we drink if every residence had on-site water filtration?
Yes, and we have a culture of overwork so even if people did want to cook at home they’re too exhausted or short on time to consistently cook healthy meals.
If humans behave rationally and eating healthy is cheaper and healthier why don’t more people do it?
> Obesity rates suggest people eat far more than they need to.
Obesity rates are also higher among poorer segments of society than wealthy, so it isn't necessarily a given that obese people will choose to eat less just because doing so will make them poorer due to higher prices.
It's likely possible that the lack of self-control that is sometimes related to overeating correlates with lack of self-control in other areas such as saving money or avoiding debt.
But that's not popular to talk about; nobody likes hearing about personal responsibility anymore.
It can also be a learned reaction due to past experience. Shortage or hungry times resulting in an instinct to overeat when food is available to act as a buffer should bad times come again.
Demand for food is highly elastic. Food is not a homogenous substance that costs the same to produce each kind. When people are feeling more flush, they will consume more expensive food products (lobster, beef, fish, berries, mussels) and when they are feeling more price conscious they will economize on cheaper products (wheat, lentils, rice, tofu, chicken, beans, vegetables), and by wasting less food. We're talking about literally thousands of different ingredients and products, produced in different ways in different regions, that can to one extent or an other be substituted for each other.
Animal feed makes demand for food highly elastic. Simplest example, you can convert #2 corn to cow feed and make 1 calorie out of 7, turn it into chicken feed for closer to 1:2, or turn it into corn-based food directly. People can and do shift consumption to cheaper substitutes, like chicken instead of beef (or oatmeal instead of eggs for breakfast).
Let's check this empirically. Which cartel-like brands are publicly traded and publish financial reports? We can look at their profit margins next quarter.
It's probably better to look at the margin, I could see how the profits increased in absolute numbers as people may have switched from eating out to home-cooked food.
Profit margin increased by 230 base points that represents a 14% higher margin.
130 basepoints if you use GAAP measures so only ~7% higher margin then but clearly unilever doesn't just have higher costs but is also increasing their margin.
I don't know, but I would not be too surprised if local / smaller producers are a bit better represented for restaurants. In any case, profit margin should not be sensitive to this.
Margin will also help discount issues resulting from Covid; a company that lost money during Covid (think restaurant suppliers) would go to a profit when it was over, but are they making MORE margin (percentage) than they were before Covid?
Also many people don't pay attention to how much food costs, at the point of purchase. It's all things that have low numbers that add up. e.g. when asked, nobody knows the price of a pint of milk.
I guarantee you that people trying to raise a family on a budget pay very close attention to the cost of individual items.
People might stop caring quite as much about individual pricing once they have enough money not to have to care.
People who have to worry "can I afford all of this once I get to the till" are very aware of how much everything costs, and they are more common than people who don't have to worry.
A pint? I mean no, but that's because milk is sold by the gallon. If you think people aren't acutely aware of the price of a gallon of milk then you live in a bubble of wealthy people. If milk rises above $3 a gallon or falls below $1.50 half of my Facebook feed has something to say about it. Same goes for many other standard products.
This thread title starts with "UK:", where milk is sold in pence per liter (and also "metric pints", which are pint-multiple containers quoted in mililiters)
Outside of chemistry, liquids are typically measured in litres (AmE: liters), a metric unit of capacity equal to the volume of one kilogram of water at 4°C (39°F) and at standard atmospheric pressure of 760 millimeters of mercury.
"Gallons" are not a universal metric:
For the US, 1 Liter of milk = 0.2641720524 (US) Gallons.
For the UK, 1 Liter of milk = 0.2199692483 (UK) Gallons.
Because this has been and still is confusing, the standard unit of liter was introduced as a universal alternative (no flamebait intended).
If you are poor and/or live paycheck to paycheck (for example due to your monthly home heating bills having gone from 400 euros to 3000 euros year over year), I can guarantee you, you pay very close attention to how much food costs.
This. The last part, thank you. I think it's a major problem in the economy today. For a market economy to work there needs to be competition, but there's too little of it. If the prices are too high, the market response should be to produce more. But it's not happening - even if you produce something you need to get it in stores and every country is dominated by a few huge chains. They don't want to do business with small time producers. So in multiple parts of the chain you have entities that can basically do whatever they want.
Housing works the same way, and we've seen the result of that. If food distributors are able to coordinate price increases without direct collusion, expect it to go the way rent has.
We had shortages of ammonia, a key component of fertilizer, last year. That drove up fertilizer costs. Not a huge surprise when the output goods are then marked up.
Many of the workers in these factory jobs decided it was a good point to retire, decided it was more worth it to stay home with their kids, found a calling in a different career, went back to school, etc. This all had had ripple effects throughout the supply chain, making for less goods available. Combine that with low unemployment, hence many folks competing for those goods, and it's easy to see why we are where we are.
so gullible people not paying attention to their profits would just blame inflation for the entire price increase rather than recognizing that greed is driving a chunk of it
If it owns all brands and they raise the price, then start your own food company offering lower prices, you will turn up the market to you like from day to nite.
As someone who doesn't live in the UK, the impression I get from headlines is that the UK is becoming poorer by the day, the NHS has collapsed, crime is exploding, poverty is rising, most people can't afford anything anymore, the Royal Mail is hanging by a thread, and the economy is in free fall.
Anecdotally, my buddy (31M) in London says he's having the time of his life. Making a lot of money at BP, parties every weekend, just moved into a nice flat with a partner. I suspect, just like in America, that if you're inside the "formal economy" (corporate job with real benefits and potential for career growth) your life is pretty great. If you're outside that (service worker, gig economy, small business owner, NEET) then things are pretty grim.
It seems that way because part of the problem is that grievance has become the most valuable currency.
Food here is, empirically, still unbelievably cheap. I can buy a 500g bag of spaghetti for 28p, lentil and beans are cheap, bread is relatively cheap, chicken is so cheap that you wonder how safe it is...still...but the problem is that in the UK, if anything doesn't benefit you immediately then people will complain.
RM...they had a monopoly, their workers are almost always threatening industrial action, like they aren't "hanging by a thread"...they have a licence to print money, workers just won't turn up to work because they feel aggrieved.
NHS...funding is through the roof, the biggest individual component of the budget with a deficit of 5% and tax % of GDP at all-time highs...workers on strike, "they get paid more in Australia" (true of almost every job in the UK because Australia also has significantly higher CoL).
Crime? Again, we have an underclass of people who commit all the crime, repeat offenders often walk free over and over, shoplifting isn't investigated, robberies aren't investigated...and people wonder why it is attractive to commit crime?
Poverty hasn't increased, unemployment has dropped like a stone over the past ten years, all this time we have people like you: the economy is in FREE FALL, poverty is going to rise soon...it hasn't happened, the issue we have is that people are constantly feeling aggrieved. This seems to be a disease of the West too, you see the same thing in the US where there are real economic issues but there is very little discussion of them...all it is just single-dimensional, "things have never been so bad" grievance-building.
But no, nothing has really changed. Life carries on unsurprisingly. The UK has issues, food prices aren't one (in fact, food prices are far too low still), problems that do exist remain unaddressed, problems that don't exist absorb all of the attention.
I live in London and am married with 2 kids, working in tech. Personally, I'm not seeing too much difference.
* Energy prices are higher, and this has had a knock-on effect, but I see it more on childcare (e.g. nursery) than food.
* There have been shortages of some foods - specifically there were shortages of tomatoes and peppers for a week or two a month or two ago, but not recently... and there are shortages of eggs, which I understand from my cousins, who are egg farmers, is primarily due to bird flu (most eggs in the UK are from British hens).
* Regarding NHS, we've not needed to use hospitals recently, but access to GPs has been same as usual.
* I've not seen an increase in crime.
* I hear that poverty is rising, but don't have direct experience.
* The Royal Mail is almost certainly dying, but I think it's been on its way out for years.
Like I say, this is just personal experience - I appreciate that I'm quite lucky at having an OK-paying job, so could well be insulated from problems that others face.
It's hard to get a handle on any kind of objective reality. Headlines always catastrophise.
Anecdotally at least:
- Brexit is a pretty notable economic negative, purely in the sense that it's added a lot of drag to EU trade and made it harder for workers to access the UK market. Nobody likes loads of red tape. It's hard to separate this from the many other influences from COVID through to Ukraine.
- There has been a pretty clear spike in the cost of living, which has a direct impact on things like poverty. Notably the housing market was very disrupted by the policies of the previous prime minister; again, it's hard to separate this from anything else but anecdotally a very large number of people noticed that they suddenly had to find hundreds of pounds of extra money every month due to housing end energy costs.
- The NHS is not in a great state, no. Several years of underinvestment and the pandemic came home to roost, and combined with the pandemic and rather a lot burnout it is not sounding great from anyone who works there.
- The economy isn't in "free fall" but does have several things dragging at it – including supply-chain difficulties, inflation, worker shortages, and other challenges. It's hard out there.
- Most noticeable and in-your-face thing for someone like me—in the fortunate position of being on the breadline—is an obvious deterioration in services and availability. Lots of strikes in various industries, quality of everything suffering, difficulties getting basic goods sometimes. It can feel pretty oppressive, though of course nothing compared to how some people must be struggling to get by at all.
Economy is not great but certainly not in free fall. Most people are ok. Crime is no worse than in other major European countries. There are no riots in London (looking at you, Paris...)
On the other hand, according to certain parts of the UK press those riots in France are a sign that their politics is far healthier than the awful state of politics here (looking at you, Guardian)...
On the contrary, those riots show that every important issue in France is hijacked by violent far left militants who don't want to debate but to bring "the system" down or just destroy as much property as they can get away with. That is not healthy. Riots on the pretext that the retirement age increases by 2 years to an age still below the EU average is not a sign of healthy politics.
32, tech worker, just bought a house in a village in the south... Yes my vegetables are a bit more expensive week to week, maybe i need to go to another store to buy one or two specific things but generally life is fine.
Still getting pay rises, still getting bonuses. Generally life is more comfortable for me than its ever been.
Someone set fire to a bin last week, does that count as an increase in crime?
I’d say they’re overly dramatic headlines. For example, the nhs is under funded, as always, but still functioning with long wait time s for non emergency surgery/consultation. Poverty is rising as a consequence of the cost of living crisis. The Royal Mail has always been an overly priced service buts there’s loads more competition. Personally, I reckon we should just let the service die!
Saturday deliveries and 5 weekday deliveries seem unnecessary, but universal letter and small (CD-sized) parcel service seems worthwhile.
If the logistics work, delivering letters only if there's a first class letter to be delivered, if there's a standard letter that's been waiting more than 2-3 days, or if Royal Mail feel like it (e.g. delivering to this road for someone else's first class letter) might save a lot of money.
The reality is very difficult to assess, but there are some clear markers: NHS waiting times have increased, and there is an unprecedented series of strikes by NHS staff some of whom are badly underpaid and all of whom have been exhausted by the pandemic.
Crime is not necessarily exploding, but confidence in the police is rather low. A Metropolitan police officer was jailed for 71 counts of sexual assault earlier this year, having done quite a lot to raise the crime rate all by himself.
That's the rising income inequality working the way it does. Inequality is the reason many third world countries are as bad as they are. Now the US and the UK are seeing rising inequality and for sure you'll see they having more of this stupid problems happening.
I have a lot of friends in the UK, and my perception 15 years ago was that it was a country in decline. There was a general feeling of malaise, with not many hopeful for the future.
2008 was probably not the best time to ask that question - and it's probably not the best time to ask it now either. (Unless you want a negative, doom-laden answer, in which case you got lucky both times!)
London has experienced the worst drop in quality of life by far, other places are also being hit but they're kind of used to it by now and they can't really fall much further anymore.
I've lived in London for the past 6 years and I wouldn't say that at all. Food and energy has gone up (comparably to the rest of Europe), but there's a feeling that Sunak is more competent than the previous lot. Plus we're getting loads of tech investment.
I lived in London pretty much since I was born (2000), I moved away last year because of how bad it's gotten, and it has very little to do with food and energy. There is basically no sense of social cohesion left anymore, you cannot expect safety, you cannot leave a car parked outside and expect it not to be broken into. I've had a guy almost pull a knife on me because I accidentally came up behind him and he thought I was from an opposing gang. This sort of thing was a not-so-uncommon experience for my peers at school.
This is just so alien to me. I'm in a not-so-great area of North Islington, and never even _seen_ violent crime happening.
I can't walk down the street any more without saying hi to people, the chippy guy who goes on Sunday runs, the coffee shop owner who lets me know when they're trying a new roaster, the elderly women walking their dogs at lunchtime. It's almost like my old hometown.
I'm very Americanized owing to the amount of American content I've consumed, especially due to the internet. For example: I also say 'dude' and use American spellings for words.
Not related but The price of poultry has gone up significantly in the GTA, and a friend who works for the government informed me that there is an outbreak of bird flu in Ontario that's affecting poultry farms. Unfortunately, farmers can't talk about it due to ag-gag laws.
The Canada Food Inspection Agency publishes weekly estimates of the number of birds affected by highly pathogenic avian influenza infections. The numbers seem relatively high (any number above zero is concerning), but they have barely increased since January:
Week ending 2023-01-18: 748,000 birds affected in Ontario, 7,051,000 in Canada [1]
Week ending 2023-03-22: 749,000 birds affected in Ontario, 7,173,000 in Canada [2]
Unsurprising. Over 58 million US chickens have died of the H5N1 bird flu in the last year. Although it seems to have slowed down considerably in the last two months. Currently, South America is having a lot of problems with the same strain.
Glancing at the exchange rates the pound fell year over year 5% from a local max vs Euro so this is on top of the certainly high inflation on Europe. Also it is said that UK supermarkets lock in prices long term with domestic producers. But goods are somewhat mobile so the shelfs in the UK empty. And while it is just an anecdotal bit - our local Aldi here in Germany was selling British scones and shortbread.
While the exchange rates over the past decade mostly move sideways and the effect yoy should be one-off the current moves in the financial markets have potential for further disruption and the UK being more isolated will see her Pound fluctuating more with more immediate impact on people and business.
The UK politics seems like a separate level of dysfunction. It seems like all the worst decisions being made together. For some reason people voted for Brexit. The PM who was the chief Brexit Campaigner (Boris Johnson) had to resign because of entirely avoidable mistakes. The next PM had to resign too soon due to trying to bring policies which were not well thought out. The current PM had to be annointed since it didn't seem like the Party membership would vote for him.
It doesn't seem like Labour has a charismatic leader either. I could never even find a concrete stance by Corbyn on what he was running on wrt Brexit.
HNers from UK, what does the outlook look like policy wise for the UK.
> what does the outlook look like policy wise for the UK
Sunak will gracefully lose the next election, by a lot, but a lot less than Truss or BJ would have lost it by, and having helped to slow the freefall in reputation by the Tories and steadied the economy a bit. Keir Starmer will be a decent and competent but dull leader for two terms, and the who the heck knows. But the next ten years or so should be pretty dull, in a good, centrist sort of way, ideally culminating in rejoining the EU.
"what does the outlook look like policy wise for the UK"
I'm hoping for boringly competent management of the economy plus a gradual drift back towards relatively friction free trade (both goods and services) with our largest neighbour.
Wage growth would be good and some action on housing so wage gains don't just turn into house price rises.
You’re spot on calling uk politics a separate level of dysfunctional. It feels like we’re stuck with a shower of gobshites for a while! Exporting immigrants to Africa is a particularly shambolic/shameful recent effort. And don’t mention ‘the Brexit’ - I’m not saying it’s the only reason but it’s certainly a huge pain point on many fronts.
I think UK politics is at a rock bottom at present but hopefully it’ll spur enough of us on to hold our representatives to a a higher standard…
Yet another sector where investment is low and prices are high.
Over winter tomatoes were in short supply, not because we couldn't grow them, but because the methods of heating greenhouses were too expensive. CO2 heaters use gas in largely uninsulated greenhouses. A bit of creativity (solar thermal with storage supplying radiators) or just modernity (air source heat pumps) would have solved this problem.
Alas, there is little guidance and support. The economic case for fossil fuels continues to weaken and the government does absolutely nothing to support a transition to cleaner sources of fuel which provide shelter from the volatility of energy markets. So we pay instead.
It is all relative I guess? I lived in Spain for a while and noticed how out of season produce was very expensive and there was very little of it. In the UK we expect to be able to buy everything all year round and cheap.
Nobody stops to think how that was possible but that doesn't prevent them moaning when Sainsbury's only have 12 varieties of tomato on the shelves in December.
Greenhouses are a tiny sliver of overall food production. The rest of agriculture is heavily biased toward the energy density of fossil fuel, particularly nat gas and diesel. The innovation required to move away from the actual energy problem in agriculture is much greater than a bit of creativity
Moving away from these kinds of farming methods is really not as hard as people suppose. For a start, composting food waste would produce a carbon neutral source of fertiliser that would cover fairly large amounts of domestic need. Measures like these are really not hard. There's a glut of alternatives available, government simply does nothing to aid in the transition.
For starters, a commercial scale composting operation needs inputs from various sources in order to achieve NPK balance - not just food waste. Therefore, the complexity increases by an order of magnitude as we have to orchestrate the logistics of food waste, manure, wood chips, and more.
