President Biden has begun to accuse stores of overcharging shoppers, as food costs remain a burden for consumers and a political problem for the president.
Inflation literally means prices going up. Calling it as greed isn’t useful, because greed can lead to both price increases or decreases, depending on the context. For example, firms that are greedy for market share can drive prices down (a phenomenon that American consumers have benefited from greatly, over decades).
No, inflation means purchasing power decreasing. Prices going up is an effect of that rate but they are not directly tied. Not everything goes up by a flat percentage every month or year.
The food price increases were never at the rate of inflation. The worst inflation the US saw was 9% in June 2022, but that was just for that month period.the overall rate for 2022 as a whole was 8%. For 2023 the annual inflation rate was back to almost normal, at 3.5%, just above the 3.2% long term inflation rate.
So even if we assume costs jumped immediately, if a price went up more than 9% it was bullshit.
Picking out one price rise, and calling it out because it’s higher than the average inflation rate, is silly. Since inflation is the rise in the price level, averaged over all goods, almost by definition there will be some prices rising by more than average (and others less than average).
In fact, it’s well known that inflation hits very unevenly across different prices in an economy. The 1970s inflationary episode, for example, started with gas prices going up due to the oil embargo, before bleeding through into other prices. There are entire fields of economics dedicated to looking at inflation through different segments of the economy, precisely because price rises can be so uneven.
The bigger issue is that inflation is a problem of monetary and fiscal policy, which means pointing to greed is totally beside the point. Inflation was quiescent during the 2010s, and it’s not like people and companies were magically non-greedy during that period.
Inflation literally means prices going up. Calling it as greed isn’t useful, because greed can lead to both price increases or decreases, depending on the context. For example, firms that are greedy for market share can drive prices down (a phenomenon that American consumers have benefited from greatly, over decades).
No, inflation means purchasing power decreasing. Prices going up is an effect of that rate but they are not directly tied. Not everything goes up by a flat percentage every month or year.
The food price increases were never at the rate of inflation. The worst inflation the US saw was 9% in June 2022, but that was just for that month period.the overall rate for 2022 as a whole was 8%. For 2023 the annual inflation rate was back to almost normal, at 3.5%, just above the 3.2% long term inflation rate.
So even if we assume costs jumped immediately, if a price went up more than 9% it was bullshit.
Picking out one price rise, and calling it out because it’s higher than the average inflation rate, is silly. Since inflation is the rise in the price level, averaged over all goods, almost by definition there will be some prices rising by more than average (and others less than average).
In fact, it’s well known that inflation hits very unevenly across different prices in an economy. The 1970s inflationary episode, for example, started with gas prices going up due to the oil embargo, before bleeding through into other prices. There are entire fields of economics dedicated to looking at inflation through different segments of the economy, precisely because price rises can be so uneven.
The bigger issue is that inflation is a problem of monetary and fiscal policy, which means pointing to greed is totally beside the point. Inflation was quiescent during the 2010s, and it’s not like people and companies were magically non-greedy during that period.
But it was greed, not just monetary policy.
https://truthout.org/articles/greedflation-accounts-for-53-cents-of-every-dollar-of-inflation-in-past-6-months
https://www.theguardian.com/business/2023/dec/07/greedflation-corporate-profiteering-boosted-global-prices-study