Capitalism, The Fed and Economic Policy
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Not today Sir, Probably not tomorrow.............................................. bayfront arena st. pete '94
you're finally here and I'm a mess................................................... nationwide arena columbus '10
memories like fingerprints are slowly raising.................................... first niagara center buffalo '13
another man ..... moved by sleight of hand...................................... joe louis arena detroit '140 -
During Trump and covid was NOT the time to be opening a business though...mickeyrat said:
These little tidbits are interesting but misleading.0 -
Maybe that is why they're saying since 2019 and not 2020/2021?tempo_n_groove said:
During Trump and covid was NOT the time to be opening a business though...mickeyrat said:
These little tidbits are interesting but misleading.www.myspace.com0 -
POOTWH took office in January 2017 and the twit referenced October 2019. Covid shut downs began in March 2020. How are “those little tidbits interesting but ‘misleading’?”tempo_n_groove said:
During Trump and covid was NOT the time to be opening a business though...mickeyrat said:
These little tidbits are interesting but misleading.09/15/1998 & 09/16/1998, Mansfield, MA; 08/29/00 08/30/00, Mansfield, MA; 07/02/03, 07/03/03, Mansfield, MA; 09/28/04, 09/29/04, Boston, MA; 09/22/05, Halifax, NS; 05/24/06, 05/25/06, Boston, MA; 07/22/06, 07/23/06, Gorge, WA; 06/27/2008, Hartford; 06/28/08, 06/30/08, Mansfield; 08/18/2009, O2, London, UK; 10/30/09, 10/31/09, Philadelphia, PA; 05/15/10, Hartford, CT; 05/17/10, Boston, MA; 05/20/10, 05/21/10, NY, NY; 06/22/10, Dublin, IRE; 06/23/10, Northern Ireland; 09/03/11, 09/04/11, Alpine Valley, WI; 09/11/11, 09/12/11, Toronto, Ont; 09/14/11, Ottawa, Ont; 09/15/11, Hamilton, Ont; 07/02/2012, Prague, Czech Republic; 07/04/2012 & 07/05/2012, Berlin, Germany; 07/07/2012, Stockholm, Sweden; 09/30/2012, Missoula, MT; 07/16/2013, London, Ont; 07/19/2013, Chicago, IL; 10/15/2013 & 10/16/2013, Worcester, MA; 10/21/2013 & 10/22/2013, Philadelphia, PA; 10/25/2013, Hartford, CT; 11/29/2013, Portland, OR; 11/30/2013, Spokane, WA; 12/04/2013, Vancouver, BC; 12/06/2013, Seattle, WA; 10/03/2014, St. Louis. MO; 10/22/2014, Denver, CO; 10/26/2015, New York, NY; 04/23/2016, New Orleans, LA; 04/28/2016 & 04/29/2016, Philadelphia, PA; 05/01/2016 & 05/02/2016, New York, NY; 05/08/2016, Ottawa, Ont.; 05/10/2016 & 05/12/2016, Toronto, Ont.; 08/05/2016 & 08/07/2016, Boston, MA; 08/20/2016 & 08/22/2016, Chicago, IL; 07/01/2018, Prague, Czech Republic; 07/03/2018, Krakow, Poland; 07/05/2018, Berlin, Germany; 09/02/2018 & 09/04/2018, Boston, MA; 09/08/2022, Toronto, Ont; 09/11/2022, New York, NY; 09/14/2022, Camden, NJ; 09/02/2023, St. Paul, MN; 05/04/2024 & 05/06/2024, Vancouver, BC; 05/10/2024, Portland, OR;
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https://www.forbes.com/sites/rhettbuttle/2024/01/12/three-year-small-business-boom-is-unprecedented/?sh=2b4569743af9Three-Year Small Business Boom Is Unprecedented
On Thursday, the White House announced that the past three years have seen an unprecedented number ... [+]
GETTYBy: Rhett Buttle
A sure sign of the direction of the economy is the number of small businesses opening. On Thursday, the White House announced that the past three years have seen an unprecedented number of entrepreneurs open up shop in their homes and Main Streets across America.
“Every time someone starts a new small business, it’s an act of hope and confidence in our economy,” said President Joe Biden in a statement. “Today, we learned that Americans filed 16 million new business applications during the first three years of my Administration—16 million acts of hope, the strongest stretch on record.”