Second is that compost is not even close to ammonia-based fertilizer in terms of elemental nitrogen, which is critical for our most calorie dense crops. Places like the Rodale Institue are not at all intellectually honest about organic production yields. Their systems fall apart at the global population level.
It is a fact that if we were to shift all-organic farming that we would need MORE land, and MORE people to create the same amount of food. That's the opposite of our current goal which is to create more food with less land and less people.
Third, the application of compost would actually increase soil compaction due to larger, heavier equipment required. It just so happens that these large equipment (tractors included) are not yet able to run on electricity. There are some electric tractors, yes, but nothing with the power equivalent to modern combines.
Fourth, is the bias toward energy density that I hinted at in the third point. But it isn't just tractors. Many farm operations are unable to electrify due to their proximity to the grid and the energy draw. I'm talking about grain storage and refinery, and many others.
These are all problems that could be solved with innovation. But to your point, it is probably HARDER than many people suppose. Definitely harder than you are making it out to be. Food systems are incredibly complicated. It is also incredibly optimized, and advocating for a massive shift comes with the intellectual responsibility of addressing this complexity and coming up with a solution that can compete with the status quo.
To your final point, the government is doing a lot to aid in the transition actually. Not sure where you are from, but the USDA is now offering more grant programs than ever before to address all of the above.
have consumers increased their exposure to rising costs by consuming fewer raw materials and more finished goods? instead of buying flour, eggs, butter, cocoa powder to make a chocolate cake - they just go buy the cake. and I recognize there's an entire spectrum of stages each raw material goes through to get to the final finished product. each of those stages though is an attack vector for cost increases (legit or malicious - doesn't matter)
having the skills/knowledge to consume fewer finished products is insurance. and the only real price for that insurance is time.
I think this is part of it. Anecdotally, I have heard from a few chefs that young people today know a lot less about how to cook than they used to, so it's harder to hire line cooks. The same goes for many other kinds of basic things, like repairing your house, sewing clothes, etc.
At the same time, a lot of these basics are getting more difficult in the name of efficiency: think about repairing a linen shirt with a loose weave and no stretch vs repairing a spandex-poly shirt with a very tight weave and a ton of stretch.
Interestingly, it seems like even those products seemingly not affected by price inflation have taken a hit over here in the UK. In addition to that, we've also seen:
1. Products offering far smaller portion sizes than before, likely to an even more ridiculous degree than what was happening with things like crisps and chocolate already.
2. The taste and quality of a lot of food items getting worse (probably because the original ingredients got more expensive/became uneconomical to use).
So even products that stayed the same price seem to have suffered recently.
Something interesting is that this article breaks the narrative about it all being about the vegetables and the weather. Veg inflation was 18%, slightly below the average. Several other food categories like grains and fats had higher inflation.
This certainly seems to be more of a sign of a weakening pound not buying as much in n imports than something about food alone.
Everything is mass produced. The prices are inflated because lack of competition. In a monopoly the seller sets the prices. That said, food is cheap, and consumers don't care what something costs. And if you are poor you usually have to buy from the most expensive shop, people with free time can afford to buy where its cheapest.
I'm living in the UK (Edinburgh) and I definitely feel like everything has gotten worse. The facts - on waiting times, strike days, inflation, wage stagnation, inequality etc. - speak for themselves. But there is also just a general feeling of malaise and decay.
I will say that the large population of increasingly Facebook-addled Boomers really don't help. These are people who've paid off their mortgage, can collect rental income, are becoming pensioners, and generally vote against immigration, against public spending, and for lower tax rates. They're also massive consumers of NHS resources. We're going to be supporting these people with our taxes for decades to come. Meanwhile the Government has consistently failed to support productivity growth or infrastructure investment, and our whole economy is oriented around the service sector in London and a handful of other cities.
The only alternative prospectus (Corbyn's "Green New Deal") was trashed by the established media, and his successor is now delivering bromides about national unity and being "tough on crime". He's also put EU integration completely off the menu. Nobody in power seems to grasp the scale of the economic and demographic crisis we're facing. It's not great.
Inflation is super high in California, but I track it mentally on a per product basis for things I buy regularly. Juice is up 33% - lots of things are 18%, 25%, etc.
I dont care what they state national inflation is - Its important by food category.
On the topic of whether inflation hits the poor harder than the rich, I have been undecided/inconclusive in my mind about this. And would love some perspectives on it, along the lines of:
Although day to day items that dominate the spending of a lower income person's paycheck are easily seen affected when inflation hits, for a wealthy person, whatever savings and money is accumulated eventually has to be spent on such things also -- whether directly by the owner, or through goods/services that have to pay such expenses.
So in time, in having to spend their wealth, the rich get affected by shrinking buying power as well. (they just have the luxury to spend on more items that are not daily/monthly subsistence expenses)
Is that reasonable to think?
Why am I getting downvoted for such a legitimate economic question? Is this offensive against lower income people?
Inflation hits everybody, but it hits people with bad market timing a lot more than people with good market timing. That means the dumb rich are the biggest losers, the smart rich are the biggest winners, and the poor (who don't have the luxury of choosing how to time the market on most things) also generally lose.
Does anyone know what is powering worldwide price inflation? And how the US Fed raising interest rates will somehow combat a global phenomenon? Is it due to the Unjust War on the Breadbasket?
Given that there’s an obesity epidemic in the United States, we would benefit long term from such high food inflation IMO. It will force people to reach for cheaper, healthier options, or simply go without food and use up their fat stores. The poorest are often the most obese here.
Imagine being so avoidant to having self control that you would rather have higher food prices, I cannot even comprehend this
It's not hard not being obese, just eat less. Yes, that means having a degree of control over your actions, taking responsibility and not stuffing yourself with dopamine inducing fried food all day
Huh? Isn't cheaper food often the unhealthiest food? In Chicago, using the McDonalds app [0] I can get a large latte and 2 bacon and egg biscuits for just $5. That's a ready-to-eat meal with a ton of calories. You could match that value in healthy foods by buying in bulk, but then you'd have to include costs of freezer space and time for prep.
[0] $4 for a bacon & egg biscuit, $1 more for buy-1-get-1-free, and the McCafe drink of any size comes free for an order of $3+
Anyone who watched Clarkson's Farms would get the impression that overburdensome government regulations on farming have contributed tremendously to increase food costs in the UK. Clarkson himself during the series mentions that Brexit has had an impact too.
Obviously, inflation will destroy the value of wealth, and disincentivise future investment, so in order to reduce inflation, we need to raise interest rates.
As a person living in the UK, I have definitely noticed a considerable rise in unit prices. One of many examples is that a loaf of my favourite bread increased from £3 to £4 recently, which was a shocker. Toilet roll prices, as ever what the news loves to talk about, has exploded, increasing by around 70% since 2020 by my anecdotal observation.
A sad thought I have about inflation is the fact that it is, wittingly or not, a weapon wielded by the rich against the middle and lower classes. In an inflationary economy, the winners are rich who have valuable assets whose value skyrocket - think real estate, businesses, etc.
The lower classes rely on A) proportionately much more on fiat, i.e. monthly paycheck going into current and savings account, and B) a blue-collar job, the wage of which always lags further behind inflation than white-collar jobs.
Those two factors combined means that the lower classes get absolutely battered, while the rich just sit gleefully as their asset values balloon and pass down wholesale price increases, etc.
It's the dark, sinister side of inflation, and I think we are all beginning to see the societal tensions that it is breeding, e.g. endless blue-collar UK worker union strikes, riots, protests, etc.
Not saying that it is only one class that is affected, but let's face reality here - the lower class suffers by far the most in this situation.
The lower class does suffer the most, but unfortunately it is the policies intended to help them which actually cause most of the problem. By giving money to people without producing more stuff - or even making it harder to produce the same - you MUST have inflation, rationing, or empty shelves - and often all three.
The solution to allowing lower classes to have more stuff is to make it easier for everybody to produce more stuff.
Giving money CAN help with distribution of stuff, allowing poor people to purchase a larger share. But it requires lots of money given directly to the people that need it (vs allowing the gov't to spend it themselves). And also requires lots of high inflation. Imagine, for example, just giving everyone £10M to spend on whatever they want. This would not create any more stuff - but it would sure be a big equalizer for people buying that stuff!
But really - if we could all focus a bit more on production - allowing, encouraging, and celebrating it - then we'd all have a lot more stuff.
This seems to come from the same place as the argument of "trickle down economics". Yea no, I've seen similar things done in Japan with abenomics (with one of the targeted goal even being more inflation; without achieving it) and studies show it doesn't work.
Those spending never reaches the "lower classes", and seldom even reach places where it would have the potential to increase productivity.
It's a tired, old argument that is done to justify stupid spending and enriching certain pockets while claiming to benefit all with a shoddy reasoning that omit the important details
His argument is that the government can do 2 things:
1. Interest-free money for businesses to launch, grow, and advance. This leads to more goods in the market and thus lower prices
2. Free money straight to the people which means more money in the market and thus, inflation, empty shelves, etc.
His general point is that having interest-free money keeps existing players honest since newcomers can come in and start a competing business. Now that the money is drying up, existing players are increasing their moat.
The US has had extremely low interest rates for a very long time, and yet effective competition is further than ever in many industries. Something I'd observe is how unreasonably difficult it can be to legally sell things in the US. For instance hitting on this topic (of food prices), why can't I simply start baking bread and selling it? You can make an amazing loaf of bread for a tiny fraction of what people pay in a grocery store, but somehow actually being able to legal sell it is painful, at best.
By contrast I now live abroad in a developing country and it's quite amazing how ripe small business is. Want to sell bread? Okay, bake it and sell it. You can even get it stocked at "convenience marts" easily enough since a that's often just some guy's lower floor transformed in a shop. Talk to the owner, who's probably the guy at the counter, and make a deal. If people like your bread, you're now officially a baker - congrats.
Make it easier for people to sell stuff, and there will be more stuff. And the prices of stuff will trend downwards. While money is a way around these issues, a regular joe who happens to make a great loaf of bread probably isn't especially keen on taking on 5-6 figures of debt just to see if selling his bread actually works, let alone being something he really wants to dedicate himself to.
This is a highly relevant point. The more difficult it is to learn about and comply with regulations, the fewer businesses will attempt to do so.
In some cases, business simply ignore regulations that that are obscure or inefficient to comply with; this leads to corruption and/or shadow economies.
In more cases, business is simply discouraged and doesn’t grow, or just doesn’t start at all.
The messy patchwork is city, (sometimes) county and state licensing and taxation framework in the US is a huge drag on small business.
I am not arguing for no regulation, licensing, or taxation, only that these entities recognize that requiring businesses to file paper tax returns every quarter, even if they have done zero business in a given city is a significant hindrance to business activity.
Safety, including healthcode safety, is a good thing. A level playing field ensures that everyone in the market is making safe, hopefully good quality, products for that market. Reviewing, streamlining, and creating easier for small businesses to follow guidelines about the regulations that exist in a given field also sounds like good ways of improving consumer choice and safety.
> Safety, including healthcode safety, is a good thing. A level playing field ensures that everyone in the market is making safe, hopefully good quality,
Sure, you can raise the standards so much that only multi billion companies will be able to comply. In fact that is what we witness today. How many mom and pop shops still exist compared to the '60s?
> A level playing field ensures that everyone in the market is making safe, hopefully good quality, products for that market
I don't believe "safe" and "good quality" are necessarily aligned. I live close to a dairy farm where they sell (their own) unpasturised milk. You bring your own bottle, fill it, and pay in the honesty box. The farmer has a (small) disclaimer suggesting that the milk be boiled prior to consumption, but I don't believe any of the local buyers actually do that.
My OPINION is that it should not be forbidden BUT that it should be clearly labeled.
UNPROCESSED Raw Milk (animal species)
There should probably be a poster or something created by the FDA that quickly summarizes the risks involved with not performing each of the mandatory safety steps for normal retail 'Milk', and it would be helpful if more detailed information were available on a website and from the local health agencies.
There has been a complete and confusing lack of deregulation talk in the inflation discussion and I don’t know why. Your example could also be taken with housing - why is construction not deregulated in smart ways to jump start residential building? Building a house is a total red tape disaster.
Because home prices are tracked so closely, sited widely, and used as a barometer of economic success and political success.
But yeah I think that's weird and destructive. Wouldn't it be better to prominently track and celebrate how much new housing is built?
OTOH, many people have all or most of their net-worth tied up in their home price. So even though NOTHING CHANGES when that price goes up or down, it has a psychological affect on them, who vote a lot.
HOAs are even worse than county & state governments when it comes to building a house. Many HOAs have building codes which include a minimum square footage. Some HOA regulations require over a 1000 sq ft livable footprint (garages don't count). The problem is HOAs have an incentive to raise property value, which makes it far more expensive for people to build a home to live in. HOAs are incentivized to increase property value of the neighborhood & large houses increase property value.
Small plots of land are dominated by HOAs. Finding small plots of "unregulated" (no HOA) land often requires one to live very far from a city & decent grocery stores.
I'm not a big fan of the red tape of regulation & how regulations can be abused by large capital, but in the case of housing, HOAs are a bigger problem. Of course, there are also municipal regulations which require small plots of land to be more tightly regulated re: housing.
A solution is to improve house design which can be modularly expanded as one gains more wealth. That way, a family can start small & gradually build additions or attach additional modules as time goes on.
> Make it easier for people to sell stuff, and there will be more stuff.
This is an excellent idea. Just lower the barrier whatever that barrier is.
Some people can think that lowering the entry barrier can result in subpar products and services but in fact the higher the competition, the higher the quality will be.
> but in fact the higher the competition, the higher the quality will be.
If this were true, then appliance manufacturers who produce higher-quality goods would be rewarded. But instead, we're at a weird state where appliances are still not cheap while also not being built to last.
Competition isn't guaranteed to keep the market honest; I'd argue once a market passes a certain size the number of people who can spot lemons becomes insignificant, and then it's a race to the bottom.
If that was true... You might end up with mass bacterial infections everywhere as only those cutting standards while providing highly addictive products survive etc. There was a reason why those regulations started initially. Overburdening with new more and more expensive regulations might be the issue.
There is always a tension between economic growth and consumer protection. Selling bread is hard mostly due to health regulations. We used to have a lot of people die due to contaminated food. Now that's so rare that it makes the news when it happens. Food safety rules were written in blood.
Some states such as California do have special exemptions for "cottage" production of low risk foods such as bread.
> Selling bread is hard mostly due to health regulations. We used to have a lot of people die due to contaminated food. Now that's so rare that it makes the news when it happens. Food safety rules were written in blood.
Bread was just an example. Just try to open a small corner shop and see how easy it is. Almost any small business has legal obstacles and a barrier as a high to entry as a large corporation. While the corporation can pass that barrier, little guys can't.
> Want to make screwdrivers and sell them to the local hardware store? Go ahead.
I doubt you can do it without having to pay attention to thousand of different regulations.
Your claim is trivially falsified. There are literally hundreds of small restaurants and retail stores within a few miles of me that are run by small businesses or individual proprietors. The barriers are more in high rents than in regulatory compliance.
The bread example seems pretty bad too. There are tons of local bakeries that take more of an artisanal spin on things in my neck of the woods, and I bet all over the US. They'd have to be niche because it's not like they're going to compete with a national brand that has automated factories that crank bread out. That's who a corner store in the US is going to buy from.
But the point is that you can compete against these national brands, quite trivially. I wasn't exaggerating on the cost. You can make a loaf of bread literally for pennies. And it's better in every single way than what you buy in the store besides the fact that it will tend to go stale within a few days if not refrigerated. But even that's arguably a benefit as well. It goes stale because it's not jam full of chemical preservatives.
It's only when you start making all sorts of things for yourself that you really start to see how completely irrational the markup on many things is, which then begs the question - why isn't anybody simply dropping the prices by 50% and making a killing? And the only answer I can really see is because it's become really quite painful to be able to sell things in America, unless you want to go all-in on it.
I'd also add that in terms of food safety, the big concern is not small business, but big business. Buy food from an individual or a family and you're eating what they're also eating for dinner, and probably have been for decades. By contrast at e.g. McDonalds, those executives probably aren't touching their "product" except for photo ops. Their only motivation is to maximize profit, which often comes in the form of sacrifices in quality or even safety of what's sold. [1] And this has always been true. "The Jungle" wasn't about Joe Bob's streetside shop.
The answer that you see is just totally wrong and ignorant. Instead of making a fool of yourself here perhaps go talk to an actual commercial baker. Ask them how much they spend on licensing and regulatory compliance versus other costs like rent, labor, insurance, utilities, machinery, etc.
Sure if you bake a few loaves of bread at home then that probably seems cheap in terms of ingredients. Now add in your labor, allocate costs for utilities and kitchen appliances, and figure out what it would cost to drive around all day delivering that bread to retailers. Suddenly it's not so cheap.
The false dichotomy you're assuming is precisely the problem I'm talking about. There's a huge range of production between 0 and industrial scale commercial baker. At least there can and should be. But this false dichotomy isn't really so false in America, precisely because of our systems. Go to most of any (and to my knowledge literally any) "developing" country, and you'll see everything I've described here, and it's awesome! The effects on prices, independence, society, 'neighborliness', and more just have such great knock-on effects.
