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246

We won’t fix inflation while economists stay in denial about its causes (www.smh.com.au)

submitted 1 year ago by [email protected] to c/[email protected]

33 comments fedilink hide all child comments

Non-paywall link.

TL;DR: economists are still stuck in the idea of the market as a perfect force for reaching optimal outcomes. They're ignoring the simple fact that businesses are putting prices up purely to increase profits. And that they can do this because the economic ideal of perfect competition (where many small firms compete with near-identical products) does not exist. We have a small number of very powerful businesses—oligopolies—in nearly every market for consumer-facing goods.

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[–] [email protected] 27 points 1 year ago (1 children)

I actually don't think I've seen that many economists (the progressive ones at least) who haven't been making the case for some sort of windfall tax on profits. The Australia Institute have been all over this for years now. Even the more centrist / conservative economists admit there needs to be some sort of intervention to regulate competition in the market. Pretty sure it was the IMF who came up with the approach for calculating how much profit driven inflation there is. Anyone who doesn't recognise this is either on the payroll or selectively ignoring huge chunks of data / evidence.

[–] [email protected] 4 points 1 year ago

Everyone that can do anything about it is in charge of trickling down the payroll.