The U.S. Census Bureau has been tracking business formation statistics since 2004 and the data released on Thursday showed that the nearly 16 million new recorded business applications since the start of the Biden-Harris Administration represent an approximately 85% increase in the average flow of monthly applications relative to the period between 2004 and January 2021. In fact, the monthly average of 440,000 new business applications over the past three years is 46% higher than the average of 2017 through 2020 combined.
Keith Hall, President and CEO of the National Association for the Self-Employed (NASE), the nation’s leading advocate and resource for the self-employed and micro-business community, said, “The consistent, record-shattering rate of small businesses surging throughout the nation is great news for not only our community, but also our local and national economy.”
“As the country continues to emerge from the Covid-19 pandemic and recovers from recent economic volatility, we applaud the courage and grit of all new business owners, especially Black, Hispanic, AAPI, Native, and other business owners who continue to make entrepreneurial leaps in the face of adversity,” said Ying McGuire, CEO and President, National Minority Supplier Development Council. “The resilience displayed by these leaders highlights the spirit of America, and creates new economic opportunities and pathways for success not just for them, but for their communities and the whole country.”
The increase in growth in entrepreneurship has been particularly high among women, Latinos, and Black Americans. Black business ownership is growing at the fastest pace in 30 years with the share of Black households owning a business more than doubling from 5% to 11% between 2019 and 2022. In addition, Latino business ownership rose from 7% to 10% between 2019 and 2022, the fastest pace in more than a decade. However, the greatest growth can arguably be seen in the number of women-owned businesses, as the rate from 2019 to 2023 was 94% greater than the growth of men-owned businesses.
“The President’s announcement of a record 16 million new small businesses in the last three years is a signal that the US economy is working for entrepreneurs, and in turn, that business owners have confidence in the economy,” said Chiling Tong, President and CEO of the National Asian Pacific Islander American Chamber of Commerce and Entrepreneurship (National ACE). “AAPI businesses have benefited from a stronger economy, with over 2.91 million AAPI owned businesses and counting, fueling job creation and economic growth in their communities.”
“More Americans than ever are pursuing their dreams of business ownership as the rate of new business applications filed and establishments under President Biden continues to surge,” said U.S. Small Business Administration (SBA) Administrator Isabel Casillas Guzman. “In the last year alone, Americans across the country and in a wide range of industries filed a record five and a half million new business applications, bringing the total number under this Administration to a record-breaking 16 million. America’s great diversity continues to propel entrepreneurship with Black, Latino, and women founders starting up at higher rates than ever. As we enter 2024, the SBA will continue its work to increase access to the resources needed to start and grow resilient new businesses, harnessing the unique optimism and ingenuity of American entrepreneurs.”
While there are many factors for this unprecedented growth, there is a general feeling among small business owners that it would not have happened through laissez-faire capitalism. It appears that the initiatives of the Biden-Harris Administration’s Investing in America Agenda are lifting up small businesses across the country.
“Policies like the Bipartisan Infrastructure Act advance this positive momentum. The $400 billion in investments in all 50 states announced so far, creates ample new opportunities for small businesses while repairing our nation's roads and bridges and strengthening our supply chains,” said Small Business for America’s Future Co-chair Walt Rowen, who is also President of Susquehanna Glass Company in Lancaster, Pennsylvania.
This growth is connected to other positive aspects with our economy, including 14 million new jobs over the last three years and an unemployment rate that has been below 4% for the longest stretch in more than 50 years. As we kick off 2024, a primary focus for our country should be to build on these successes.
www.myspace.com0 -
tempo_n_groove said:
During Trump and covid was NOT the time to be opening a business though...mickeyrat said:
These little tidbits are interesting but misleading.
a careful read shows covid wasn't a consideration here. Under fuckstick IN 2019.....
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Not today Sir, Probably not tomorrow.............................................. bayfront arena st. pete '94
you're finally here and I'm a mess................................................... nationwide arena columbus '10
memories like fingerprints are slowly raising.................................... first niagara center buffalo '13
another man ..... moved by sleight of hand...................................... joe louis arena detroit '140 -
Fucking dems. Chaos agents and all, and like the border, nothing is getting done.The Juggler said:
https://www.forbes.com/sites/rhettbuttle/2024/01/12/three-year-small-business-boom-is-unprecedented/?sh=2b4569743af9Three-Year Small Business Boom Is Unprecedented
On Thursday, the White House announced that the past three years have seen an unprecedented number ... [+]
GETTYBy: Rhett Buttle
A sure sign of the direction of the economy is the number of small businesses opening. On Thursday, the White House announced that the past three years have seen an unprecedented number of entrepreneurs open up shop in their homes and Main Streets across America.