At my corner store, you can buy a taco wrapped in foil that was clearly made by some local next to a crack pipe and milligram scales. The bread is Mrs. Baird's or some other national brand. If you think that strict regulation is what created this state of things, then you may want to re-evaluate that.
> For instance hitting on this topic (of food prices), why can't I simply start baking bread and selling it?
Excessive bureaucracy and excessive legislation have the perverse effect to seemingly protect the consumer while in reality helping the big players. Small players will go out of business while new players can't enter. It wouldn't be much surprise if powerful lobbies ask for such legislation while they pretend they think of the public good.
No one likes competition, even entering the bar as a new lawyer is difficult.
>1. Interest-free money for businesses to launch, grow, and advance. This leads to more goods in the market and thus lower prices
We tried that. It all went into real estate and stocks and gave birth to a massive scam industry involving crypto and other get rich quick schemes as the world is full of stupid people and opportunists.
The average joe didn't see much trickle down to him unless he was already invested in real estate or stocks.
It was basically a wealth transfer. Housing is now about 30% more expensive than pre pandemic but take home wages are not.
Giving away free money without any strings attached to individuals or corporations is a bad idea.
Exactly this. And it’s not anecdotal either. In the UK, 75% of that new money goes to asset purchases[1], that’s likely a similar number in the US. Chronically low interest rates is a wealth redistribution program to the ones who get the biggest loans (guess who). The legend of the honest guy who needs a tractor or a fishing boat may as well be a mythical creature.
At least giving money directly to poor people is spent on things that can grow local economies. It is not perfect, but a lot more “stimulating” than giving money to institutions, corporations and rich people.
> Chronically low interest rates is a wealth redistribution program to the ones who get the biggest loans
What's the mechanism? A big loan is a big risk. With a big risk you can have either a big reward or a big failure. Smaller loans, smaller risks, smaller rewards and smaller failures. It's proportional. Why do you think of wealth redistribution?
Big risk are if you use that big loan to start a new business, but not if you dump it all on stocks and desirable real estate in hot or future hot areas.
> We tried that. It all went into real estate and stocks and gave birth to a massive scam industry involving crypto and other get rich quick schemes as the world is full of stupid people and opportunists.
You tried the wrong thing. You shouldn't hand money without conditions. Instead of letting speculative assets grow, you should only let productive bussineses borrow money with low interests. Businesses which produce tangible goods and are creating jobs.
I always thought "trickle-down" economics was about giving money to businesses via tax-breaks and that money would make it's way back to the people as wages. We know this doesn't happen and companies do stock-buybacks with that money.
Here, we're discussing a different paradigm: interest-free money vs free money. The issue is that interest-free money has little to no use for individuals. They can't put that interest-free money into an existing business and reap the returns. That's why most people just use that "interest-free" money for stocks (margin trading) and even then it wasn't fully interest-free.
The fundamental issue is how to give individuals interest-free money and have them see returns. Maybe using that money toward job training, or starting incubators that find small businesses and infuse them with money, mentorship, etc.
The government can also buy things (like infrastructure) and employ people to provide public services, which directly injects money into the economy by paying it to the people who do that work.
The current UK government has not been doing much of this.
> The government can also buy things (like infrastructure) and employ people to provide public services, which directly injects money into the economy by paying it to the people who do that work
With interest free money, people will just borrow money and spend them massively which will raise inflation. Just what happened in the US with very low interest rate or in EU with negative interest rates.
Borrowing + consumption doesn't in particular generate inflation.
Debt is a heat sink, which is why Japan failed to spur inflation for two decades despite pulling every spending lever they could come up with. Debt kills economic dynamism, robbing the economy of the capital it requires to invest, expand.
To get to inflation out of borrowing + consumption, you need supply to not keep up. For most of the prior two decades for the US, supply kept up (courtesy of the China manufacturing juggernaut, which was a deflationary force for US consumers). The China effect has reached its end in terms of peaking, the next two decades will not see that kind of offset benefit (at least for the US).
Over the coming decades, the US will see similar problems that Japan did in terms of being unable to spark expected levels of inflation, despite high spending and debt problems. The cause will be the same, more and more of the economy will be locked up in the freezer as debt (typically yielding ever lower interest, in a downward spiral).
No, but communist countries were the poster child for "public owned".
To a degree you can do it, have the state own companies. But it will kind of be economically inneficient, high position employees and some politicians will steal money. No one will have the motivation to push farther.
That's not an accurate way to describe HK MTR or Japan Rail and it's definitely not accurate for Brightline.
Most US transit systems are bad because the government puts even more effort into stopping them from working (via bad land use, incredibly slow decision making, power-harassing Andy Byford) than it does operating them.
So in yourcideology it is wrong for governmnet to invest i to economy directly and it is wrong for government to give money to individuals for them to invest it
It is only acceptable to give money to corporations.
Seems very convenient and totally unbiased
So I go and register an LTD company now I am eligible for free government money.
Yeah, the reality is that this will always be the case as long as the national minimum wage (rebranded as the living wage) is in no way related to inflation or the GDP of the country.
As long as execs and CEOs are free to reap the benefits brought by their staff without paying any of it back this problem will continue to be exasperated.
Another contributing factor in the matter is the fact that politicians seem to be immune from the affects of their policies.
This gives them very little incentive to actually help people at the bottom of the totem pole as their funding is coming from the very same people whom are essentially exploiting a desperate workforce.
Is a shelf stacker in Sainsburys a high skilled job? No. Is it absolutely crucial in order for Sainsburys to have a working business? Yes.
The same is true for the cleaner in a bank. If a bank is covered in dirt and stinks people are not going to bank there. Likewise with cleaners of trains and pretty much any other industry.
When you pair the fact that governments are funded by the same people whom are also funding a divisive narrative throughout all media outlets you end up with a grim and bleak outlook for society.
As someone that has come from below 0 to get a good job and try and get out of the council estate poverty cycle it really strikes a nerve when people act as though we get given handouts for nothing.
My mother worked her damn arse off through my childhood and continues to do so now as a 69 year old woman with chronic health issues. She has been left behind and forgotten by society and ill informed people seem to lack any ability to see beyond the outliers in shows like benefits Britain.
> This gives them very little incentive to actually help people at the bottom of the totem pole
Err, votes are the biggest incentive for politicians.
> Is a shelf stacker in Sainsburys a high skilled job? No. Is it absolutely crucial in order for Sainsburys to have a working business? Yes.
Not really, they will soon use robots.
> The same is true for the cleaner in a bank. If a bank is covered in dirt and stinks people are not going to bank there. Likewise with cleaners of trains and pretty much any other industry.
I think in Japan cleaning is robotized already.
> When you pair the fact that governments are funded by the same people whom are also funding a divisive narrative throughout all media outlets you end up with a grim and bleak outlook for society.
Votes matter a lot less in an FPTP voting system, and the point about media division and ownership plays into the fact that people can easily be mislead into voting against their own interests.
Not sure if you are aware of the little old B word which was proven to have been based on a campaign of lies.
As for your remark about robots replacing shelf stackers and cleaners. I’ll leave that as the ill-informed and provocative comment it is.
Regarding government funding, governments spend public tax payer money, yes. Political parties receive their funding from private donors who ultimately end up expecting some kind of payback for their donation/bribe. Which ultimately comes out of the tax payer’s pocket.
This creates a cyclic system which is built to extract wealth from the bottom and middle classes in order to feed it back to the society’s richest people.
"Trickle Down Economics" is a talking point of those who oppose whatever it is that they want to attack at a given moment.
It can, and has at times, meant:
- Corporate bailouts and "welfare"
- Tax cuts
- Deregulation
- Lobbying / big money donations
Sometimes it means some of the above, other times it means all of the above. But the point is that no one on the fiscal conservative side of the aisle has ever come out and used the term "trickle down economics." Their opposition uses that word because it is loaded and it speaks to their base.
> Those spending never reaches the "lower classes"
What spending are you talking about? The OP was talking about removing barriers to creating business and attributed these barriers to good intentions. We can probably safely assume that the OP is a fiscal-conservative who favours deregulation and a business-friendly environment. And for what it's worth I am not trying to take one side over the other, you just lost me at "spending." The OP is talking about the exact opposite of spending. They are taking a "private solutions over public solutions" position. One where you spend less by having less overhead and red tape standing in the way of those who want to produce goods & services thus creating abundance of supply which lowers prices in addition to more jobs which puts more money in peoples' pockets.
https://www.epi.org/productivity-pay-gap/ shows that producing more stuff per person since 1978 hasn't fixed inflation (not graphed there), and we can afford less of it because real wages haven't kept up.
No, that's not what real wages mean. Real wages going up means we can afford more stuff, full stop.
The fact that real wages haven't kept up with productivity means that we can't afford as much more stuff as is being produced, but we can still afford more stuff.
I'm not making a point about society, I'm making a point about what real wages mean.
You're quoting the outputs of a propaganda industry, not the outputs of credible independent research.
These are the orgs who persistently try to sell trickle-down economics, minimal taxation, low regulation, and other discredited, disastrous, and irrational neoliberal policy arguments.
Many are also enthusiastic climate change denialists.
> and other discredited, disastrous, and irrational neoliberal policy argument
Never mind. I guess we have nothing to agree on.
> Many are also enthusiastic climate change denialists.
You're clearly influenced by the outputs of a propaganda industry, not the outputs of credible independent research. See what I did there? I'll even one-up you with some links:
Inflation in 1980, when Carter's presidency ended, was at 12% YoY, the highest they'd ever been in his entire presidency. Rising oil prices were not the only, or even primary, cause of inflation.
From the article: "In the early 1960s, a pair of Nobel Prize–winning economists, Paul Samuelson and Robert Solow, argued that in order to keep unemployment around 3 percent, U.S. policy makers should be willing to accept that "the price index might have to rise by as much as 4 to 5 percent a year. That much price rise would seem to be the necessary cost of high employment." Both economists were close to Kennedy, who pushed for low interest rates, hoping to spur rapid economic growth."
This idea turned out to be false.
Also from the article: "In the early 1960s, a pair of Nobel Prize–winning economists, Paul Samuelson and Robert Solow, argued that in order to keep unemployment around 3 percent, U.S. policy makers should be willing to accept that "the price index might have to rise by as much as 4 to 5 percent a year. That much price rise would seem to be the necessary cost of high employment." Both economists were close to Kennedy, who pushed for low interest rates, hoping to spur rapid economic growth."
This turned out to be true. And, lastly:
"In the 1970s, that is exactly what happened in the American economy, often by design. As Frum wrote, "The United States had consciously chosen to inflate its currency. It made that choice because of the political ideology and personal weakness of the men entrusted with the job of managing the American economy: their utopianism, their arrogance, and then finally their cowardice." The inflation that vaulted Reagan into office was not an accident or an incidental effect of policy. It was the result of deliberate policy choices."
As I said. Took several years and Volcker was appointed late '79. To R's credit, he didn't get in the way of that part.
Although tax cuts don't help inflation so wasn't a clean assist.
He also vastly increased govt spending later in his term, despite the common narrative about being frugal.
"It was only after the election, when Volcker knew Carter had lost, that he really clamped down on the money supply. This illustrates an important point: Presidents get the Fed policy they want, no matter how “independent” the Fed may be. If there had been any doubt about this, it was settled in 1967, when Fed Chairman William McChesney Martin buckled under pressure from Lyndon Johnson and eased monetary policy even though Martin knew he should be tightening. This caused inflation to jump from 3 percent in 1967 to 4.7 percent in 1968 and 6.2 percent in 1969."
And:
"Few people now remember how much pressure there was on Reagan to get rid of Volcker and have the Fed run a more accommodating monetary policy. Yet Reagan not only supported Volcker publicly, he appointed like-minded people to the Fed whenever he had the chance. He reappointed Volcker to the chairmanship in 1983 and appointed Alan Greenspan to replace him in 1987.
The result of the Fed’s tight money policy was a far faster reduction in inflation than most economists thought feasible. From 12.5 percent in 1980, inflation fell to 8.9 percent in 1981 and 3.8 percent in 1982. It is difficult to explain just how remarkable this achievement was. Most economists would have considered it impossible in 1980, especially given the big 1981 tax cut, which economists schooled in Keynesian economics generally viewed as pouring gasoline on the fires of inflation."
You can be as self-assured as you like, and that's your prerogative, but why post a response if you're not going to take the time to be convincing in any way, such as by providing any evidence, information, or even rhetoric? I'm certainly not going to change my mind because you said you read a book.
Cutting and pasting someone else’s work is not a discussion. Not to mention what you added didn’t exactly contradict my take so there’s not much else to say.
I mean, I did contradict your take. I contradict that inflation dropped primarily due to Carter picking Volker, or that dropping oil prices were a major factor. How much more contradictory can I be?
The authors claims that the Reagan tax cuts were a key ingredient without which the inflation reduction may not have occurred at all, or it at least would have occurred at a much slower rate.
But, look at me not carrying on a "discussion" because I keep citing other sources. I should just respond with one single sentence stating my belief as fact, right?
Inflation has been remarkably low since 1980 though… and that graph doesn’t mention prices. Theoretically if more is being produced then you don’t need wages to keep up to afford the same luxuries. In fact all the stats I’ve seen shown that we can and do afford a lot more these days
Meanwhile the headline article is saying the exact opposite.
We're not talking about luxuries, we're talking about essentials. A nice iPhone is useless if you can't afford to feed your family or pay your energy bills - which is quite literally the situation many families in the UK are now finding themselves.
>By giving money to people without producing more stuff - or even making it harder to produce the same - you MUST have inflation, rationing, or empty shelves - and often all three.
Completely inaccurate. Giving people money that came from taxes does not increase the money supply.
Giving people money that came from selling bonds does not increase the money supply.
The main driver in inflation is monetary velocity - the rate at which money is exchanging hands in the market. Increases in monetary supply almost invariably lead to increases in monetary velocity, so the two are generally equated - but this is not strictly necessary. If I gave you a quadrillion dollars tomorrow, and you chose to simply keep it under your [rather large] bed, but otherwise continued living as you do - then obviously no inflation is going to happen, even though you just increased the monetary supply quite substantially.
So while one could nitpick some points about the specifics of government actions in relation to the monetary supply, even if we take all of your points for granted - there would almost certainly be inflation proportional to the amount given. The only way there would be no inflation is if this action didn't increase monetary velocity.
>The main driver in inflation is monetary velocity
I would say this is also mostly innacurate. Velocity is one factor, but may or may not be the driving factor depending on circumstances.
If a global pandemic shuts down most of the manufacturing cities in China, and a war in Ukraine takes Russian energy and Ukrainian grain out of the supply equation, then the velocity of money is irrelevant compared to supply constraints.
Again this is not really a solution to the problem. Because the issue is not one of monetary supply, but of velocity. Giving money to people who will spend that money increases monetary velocity. The only way to prevent this is to reduce the amount of money people are spending.
That's why, for instance, the Fed is currently raising interest rates. They want to 'gently' brake the economy (while trying to avoid breaking it) such that people stop spending so much money, and inflation cools down. By contrast countless countries have tried to solve inflation by simply naively tackling the problem.
People don't have enough money to buy chicken? Well obviously we just need to give them more money! And that's how you get Zimbabwe. [1] Alternatively, another direct approach is to say "Okay - companies may no longer charge more than $0.50 for a chicken." That's how you get Venezuela. [2]
Printing Money == Borrowing Money in our modern banking systems. And borrowing is often exactly how this gets funded.
Also, it's not just about the money supply. It's about who has the money and what they do with it.
Taking money from a rich person who might have had it tied up in stock, and giving it to a poor person who takes it to the grocery store - will not put anything more on the shelves in that grocery store. In the aggregate, it MUST do one of those three things. It may ALSO decrease the price of stock as it's sold by the rich people.
Clearly the economy is complicated, and it's hard to follow around the money. That's why I like to get back to fundamentals. Not even economics, but basically physics: We can't consume what isn't produced. Money is to some degree beside the point. If we want people (of any class) to have more stuff, then we must allow for that stuff to be produced.
>Printing Money == Borrowing Money in our modern banking systems.
Not exactly. Printing simply introduces new money supply. Borrowing (or selling bonds in our case) comes with a corresponding liability that decreases the supply over time in an aggregate amount greater than the original amount, and results in a corresponding difference in behavior from the borrower.
Actually money from selling bonds does increase the money supply.
The government hands out that money, and people use it to buy more bonds, then the government hands out more money, and repeat. There is now more money in the world.
Yes, if you unwind everything it will go back down, but that's never actually done.
> Actually money from selling bonds does increase the money supply.
With a corresponding liability that will eventually remove more money from the system than was introduced. This is of course a dramatically different equation.
We avoid inflation by taxing the wealthy and redistributing that to the lower socioeconomic classes.
Global ecosystems are already in a free fall, we don’t need to “encourage production” [by deregulating industries? perhaps getting rid of those pesky environmental and worker protections? (that’ll definitely help out those workers) ] and even more rapid resource consumption.
The biggest growth period in the Western world - after WWII - happened to coincide with enthusiastic social spending programs, aggressive government funding of new R&D, and very high tax rates.
In the US the rate peaked at 91% on earnings over $400k - which is about $4m adjusted.
