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Another narrative: employment was up and workers were gaining power. Out of nowhere, JP Morgan Chase chairperson started going to meetings and talking about a recession, over and over. Other businesses took his lead and started raising prices. After a while we're no closer to a recession, but we have lost a lot in standard of living.
When a handful of corporations control entire industries, capitalism stops working.
It's supposed to be a bunch of competitors trying to get as many sales as possible by having the lowest prices or highest quality.
But in the current economy, if a corporation raises their prices across the board, the rest raise their prices. The only times they lower prices, is straight to a loss to force small competitors out of business. The large corporations can deal without profits for six months, smaller companies go under and often have to sell to the giant corporations.
This cycle has been repeating for decades, it's not hard to notice it
The only solution is breaking up those giant corporations. Republicans sure as shit won't do it, but neither will the moderate wing of the Democratic party. It would cut into their donations too much.
If anything in the economy is "too big to fail" the solution is breaking them up, not bailing them out whenever necessary.
When a handful of corporations control entire industries... that is capitalism. Capitalism isn't some self-correcting system that benefits all, its a system that supports and benefits those who make the most profit possible. When companies have less competition and more control, they're better able to make money. And thus, are better at capitalism.
This isn't capitalism failing to function, this is capitalism working as intended. The "free-market" is an illusion created on hope and delusion.
What you're doing is the same as saying universal healthcare and communism is the same thing...
All capitalism isn't "free market". The government (at least supposed to) regulate capitalism. There was a time in America when it would even break up giant corporations who had monopolies. Lots of Americans alive today were even alive when it happened.
Things changed in the 1990s when James Carville convinced people Bill Clinton caused the Dotcom boom with neoliberal economics.
Suddenly both parties were bending over backwards to funnel money to the wealthy at the expense of what's left of the middle class.
You're demonstrating exactly why capitalism doesn't work. Once corporations capture politicians and grow fat, it is incredibly difficult to get them out. This isn't an aberration. It's inevitable in thew long run.
If Keynesians could implement their policies and hold them indefinitely, capitalism might work. They can't.
Unionize all the things.
They shouldn't be able to capture politicians the way they have, that's a failure of the supreme court, which was also captured.
Again, probably inevitable as you say, but that was in theory the last chance to stop it.
Unions imply capitalism, so... Sure I guess?
Like the history is wrong, and the reasoning is hellaciously wrong, but unions are indeed good.
If Russia and China are what real world Communism always turns out to be, North America and Europe are what Capitalism always turn out to be
Capitalism "working as intended" includes functional institutions that address externalities.
It also stops working when the vast majority of the population lacks capital. The recent experiments with a UBI in Kenya show this pretty well. Folks who decided on a lump-sum payment rather than monthly invested in creating businesses and were better off.
I mean, there's been studies in America too.
Give an average American a dollar and it boost the local economy by more than a dollar.
They tend to already have things they're saving up for, and spend it at local businesses.
Give the wealthy a dollar, and they hide it in Panama. Remember that big thing where we found out they all do it and then nothing happened?
That money never gets spent, it sits in a bank somewhere anonymously and is often permanently removed from the economy.
Worse is when that rich man's dollar gets dumped into real estate, directly harming everyone else by making housing even more unaffordable
We do have to constantly remind ourselves that the ultra rich aren't bound by any boarders and have no loyalty to any government.
Why do people even try to say nothing happened with Panama papers. I'll be the person this time and every time that shows LOTS has happened. From nearly day 1.
https://en.m.wikipedia.org/wiki/Panama_Papers
https://www.icij.org/investigations/panama-papers/five-years-later-panama-papers-still-having-a-big-impact/
People follow the initial headlines but don't care enough to stay with a story.
Same thing with Biden and the rail workers.
Do you see excess stock? Profits are not particularly high after the two years of costs that COVID created. Trillions of dollars were printed during COVID while people were not working and products were not being manufactured/farmed/repaired/....
There simply was/is more money floating around then stuff being produced. Unless God herself comes down and drops food/shelter/iPods from heaven, costs won't come down. Failing that, it is up to us to produce these products otherwise nothing will change.
There's a rather long history of it taking a recession to stop inflation. That it didn't this time is a very big deal.
It’s pretty basic supply and demand. Inflation historically goes up in an economy when a lot of people want to buy stuff, and that stuff is in limited supply.
Workers had cash and stimulus money = higher demand
The pandemic fucked with good manufacturing, and transport = reduced supply
When there is less of something, and people have money, they’re willing to pay more to get their hands on the scarce thing. Companies pay more for chips, or to have first dibs on something from the port, and that increased cost is passed along to the consumer.
Are we really still pretending the "stimulus" money of a whopping1400 actually had an impact for 99% of people?
No, but 3 years of pent-up demand and crippled supply chain infrastructure did
If it was merely an increase in costs, corporate profits should be neutral after they hike their prices to match. Same ratio going in and out.
What we actually saw was corporate profit margins going to record highs. Some sectors did see actual price increases--pandemic supply constraints, the Suez canal being blocked up by a shipping accident, and the war in Ukraine all did cause upward pressure on prices in some sectors. However, none of it could explain the data fully.
Even worse, those corporations saw 15-20% profit margins for the first time ever, and now their public stockholders expect them to keep doing it forever. This is insane. Big tech firms can see that kind of margin, but they're the exception. Not even banks see those margins on the regular. The belief that they can has driven many of the layoffs from otherwise profitable companies this year.
Corporations used world events as a cover for increasing prices. They had a once in a century opportunity to cover their actions and took it. To be honest, it usually is the case that prices don't just go up as a matter of greed. That's not what happened this time.
You might see that initially, but all of the little supply and demand changes start to inflate the overall value of the dollar, that starts to show up in profits.
Every company is affected differently during times of high inflation. I work for a fortune 50 company that had their earning take a hit because of inflated prices. That said, profit margins for many companies absolutely can and do inflate with the value of the currency.
Your profits are fuel for future investments, and if your finance team is doing their job correctly, they are making sure that profit is adjusted for inflation.
You're ignoring both the rise in demand and the increase in available spending money, and misunderstanding the relationship between profits and price.