“Every time someone starts a new small business, it’s an act of hope and confidence in our economy,” said President Joe Biden in a statement. “Today, we learned that Americans filed 16 million new business applications during the first three years of my Administration—16 million acts of hope, the strongest stretch on record.”
The U.S. Census Bureau has been tracking business formation statistics since 2004 and the data released on Thursday showed that the nearly 16 million new recorded business applications since the start of the Biden-Harris Administration represent an approximately 85% increase in the average flow of monthly applications relative to the period between 2004 and January 2021. In fact, the monthly average of 440,000 new business applications over the past three years is 46% higher than the average of 2017 through 2020 combined.
Keith Hall, President and CEO of the National Association for the Self-Employed (NASE), the nation’s leading advocate and resource for the self-employed and micro-business community, said, “The consistent, record-shattering rate of small businesses surging throughout the nation is great news for not only our community, but also our local and national economy.”
“As the country continues to emerge from the Covid-19 pandemic and recovers from recent economic volatility, we applaud the courage and grit of all new business owners, especially Black, Hispanic, AAPI, Native, and other business owners who continue to make entrepreneurial leaps in the face of adversity,” said Ying McGuire, CEO and President, National Minority Supplier Development Council. “The resilience displayed by these leaders highlights the spirit of America, and creates new economic opportunities and pathways for success not just for them, but for their communities and the whole country.”
The increase in growth in entrepreneurship has been particularly high among women, Latinos, and Black Americans. Black business ownership is growing at the fastest pace in 30 years with the share of Black households owning a business more than doubling from 5% to 11% between 2019 and 2022. In addition, Latino business ownership rose from 7% to 10% between 2019 and 2022, the fastest pace in more than a decade. However, the greatest growth can arguably be seen in the number of women-owned businesses, as the rate from 2019 to 2023 was 94% greater than the growth of men-owned businesses.
“The President’s announcement of a record 16 million new small businesses in the last three years is a signal that the US economy is working for entrepreneurs, and in turn, that business owners have confidence in the economy,” said Chiling Tong, President and CEO of the National Asian Pacific Islander American Chamber of Commerce and Entrepreneurship (National ACE). “AAPI businesses have benefited from a stronger economy, with over 2.91 million AAPI owned businesses and counting, fueling job creation and economic growth in their communities.”
“More Americans than ever are pursuing their dreams of business ownership as the rate of new business applications filed and establishments under President Biden continues to surge,” said U.S. Small Business Administration (SBA) Administrator Isabel Casillas Guzman. “In the last year alone, Americans across the country and in a wide range of industries filed a record five and a half million new business applications, bringing the total number under this Administration to a record-breaking 16 million. America’s great diversity continues to propel entrepreneurship with Black, Latino, and women founders starting up at higher rates than ever. As we enter 2024, the SBA will continue its work to increase access to the resources needed to start and grow resilient new businesses, harnessing the unique optimism and ingenuity of American entrepreneurs.”
While there are many factors for this unprecedented growth, there is a general feeling among small business owners that it would not have happened through laissez-faire capitalism. It appears that the initiatives of the Biden-Harris Administration’s Investing in America Agenda are lifting up small businesses across the country.
“Policies like the Bipartisan Infrastructure Act advance this positive momentum. The $400 billion in investments in all 50 states announced so far, creates ample new opportunities for small businesses while repairing our nation's roads and bridges and strengthening our supply chains,” said Small Business for America’s Future Co-chair Walt Rowen, who is also President of Susquehanna Glass Company in Lancaster, Pennsylvania.
This growth is connected to other positive aspects with our economy, including 14 million new jobs over the last three years and an unemployment rate that has been below 4% for the longest stretch in more than 50 years. As we kick off 2024, a primary focus for our country should be to build on these successes.
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The Juggler said:
Maybe that is why they're saying since 2019 and not 2020/2021?tempo_n_groove said:
During Trump and covid was NOT the time to be opening a business though...mickeyrat said:
These little tidbits are interesting but misleading.