I often see the arguments made about how the US didn't suffer from the 90% tax rate. Those same arguments universally and intentionally ignore the elephant in the room: the US was the prime industrial power left standing in pristine shape after WW2 and largely inherited the globe accordingly. The US stepped right into being globally dominate in manufacturing, which produced a temporary, artificial prop for the middle class of gigantic proportions. That can't be repeated today and it wasn't the high tax rate that helped make things so great for the middle class.
This is also why middle class tax rates are so high in Nordic countries, and most affluent nations with good social welfare structures. Taxing the rich isn't nearly enough. The US would have to shift to a much higher tax system for everyone, and the US middle class (which is spoiled by relatively low income tax rates) will not go for it (not yet anyway).
You avoid inflation by taxing everybody. That takes money out of the system. The "wealthy" are already taxed pretty heavily, and they don't buy a lot of stuff. In fact, your best bang-for-the-buck on reducing inflation is to tax the lower classes, since their money tends to be higher-velocity than the money of the wealthy. It sounds fucked up, but mathematically speaking, you need to tax the poor if you want to stop inflation.
>By giving money to people without producing more stuff - or even making it harder to produce the same - you MUST have inflation, rationing, or empty shelves - and often all three.
Says who? Why can't the people producing stuff simply take lower profit margins instead?
Prices lower than the market-clearing price necessarily mean rationing or empty shelves. If you have a hundred potatoes and two hundred people, lowering prices just mean some people won't be able to buy at the low price.
Exactly this - the current inflation is not demand driven. It is supply constraints that is causing it.
This means that the normal way of controlling inflation (e.g. taking money away from people so they can't spend it) is not going to work. And in many ways is probably counter productive as it is making supplying goods more difficult.
There is a very strong disconnect between the value created by the lower class though their labor and what they are paid in wages.
Companies don't use some formula where they give a percentage of what you create to you in return, they try to squeeze your wages down as low as possible. It doesn't matter if you produce 5000 bucks an hour or 100 bucks an hour in value for your company, they still want to pay you as little as possible.
Stuff like staff loyalty and retention has been to a large part abandoned in favor of simply keeping wages down.
Is it? Are the rich people eating up all the bread? Buying up all the shoes?
It you take all the cars from the top 1% and give them to the other 99%, how many additional cars do you suppose the average family will get? How about for houses? How about for haircuts?
> Imagine, for example, just giving everyone £10M to spend on whatever they want. This would not create any more stuff - but it would sure be a big equalizer for people buying that stuff!
This is mostly true, but it isn’t always, and it isn’t a perfect formula.
For example, there are some goods that have zero or negligible marginal costs to provide. For example, a streaming service. If people use the extra money they get to buy Netflix subscriptions, it isn’t like there will suddenly be a shortage of Netflix streams. It doesn’t take many resources to add additional subscribers for Netflix… it isn’t exactly zero margin, but it is pretty damn close.
This is even somewhat true for some physical goods. There is a lot of latent productivity in our economy… factories only running at 50% capacity, for example, or mines that aren’t producing all the ore they can because the demand doesn’t exist for what they produce. If demand suddenly increases because there is more money being spent, they can increase productivity without putting strain on the productive capacity of the industry.
Obviously this is not infinite capacity, but it is why it is not as simple as “creating more money == 1 to 1 equivalent inflation”. In other words, you aren’t going to get a 10% inflation if you add 10% to the money supply. It would be some fraction of that 10%.
And what's good of having high GDP like Ireland (neighbour to UK) if then there's no housing and prices are insane and people who don't already have a secure situation are screwed and have to leave anyway?
Why do tax reliefs and strategies always benefit the big companies with lots of lawyers.
Lower the taxes of the common folk. Their interests are not being met, but those of the lobbyists.
The wealthy in the UK are largely landed gentry. They can't flee with their property and if they sell it off at firesale prices to ordinary folk to avoid being taxed that would largely solve the housing crisis.
The problem wouldn't be that they would leave. The problem would be that they would stay and become violent.
Not the structure built on it (well ... not much ... and you can often just tax that through the resources it consumes).
Not only are you taxing the asset that can't flee the country, and which the poor typically don't own, you also incentivise efficient land usage (it becomes too expensive to be a NIMBY).
Not really sure I'd call the "Hinduja" family wealth "British" although what small % of their wealth they do have in the UK is undoubtedly in property.
There's quite a number of very rich foreigners who economically have very little effect on the UK apart from monopolizing scarce inner city property.
In NYC for example, 40% of the tax revenue comes from 1% of the tax payers[1]. High taxes are causing high earners to leave the city. What's going to fill that gap in revenue?
Cristobal Young and Charles Varner did a study “Millionaire Migration and State Taxation of Top Incomes” and found that when taxes were jacked up on New Jersey residents they tended to stay despite low tax states (e.g. Connecticut) being quite close.
If people are reluctant to move to a nearby state to save on taxes theyre gonna be even more reluctant to move to a whole other country.
They can leave if they want, as long as they pay an exit tax. But personally I think that's bullshit, they'd rather be less rich in France than more rich in Romania.
And if you're talking about companies leaving France, then that's flimsy too. French citizens are among the richest in the world. International companies will pay higher taxes to access that market, and if they don't that's fine, a domestic company can step in or the government can snap up the productive capacity to invest in infrastructure.
Government has funded those things way more, but when a rich person runs a museum it's "philanthropy", when the government does it it's a "waste of taxpayer money".
There's no reason the government couldn't fully fund those things instead.
In fact, "businesses that require high capital" are almost always funded by the government. It's called infrastructure spending.
Good? It's not like they're using that money to enrich the country they live in or the other people or society, they're not building hospitals and funding schools anymore or employing people or raising wages. They're buying assets and becoming landlords and lobbying politicians and making things worse. Not just 'let them go', get rid of them, let them be somewhere else's problem.
>The lower class does suffer the most, but unfortunately it is the policies intended to help them which actually cause most of the problem. By giving money to people without producing more stuff
Which specific policies of this Conservative government amount to a change in the direction of giving more money to more nonproductive people? If anything, exactly the opposite has been happening, and yet inflation has been getting worse.
At some point AI will produce stuff for us. It is just a matter of time until AI can do the basics: grow food, build houses, operate people, etc. I mean, that is what technology was always for: making life better. So clearly there cannot be a correlation between how much you produce, and how much you consume.
I understand where you're for: patching things for some at the bottom doesn't help produce more.
But focusing on the alleged producers while fleecing the people in the middle (who are not the lower end either) is equally bad.
The people in the middle get high taxes, no real possiblity of ownership, no benefits of the bottom (state help) or of the top (the top just increases their own margins).
The top lobbies government and sets an unfair advantage for themselves, making the whole alleged democratic representation a farce.
The government should be more frugal with their won bureocracy and corruption and lower the taxes for the middle and bottom. The pretende that increasing conditions to the top will drip down is demonstrably false. It's mostly a rigged game, depending on where you started.
Whatever we do with corn is a good example. We have way more of it than anyone wants, but it continues to be produced because the producers are subsidized. (We have found alternate uses for the corn glut; high fructose corn syrup, ethanol in your gasoline, etc. Neither of these things exist in countries that don't subsidize corn production.)
In theory, you could do this with toilet paper or loaves of bread too.
Or you know, deregulate things? Things like allowing free import of cabbage seeds, removing restrictions on manufacturing in residential areas, letting folk build homes which are different to what the local urban planners envisioned?
> but unfortunately it is the policies intended to help them which actually cause most of the problem.
In the US, the Fed is not concerned about the bottom. They're solely concerned on the top. Check the numbers, zero interest rates did *not* trickle down. Instead they helped further increase the income inequality gap.
To blame to poor (read: the powerless) in any way, shape or form is, at best, misinformation. Worse it gives those responsible a free pass.
"I sit on a man's back choking him and making him carry me, and yet assure myself and others that I am sorry for him and wish to lighten his load by all means possible… except by getting off his back."
> The lower class does suffer the most, but unfortunately it is the policies intended to help them
I defy you to find any policies in capitalist countries that are intended mainly to "help the poor." Even the liberals' beloved FDR claimed he was just trying to save capitalism with his social programs.
I know this is probably going to give a heart attack to some of the libertarian tech-bros here, but there is an easy and tested solution for that: price controls. Inflation has a very clear source, it happens when someone decides to raise the prices. Why not stop the problem at the source?
The rises are due to a power dynamic: the companies raising the prices can basically get away with it ("whatever the market will bear").
Why can they do this? One reason is monopoly power- monopolies must be broken up.
But what else can be done (besides central bank driven demand destruction)? So instead of price controls, a more palatable solution is collective buying. This gives buyers more clout, allows them to bargain for lower prices.
So we need more large non-profit buyers clubs, things like that. In the US, allow medicare to bargain with drug companies- it's insane that they can not.
An example where this works: my parents live in a gated community. They pay very little for the cable + internet + cell phone because the entire community has a deal with the provider.
Large retailers have this exact role: they certainly demand and get lower prices from their suppliers. We need a non-profit version of this, why should Walmart owners only benefit from their buying power?
Grocers are typically a commodity business, one feature of which is that the companies do not have pricing power. So unless the grocers have increased their net profit margins, I don't think evil-powerful-corpos is a tenable answer. It's a nice simple, market-based answer that gives people someone to blame, but it's just wrong for grocers.
Target has a NET 2.6% profit margin, Walmart has 1.9%, which are on the low side of what you'd expect for a sustainable commodity business. Tesco appears to have a GROSS (not net: this is after cost of goods but before salaries, etc.) margin of 6.5% and Sainsbury's has 7.6%. [1] Obviously their net profit margin is going to be less. This is hardly a company with a huge pricing power dynamic. If you want to see that, look at Apple (24.5% NET margin), Coca-Cola (22.2% NET margin), Visa (50.3% NET margin). (Note however that Coca-Cola's customers are its bottlers and Visa's customers are merchants so their pricing power might be invisible to end consumers)
>Large retailers have this exact role: they certainly demand and get lower prices from their suppliers. We need a non-profit version of this
This was tried a lot in the 20th century (starting in the 19th century), usually emerging from the labour movement. I think in food retail and energy it has mostly failed or simply stopped making a difference. The profit margins of food retailers are small to begin with and easily lost by being a bit less efficient.
But Europe and the UK in particular has been using a similar model pretty successfully to keep drug prices low. Some argue that costs were merely shifted over to the U.S. I think this is only partially true.
Price controls are equivalent to welfare payments, except instead of being handled by an at least theoretically accountable government, the responsibility is imposed on random third parties with no oversight. Unsurprisingly, most of those third parties decide they'd rather keep their wealth instead of selling at a loss.
Gives anybody with elementary knowledge of econ a heart attack. How far up the supply chain do you want to go with these price controls to try and avoid the inevitable shortages and black markets? Labor price controls? Would that be effective?
> "It happens when someone decides to raise the prices"
What would drive someone to raise the price of something with the confidence it will still sell at that price?
Rising demand and limited supply. Someone with a monopoly on all the widget production can arbitrarily decide to limit supply (e.g. your "limited edition" MTG card), which is a farce.
More often and importantly, in an environment where there are many producers of a commodity like toilet paper, they suffer input shortages or other increases to the cost of production/delivery. On and on this analysis goes until you get to your question, "why not stop the problem at the source". Where is the source in the price increase in toilet paper? Paper production costs are up? Ink costs are up? Shipping costs are up? Regulatory costs are up? Energy prices are up? Labor costs are up? Freeze all of these by government mandate?
As the guy cutting down trees for toilet paper with a shortage of gas for your chainsaw (meaning it costs more to run), do you want the cost of your product arbitrarily frozen with no regard to your input costs? What if the cost of your logging lease from the government increased? Can you raise the price of the toilet paper logs you're selling? No? How is that fair? What if landslides decreased your tree availability by half, but the number butts that needed wiping hasn't changed, or worse, has increased? Are you to sell your now scarce trees at the same price you always did? Or shall you sell to the highest bidder? What if the government says you can't auction the trees but must sell them for the same price? Maybe you look for off-the-books compensation - free tickets to the game, whatever. Someone still bears that increased cost.
If rising demand relative to limited supply is the actual source of the problem (too many people want toilet paper) why not stop the problem there by simply rationing toilet paper? Turns out this is what happens more frequently - rationing eggs, toilet paper, trying to prevent hoarding, scalping, etc.
Arbitrarily limiting the supply costs of a product or the demand for a product is a temporary solution at best.
Price controls and rationing go hand in hand. Ultimately the goal is to ensure that everybody is able to acquire the goods that they need to survive. We are not talking about luxury yachts here, we are talking about food. If the source of the price increases is an insufficient supply of the raw materials, would you rather allow the market to increase prices until the point that some people are starving while others are buying ten times the food that you need to survive to feed their pets?
> Gives anybody with elementary knowledge of econ a heart attack
Plainly, this isn't true. This opinion is not uncommon amongst so-called "Marxist economists" such as Richard Wolff. You can disagree that price controls and rationing would be the best way to solve the problem, but it is outright ignorant and needlessly insulting to make this claim.
That went really well in my country 30-40 years ago.
My father once went to buy me diapers and returned with living room furniture set(ugly one also), because this was only one available since month or so, and he had to take it on the spot, because entire shipment will be gone in next few hours.
Then he had to go back to the diaper line and wait a few hours, because I wasn't impressed with the furniture enough to stop eating.
I'm not sure you really get how markets work. Price controls can have a few different effects depending on the good in question, but one of those is shortages, which can be really bad when the good is food.
People don’t decide to raise prices out of the blue… it isn’t quite this simple, but for the purpose of understanding the basic concept, you can think of it as the price goes up when you can easily sell your inventory at the current price… if your product sells out quickly, and you still have people eager to buy your product, you raise prices, and you keep raising them until you can just barely sell all your product (of course it is more complicated, because you are trying to maximize profit and not minimize inventory, but the basic idea is the same)
If you fix prices, it just means the product keeps selling out quickly and most people can’t get the product.
This is why prices go up when there is a supply shock (like with eggs and the bird flu). There are fewer eggs available, and raising prices reduces demand until it matches the supply (as people who only kinda like eggs switch to cheaper alternatives). While it sucks that eggs are more expensive, at least you can still buy them if you really like eggs. With price controls, it becomes a crapshoot on whether you can get them or not.
With eggs its kind of a different story. The price of eggs has increased for the supermarket to buy, by maybe a cent or two coming down to up to 16 cents.
Packaging takes 4 cents per egg.
Meanwhile the eggs in the supermarket cost 56 cents each.
Hope you don't mind me re-posting this from another comment of mine, but since you specifically raise the UK it's actually more relevant here. In the UK it doesn't look like gouging is the issue:
Honestly you're right that inflation can benefit the well off, but I don't buy the conspiracy theory angle. "The Establishment" has been holding inflation rates at historically unprecedented lows for the last generation. It's been the number 1 priority for central banks since the early 90s. The last time the UK inflation rate was above 4% was over 20 years ago.
The money supply gets brought up in every single discussion around inflation on this forum, and it’s obviously relevant.
However inflation!= growth in the money supply. A lot of the reasoning behind that growth was because inflation was persistently below the 2% target for the entire period up until 2021. That’s two decades of stubbornly low inflation, despite the feds best efforts in juicing the money supply.
It’s maddening how common it is for this forum to treat the issue as so simplistic and formulaic as though policymakers are somehow dunces compared to software engineers.
What is consistently lost in the M2 supply talking point is the demand aspect of currency.
One of the reasons why the M2 supply increasing wouldn't directly correlate to inflation has to do with global demand to hold the asset in reserve.
So the argument I don't think is bad, just misguided in the sense that once the global demand for currency reserve is saturated the party is over for increase in supply with out a very direct affect on inflation.
It's called the Cantillon Effect. And there usually is a delay from implementation to experienced effect. After 2020 the money printing was excessive, and it almost immediately lead to unprecedented growth in the stock market. Now, however, the delayed effect of that party is leading to unprecedented growth in food and energy prices, which affects the lives of everyone.
Correct, however parent comment wasn’t referring solely to 2020, they explicitly went back to 2000. Hence why I spoke to the whole period in my comment.
The GP specifically mentioned bread prices too, and for that surely supply due to the war is also a factor. Food supply limitations, shipping being threatened near Iran, trading partners being asked to pick sides. This is all very similar to the picture Zeihan depicts in his stuff. Unnerving.
That chart shows a net increase in M2 of about 5% for the UK, rather than multiples - the Y axis doesn't start at zero, which might be misleading at first glance.
I may be missing something, but the page I posted has very similar numbers to those referenced for the StLouis Fed. You have to click on "25 years" to have a comparison with year 2000.
The post you replied to referenced the St. Louis Fed chart saying 4x M2 growth from 2000 to now. The page I referenced shows the same 4x M2 growth for the UK: from 750k at 2000 to 3000k at 2023 (values in GBP Millions). Virtually identical.
So you're saying just because this is an entirely different economy, country, currency, money supply growth rate, central bank and interest rate regimen, that this means the elites aren't conspiring to do the thing they hate more than anything else, the thing that causes them to intentionally decrease jobs and employment to prevent?
IIRC deflation and inflation are equally as bad. If 'inflation' rates are negative, the economy grinds to a halt. Having an inflation rate of ~2% is widely considered to be beneficially for everyone, since it's in a 'goldilocks' zone, it creates stability.
