The Official World Politics Thread
- Thread starter Herbal Kint
- Start date
StringerBell
OG
Define fake inflation. I know price gouging is real, but so is the inflation we've been experiencing.
The Lonious Monk
Celestial Souljah
Inflation is real, but that inflation isn't the reason some prices were jacked up. When milk and eggs had their prices skyrocket because of shortages, that was a result of inflation. When grocery stores decided to also raise the prices on a bunch of other things at the same time because they believed customers wouldn't question it, that's fake inflation. Also, the broken supply chains are the reason that the prices of a lot of things rose. Those supply chain are working again, so the prices should have come back down, but in a lot of cases they haven't. That is fake inflation.
I don't disagree but it brings me to question, to what extent is inflation real vs fake?
For instance, fuel costs and inflation rate seem to correlate:
Regular Gas and Diesel Gas prices:
Inflation rates:
Seems that when fuel costs peaked so did inflation rate. When fuel costs dropped, so did inflation rate. To what extent is price gouging reflected?
The Lonious Monk
Celestial Souljah
It's a case by case basis. Supply chain issues were a big part of inflation, and that includes problems with fuel.
That said, higher fuel prices shouldn't effect everything the same. Think about it like this. If there's a grocery store that just marks up all it's products 10% to account for inflation, that might be valid for the products that were shipped from across the country, but it wouldn't make sense for the products that were bought locally.
Again, it's not that inflation is fake. The problem is more that scope of the inflation is greater than it should have been. They even caught some business owners admit that they were artificially raising prices on products that were really affected by the inflation.
This right here is where I wonder, to what extent is the inflation exaggerated by price gouging.
The Lonious Monk
Celestial Souljah
Again, you have to take it on a case-by-case basis. Not all businesses were price gouging and not all business were gouging in the same way. However, one metric they can look at is profits. The whole point of inflating prices is to avoid losses due to lowered sales. For example, if there is a gas shortage and you think you're going to sell less gas, then you raise the price so that you can make the same amount of money from less sales. That's what the companies claimed they were doing, but when the numbers came out they were making record profits. That means they were either raising the prices on things that didn't need to have the prices raised or they were raising the prices way higher than needed.
So in general would u say the vast majority of inflation we are experiencing is from price gouging on a case by case basis (fake inflation) or by the general factors that usually contribute to inflation?
The Lonious Monk
Celestial Souljah
That's hard to say. I think the point is that corporations shouldn't be using inflation, real or otherwise, to prey on the public and they are definitely doing that. These corporations can't, on one hand, say they are being squeezed by problems like supply chain disruptions that are causing them to raise their prices, and then, on the other hand, report record profits. There are absolutely things that we've had to pay higher prices for because of genuine problems that led to inflation. We all have had to pay higher prices for things because of corporate greed. If we're talking about at this very moment though, I think most of us are being price gouged because if I'm not mistaken most of the problems that led to the inflation have cleared up, the corporations just never dropped their prices.
One problem that flies under the radar now is that these corporations collude a lot more now. In a free market, competition is supposed to make it so that everyone gets a fair shake. If one company is selling something and its prices are artificially high, it will lose out because its competitors will offer the same thing at a lower price. The problem is that these company come together and agree to all sell those things at artificially high prices, so consumers are stuck paying overly high prices.
Here's an article about how landlords in the DC area have been using this software program to colluded on inflate rents in the area. People in the area can't search around for better prices because all the landlords have basically agreed to commit to higher rents.