I'm way off on this one. A spike occurred during the pandemic for new business' wow. Brick and mortar closed while home shops opened.Halifax2TheMax said:
POOTWH took office in January 2017 and the twit referenced October 2019. Covid shut downs began in March 2020. How are “those little tidbits interesting but ‘misleading’?”tempo_n_groove said:
During Trump and covid was NOT the time to be opening a business though...mickeyrat said:
These little tidbits are interesting but misleading.
I didn't see that one at all.
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The comparative from X was October 2019 vs Oct 2022. No effect from Covid in either window.tempo_n_groove said:The Juggler said:
Maybe that is why they're saying since 2019 and not 2020/2021?tempo_n_groove said:
During Trump and covid was NOT the time to be opening a business though...mickeyrat said:
These little tidbits are interesting but misleading.
I'm way off on this one. A spike occurred during the pandemic for new business' wow. Brick and mortar closed while home shops opened.Halifax2TheMax said:
POOTWH took office in January 2017 and the twit referenced October 2019. Covid shut downs began in March 2020. How are “those little tidbits interesting but ‘misleading’?”tempo_n_groove said:
During Trump and covid was NOT the time to be opening a business though...mickeyrat said:
These little tidbits are interesting but misleading.
I didn't see that one at all.0 -
Well if u look at the chart for it there is a HUGE drop beginning of covid and then a HUGE spike during. Again, I didn't see that coming as I watched many brick and mortar business' fail.mrussel1 said:
The comparative from X was October 2019 vs Oct 2022. No effect from Covid in either window.tempo_n_groove said:The Juggler said:
Maybe that is why they're saying since 2019 and not 2020/2021?tempo_n_groove said:
During Trump and covid was NOT the time to be opening a business though...mickeyrat said:
These little tidbits are interesting but misleading.
I'm way off on this one. A spike occurred during the pandemic for new business' wow. Brick and mortar closed while home shops opened.Halifax2TheMax said:
POOTWH took office in January 2017 and the twit referenced October 2019. Covid shut downs began in March 2020. How are “those little tidbits interesting but ‘misleading’?”tempo_n_groove said:
During Trump and covid was NOT the time to be opening a business though...mickeyrat said:
These little tidbits are interesting but misleading.
I didn't see that one at all.0 -
I’m thinking it’s comparing the same two periods of time, from inauguration day to October two years later. 1/20/2017 to 10/31/2019 versus 1/20/2021 to 10/31/2023.mrussel1 said:
The comparative from X was October 2019 vs Oct 2022. No effect from Covid in either window.tempo_n_groove said:The Juggler said:
Maybe that is why they're saying since 2019 and not 2020/2021?tempo_n_groove said:
During Trump and covid was NOT the time to be opening a business though...mickeyrat said:
These little tidbits are interesting but misleading.
I'm way off on this one. A spike occurred during the pandemic for new business' wow. Brick and mortar closed while home shops opened.Halifax2TheMax said:
POOTWH took office in January 2017 and the twit referenced October 2019. Covid shut downs began in March 2020. How are “those little tidbits interesting but ‘misleading’?”tempo_n_groove said:
During Trump and covid was NOT the time to be opening a business though...mickeyrat said:
These little tidbits are interesting but misleading.
I didn't see that one at all.
We were told, repeatedly, that POOTWH’s tax cuts would trickle down and pay for themselves with 4% GDP growth, year over year, quarter over quarter, for 10 years. It’s a comparison of two economic visions and their respective results. Covid shouldn’t even be part of the conversation as it hadn’t occurred yet. Unless folks with Q knowledge knew about Covid before hand and sat on their ideas and money or had no faith in the future.