With lack of fundamentals in economics this is very counterintuitive. Japan is a good example of the negative consequences of zero or negative inflation.
Stability is a feature of industrial processes. Natural processes are all over the place. Also, there are external shocks that you can't control (e.g. oil producers raising prices in the 70s, Russia invading Ukraine, etc.).
Compare pre and post 1945. The 1800s had a depression every banking cycle, now we just get recessions. Bank failures no longer take down your life savings. The king of England doesn't sometimes surreptitiously start putting copper in the gold coins to fund wars any more (e.g. inflation). GP's chart is pretty impressive, actually. Aside from the 70s oil shock, inflation is pretty constant, especially in the last couple decades.
But then again inflation benefits people with debt. 4% annual inflation means their real debt load is 3.8% lower. Low inflation is basically a subsidy to creditors.
I just want to point out that pretty much every natural economic condition is beneficial for the rich. The thing about money is it’s very flexible. You can hoard it in deflationary cycles, spend it on assets in inflationary cycles, grow it in economically good times and buy cheap property and goods in economically bad times.
Thing is inflation isn't 'natural' economic condition, it is mostly a product of economic policy according to a very respected school of thought (monetarism). In other words it is as natural as slapping a wealth tax of 80% on the super wealthy, which is definitely not beneficial for the rich.
Both income and point of sale taxes definitely feed into inflation so I'm not certain why you're trying to draw a distinction between those taxes on productive money and taxes on accumulated wealth (generally unproductive money).
Those are deflationary. They reduce transactions (because you want to spend less) and they reduce the money supply. Wealth taxes reduce the money supply as well, but they increase transactions because you have to buy the currency to pay them in by selling your assets.
That's because you still have to pay wealth taxes in currency, not just by giving up your "wealth". You can't pay taxes in 1/4 of a house or painting.
Although I'm pretty sure an 80% wealth tax would just collapse the economy because people wouldn't own their homes or businesses anymore. Maybe you could take 80% of their debt too?
Basically, when times are bad, the rich are solvent enough to afford to just "buy the dip", and sit on it to appreciate during the good times when rates will be low enough again, then rinse and repeat between the boom-bust cycles to increase wealth.
Inflation helps them as their assets are inflation-proof and it helps wipe out their debd.
Money isn’t fundamentally a zero sum game like it seems on the surface… rich peoples wealth is invested, and gets used by less wealthy people to also create value - they might say draw a salary supported by a business loan, or mortgage a house.
You're quite correct - but poor people's money also does that. Rich people's wealth is generally less productive in being accessible for loans since it's generally tied up in speculative investments... compared to less well off folks that are more likely to have a pile of cash in a bank account.
If by "natural" we mean somehow rooted in or consequent to human nature, then economies are very much natural. Human beings are social animals, and within this social context, we exchange goods and services for mutual benefit and for the sake of the common good. Economies become unnatural to the degree that they are detrimental and depart from human nature, in which case they cease to be economies to the degree that they fail. The details of economic practices are subject to a great deal of prudential judgement, and regulation is but a prudential determination of general principles of human nature to specific circumstances.
Economies don't live in some abstract realm, of course. They are the sum of human exchanges which themselves are a product of individual choices themselves influenced by culture and law. When the law is used by those in power to exploit everyone else for their own (myopically understood) benefit, we call that a tyranny.
But to be able to judge any of this requires a clear grasp of what is just. Recall that justice consists in rendering onto others what is their due.
Many, but not all: an example of unfavorable economic conditions for rich is real estate bubble burst (2008). Rich own real estate disproportionally to low and middle class.
How many rich people were foreclosed upon? The poor always feel the real brunt of any unfavorable economic conditions. The rich will stay rich and likely become even richer because they can take advantage of the recovery.
Correct. Being rich is always better than being poor no matter what the economic context is. Even Marxists should be able to understand that.
Although, to be precise: Inflation hurts everybody maintaining their savings in some form of cash. Rich people with a large pile of cash also have a lot to lose.
In the medium term current retail prices will be offset by wage increases as long as inflation does not become a galloping inflation.
In fact, Marxists understand this point most of all. Which is why the moral impetus is to remove the possibility of being individually rich, in order to bring a more beautiful wealth to all.
Individual "wealth" is so boring and flat and uninspired. Just Scrooge McDucks everywhere. Doesn't it feel like an archaic concept at this point? Such a narrow instantiation of humanity, can't die soon enough.
Assets are deflating at the moment though. S&P500 is down, property prices are down, etc. Asset prices are highly inversely correlated to interest rates, so for a 'rich' person you are actually much better off without inflation, as interest rates are lower and asset prices rise faster.
Not sure why you are being downvoted. Stock prices are on the slide and property prices and rental yields are extremely precarious.
I also agree that low rates were good as you could invest in property with leverage and in businesses which could borrow and raise money to cheaply to grow.
Because the British media feeds this narrative by making it look like the rich always win. The only changes in their wealth that the media draws attention to are increases, and if there's a drop that just gives a new baseline for the next round of headlines about increases. High inflation and increased interest rates got assets down across the board? Well, that means that the better off are getting lots of "unearned income" from interest whilst normal people's wages decline in real terms, never mind that the value of whatever savings they're earning that interest on is also dropping in real terms by more than they're making back in interest.
Because they do always win (in aggregate, in relation to other income brackets). With changing economic situations, those with more resources have more options, and are therefore on average able to adapt more effectively. Sure there will be winners and losers in every tax bracket but a quick look at a graph of income inequality over time should disabuse you of the notion that the rich are somehow at a disadvantage in all this.
The parent's point is that these events are not making the rich any richer than they would be.
Anyone with debt is better off with higher inflation as the amount required to pay back is worth less. Anyone who gave money away for interest takes a haircut. The richer entities usually loan money so this is better for the poor with debt. If wages don't raise than this changes
Rich people have a lot more debt than poor people. If you're too poor, nobody will loan you anything. The more money you have, the better the conditions will be which are available for you. Would a rich person ever consider something like your average payday loan? After the last couple of years with practically free loans, who do you expect to have borrowed more? The rich or the poor?
> I also agree that low rates were good as you could invest in property with leverage and in businesses which could borrow and raise money to cheaply to grow.
You can't get something from nothing.
This was simply subsidizing business borrowing / capitalists at the expense of the labor's purchasing power.
It shouldn't be a mystery why inequality sky-rocketed to surpass Belle Epoch levels under ZIRP.
And they're still hugely inflated compared to a couple of years ago, while wages are either constant or significantly lower in real terms.
The price-to-earnings ratio is 9X in London and around 5X in the rest of the UK.
Property speculation is always ten steps forward and one step back. Prices in the UK would have to crash by at least 50% to return to any kind of widespread affordability.
Because only one class will come out of this with MORE assets that at some point will return back to their higher valuable. It's a completely facetious argument. Sure you lost your house, but think of how much the poor billionaire's paper value dropped (while the billionaires asset acquisition continued apace taking advantage of the firesale forced upon the lower classes).
It isn’t facetious. People with investments and assets have lost a stack as inflation has taken off and could be waiting for a long time to return to the peaks. On a long enough timeline I’m sure you are right, but this year and likely over the next few years nobody is winning.
Of course it's relevant. It's absolutely fundamental.
The real metric isn't total cash, it's outgoings vs income.
Billionaires do not have significant non-discretionary outgoings. At the billionaire level food, housing, and transport are essentially free, and your time is your own. There may be mild chagrin if you can't afford a bigger yacht or another private jet, but mild chagrin is all.
That's not true for most people. The poorer you get, the more aggressively you have to sell your time, and the more likely it is that your outgoings are going to exceed your income.
Not because you can't organise your finances, but because inflation and wage stagnation have made any other outcome impossible.
Always worth remembering that, at least for property prices, "being down 10%" doesn't mean that 1y they were worth 100 and this year are worth 90, but that 2y ago they were worth 100, 1y ago they were worth 110, and this year they are worth 119. In other words we often talk about "the % year on year increase is down", not "the value of the house is down".
Can you point to a single usage in the context of property prices where "being down X%", without specifying that X is referring to a YoY increase, means what you say?
Inflation, asset deflation and a financially strained middle/low class causing them to be upside down on debt = firesale on what assets they had for the top class to acquire. I believe this cycles used to be called pump and suck when directed at third world economies, get them addicted to debt then acquire their desirable assets. Crazy to see it being used now on the UK and USA middle class. We never thought the banking leopard would eat our face.
Folks feast like kings when the cheap money is flowing, failing to realize that eventually the tab comes due.
It's what you're seeing happening in Silicon Valley right now.
Usually a reality check occurs every decade or so, bringing heads back down to Earth, but I think too many felt that the COVID lockdown lows in the markets were that reset. They then went right back to their old habits, after a brief pause.
Just thinking about how long it took to recover from 2000, 2008, etc., it's obvious that we didn't truly have that reset.
The lockdowns fundamentally changed a lot, but few people seem to want to acknowledge it. The effects of the lockdowns will been seen for a long time, I honestly do believe.
> Asset prices are highly inversely correlated to interest rates
this is true in the short term because a lot of assets are held with borrowed money. when interest rates go up those assets get sold to cancel the debt and bring down the market value.
however, either if inflation is sustained or interest rates go down, asset values will inevitably bounce back, but money will NEVER recover its value.
Higher prices don't mean more profit. People adjust their behavior and retailers eat some of the costs of higher prices. They'll sell a lot less. Their revenue might not even go up necessarily
Are they down YoY or compared to pre-Covid? The linked article doesn't seem to have that information concretely, but does include "The average British home now costs about nine times average earnings: one estimate I recently read reckoned that the last time UK houses were this expensive was in 1876." which suggests they're still higher by that measure than three years ago. So: correction of a super crazy time, but still a "win" for asset values for the owners over the last 4 years, or "overall trending down"?
they "have" to be when interest rates are up, since it means the price of money (to borrow) is high. When money can be had for cheap (rates), prices balloon, and when rates are up, real estate prices will, relatively speaking, go down. Another way to put it is that RE prices are always viewed through the relative lens of current interest rates. Yet another way to put it is that it can be hard to figure out if they have objectively risen or fallen, because of the changed rates.
UPDATE: I can see a comment below says they have gone up in some places. Well, when both rates AND prices have gone up, it is not hard to tell :-)
The winners from inflation are anyone with debt. If your mortgage was equivalent to 1000 loaves of bread yesterday, and it buys 500 loaves of bread today, you just got a bunch of free money. This assumes wages keep pace with inflation; at the very low end of the spectrum (minimum wage) they probably don't, but for professionals, it seems like everyone has gotten inflation raises over the last couple years.
Other than the sticker shock on the price of everything, it's not too bad for a lot of us.
Amazing that you were able to bring class divide that inflation fosters without mentioning the major responsible for it: the government and central banks.
In fact, inflation is, in its current form, a tax levied by the government on all citizens--rich and poor. You are correct that the rich can find ways to hedge some of the effects of inflation, but that's expected as the rich have way more disposable income.
I just want to know for how long people will close their eyes to these policies (green energy stimulus, self-inflicted supply chain bottlenecks, QE and bailouts to ultra rich and party donors via deposit bailout).
I am a "believer"(#) in Modern Monetary Theory. So yeah I do think inflation is a choice by government - but only because they do not "believe" in the solution.
(roughly speaking the UK can print as much money as it has productive capacity, ie nurses or house builders, then pay those nurses to do something useful, then when there is too much money in nurses pockets and they go spending 4 pounds on bread, the government can tax the money back out of the economy. Either by taxing nurses, or you know million pound equity portfolios or billion dollar companies. The point is if inflation is too much money chasing too few productive capacity the government has a way to remove that money from the economy. How is the politics, but belief is the overton window)
Anyway, yes inflation bad. Solution is not to spend less but to tax more. Who you tax is a political choice. Personally Machine Gun Kelly is the brains here - rob the banks because that's where the money is. Tax the rich because that's where the money is.
(#) not sure what the right term is here. It seems so simple and obvious. But believer is close.
Wealthy, central banks, government are all a rotating and revolving door of interests. I don't understand why you're making a distinction. Who do you think the government acts on the behalf of? The wealthy.
Assuming you took a look at the search result I provided, but in case you missed it - “The OECD said last week that the U.K. is lagging substantially behind other developed economies, performing second only to Russia among the world's major economies.”; which is saying a lot given Russia basically committed economic suicide.
I'm not so sure I would say that. Inflation is more harmful to those with assets, it generally accompanies a strong labor market, and the means central banks use to fight it amount to deliberately increasing unemployment.
We can say that inflation is good for those with assets, and interest rate hikes are harmful to those with assets, and the two tend to go together -- but not always; that's mainly up to the central bank.
> We can say that inflation is good for those with assets
If the assets are liquid ones not really; that's one of the reasons asset-holders start to clamor for the Fed to do something when inflation is high. I read the introduction of Secrets of the Temple, which is kind of a counter-conventional wisdom explanation of how higher rates of inflation were salutary for regular people at the expense of the ruling class, and it was pretty compelling.
For some reason when I hear people saying this I just picture them as thinking of the poor as having a mortgage on their second summer home or something like that.
And a large part of today's work force is simply not familiar with fighting for wage increases. They're used to getting meager increases that don't keep up with inflation. Workers have been getting screwed for decades, the slowly boiled frog. It's not worth the fight so they have in effect gotten pay decreases, in aggregate, over 30+ years.
Of course the poor are getting payday loans at interest rates of up to 664%[1], or credit card debt at 20%, both of which make inflation irrelevant, while the super-rich are taking out loans backed by their stock and real estate[2] at interest rates below inflation.
That can also be true if you have sufficient loans. It's really a balance between how long your comp takes to catch up with inflation and loans vs cash. That said, I think better off people generally might have leveraged their assets even more, getting the double whammy of the mortgage becoming cheaper while the underlying asset goes up in value. Credit card debt also becomes less meaningful though... It all depends (just like in software engineering).
Do those loans have interest on them? Many major religions banned usury because it’s primarily a way for the haves to keep from the have nots.
The alternative where the rich are sitting on piles of money because they can’t profit off loaning would quickly make apparent how they’re leaching off the labor of the people.
> a loaf of my favourite bread increased from £3 to £4
What on earth are you eating? From where? The average 800g loaf costs £1.36.
But to feed into your point about who suffers, if you had to give up your luxury loaf, you could still afford two average loaves in its place. People who could only afford a 80p loaf before are now going without.
A 1kg wholewheat sourdough loaf. I'm a bit picky regarding bread and have actually started making my own in the last few months due, in part, to A) rising prices, B) manufacturer corner-cutting, and C) it's fun!
> In an inflationary economy, the winners are rich who have valuable assets whose value skyrocket - think real estate, businesses, etc.
Actually, it's the opposite that is happening, because central banks have aggressively raised interest rates to bring inflation under control.
When rates rise, the net present value of every long-term cash-earning asset declines, and those individuals and businesses (including banks) that borrowed too much in relation to the declining value of their assets, can and will suffer large losses.
It's not a coincidence that stock markets are down, businesses are cutting costs, office buildings everywhere are starting to file for bankruptcy protection, mismanaged banks are now in financial distress, venture capital firms and their investors are facing the prospect of large losses, and so on.
Rising interest rates make debts worse and asset values (including those belonging to the rich) to decrease, whereas it's mostly just the value of money which improves.
Also, who is rich/poor and has assets/debts can be hard to tell from appearances alone. Would you call this guy poor [0]? Seems like he has a good life. Which begs the question... when we talk about taxing the rich, who are we thinking of exactly? Someone living beyond their means, or below their means?
I think it is very important to note that when it comes to grocery price increases, even if suppliers are raising their prices (and this isn't always the case), groceries stores aren't just passing down wholesale price increases, they're raising prices even further.
For grocery stores, this isn't an issue with (unqualified) "inflation", it's an issue of price gouging.
Everyone cites "price gouging" every time prices go up in any industry, but if you bother to look it up the average profit margin of a UK grocer in 2022 is about 3%.
Unless that has jumped to 10-15%, or jumped in any meaningful way, you're just seeing inflation, not gouging. Generally, grocers are among those businesses with the least pricing power.
What you'll note from this article (from the Daily Mail, but the quotes seem legit) is the source of the price rises is contested. The grocery store management said -- somewhat vaguely, after being questioned about it -- that, yes, suppliers could be raising prices excessively. Then an "insider" said that actually it was the groceries that were doing it.
The whole point with inflation is that nobody knows what future price-levels are going to be, so there's upward price instability. Everyone is trying to gauge how much to raise things -- and of course, they tend to overshoot, which leads to a higher rate of inflation. That's what makes inflation so pernicious, and hard to eradicate. It's not so much that a constant rate of inflation is damaging, but when increase become noticeable, people begin trying to anticipate it, and that increases the rate of change.
You'll also see this in pay negotiations: you'll see more strikes over pay raises, but it'll be very hard for unions or companies to accurate gauge what the pay rate rise should be. It's not that unions are trying to "gouge" management -- it's that the consequences of demanding too small a pay rise is the same as accepting a pay cut. So labour demands more than inflation, which in turn tends to push up the inflation rate.
You are talking like inflation is some conspiracy wielded by “the rich” (who are they? Are they all friends with each other and plan all their schemes together?) against the “others”.
