>We are to believe that corporations suddenly became more greedy than they were before?
I believe it. Companies get record profits but still initiate stuff like Return to Office and mass layoffs across multiple industries. At some point it's not about profits so much as control.
You're not addressing the key point - you seem to be saying that corporations are always greedy, but the comment you are replying to is asking why would they be more greedy now? If "more profit = more greed", is it also true that "less profit = less greed"?
It wasn't really an answer so much as a feeling. I don't know why they'd get more greedy now in the 2020s. I've seen enough breadcrumbs otherwise that I could believe they are.
If you want my blind guess, the focus on satisfying shareholders simply intensified for the past 15 years or so, accelerated by tech and the need to incorporate it in all industries. That + low interest rates lead to a gold mine for corporate and a shift away from worrying about keeping a war chest as opposed to showing YoY growth. A shift way from retraining talent as opposed to figuring out how to save every penny on labor (the most expensive aspect in the US), regardless of employee satisfaction. There's more supply than ever so why fight for the best? You don't need the best if you lean on tech.
But that's just my L theory loosely based on experience and a variety of reading I did over the years.
The answer is that if people expect high inflation across the board, it's a good opportunity to raise prices more than inflation, because no one is going to notice 10% vs 13% increase.
That's only 1 explanation, but it's a plausible one.
You are mixing a lot of phenomena. In a high interest rate environment (caused by government money printed inflation) your profit margin has to be much higher than the risk-free rate of return to justify the investment, necessitating higher profits and cost cutting.
>In a high interest rate environment (caused by government money printed inflation) your profit margin has to be much higher than the risk-free rate of return to justify the investment,
groceries are pretty inelastic, they shouldn't be subject to "risk" unless people stop eating. That would be a much bigger issue (or miracle) than anything in economics if it happened.
>RTO is a whole separate thing.
it is indeed tangential. It was more just a small quip to note that company greed can get worse. Now just wait until the AI revolution next decade.
yes, but the loan you took out to renovate the stores, buy new trucks, install new point of sale is risky to the lender, so it does change and increase the cost of providing those goods.
Also, you say "pretty inelastic" - you seem to be accepting that food demand is elastic, just less so than other goods. Unsurprisingly, it turns out it depends what type of food article: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2804646/
"large" grocers. I'm not cutting Ralph some slack over something they shoulda had setup years ago.
>Also, you say "pretty inelastic" - you seem to be accepting that food demand is elastic, just less so than other goods.
Sure, it's not as inelastic as gas for Americans. America has enough free/cheap ways to eat if it really really came down to it so they can't pull an insulin. Still, I'd put it pretty high.
>Unsurprisingly, it turns out it depends what type of food articl
I figured, but that would imply that premium or convinent food caused the price spikes. Maybe it did, but I'm not so confident given how and what the government subsidizes (another reason you can't just price hike goods willy nilly. Subsidies are so you can pass on low prices to customers, not so you can pocket more money).
USD hasn't been a high interest rate environment since the 80's. And it's wrong to assert a direct causality from government spending money to interest rates going up. Rather what happened is the existence of actual price inflation (through whatever combination of supply shortages, legislative/executive government spending, and algorithmic collusion) caused the Federal Reserve to have to pull up from their ZIRP autopilot corporate handout of the past several decades.
For financial sustainability, we should all be pushing for the current moderate interest rates to be the new normal for the next several decades - enough time for 30 year mortgages and T-bills to mature, so asset prices correct. Since the Federal Reserve hasn't demonstrated any ability of self restraint, we should be supporting purposeful government spending on real investments which will prevent the Fed from dropping rates again. Furthermore it is much nicer for the economy at large when monetary creation (and thus price inflation) happens in deliberate areas needing strategic investment, instead of bubbles of whatever arbitrary asset class the bankers choose to run up each month.
I believe it. Companies get record profits but still initiate stuff like Return to Office and mass layoffs across multiple industries. At some point it's not about profits so much as control.