Again, what is “misleading” about the twit?09/15/1998 & 09/16/1998, Mansfield, MA; 08/29/00 08/30/00, Mansfield, MA; 07/02/03, 07/03/03, Mansfield, MA; 09/28/04, 09/29/04, Boston, MA; 09/22/05, Halifax, NS; 05/24/06, 05/25/06, Boston, MA; 07/22/06, 07/23/06, Gorge, WA; 06/27/2008, Hartford; 06/28/08, 06/30/08, Mansfield; 08/18/2009, O2, London, UK; 10/30/09, 10/31/09, Philadelphia, PA; 05/15/10, Hartford, CT; 05/17/10, Boston, MA; 05/20/10, 05/21/10, NY, NY; 06/22/10, Dublin, IRE; 06/23/10, Northern Ireland; 09/03/11, 09/04/11, Alpine Valley, WI; 09/11/11, 09/12/11, Toronto, Ont; 09/14/11, Ottawa, Ont; 09/15/11, Hamilton, Ont; 07/02/2012, Prague, Czech Republic; 07/04/2012 & 07/05/2012, Berlin, Germany; 07/07/2012, Stockholm, Sweden; 09/30/2012, Missoula, MT; 07/16/2013, London, Ont; 07/19/2013, Chicago, IL; 10/15/2013 & 10/16/2013, Worcester, MA; 10/21/2013 & 10/22/2013, Philadelphia, PA; 10/25/2013, Hartford, CT; 11/29/2013, Portland, OR; 11/30/2013, Spokane, WA; 12/04/2013, Vancouver, BC; 12/06/2013, Seattle, WA; 10/03/2014, St. Louis. MO; 10/22/2014, Denver, CO; 10/26/2015, New York, NY; 04/23/2016, New Orleans, LA; 04/28/2016 & 04/29/2016, Philadelphia, PA; 05/01/2016 & 05/02/2016, New York, NY; 05/08/2016, Ottawa, Ont.; 05/10/2016 & 05/12/2016, Toronto, Ont.; 08/05/2016 & 08/07/2016, Boston, MA; 08/20/2016 & 08/22/2016, Chicago, IL; 07/01/2018, Prague, Czech Republic; 07/03/2018, Krakow, Poland; 07/05/2018, Berlin, Germany; 09/02/2018 & 09/04/2018, Boston, MA; 09/08/2022, Toronto, Ont; 09/11/2022, New York, NY; 09/14/2022, Camden, NJ; 09/02/2023, St. Paul, MN; 05/04/2024 & 05/06/2024, Vancouver, BC; 05/10/2024, Portland, OR;
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I wonder if a lot of these new businesses have been opened by a lot of the same people who some said over and over and over again that they "just didn't want to work" during covid? Perhaps they transitioned to becoming their own bosses. Either way, this is welcomed news.www.myspace.com0
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I opened up a business during this time too, albeit a small one, but I did.The Juggler said:I wonder if a lot of these new businesses have been opened by a lot of the same people who some said over and over and over again that they "just didn't want to work" during covid? Perhaps they transitioned to becoming their own bosses. Either way, this is welcomed news.0 -
https://www.theguardian.com/business/2024/jan/19/us-inflation-caused-by-corporate-profits
Half of recent US inflation due to high corporate profits, report finds
Thinktank report says ‘resounding evidence’ shows companies continue to keep prices high even as their inflationary costs drop
A new report claims “resounding evidence” shows that high corporate profits are a main driver of ongoing inflation, and companies continue to keep prices high even as their inflationary costs drop.
The report, compiled by the progressive Groundwork Collaborative thinktank, found corporate profits accounted for about 53% of inflation during last year’s second and third quarters. Profits drove just 11% of price growth in the 40 years prior to the pandemic, according to the report.
Prices for consumers rose by 3.4% over the past year, but input costs for producers increased by just 1%, according to the authors’ calculations which were based on data from the Bureau of Economic Analysis and National Income and Products Accounts.
“Costs have come down substantially, and while corporations were quick to pass on their increased costs to consumers, they are surprisingly less quick to pass on their savings to consumers,” Liz Pancotti, a Groundwork strategic advisor and paper co-author, told the Guardian.
Since pandemic inflation spiked in 2021, a high-stakes debate has played out about its sources. Many progressive economists pointed to corporate profits – or “greedflation” – and supply chain issues as a driver of high prices, while their more conservative counterparts singled out government stimulus cash and high wages.
The report’s authors scoured corporate earnings calls and found executives bragging to shareholders about keeping prices high and widening profit margins as input costs come down.
The findings come as the Federal Reserve has hiked interest rates to their highest point in 20 years. The report casts serious doubt on the need for further interest rate hikes, and instead calls for stronger policies to rein in “corporate profiteering”.
Prices rose in 2021 as labor costs jumped and supply chain shocks from the pandemic and the Ukraine war snarled shipping traffic and left energy supplies in question. But those issues have in many cases been fully sorted out or are easing, and the labor market has stabilized. Many commodities and services producers’ prices have actually decreased, the report notes.
Nearly 60% of the drop in key goods and services’ inputs was driven by large declines in energy costs, such as jet fuel and diesel fuel, while transportation and warehousing costs have fallen by nearly 4% since June 2022 peaks.
Still, prices remain high. Consumers are still paying about 25% more for groceries, the report notes as an example.