Fact is the inflation we are seeing here is caused by the after effects of Covid, the Energy price surges caused by the Ukraine war and in the special case of UK - Brexit, which has lead to huge import shortages due to increased bureaucracy at the border, etc…
So please stop this conspiracy talk about the “rich” creating inflation to disown the “poor”.
If a particular group has converging interests and is facing a similar set of incentives, they don't need to be in an explicit "conspiracy" to be aligned. The emergent behavior in a system can both advantage a particular group at the expense of another without there needing to be a conspiracy whatsoever.
Consider the comparison between Norway and Sweden, two extremely similar countries in almost all respects.
Food inflation in Sweden is 22.1% over 12-month [0]
Food inflation in Norway is 8.8% over 12-months [1]
Obviously someone is making money hand-over-fist from this 12.7% discrepancy.
Comments like the one above are really disruptive to any constructive conversations. It is not a conspiracy.
The comment above is (at best) astonishingly naïve. While it is a emotionally plausible argument, we can see it does not hold up if we compare the rates of inflation over similar countries.
Norway and Sweden are hardly similar in this respect. Norway is a net food exporter. Sweden is a net food importer. That alone can account for much of the discrepancy.
That could only makes sense if you count food in currency value, not in stuff you eat. Sweden is not great in agricultural productivity (terrestial argiculture), but it's a giant compared with Norway.
Maybe we should mention that Norway exports oil and gas, and Sweden does not.
It's pretty simple. Subtract the value of food imports from the value of food exports. If the value is positive then the country is a net exporter, and if it's negative then they're a net importer. Every major country imports some foodstuffs and exports others, but countries with a trade surplus are generally better positioned to handle food price inflation.
Food’s already super expensive there. A lot of stuff is required to be made locally. Tariffs on food imports are super high, like 100% IIRC. A burrito was $45 last time I was there. Big outlier country in general.
The "who are the elites?" question is one that many people struggle with when looking for who to point a finger at for modern economic woes. A lot us who post on this site are in technical fields and are well-compensated. So it wouldn't shock me if many people in the world consider "us" to be part of "them".
In this case though, we're simply talking about inflation. One cause of inflation that you've neglected to mention is quantitative easing and how it's been used to artificially lower interest rates while allowing for higher deficits. I'd suggest you start there before you strawman people who disagree with you as "conspiracy theorists"...
It's not really an active conspiracy. It's just the rich pursuing their own interests. When the workers or poor pursue their interests too effectively, the rich in positions of power make them take their medicine. But when the rich do it too effectively, well, that's just the free market and you can't do anything about that.
I find it fairly unlikely that the rich in the UK don't actually know each other. The UK probably has the most developed class divide of most western countries, so in-class socialisation is a pretty big deal around here.
> You are talking like inflation is some conspiracy wielded by “the rich” (who are they? Are they all friends with each other and plan all their schemes together?)
No of course not. That'd be 90s-Mr-Burns territory.
Nowadays you pay a SaaS offering to do it for you if you're a landlord:
So the question is -- is real estate the only market you'd do that in? Seems unlikely.
"If I had to guess, I would bet that the big food conglomerates have all signed up with some common AI-backed pricing software package, and that shares data between them. Or, at the very least, they've all started using AI algorithms to increase or decrease production of any number of goods to maximize their profits based on real-time sales and economic data. And since they're all probably contracting this out to the same or a handful of similar AI firms, the conclusions they reach are similar. If all the production companies are running algorithms that tell them to jack up their prices at the same time, well they all jack up their prices at the same time. They don't actually have to meet in some smoke-filled backroom to plot a price-increase conspiracy. They just all run similar algorithms that respond the same way to market trends. The consumer market is highly consolidated, with most goods having just 1-3 producers. If those few producers all sign up for the same AI price-setting software, there won't be price competition to punish needless price increases."
I think it's in Hackers & Painters that Paul Graham talks about the commonly held view that wealth is like a pie, that one group of people having more somehow means others must have less. He's also immensely wealthy, so I take what he says with a pinch of salt
"They" are the wealthy people, property owners and such, in society who make a scene if their wealth gets taxed any higher.
Every western society heavily taxes working, where often for me as a freelancer it hardly pays of to work more then 6-8 months per year.
But taxes on wealth are very low. And owning property often has many tax cuts, and tends to benefit from low interest rates.
The effect of it is is that either you play the wealth game through property or investing or you are lost out.
I think it would be fare to protect the assets people accumulate through hard work, but at the same time it should be more balanced then it is now and we shouldnt all have to be financial experts.
It's incredible, a lot of people in developed countries are thinking like argentinians now. In Argentina, the propagandist media companies that belong to politicians do everything in their hands to blame anyone for inflation, except for money printing policies dictated by politicians. And we have over 100% anual inflation.
I don't think it's a conspiracy theory - lots of companies are posting record profits right now as their prices have risen above the cost price inflation, so profiteering is a valid fourth class of price inflation.
This is. Tired talking point and basically entirely lies. Necessity prices have risen by large margins in the name of inflation, but they have also recorded insane profits at historic levels.
"rich" and "poor" are just holdovers from conquerer and conquered. Just because the mandate that one group acknowledge the other's right to create value by fiat (e.g. by stamping Caesar's face into a coin) is no longer delivered by guys with swords doesn't make it not a conspiracy by one group to keep another group in its place.
They got smarter about it in the late 70's. The rich don't even have to send guys anymore, they just send guns to the local thugs with an agreement that those thugs will, upon seizing power, hook the local economy into the US banking system.
The thugs get to keep the loans, but the debt gets transferred to the local community, which cements the "somebody who isn't you gets to create abstractions that you have to treat as money"-part of the deal.
The words that used to go with it are "progressive free-market policies", but I think Kamala Harris recently called it "anti-corruption" or something along those lines.
More like, "IRS". Taxation is the demand for the currency. Even if you conduct all trade with other people in seashells (or whatever), you'd still need to obtain dollars to pay your taxes.
Do central bankers and other policy elites have no truck with financial elites? What does it mean when stimulus is injected into markets for the purpose of 'stabilizing' them? Are they not concerned with financial markets? This seems to be the directly stated objective of many economic policies.
Is this a conspiracy theory or a simple observation of incentives?
The corporations lobby the gov and both enrich each other. It's not a conspiracy but a well known aspect of the modern world.
It breaks democracy benefitting a few in power.
The effects of covid are actually the effects of covid policies which benefited govs and big tech and other corporation's while screwing most people. Yes, it appears that people wanted it but when you consider the censorship, behaviour modification propaganda and unconstitutional state force application to suppress people who wanted to oppose them, it's not that clear of a picture.
Then Ukraine, also something that benefits the gov, the energy/war companies and corporations, and not the people. Also heavily propagandized to push more profiteering through endless war.
No conspiracy. Just the system at work and people like you dismissing the true criticism with the same old labels. You may feel an impulse to call me fascist, racist and other customary labels soon, heh.
It doesnt matter what you think. Poor people that loose money without possibility to do anything about it = angry people. That is a big problem. We know from history the consequence of terrible inflation in 30's in Germany.
This comment is bizarre. Corporations taking advantage of the current economic climate to make a profit is a conspiracy now? Most of the large corporations responsible for selling these supposedly "inflated" goods are posting record profits with no shame, and here you are covering your eyes and ears to defend them.
Inflation means price increases across all actors in an economy. Large corporations also have to pay higher production costs now. So all these „profits“ are eaten up by the price increases those corporations see, too. I don’t think you have a valid understanding of what a „profit“ really is…
> So all these „profits“ are eaten up by the price increases those corporations see, too. I don’t think you have a valid understanding of what a „profit“ really is…
Uh, you should google what the word "profit" means. You're thinking of "revenue".
Er, nope. You are mixing it up, I am sorry. Profit = revenue minus all expenses. So if prices are rising, revenue grows but profit stays the same as expenses are driven up too by inflated prices of the factors of production.
But it’s a typical observation I have whenever discussing economics with Europeans — economic illiteracy is rampant, here, unfortunately, because schools do not give much priority to basic economic facts.
> I have whenever discussing economics with Europeans — economic illiteracy is rampant
The economic illiteracy would be not being aware that all those megacorps are posting record profits and trying to gloss it over with made-up theories of your own and accusing an entire continent of people with economic illiteracy in the process:
If their costs were rising more than their revenue, they wouldnt post record profits. They are posting record profits. You are simply wrong. You just !made up! a theory to avoid the actual reality.
Why have you made such a blunt, exaggerated, false statement like 'European economic illiteracy' without doing so much as a google search. Do you know how that made you look...
That‘s a newspaper article published last year citing an NGO report based on annual reports on the year 2021… that was way before the price surges really began. I would wait for the annual reports on the year 2023.
Nestlé e.g. (to stay in Europe) reported a 45.2% decrease of its net profit for 2022 — but, supposedly, also due to out of the ordinary profit in 2021 after selling L‘Oréal. But they also note: „Organic growth reached 8.3%. Pricing was 8.2%, _reflecting significant cost inflation_. Real internal growth (RIG) was positive at 0.1%.“
But it’s typical for leftists to cherry-pick their data and only read news sources that confirm their bias. I hope you are even more angry with me now. :-p
There are heaps of other companies other than Nestle. One company doesnt make an argument.
> But it’s typical for leftists to cherry-pick their data and only read news sources that confirm their bias
Its not 'leftists' cherry-picking data. Its those who use vague words like 'price increases REALLY starting' - whatever that means - even as the very capitalist publications of the most capitalist corporations on the planet say that food corporations profited off of pandemic and the war.
So its basically the words of CNBC, Oxfam etc versus your 'really' theory.
> I hope you are even more angry with me now. :-p
I didnt notice that you were disingenous debater. I do now. It explains your absurd arguments, and the 'really' theory of price increases. I'll act accordingly and avoid losing time discussing with you.
I am sorry but you are mangling together so many different things just to prove your narrative about greedy food corps profiting from food price inflation. It all just doesn’t quite make sense. At least, I am assuming that’s what you like to communicate: Food prices increase because food corps want to make insane profits. Right? You are used to being agreed to, of course, as nobody likes big anonymous corporations making billions in money.
I’ll try to show you now why food corporations might make profits and impressive ones, too, but why they can’t have anything to do with steeply rising prices and why their profits do not hurt the average joe, necessarily.
Let’s reflect a little a bit about what a price is: When food prices rise why do they based on economic theory?
In a first approximation it could just reflect a scarcity. Say apple juice becomes more expensive. That could be because apples had a bad harvest season. Or transportation was hampered so not enough apple arrived in the factory or became spoiled. Or there were not enough people available for the harvest or the transportation. Can apple juice corps. expect fat profits because of an apple scarcity? Well, only if a company was lucky enough and managed to produce and sell the same amount of apple juice for the same cost compared to the last season. But since there is an apple scarcity, most companies would have less apples and, hence, have less juice to sell. Furthermore, people tend to drink less apple juice when it’s expensive. Both effects offset the increased revenue per apple on average for all the apple juice companies and, hence, imply a constant profit.
Another reason for a price surge might be monopolization. Say, Nestlé bought all apple juice corps. and can now command a much higher price. Fat profits? Well, Nestlé would have had to buy all their competitors first and in that process had spent quite a lot of money to be in this position. That would have seriously slashed their profit (even though their apple juice revenue would have sky rocketed). Furthermore, again, people would drink less apple juice under these conditions. Finally, obviously, Nestlé isn’t the sole provider of apple juice and in fact does not happen to be the sole provider of food (as you stated yourself) —- so it can‘t in fact profit from a monopoly under the current situation.
A third reason for a rising apple juice price might be a trend shift: People might find apple juice suddenly more attractive and tend to buy more of it at the expense of orange juice and are willing to pay more for it. Surely, that would increase profits for companies only producing apple juice. Producers of both apple and orange juice (like the typical Food Corp), however, would just measure a net zero revenue shift and a rather similar profit unless apple juice production is much more efficient than that of orange juice. But — whatever, consumers wanted to spent more money on apple juice and are now happy nevertheless.
That leaves inflation for another driver of increasing prices. Inflation means our money is losing value and, hence, can not buy as much apple juice as last year. That affects both consumers and producers, however, meaning consumers can buy less apple juice but at the same time apple juice producers can buy less apples (and less machine parts and transportation services). That brings us back to my original argument: Inflation can not drive real profits as — per definition — inflation affects the economy as a whole and hurts consumers and producers alike. Inflation does not mean a redistribution from consumers to producers as your thesis implies. Well, inflation implies a redistribution from consumers of money to producers of printed money but that’s quite a different story…
So why do apple juice corps. make profits in the first place? Because they spend less money in producing apple juice than they make in selling it. The larger the profit margin, the more efficient the company is and the bigger its profit. In a competitive market economy companies cannot just increase the price of the product they produce to boost profits. It is commanded by the market and is simply given. All they can really do is lower the costs of their production.
So while the food price inflation is bad — no doubt — it is not the fault of the food corporations with their fat profits. Ultimately, you want them to make a profit otherwise they would go bankrupt and couldn’t produce any food any more. And no food production is way worse than expensive food production.
In the UK it is very hard not to look at it this way. Unlike the US and other countries, Covid stimulus was very much aimed at maintaining the status quo: there were no flat amount universal basic income style checks handed out to everyone as in the US - instead you got put on 80% furlough and had a large part of your salary paid for by the government. This basically meant the rich got ever richer whilst doing no work and the poor tried to scrape by. In addition, covid contract schemes were widely abused by business owners, the most high profile case being that of Conservative peer Michele Mone who made off with £200 million. It is estimated that billions of pounds of public money has been irretrievably lost through what is essentially government neglect and corruption.
On top of this, you've got Brexit which was orchestrated by the right wing conservative aristocracy class for their own benefit. And we've also had a conservative government that has not only not pursued a green agenda over the last 13 years, but bent over backwards to get Russian energy money.
So yes, the factors leading to inflation were outside of control. But that doesn't change the fact that the powers that be in this country have been running the country in their own self interests and have given up on even pretending otherwise and that is why the UK is being hit harder by inflation than any other country in the western world. They were so high on their own supply they even elected Liz Truss to cut taxes in an inflationary environment and only reluctantly accepted that they weren't going to get away with it when the global market responded by saying it would tank the property market (which the whole stack of cards relies on).
> Are they all friends with each other and plan all their schemes together?) against the “others”.
This is the UK with it's notorious and very real class and aristocracy system. They don't call the royal family "the firm" for nothing.
> In the UK it is very hard not to look at it this way. Unlike the US and other countries, Covid stimulus was very much aimed at maintaining the status quo: there were no flat amount universal basic income style checks handed out to everyone as in the US - instead you got put on 80% furlough and had a large part of your salary paid for by the government. This basically meant the rich got ever richer whilst doing no work and the poor tried to scrape by. In addition, covid contract schemes were widely abused by business owners, the most high profile case being that of Conservative peer Michele Mone who made off with £200 million. It is estimated that billions of pounds of public money has been irretrievably lost through what is essentially government neglect and corruption.
It was the same in most EU countries, but wouldn't that result in lower inflation? The rich that kept getting richer would invest in stocks, business, real estate, park it offshore, buy another helicopter or yacht, etc. which wouldn't impact demand for most products whose prices are increasing.
> In the UK it is very hard not to look at it this way. Unlike the US and other countries, Covid stimulus was very much aimed at maintaining the status quo: there were no flat amount universal basic income style checks handed out to everyone as in the US
How does printing more money to give to everyone lower inflation?
I didn't say there was an either or did I? But the US approach is definitely preferable to giving the most amount of public money to the people who already have the most. Larger sums of money should have been given to the poor with it tapering off gradually as income levels increased. Instead it was given out in the complete opposite way, with people at the top getting the most and those at the bottom getting the least. The pandemic could have been the perfect opportunity for a soft debt jubilee to rebalance the system. Instead, it was just another thing yet again exploited for the benefit of the 1%.
Money was given to the top because the top controls the systems that allow the bottom to make money. Give to to the bottom they spend it, create nothing and now we all have nothing.
>The pandemic could have been the perfect opportunity for a soft debt jubilee to rebalance the system.
I don’t agree with either stimmy or the lockdown business handouts but I find it ridiculous people are using a world tragedy as some sort of crowbar to bring about their idea of some sort of require rebalancing. Not sure how those people even think how that could possibly play out beyond 3 months.
Starting to suspect some people feel the pandemic was the best thing to ever happen to them and are now upset it didn’t go further.
> Money was given to the top because the top controls the systems that allow the bottom to make money. Give to to the bottom they spend it, create nothing and now we all have nothing.
Amazing. Yes, I am sure the poor will just piss their money away on nothing. Rather than you know, starting businesses or upskilling themselves or paying their houses off or whatever. Because, you know, only the people already at the top of the pyramid know how to be productive and everyone at the bottom are just there because they're lazy and useless.
> I don’t agree with either stimmy or the lockdown business handouts but I find it ridiculous people are using a world tragedy as some sort of crowbar to bring about their idea of some sort of require rebalancing. Not sure how those people even think how that could possibly play out beyond 3 months.
