Red Mosquito

tragabigzanda wrote:

Bi_3 wrote:

tragabigzanda wrote:
Assuming that high prices have been maintained in bad faith, I believe some measure of Federal regulation may be warranted; but again, I have no idea if it's actually legal.

Why would they go down? Low inflation is still inflation.

In theory, they'd go down because the supply chain is operating at capacity again*, thus the supply is stronger, thus prices could relax -- not to pre-pandemic prices, but to something "more affordable" while still maintaining the historical margins for the seller. Given the product and pricing mix of a grocery store, I have to assume there's room in their pricing strategy -- or more likely the pricing from their wholesalers -- to maintain a more affordable cost on staple items, and to generate stronger revenues on premium products.

*I have no idea if that's true, but that seems to be one of the implications of some of the "research" and reporting happening around all this.

What you say is essentially true, but here's the thing...and it's really important and commonly misunderstood: you're describing the result of a price change NOT the result of inflation.

Price increases that were caused by supply constraints would go down once those supply constraints cease to exist. What happened in reality is two things (well, lots more but these two are particularly prominent): huge supply chain issues put upward pressure on prices AND a massive increase in the money supply in the form of extremely loose monetary policy and massive deficit stimulus spending that raised the overall price level. You described how prices respond when it's just supply and demand. But when the overall price level has risen and there's "too much money chasing too few goods" those prices aren't going to adjust because there's still excess money out there.

One of the most pernicious things about inflation is that it distorts the reason for price increases. Are eggs more expensive because of supply/demand changes, or is it just the increase in money supply/overall inflation? And in fact, this very confusion (felt by everybody: sellers, buyers, policymakers) does give cover and potentially enable people to, at least temporarily, raise prices above what they might be otherwise if there were no inflation and we knew that all price changes were in relation to supply/demand fundamentals.

B wrote:Just a microcosm of what I think is the problem:

Kroger's, by FAR the nation's largest grocery chain, annual profits were about $26 billion in 2018 and 2019. (oh woe to them with the pitiful 1.6% profit margin)
They jumped to $30 billion in 2021 and a projected $33 billion in 2024.

In that time the percentage of Americans' budget devoted to vote drastically increased.
That's the biggest grocery chain pulling extra money out of our pockets (which we don't have to give) to ensure growth. Not to maintain profits, to GROW profits.

I am sure semantics will show me how this is not what you would call "inflation," but it IS bullshit, and if Republicans want to fight for Kroger's right to enrich their shareholders while more and more of us resort to the Ramen and banana diet, I'm sure votes will be pouring in.

https://www.macrotrends.net/stocks/char ... e_vignette

To be clear: in NO WAY am I crying for grocers or insinuating that 1.6% or whatever is low or anything like that. If you make 1.6 cents on every dollar you can obviously make a ton of money on enough transactions.

That said, a 1.6% profit margin means that there is very limited room for grocers to lower prices and stay in business, and it implies (strongly imo but ymmv) that they haven't egregiously raised their prices.

Quick math regarding Kroger's increase in profits from $26b to $33b. That's a 27% increase over those years but remember that's a nominal (unadjusted for inflation) increase. Over that same timeframe (2018 to current) the CPI has gone from 248 to 313. That's an increase of 26%. So 96% of those higher profits are just a manifestation of inflation, leaving only 4% as an actual increase in real profit. (Again to be clear: I'm not saying this is good or bad or their profits should be higher or lower.)

It’s probably even more complex than that since many of the stores have pharmacies inside and prescription drugs are like 10x higher profit margin than food sales. Also Kroger is apparently one of the nations largest jewelers, so not all profit is coming from groceries and drugs.

Sounds like this proposal is just the same price gouging law that already exists in 37 states, and is in fact one of those do-nothing proposals that politicians use to present themselves as fighting corporations in the name of the little guy, while simultaneously doing nothing at all about anything at all.

McParadigm wrote:Sounds like this proposal is just the same price gouging law that already exists in 37 states, and is in fact one of those do-nothing proposals that politicians use to present themselves as fighting corporations in the name of the little guy, while simultaneously doing nothing at all about anything at all.

McP rolling in with his weekly "We have always been at war with Eastasia" post.

4/5 wrote: (Again to be clear: I'm not saying this is good or bad or their profits should be higher or lower.)

I have no such qualms. Corporations should go get fucked.

tragabigzanda wrote:

B wrote:

4/5 wrote: (Again to be clear: I'm not saying this is good or bad or their profits should be higher or lower.)

I have no such qualms. Corporations should go get fucked.

Yeah products and services are dumb

Ya got me there! I am 100% against everyone buying and selling goods and services. I am burned.

hard to believe the election is less than 3 months away

i would have figured i would be sick of the whole thing by now

but i guess since orange man is in decline and kamala is new to the scene it hasnt gotten stale yet

tragabigzanda wrote:

B wrote:

tragabigzanda wrote:

B wrote:

4/5 wrote: (Again to be clear: I'm not saying this is good or bad or their profits should be higher or lower.)

I have no such qualms. Corporations should go get fucked.

Yeah products and services are dumb

Ya got me there! I am 100% against everyone buying and selling goods and services. I am burned.

You’re just incapable of nuance. You speak as if things like medicine, air travel, and the internet were born of commercialization pathways that are so simple that any old LLC could get them to market.

I don't begrudge anyone a profit. I'm happy for Kroger to make $25b a year. But they don't get to cry, "oh sorry, inflation. No one can do anything about it," while shoving every extra penny I pay into their bank account, they can get fucked. That's not inflation. They're not passing costs onto me. They're redistributing cash from the poor to the rich.

Y’all need to goggle “purchasing power and inflation”

Also LOL at the “we will give you 25k to buy your first house”.

Bi_3 wrote:Also LOL at the “we will give you 25k to buy your first house”.

Prices are too high so I will introduce a policy to increase prices!

There should be a test to determine who is qualified. If you choose a house like this as your first, you immediately lose 25k and get sent to jail.

BurtReynolds wrote:There should be a test to determine who is qualified. If you choose a house like this as your first, you immediately lose 25k and get sent to jail.

where is that house? sure its ugly as hell but it has A/C and fits a king size bed..it looks like Florida or just outside Austin
you could park 2 corvettes in those garages