Corporations maintain high prices by exploiting cost shocks caused by events like the Ukraine war and coordinating price hikes, said Isabella Weber, a University of Massachusetts Amherst economist who was not part of the paper.
The shocks create an environment in which it is safe for firms to increase prices as they expect their competitors to do the same, said Weber.
“This is a form of implicit collusion,” she said. “Firms do not even need to talk to one another to know that a cost shock is a great time to raise prices. But when costs fall, price setting firms do not have any incentive to decrease prices.”
If no firms launch a price war, Weber added, then companies “hold the line” on prices and widen margins. She pointed to food processors as an example.
The paper zooms in on the diaper industry, of which Procter & Gamble and Kimberly-Clark control 70% of the domestic market. Diaper prices have increased by more than 30% since 2019 from, on average, $16.50 to nearly $22.
The rise was partly driven by an increase in commodities like wood pulp, a major component of diapers. Wholesale wood pulp prices soared by 87% between January 2021 and January 2023, but last year prices dropped by 25%.
Still, diaper prices have not come down with lower costs, the authors say. Groundwork examined earnings calls and found executives at both companies boasting of widening profit margins as input costs decreased. A drop in inputs accounted for about one third of Kimberly Clark’s profits, company executives said.
P&G executives said in their July earnings call they expect $800m in windfall profits because of declining input costs, suggesting they won’t bring down prices.
Meanwhile, workers aren’t faring as well – corporate profits as a share of national income are up by about 29%, and workers’ share of corporate earnings is still down from pre-pandemic levels.
The Biden administration has taken steps to strengthen supply chains, Pancotti noted, and Joe Biden recently called on corporations to stop “gouging” consumers as input costs fall. But she and Weber called for stronger action, pointing to other nations with forms of price control in place.
In France, the government intervenes in price negotiations among retailers and producers. Earlier this month, with the government’s support, the supermarket chain Carrefour banned some PepsiCo products from its shelves because of “unacceptable price increases”.
Absent strong government intervention in pricing, the 2025 expiration of the Trump corporate tax cuts presents an opportunity to rein in corporations via the tax code, Pancotti said.
“We’ve decided as a country that we like to have very large, powerful corporations and we are OK with them being very profitable,” she said. “We need to take a really hard look at how our tax code incentivizes corporate profiteering and ask: ‘Do we as a country want to do something about that?’”
www.myspace.com0 -
I said this when prices were high and "supply chain" issues weren't a thing and people said I was wrong.The Juggler said:https://www.theguardian.com/business/2024/jan/19/us-inflation-caused-by-corporate-profitsHalf of recent US inflation due to high corporate profits, report finds
Thinktank report says ‘resounding evidence’ shows companies continue to keep prices high even as their inflationary costs drop
A new report claims “resounding evidence” shows that high corporate profits are a main driver of ongoing inflation, and companies continue to keep prices high even as their inflationary costs drop.
The report, compiled by the progressive Groundwork Collaborative thinktank, found corporate profits accounted for about 53% of inflation during last year’s second and third quarters. Profits drove just 11% of price growth in the 40 years prior to the pandemic, according to the report.
Prices for consumers rose by 3.4% over the past year, but input costs for producers increased by just 1%, according to the authors’ calculations which were based on data from the Bureau of Economic Analysis and National Income and Products Accounts.
“Costs have come down substantially, and while corporations were quick to pass on their increased costs to consumers, they are surprisingly less quick to pass on their savings to consumers,” Liz Pancotti, a Groundwork strategic advisor and paper co-author, told the Guardian.
Since pandemic inflation spiked in 2021, a high-stakes debate has played out about its sources. Many progressive economists pointed to corporate profits – or “greedflation” – and supply chain issues as a driver of high prices, while their more conservative counterparts singled out government stimulus cash and high wages.
The report’s authors scoured corporate earnings calls and found executives bragging to shareholders about keeping prices high and widening profit margins as input costs come down.
The findings come as the Federal Reserve has hiked interest rates to their highest point in 20 years. The report casts serious doubt on the need for further interest rate hikes, and instead calls for stronger policies to rein in “corporate profiteering”.
Prices rose in 2021 as labor costs jumped and supply chain shocks from the pandemic and the Ukraine war snarled shipping traffic and left energy supplies in question. But those issues have in many cases been fully sorted out or are easing, and the labor market has stabilized. Many commodities and services producers’ prices have actually decreased, the report notes.