Because historically, debt jubilees have been a common occurrence to maintain social order. The topic comes up semi regularly on hacker news, including yesterday. The fact of the matter is, if you don't agree with business handouts or stimulus, then you either don't agree with lockdowns and think we should have just gone about our business and let nature take it's course (if so I can see where you're coming from), or you want social disorder (I don't see where you're coming from). There's no way in hell you could have maintained a lockdown otherwise. People need money to eat and keep a roof over the heads and the poor do not have the savings to do that for an extended period of time without work. So if we're going to give money away to keep people alive, we might as well give more to the people who are struggling to survive rather than giving thousands and thousands to people who already have substantial amounts of assets. Similarly now with energy payment help, why on earth are we giving energy payments to people with second, third, fourth and however many homes rather than using that money to increase the amount we give to the poorest? That is not a ethical allocation of public money.
> Starting to suspect some people feel the pandemic was the best thing to ever happen to them and are now upset it didn’t go further.
If you're aiming this at me personally I was living at home and working a zero hours contract at a local venue so saw basically hardly any furlough money when the pandemic happened. I got £100 week from the job centre for and a handful of hours wage from the venue for a couple of months before they let us go. Meanwhile a guy I know who had been in his new teaching job barely a few weeks before covid hit was raking in over £3000 a month in furlough and treating himself to all manner of things like fire pits, jacuzzis and game consoles.
I saw the pandemic as an opportunity to escape minimum wage drudgery and worked my arse off improving my coding skills and used that to land a job at a local company as a software developer. Despite the fact half the developers worked remotely abroad, they made us go into the office with hundreds of others throughout the entire pandemic and then, when lockdowns were finally lifted for the last time, handed us all laptops and said we were free to work from home. So yeah, that was my covid experience.
So no, I don't think the pandemic was the best thing since sliced bread and that it should have gone further. What I do believe, is that when you give people at the bottom an opportunity and a bit of breathing space as opposed to pummelling them into the ground with debt and drudgery, is that those people can go on to make something of themselves.
> that is why the UK is being hit harder by inflation than any other country in the western world
I don't think that's true. Right now, UK inflation is lower than almost any European country east of Germany, including Sweden, and it seems inflation was running lower throughout COVID than even the US.
Please send me links if you've got any because this is conflicting with what I have been reading so it would be nice to have a more balanced view if this is the case.
"Oops...did I do that?" is a comedic phrase uttered by someone who makes a mistake which harms others but benefits them. Call it whatever you want, i.e. "Conspiracy theory", but you cannot deny who is harmed & who benefits.
Why does Brexit have to equal "increased bureaucracy at the border"? Is it due to the lifelong bureaucrats that loves enforcing it? An effective government should do everything in its power to reduce the bureaucracy in extraordinary times.
All countries have customs checks, to check that incoming goods conform with regulations, applicable tariffs are paid, etc.
Except countries in the EU, which has a common market that made such checks unnecessary inside of it. Of course there are still customs on the outside EU border.
So if you leave that, and your borders are now not internal market borders anymore but your and the EU's external borders, you're going to do more customs checks than you used to have. In both directions.
There's two sides to every trading relationship. Even if the UK tries to reduce bureaucracy on their side, there's still all the bureaucracy on the side of the other countries they're trading with. And they literally just torpedoed all their trade relationships by leaving a large customs union that allowed them to trade with a large number of important partners with significantly reduced bureaucracy.
I agree with you that bureaucracy here is the problem, and Brexit was the cause of it.
They've decided to leave the European Common Market, which was precisely designed to avoid the bureaucracy and reduce the burden of the customs procedures.
I would also add bunch of people in IT working primarily on peddling ads and developing total surveillance tools for years instead of doing something that produces real value.
There's a good case to be made that Putin was the richest man in the world. Nobody's sure what he's worth, but it's quite likely it was more than the $200B Arnault has. And Putin is singularly responsible for a good chunk of the inflation.
So blaming it on the rich might be appropriate, but not in the way that it's usually meant.
what he says, is but the way in which he conveys the meaning
the rich by this point aren't any group of people, but a section of the system.
the system is structural, not-alive. he is choosing to regard the system like rungs on a ladder. each rung is a social class.
the point I'm making is that he's describing the "ladder", referring to structural/systemic aspects of our civilization, not the "persons" standing on each rung which is the meaning you chose to focus on.
our society really is arranged in tiers or classes regardless of you accept it or not (but again, this is a way to understand it; there may be others)
in the UK the so-called "rich" (to answer your question) would be people with legal noble titles.
in Smerica this class of people is not explicit. I guess the older European system (which inspired American ones) at least is explicit about the fact that the royals and their nobles are "the rich" class. I countries with continuing monarchies, like the UK, they really have a noble title and registration. they're "better than you" by legal definition because of choices their parents and older ancestors made (or were forced to make)
The war in 100% the result of Putin. Putting the responsibility of this on Biden doesn't make sense. Besides, Russia was sending troops into eastern Ukraine since 2014, way before Biden took office.
You showed the evidence in your own post. The return to Biden brought the return of typical American foreign policy, which Trump upset. This foreign policy plan has basically been the same under Bush, Obama, and Biden.
The last time Putin pushed the Ukraine issue was under Obama. Under Trump’s watch, Putin didn't dare touch Ukraine.
If I was Putin, and I wanted to invade a country, I would sure as hell prefer Biden as the opponent than Trump. Trump might actually finish the war before it starts. Biden is still trying to remember he's president.
now the story changes: the war that putin started in 2014 is not the fault of Biden, but the fault of the foreign policy of everyone except the former guy?
instead of the dude who actually started it with the invading?
you also seem to misunderstand that Putin has been "touching Ukraine" since the war started in 2014, and the former guy did nothing to stop the war
I'm not saying Putin isn't responsible. That's as obvious as crickets. If people didn't commit evil, the world would be perfect.
Obviously, people commit evil.
However, if you are charged with authority, it is your responsibility to defend against evil, while also pushing to being about peace. Obama and Biden did not keep evil in check. Trump did so much more, as ironic as that may seem to you.
the former guy did literally nothing to push back against the evil of russia's invasion and genocide of Ukrainians which started in 2014 and lasted his entire term (aside from trying to extort the victim for personal political favors and getting impeached for it), as ironic as that may seem to you
Do you mean the sanctions our rulers voluntarily chose to impose on that sector? Or is there something intrinsic to the war that would have that effect?
Help me understand: is this a stacked chart? Why does a chart that ends in 2021 show inflation in 2022 and 2023?
> This inflation is due to insiders (central bankers) printing money.
If this is about the money supply, why is food more affected than other products? IMO everything is a factor, and there is no one culprit, and therefore no one easy fix.
Imagine being a rational human looking at g7 central banks adding 40% to the money supply in <2 years, and your focus is "everything is a factor, there no one culprit" for price inflation.
I look forward to open source ai economic simulation tools - when you change variables like m2, you'll see what happens to inflation - and there'll be no more ambiguity
> Imagine being a rational human looking at g7 central banks adding 40% to the money supply in <2 years, and your focus is "everything is a factor, there no one culprit" for price inflation.
Imagine being a rational human and deciding that a war involving two of the biggest agricultural exporters in Europe, one of whom is also one of the main exporters of oil and gas, as well as a ton of different important materials (nickel, steel, fertilizers, etc.), after 2 years of pandemic that crippled global supply lines and resulted in explosion of prices in many raw materials, have combined absolutely no impact on prices anywhere.
just sayin': why did inflation appear when it did? why not sooner? why not later? Why is the impact of inflation non-uniform?
We know the model pretty well: "money printer goes brrr" leads to higher prices for good and services. But the data lately doesn't make a great supporting case.
> I look forward to open source ai economic simulation tools - when you change variables like m2, you'll see what happens to inflation - and there'll be no more ambiguity
Economists have been leading the way in multifactor causal inference, but GPT in particular is not well suited to it. And macroeconomics in particular is hard to measure via natural experiment, so you're left trying to estimate counterfactuals based on a paucity of data
but look, my day job is people coming to me with timeseries data showing an engineering fuckup and debating about what caused it (usually ops vs prod). if theres a nuanced take, im all ears, but so far your fire has brought more heat than light.
Unless people who can afford it are hoarding groceries an increasing monetary base shouldn't be affecting grocery prices. Only a decrease in supply versus demand, or increase costs of production, should be increasing grocery prices, if market manipulations aren't happening.
I actually do get it. An excess of money doesn't automatically make things cost more. An excess of demand with (more purchases), or for (higher prices), that money does. The demand excess has to start somewhere.
What do you think putting more money into circulation does to demand & nominal purchasing power?
An excess of money causes increased demand per unit dollar and subsequently, higher prices and inflation, through mechanisms including the Cantillon effect, changes in monetary velocity etc.
If i deposit more $ in your bank account, what happens to your nominal demand?
If it was as simple as you say, why didn't we see double-digit inflation in 2021 and 2022 when the money in questions was actually being handed out? There are multiple factors at play here with "money machine goes brrr" being only one of the causes of inflation.
> What do you think putting more money into circulation does to demand & nominal purchasing power?
Ideally people would save for a rainy day. But people don't, and can't, always do this. Because for some this is the rainy day.
Non-ideally I would assume that most demand increases would go for non-groceries, and non-commodities in general, such as housing and travel, though I would expect some increase in durable goods commodity prices as people replace older goods with newer. Yet here we have grocery price increases. Are salaries in the grocery production chain going up 18%? Warehouse costs? I doubt it. The price increases are mainly coming from elsewhere, not from money printing.
It doesn't have to be groceries that they're buying. Factories in China producing non-essential consumer goods run off the same natural gas supplies that could otherwise be used to make fertiliser. Jets taking tourists on vacations run on basically the same fuel that could go into farmers' tractors or lorries transporting food to stores. More money allowing people to make more non-essential purchases impacts food supply if the global economy and global fossil fuel supply don't have the capacity to produce that stuff, and it turns out they didn't.
Sure. But there's a more immediate impact to fossil fuel supplies in the UK than an increase in demand. An increase in demand from an increased money supply is likely a contributing factor, but not the sole cause that elevenoh4 says it is. Has fossil fuel demand even fully bounced back to what it was in 2019?
Passive rich are usually severely hurt by inflation as well. One feature of inflation is that interests rates rise to cover expected future inflation. High interest rates = low asset values, since the value of an asset is the discounted value of all future cash flows and the discount rate goes up with prevailing interest rates. In theory companies' earnings should rise with inflation, but in practice existing companies are often too locked into existing price structures and competitive markets. Additionally, anyone with fixed-denomination assets (bonds, bank deposits) sees the value of them decline in real terms since the dollar is worth less.
The main winners of inflation are:
Adaptive over passive. As you mentioned, the average blue-collar wage growth always lags behind inflation. We aren't really seeing white-collar wage inflation either in the U.S. right now though - fast food workers are making $22/hour and Amazon drivers $18/hour, but FAANG engineers are getting laid off. Who are the winners then? The people who swap jobs or swap industries into ones with pricing power, or who found new businesses enabled by changing price structures. What we're seeeing in the U.S. now (with ~5% wage inflation) is that the 80% of wage earners who stay put at their job are getting ~0% raises, while the people switching are getting ~20% raises.
Debtors over savers. This is well documented in econ textbooks - inflation is a transfer of wealth from savers to debtors, because debtors can pay back their debts with less valuable money.
Governments over citizens. Partially this is because of government usually being a net debtor if it gets into a position where inflation happens, and partially it's because of the government's power to issue new currency. Plus tax revenue is usually a percentage of economic activity, so if all prices & wages increase by a certain percentage, so do tax revenues (and the government can bracket-creep you into higher tax brackets).
Poor people usually fare worse than rich people because of the adaptive vs. passive bulletpoint - they have fewer options and less awareness of options than richer people do. But the debtors-over-savers effect works in their favor: poor people usually have higher debts than rich people, and inflation is a form of debt jubilee. If, for example, they jump into a fast-growing new business started because of inflation (like Microsoft or Apple Computer in the 70s) it could be their ticket out of poverty.
> Debtors over savers. This is well documented in econ textbooks - inflation is a transfer of wealth from savers to debtors, because debtors can pay back their debts with less valuable money.
Wouldn't this be true when interest rates are fixed only? People with variable rates will suffer as interest rates tend to spike during inflation and drive bankruptcy.
Also given wages lag inflation, the debt cost proceeds the payback.
So it feels a mixed case of, this will make some people loose out significantly, but those that can see the other side do well.
The debt effect is true for the term that the interest rate is fixed for. So for a 30-year fixed mortgage, you lock in expected inflation based on the interest rate when you take out the mortgage, and if inflation happens to run above that, you profit. For a 7/1 ARM, you lock it in for 7 years, then the principal will have inflated away by some percentage, and then you're at the mercy of current inflation expectations. Bonds are usually fixed rate for the term of the bond (I-bonds excepted), which is why 10-year Treasuries have gone down so much relative to 90-day Treasuries.
Wages only lag inflation if you stick with one job. If you're forever job-hopping, you get the new wage as soon as you land the new job, which could be within weeks.
Yes, this means that you have an incentive to never do any actual work and instead spend the time immediately looking for a new job. This is one of the positive feedback loops that turns inflation into hyperinflation and state failure. With everyone incentivized to look for new work rather than do the old work they signed up for, no actual work gets done. This exacerbates shortages, which causes further price hikes, which increases inflation, which means people have even more of an incentive to take very short jobs and not do them. It also prevents the formation of capital stock - nobody can get good at a job, or train on some expensive piece of machinery, if they need to take a new job tomorrow. That's why there's this compression of time horizons in countries undergoing inflationary episodes, where everything becomes focused around surviving until tomorrow rather than building for the long-term.
Is a 30 year fixed mortgage common where you are? I'm Australia and they don't exist. About 25% of people have fixed mortgages and this is usually for 2-3 years so this view doesn't apply here.
Also regarding job hopping, that may be true but taking a macro view of the world, most people don't or can't job hop that often, so I feel this is more the exception that the rule.
Generally I'm not convinced debt is a good thing during inflation as a broad rule. I feel it's more there are good exceptions if the right conditions align but this is not true to the average.
Thank you for taking the time to provide the detail. I see now that the subject is quite a lot more complicated than I thought, and it's less about wealthy versus not-wealthy but rather a list of X versus Y, where X and Y are not what you would necessarily expect, such as gvmt versus citizen, etc.
There is a counter-argument (which I don't necessarily agree with, but is interesting to note) where the ability to accumulate assets that keep pace with inflation is the only thing that motivate extra work.
e.g. the ability to accumulate "Tokens of Power" (vs the equivalent of arcade game tokens for commodities) is what motivates the Steve Jobs and Elon Musks to do their universe denting.
This is quite different than say tribal societies where extra resources do not maintain their value across time. An abundance of meat and other resources can only be transmuted into common cultural power via Feasts and Festivals.
Metaphorically, "gold" creates "dragons" because it allows immortal hoarding. Dragons are the only thing with influenceable agency that can reshape "nature". Controlling dragons allows this dominance (for better or for worse) at the cost of dragon externalities (burned towns, randomly devoured livestock)
>A sad thought I have about inflation is the fact that it is, wittingly or not, a weapon wielded by the rich against the middle and lower classes.
I’m sure the Roman plebeians also thought as much during drought induced famine; “the wealthy caused shortages by their greed”
Seems to be the natural response of the hyper-social-aware-confabulatory-ape-mind we, as humans possess.
But make no mistake, inflation is caused by a mismatch between societies expectation of productive capacity, and its real productive capacity.
Right now, real asset values are going down. Yes, some businesses have maintained nominal increases, but as consumers feel the squeeze so will asset real values. Asset valuation is based on real returns, and consumer behavior drives real returns.
The conventional analysis is the other way around.
When inflation is entrenched, wages and prices rise at a similar rate so that workers aren't too terribly effected but the value of financial assets don't keep up.
Inflation is insidious in that respect in that it compounds like interest, you might think 5% a year is not that much, but over 50 years the value of your assets are less than 10% than what they were.
It is harmful to the financial services industry in that people decide it is not worth investing. In 1979 Merrill Lynch was practically a penny stock because they didn't have any products to sell that people found attractive.
Indeed. All the institutions which might possibly have produced that level of coordinated unrest were deliberately dismantled or atomized. There's no way to turn dread into political action.
> In an inflationary economy, the winners are rich who have valuable assets whose value skyrocket - think real estate, businesses, etc.
On the other hand, rising interest rates causes all assets to decline in value, and the decline is worse depending on how far away the "maturity date" is. It looks like the UK has been raising rates, similar to the US. [1]
It’s hard to grok but inflation is just the “price of money” in terms of goods and services. (I.e. I can ‘buy’ one pound with X good)
Inflation only negatively affects the poor in that their wages are sticky and do not adjust in time (so in effect, their wages in goods and services terms declines)
The same thing happens to rich people, it’s actually a “capital owner vs salary man” divide. (A small building owner is impacted less than a very wealthy athlete for example, since one can raise rent yearly and the other is in a long term salary contract).
I first really liked the athlete example, but now think that that also depends on where the athlete is in their career and what they have done with their past income. A athlete a little bit later in their career, should have substantial investments unless that more than make up for the inflation impacting the value of their current salary. They probably also have a steady stream of sponsorship deals that get (re-)negotiated more frequently than salary at McDonald's
Very similar dynamics probably hold almost by definition for anyone who is wealthy.