Nearly 60% of the drop in key goods and services’ inputs was driven by large declines in energy costs, such as jet fuel and diesel fuel, while transportation and warehousing costs have fallen by nearly 4% since June 2022 peaks.
Still, prices remain high. Consumers are still paying about 25% more for groceries, the report notes as an example.
Corporations maintain high prices by exploiting cost shocks caused by events like the Ukraine war and coordinating price hikes, said Isabella Weber, a University of Massachusetts Amherst economist who was not part of the paper.
The shocks create an environment in which it is safe for firms to increase prices as they expect their competitors to do the same, said Weber.
“This is a form of implicit collusion,” she said. “Firms do not even need to talk to one another to know that a cost shock is a great time to raise prices. But when costs fall, price setting firms do not have any incentive to decrease prices.”
If no firms launch a price war, Weber added, then companies “hold the line” on prices and widen margins. She pointed to food processors as an example.
The paper zooms in on the diaper industry, of which Procter & Gamble and Kimberly-Clark control 70% of the domestic market. Diaper prices have increased by more than 30% since 2019 from, on average, $16.50 to nearly $22.
The rise was partly driven by an increase in commodities like wood pulp, a major component of diapers. Wholesale wood pulp prices soared by 87% between January 2021 and January 2023, but last year prices dropped by 25%.
Still, diaper prices have not come down with lower costs, the authors say. Groundwork examined earnings calls and found executives at both companies boasting of widening profit margins as input costs decreased. A drop in inputs accounted for about one third of Kimberly Clark’s profits, company executives said.
P&G executives said in their July earnings call they expect $800m in windfall profits because of declining input costs, suggesting they won’t bring down prices.
Meanwhile, workers aren’t faring as well – corporate profits as a share of national income are up by about 29%, and workers’ share of corporate earnings is still down from pre-pandemic levels.
The Biden administration has taken steps to strengthen supply chains, Pancotti noted, and Joe Biden recently called on corporations to stop “gouging” consumers as input costs fall. But she and Weber called for stronger action, pointing to other nations with forms of price control in place.
In France, the government intervenes in price negotiations among retailers and producers. Earlier this month, with the government’s support, the supermarket chain Carrefour banned some PepsiCo products from its shelves because of “unacceptable price increases”.
Absent strong government intervention in pricing, the 2025 expiration of the Trump corporate tax cuts presents an opportunity to rein in corporations via the tax code, Pancotti said.
“We’ve decided as a country that we like to have very large, powerful corporations and we are OK with them being very profitable,” she said. “We need to take a really hard look at how our tax code incentivizes corporate profiteering and ask: ‘Do we as a country want to do something about that?’”
The car manufacturers are still following these practices today and why I'm going to drive my vehicle into the ground before I buy a new one.0 -
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Not today Sir, Probably not tomorrow.............................................. bayfront arena st. pete '94
you're finally here and I'm a mess................................................... nationwide arena columbus '10
memories like fingerprints are slowly raising.................................... first niagara center buffalo '13
another man ..... moved by sleight of hand...................................... joe louis arena detroit '140 -
tempo_n_groove said:
I said this when prices were high and "supply chain" issues weren't a thing and people said I was wrong.The Juggler said:https://www.theguardian.com/business/2024/jan/19/us-inflation-caused-by-corporate-profitsHalf of recent US inflation due to high corporate profits, report finds
Thinktank report says ‘resounding evidence’ shows companies continue to keep prices high even as their inflationary costs drop
A new report claims “resounding evidence” shows that high corporate profits are a main driver of ongoing inflation, and companies continue to keep prices high even as their inflationary costs drop.
The report, compiled by the progressive Groundwork Collaborative thinktank, found corporate profits accounted for about 53% of inflation during last year’s second and third quarters. Profits drove just 11% of price growth in the 40 years prior to the pandemic, according to the report.
Prices for consumers rose by 3.4% over the past year, but input costs for producers increased by just 1%, according to the authors’ calculations which were based on data from the Bureau of Economic Analysis and National Income and Products Accounts.
“Costs have come down substantially, and while corporations were quick to pass on their increased costs to consumers, they are surprisingly less quick to pass on their savings to consumers,” Liz Pancotti, a Groundwork strategic advisor and paper co-author, told the Guardian.
Since pandemic inflation spiked in 2021, a high-stakes debate has played out about its sources. Many progressive economists pointed to corporate profits – or “greedflation” – and supply chain issues as a driver of high prices, while their more conservative counterparts singled out government stimulus cash and high wages.
The report’s authors scoured corporate earnings calls and found executives bragging to shareholders about keeping prices high and widening profit margins as input costs come down.
The findings come as the Federal Reserve has hiked interest rates to their highest point in 20 years. The report casts serious doubt on the need for further interest rate hikes, and instead calls for stronger policies to rein in “corporate profiteering”.
Prices rose in 2021 as labor costs jumped and supply chain shocks from the pandemic and the Ukraine war snarled shipping traffic and left energy supplies in question. But those issues have in many cases been fully sorted out or are easing, and the labor market has stabilized. Many commodities and services producers’ prices have actually decreased, the report notes.
Nearly 60% of the drop in key goods and services’ inputs was driven by large declines in energy costs, such as jet fuel and diesel fuel, while transportation and warehousing costs have fallen by nearly 4% since June 2022 peaks.
Still, prices remain high. Consumers are still paying about 25% more for groceries, the report notes as an example.
Corporations maintain high prices by exploiting cost shocks caused by events like the Ukraine war and coordinating price hikes, said Isabella Weber, a University of Massachusetts Amherst economist who was not part of the paper.
The shocks create an environment in which it is safe for firms to increase prices as they expect their competitors to do the same, said Weber.
“This is a form of implicit collusion,” she said. “Firms do not even need to talk to one another to know that a cost shock is a great time to raise prices. But when costs fall, price setting firms do not have any incentive to decrease prices.”
If no firms launch a price war, Weber added, then companies “hold the line” on prices and widen margins. She pointed to food processors as an example.
The paper zooms in on the diaper industry, of which Procter & Gamble and Kimberly-Clark control 70% of the domestic market. Diaper prices have increased by more than 30% since 2019 from, on average, $16.50 to nearly $22.
The rise was partly driven by an increase in commodities like wood pulp, a major component of diapers. Wholesale wood pulp prices soared by 87% between January 2021 and January 2023, but last year prices dropped by 25%.
Still, diaper prices have not come down with lower costs, the authors say. Groundwork examined earnings calls and found executives at both companies boasting of widening profit margins as input costs decreased. A drop in inputs accounted for about one third of Kimberly Clark’s profits, company executives said.
P&G executives said in their July earnings call they expect $800m in windfall profits because of declining input costs, suggesting they won’t bring down prices.
Meanwhile, workers aren’t faring as well – corporate profits as a share of national income are up by about 29%, and workers’ share of corporate earnings is still down from pre-pandemic levels.
The Biden administration has taken steps to strengthen supply chains, Pancotti noted, and Joe Biden recently called on corporations to stop “gouging” consumers as input costs fall. But she and Weber called for stronger action, pointing to other nations with forms of price control in place.
In France, the government intervenes in price negotiations among retailers and producers. Earlier this month, with the government’s support, the supermarket chain Carrefour banned some PepsiCo products from its shelves because of “unacceptable price increases”.
Absent strong government intervention in pricing, the 2025 expiration of the Trump corporate tax cuts presents an opportunity to rein in corporations via the tax code, Pancotti said.
“We’ve decided as a country that we like to have very large, powerful corporations and we are OK with them being very profitable,” she said. “We need to take a really hard look at how our tax code incentivizes corporate profiteering and ask: ‘Do we as a country want to do something about that?’”
The car manufacturers are still following these practices today and why I'm going to drive my vehicle into the ground before I buy a new one.
The people who don't understand this stuff are the one's who still think inflation is out of control and just want to blame Biden for everything. They don't seem to post much anymore.www.myspace.com0 -
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Not today Sir, Probably not tomorrow.............................................. bayfront arena st. pete '94
you're finally here and I'm a mess................................................... nationwide arena columbus '10
memories like fingerprints are slowly raising.................................... first niagara center buffalo '13
another man ..... moved by sleight of hand...................................... joe louis arena detroit '140 -
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Libtardaplorable©. And proud of it.
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_____________________________________SIGNATURE________________________________________________
Not today Sir, Probably not tomorrow.............................................. bayfront arena st. pete '94
you're finally here and I'm a mess................................................... nationwide arena columbus '10
memories like fingerprints are slowly raising.................................... first niagara center buffalo '13
another man ..... moved by sleight of hand...................................... joe louis arena detroit '140
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