>A athlete a little bit later in their career, should have substantial investments
Yes, that makes them a capital owner, but it's hard to make a metaphor where people aren't allowed to buy stocks with their excess money.
>They probably also have a steady stream of sponsorship deals that get (re-)negotiated more frequently than salary at McDonald's
Sure, but that still makes them worse off than a capital owner.
>Very similar dynamics probably hold almost by definition for anyone who is wealthy.
Sure, but a relatively low-wealth landlord is hurt less than a wealthy banker who consumes most of their salary. That's the only point- that it's more than rich/poor, even if the true nuance is correlated to rich/poor.
I don’t think that’s quite right. Lower classes also have debt, and inflation effectively reduces your debt. In that case, it’s a direct transfer of wealth from lenders to debtors.
There's a lot of national and consumer debt to inflate away so I think inflation is what's on the menu. Workers are going to bear the brunt of the fallout if they cannot or will not demand increased pay. Workers can't get sucked into the trap of employers claim they can only afford to pay more for rent, loan, and supplies costs - and not wages.
I don't think it's that simple - inflation is also especially beneficial to debtors which is more of an upper middle class or professional/managerial phenomenon. The truly rich would likely have a cash buffer that gets eroded by inflation same as the typical person's wage.
So, do you feel that the focus of the central banks to keep interest rates low and inflation low is to protect the lower class? I would submit that what the central banks want is to benefit the main asset holders who suffer the most from erosion by inflation.
Asset holders do not suffer the most from erosion by inflation; asset holders benefit from inflation (which is a devaluation of the currency) because the price of their assets increases. It is those whose wealth is mostly in cash that suffer the most.
Keeping interest rates low keeps inflation high. Raising interest rates reduces inflation but also hurts asset prices and can potentially bankrupt some heavily indebted businesses. This is the balancing act the central banks have been trying to perform. The reality is that getting it wrong in either direction hurts the lower class: excessively high interest rates lead to high unemployment; excessively low interest rates lead to high inflation.
Its always someone else's fault, no matter what. I mean, the current laws of physics are just a conspiracy to benefit the rich. Congress just needs to pass a law making everything free without limit.
When you point your finger, there's three point back at you
I will copy a previous answer of mine to a similar comment:
A 1kg wholewheat sourdough loaf. I'm a bit picky regarding bread and have actually started making my own in the last few months due, in part, to A) rising prices, B) manufacturer corner-cutting, and C) it's fun!
Regarding "A quarter of that", that is, IMHO, very optimistic. 1kg of bread for £1 would be quite the steal.
However I should have been more specific about it being sourdough, which is much more expensive to produce than "regular" bread at UK supermarkets.
Perhaps I should have been a bit clearer on that part. I was thinking of the recent political turmoil in France, which is somewhat related to the economy (rising retirement age is always a response to struggling economies, in part due to ailments like inflation).
Do you think that won’t recover? Anyone with means can buy up now or keep saving. The poor can’t and their 0 investments will be worth 0 after as well.
A food producer may benefit from inflation, whereas a government loses out, despite both representing "the rich". An unattached young trades-person can ride the wave of inflation because they can easily switch to jobs with higher wages, whereas a another with a family cannot.
Neither "the rich" nor the "lower class" is a monolithic entity. The idea that they are monolithic allows for elites to disguise their selfish consolidation of power as evidence of being on the side of the people. For some obvious examples, Hitler successfully blamed the Jews for German hyperinflation, and Stalin successfully purged political enemies he deemed as "capitalist".
Godwin's law in effect in comment number two (at the time of writing). I see the sentiment you're trying to portray but maybe try and be a little more verbose so you don't have to name the 20th century atrocities. Something like:
Being deluded into thinking ["the rich" nor the "lower class" are monolithic entities] is a recipe for abuse by those in power.
Fair point. Edited. I do think the examples are still relevant because I don't think many people are aware of how this relates to antisemitism and the Soviet purges. I could bring up for a modern example, like Trump somewhat dismantling of the EPA, but that's requires more nuance to demonstrate my point.
I think you've got the wrong end of the stick. We're in this mess because of Thatcher, Reagan and TINA. Almost everyone now believes in capitalism in the same way that medieval peasants believed in the feudal system. That is, while they don't necessarily like it, they see no viable alternative.
It's possible to imagine circumstances in which the upper classes suffer proportionately more than the lower classes. We have, in fact, had these circumstances. Such as the impact of transition from land wealth to industrial wealth during the first couple of industrial revolutions that saw various nobles having to sell their ancestral estates and belongings. Meanwhile the lower classes gained jobs that allowed them to afford more than they could before.
It is said that inflation (caused by money printing at least) is a hidden tax on everyone, which definitely hits the poor more than a progressive tax scheme would.
I forget a famous economist (old British guy I think) who said that there is no more effective way to secretly and insidiously overthrow / disrupt a society as unchecked inflation.
(something similar to that, I'm probably paraphrasing badly)
Despite being a net food importer, the UK continues to allow relatively high levels of immigration. While there are multiple causes for food price inflation, having more people living there certainly causes some upward pressure on prices.
That’s not so - were it the case, food would be more expensive in more populous countries, and this is demonstrably not the case. If anything, a larger consumer base allows greater economies of scale.
This is a supply side issue, a labour issue, a border issue, and a stagnant economy issue. Productivity in the U.K. flatlined years ago, with the 2008 recession, and what is being experienced there remains the after effects of the bungled policy decisions at the time.
> A sad thought I have about inflation is the fact that it is, wittingly or not, a weapon wielded by the rich against the middle and lower classes.
I think you have it backward. I think the inflation is the byproduct of their ability to own and hoard assets like land and labor, and reap the most value from those things, while everyone else is unable to get a foothold.
Inflation is happening because everyone is making more money, and everyone got a bunch of during covid, and now a lot of people are having large swaths of debt cut from their lives (college loan forgiveness program), not because rich people own stuff. But poorer people also can’t get ahead because rich people own everything.
This is a capitalism problem more specifically than it is a rich v. poor problem. Make it illegal to own more than one property and you will instantly give the lower and middle classes a chance.
It is truly strange to see so many comments on Hacker News -- a message board owned by YCombinator, a startup accelerator whose actual mission is to launch wildly profitable companies -- talking conspiratorially about the wealthy being "parasites", lambasting "capitalism", pointing to increased profits as evidence of unscrupulous behavior.
Sometimes it feels like the site is being astroturfed with progressive / class warfare type messages.
Othertimes I feel it's just the same old "eternal september" problem but with techies, a bunch of young idealistic kids fresh out of college who tend to think in black and white terms of "us" vs "them". I remember being this way as a teenager, not quite sure when I grew out of it.
I remember listening to punk rock and advocating for "anarchy" etc (I'm sure I got the idea listening to too much Sex Pistols)... SMH... We all took ourselves and our political views sooooo seriously at that age.... Thank god no one was listening to me back then. The difference between then and now is that my conversations were in person and shared amongst a few high school kids, now they're broadcast to the world, commented on, and amplified.
The more I think about it, I'm hoping its just kids being kids.
The class struggle is the favorite argument for every form of ill in the UK. It's a culture war if you like. Once someone gets to the point of blaming something on the evil rich or the feckless layabouts then you cannot get any further in working out what's actually going wrong.
It is a horrendously boring argument which immigrants like me "cannot understand" because somehow or other we don't feel like we belong on either "side".
Europeans are more aware of class struggle than people from the United States. They didn't have a McCarthyism red scare. Since this news is about an European country, it is no so strange that people complain about the system that brought this into being.
Because the startups are (hopefully) adding value whereas the people we're talking about are robbing the UK blind whilst offering little of value in return. One is competence, the other is extortion.
This isn't the case. The stuff you read about this is just ludicrously inaccurate.
One, UK is growing at about the same rate as other developed economies. This is quite remarkable because, if you look at Europe, 100% of these countries have significantly higher unemployment.
Two, productivity growth has slowed everywhere after 2007. The UK is comparable to Western Europe, slower than Germany, faster than Italy, it depends heavily on what start and end date you pick. This isn't particularly surprising given that we essentially outlawed the most productive sector of our economy after 2007.
Three, the UK had no financial boom in the 2010s, the US did, and the EU did...let's just wait until the debt has to be repaid to see the full score on whether that has worked out economically.
The culture in the UK is to live for the weekend. Weekend consisting of getting drunk and watching football. A lot of the people carrying it both in blue collar and white collar jobs are foreigners. Even when it comes to academics, go to any top university and you will forget you are in the UK.
As well as declining productivity per worker, they are also suffering a declining worker pool as more people are switching to part time, taking early retirement, or are claiming unemployment/disability.
The UK will last longer than the EU. The EU has a fundamental schism of a shared monetary policy, without a shared fiscal policy (see euro sovereign debt crisis). It also has a problem regarding the population becoming increasingly sceptical of freedom of movement, voting for more socially conservative parties.
Hopefully the EU can be reformed to go back to a trading bloc, with a liberal visa regime for member states, rather than an idealistic United States of Europe model, punctuated periodically by brutal austerity.
It's perplexing how some are quick to place all blame on "greedy price gouging capitalists" while you have a massive elephant in the room.
As a society, we pride ourselves on being logical yet we ignore the predictable consequences of injecting trillions into the economy amidst heavily damaged supply chains?
I'm not even referring to the downstream consequences such as the extreme fragility leading to blow ups like SVB. Just consider what might happen when you have trillions in new money competing for fewer goods.
Conventional economic policy lets you balance inflation with both monetary and fiscal policy. But there's no will to tax the money out of the economy again. The money printing delayed a lot of economic collapse that would otherwise have happened during the pandemic.
With all due respect, I'm of the opinion that this idea of maintaining an equilibrium through "easing" and "tightening" is a logical fallacy.
In practice, this theory has been shown to be deeply flawed with grave consequence. Each iteration of this easing/tightening cycle seems to make the entire system more fragile at an exponential rate.
In essence, with each iteration, the extent of easing or intervention needed is increasing exponentially. Simultaneously, the system's capacity to withstand tightening or normalization is decreasing exponentially, requiring further interventions sooner and with greater severity.
I believe this is the basis for prognoses such as Balaji's on the US economic hegemony. When examining the exponential increase of these factors, it becomes evident that there is little space left before hyperinflation sets in. While I do not think the collapse will occur in 90 days, it may transpire in 900 or even 3000 days.
Who would have thought empire came with a price? Even when you're just a junior partner to the madness, albeit much more enthusiastic than the rest of NATO.
The nasty move is when they reduce the weight of the package but keep the price the same. Meanwhile everyone on PPP loan cash out built their own custom made mansion. And we’re more concerned with paying out millions in reparations. The country deserves to fail if this is how we prioritize our concerns
I know this doesn't fit the European worldview, but if only they had Costco.
They make 0-1% margin [0] on their groceries - which by the way is very high in quality.
Essentially all their profit is from their annual membership fee.
You have to buy massive quantities of everything though. This works well if you live in a huge North American house and have an SUV to transport your month's (year's?) groceries.
[0] I saw a newsletter from Ryan Reeves and confirmed it by checking their financial statements
There are about 30 Costcos in the UK. You’re right that they aren’t particularly useful for weekly grocery shopping unless you have a car and a large fridge.
This was predicted when Ukraine was invaded. Russia and Ukraine were the world's leading producers of the ingredients in fertilizer.
They are now no longer exporting, and many countries in the world are getting 50% or more of their calories from import. Things will get better before they get worse.
> They are now no longer exporting, and many countries in the world are getting 50% or more of their calories from import. Things will get better before they get worse.
It's not like they wouldn't like to export when they could. But they are not allowed to export due to various sanctions and limitations. It's almost like one side taking half of the world as hostages and letting them hunger, so they could harm and blame the other side.
But yes, "Carthago delenda est" no matter the costs and victims.
> Bread was up 20.8%, with pasta products and couscous up 25.3%
This is unjustified. Under no circumstances could this happen unless a) price gauging, or b) supply chain is drying up.
Edit for the ignorant:
> The UK is largely self-sufficient in production of grains, producing over 100% of domestic consumption of oats and barley and over 90% of wheat. Average yields over recent decades have been broadly stable but fluctuate from year to year as a result of better or worse weather. Increasingly unpredictable and extreme weather as a result of climate change is likely to exacerbate these fluctuations. Wheat yields in 2020 were the lowest since 1981 due to of unusually bad weather. However, preliminary data indicates they have since increased in 2021.
> In meat, milk, and eggs, the UK produces roughly equivalent volume to what it consumes. In 2020 it produced 61kg of meat, 227L of milk and 172 eggs per person per year. By value, the UK is a net importer of dairy and beef. This reflects UK consumer preferences for eating higher value products, while lower value products are exported.
> The UK produces a significant proportion of its other crop needs, including around 60% of sugar beet, 70% of potatoes and 80% of oilseeds. Apart from a recent pest-related reduction in oilseeds, these proportions have remained stable over the last ten years. Climate change represents a risk to production both in terms of making conditions unsuitable for some crops and allowing new pests to proliferate but it may also benefit new types of crops.
> The UK produces over 50% of vegetables consumed domestically, but only 16% of fruit. 93% of domestic consumption of fresh vegetables was fulfilled by domestic and European production, while fruit supply is more widely spread across the EU, Africa, the Americas, and the UK.
Are you aware that the UK is largely self-sufficient wrt grains?
> The UK is largely self-sufficient in production of grains, producing over 100% of domestic consumption of oats and barley and over 90% of wheat. Average yields over recent decades have been broadly stable but fluctuate from year to year as a result of better or worse weather. Increasingly unpredictable and extreme weather as a result of climate change is likely to exacerbate these fluctuations. Wheat yields in 2020 were the lowest since 1981 due to of unusually bad weather. However, preliminary data indicates they have since increased in 2021.
> The UK produces a significant proportion of its other crop needs, including around 60% of sugar beet, 70% of potatoes and 80% of oilseeds. Apart from a recent pest-related reduction in oilseeds, these proportions have remained stable over the last ten years. Climate change represents a risk to production both in terms of making conditions unsuitable for some crops and allowing new pests to proliferate but it may also benefit new types of crops.
> The UK produces over 50% of vegetables consumed domestically, but only 16% of fruit. 93% of domestic consumption of fresh vegetables was fulfilled by domestic and European production, while fruit supply is more widely spread across the EU, Africa, the Americas, and the UK.
That have considerable export logistics through Romania. Minus the resources that Russia stole over the territories it had control over during this stupid Putin war.
Well we saw extreme disruption in the supply of fertilizer and some extremely poor growing seasons in some bread basket reasons around the world simultaneously, if I recall correctly (which I might not be).
Maybe it's the new old way of making known to the reader that an LLM was not used, like back in the day when printed maps had minor intentional mistakes (for entirely different reasons though) !
Would it not make sense to have a crypto solution to the inflation problem? Can't governments initiate a crypto currency which can be only used for a basket of goods and the providers of these goods can then exchange this currency for input goods or fiat money after verifying. This crypto coin can be distributed to everyone every month/week and with a expiry date.
What I understand is that inflation in high price goods gets passed on to the essential goods as a lifting tide lifts every boat but these can be decoupled.
There is no such thing as decoupling when there is a cash equivalent. For example, in the US a lot of welfare funds are handed out in the form of food stamps. This has created a secondary market in food stamps where people sell them to get cash. Also, the mere fact of having the food stamps frees up funds for other things where the consumer can spend more on "non-essential" goods carrying the inflation with it.
>The Edict on Maximum Prices is still the longest surviving piece of legislation from the period of the Tetrarchy. The Edict was criticized by Lactantius, a rhetorician from Nicomedia, who blamed the emperors for the inflation and told of fighting and bloodshed that erupted from price tampering.
>During the Crisis of the Third Century, Roman coinage had been greatly debased by the numerous emperors and usurpers who minted their own coins, using base metals to reduce the underlying metallic value of coins used to pay soldiers and public officials.
This is really a perfect storm of poor planning and adverse events:
1. Russia's invasion of Ukraine hit energy prices. Europe-wide Ukraine has been a bit of a scapegoat however as Europe is in an energy crisis in large part due to poor planning. That is, complete dependence on Russian natural gas when for almost 10 years the US saw this coming and begged Europe to build LNG ports;
2. Ukraine produces a significant amount of wheat. The war has disrupted that supply and had a large effect on wheat prices. These are pretty much back down to pre-invasion levels but this brings us to;
3. Corporate profiteering. The solution to this is windfall profits taxation.
Remember when people can't afford to heat their homes and have enough to eat, that's not an inevitability to just throw your hands up at. It's a choice. The government could raises money through taxes and subsidize energy costs as a short-to-medium term measure if they wanted to.
The worst part of this is how many just throw their hands up and say there's nothing we can do other than raise interest rates.
Quite often I’m starting to notice dark patterns in pricing where things you normally didn’t worry about will have randomly increased by £2-3 and you get the checkout and you’ve spent £25-30 on next to nothing.
I wonder if inequality increases caused by printing trillions of dollars during COVID are anything to do with this inflation? Could it be that making the rich endless more wealthy and increasing asset prices is bad for society?
How do we fix this? Some people think redistribution of the increases the wealthy have had over COVID back to the poor would be a good move, but is this all inequality?