Don't Blame 'Greedy Corporations' for Inflation. Blame the Government.
"Greed is constant. If it's greed, how do we explain prices falling?"
Inflation is the worst in 40 years.
The price of cars is up 37 percent. Gas is up 49 percent.
During the last few years, as politicians spent ever more money, experts told us not to worry.
Jerome Powell, chair of the Federal Reserve, said inflation would be "transitory."
Treasury Secretary Janet Yellen said, "I don't anticipate inflation is going to be a problem."
Now she says, "I'm ready to retire the word transitory."
What went wrong?
"Big corporations have taken advantage," says Rep. Ted Lieu (D–Calif.).
Sen. Elizabeth Warren (D–Mass.) tweeted: "Greedy corporations are charging Americans extra." It's "price gouging."
This is nonsense.
"Greed is constant," says economist David Henderson in my new video. "If it's greed, how do we explain prices falling?" When oil prices fall, is it because "oil companies just suddenly decide, 'I'm gonna be less greedy?'"
Prices change because of supply and demand.
Inflation results "from too much money chasing too few goods," explains Henderson. "If government's spending more money, that's more money chasing too few goods."
Lately, government borrowed from the Fed, and spent much more money. Under President Donald Trump, the national debt rose $7.8 trillion. Under President Joe Biden, it's grown $2.2 trillion in just one year. Biden wants to spend even more—a record $6 trillion this year.
Where will they get the money? Government has no money of its own, so increased spending means politicians must borrow more, tax more, or, easiest of all, create money out of thin air by just printing it.
In the last few years, that's what they did. In an untested experiment, the Fed printed more money than ever in history.
All this new money sloshing around the economy makes money we have less valuable. You notice the price increases, but you may not notice the damage inflation does to your savings.
If you put $10,000 under your pillow, 7 percent inflation will reduce that to $2,342 in just 20 years.
If you were counting on those savings for retirement, too bad. Most of your savings will be gone.
Yet today's politicians want to spend even more.
Biden claims his spending bills will "reduce inflation."
"Biden's wrong," Henderson responds. "There's no economic theory that says when the government spends a huge amount more money, prices fall."
Some people want government to stop inflation by imposing price controls.
That would be "horrible," says Henderson.
Price controls were tried before. In 1971, President Richard Nixon ordered a freeze on all prices.
It sounded reasonable. Too much inflation? Our intuition tells us that government can fix that with a price freeze. But "that's where people's intuition goes wrong," says Henderson.
Wrong because prices are not just money; they are also information.
"Prices are signals…that guide people," explains Henderson. "Mess that up, you've really messed up the economy."
Price changes tell buyers what to avoid and sellers what to produce. When COVID-19 hit, the price of face masks rose sharply. Immediately, producers made more. New Balance switched from making footwear to making masks.
Flexible pricing gets suppliers to produce what people really need.
Now there are shortages of some products because COVID-19 interrupted supply chains.
Price controls would make the shortages worse.
Soon after Nixon froze prices, there were shortages of gasoline. I drove around, wasting gas, searching for gas stations that had it.
"Price controls are like saying it's really cold and I'm going to solve that by breaking the thermometer," says Henderson. "It's actually worse than that because breaking the thermometer doesn't reduce the temperature, whereas price controls cause actual shortages!"
Venezuela's price controls led to a shortage of food. And yet inflation got much worse. 270 percent, 700 percent, eventually 400,000 percent inflation!
Once inflation starts, it's hard to stop.
In Zimbabwe, President Robert Mugabe couldn't collect enough in taxes to pay for his grand plans, so he printed more money.
A few years later, Zimbabwe was printing 100-trillion dollar bills.
Such drastic inflation hasn't happened here. It probably won't because recently the Fed reigned itself in.
But with Democrats and Republicans eager to spend more, it could happen here.
COPYRIGHT 2022 BY JFS PRODUCTIONS INC.
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Dennis Miller?
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Fucking Stossel playing BOAF SIDES. He quoted Trump spending money as well as Biden. If Stossel was a true libertarian he’s be telling everyone to vote for Republicans because they’re the party of fiscal responsibility. Want proof? Just look at how the deficit and debt dropped under the last several Republican administrations. I mean, Trump was on the way to balancing the budget!
vote for Republicans because they’re the party of fiscal responsibility
Look pal, the Republicans are the most fiscally conservative party out there. When they’re not in power.
The difference between Republicans and Democrats is that Republicans feel bad when they tax & spend more – though they both still do it.
You are doing it again, Sarc.
Trump and the Republicans lowered taxes, I.e. reduced violations of the NAP. How has Biden done anything like it?
The deficit and debt are not libertarian concerns. Lending money is not a violation of the NAP.
Your cramps must be really bad this month. So go take your midol and wash it down with some hobo wine.
> Want proof? Just look at how the deficit and debt dropped under the last several Republican administrations.
When Republican administrations increase the deficit they do it by doubling down on wars, the military and tax cuts for the wealthy and big business.
When DEMOCRAT administrations increase the deficit they do it by trying to give money, healthcare and foodstamps to people considered “undeserving” by the average shithead in this comment section.
The problem is not the deficit, debt or inflation, the problem is bums being helped.
“The US is a very wealthy country and we can afford this. ” Every progressive ever.
Fuckin’ Progs.
So the solution is to confiscate all prog wealth to pay for things. Plus reparations for what they have done.
“Greed is constant. If it’s greed, how do we explain prices falling?”
Periodically, corporations and the people who run them see the error of their ways. Like men did in the 60s. No man loved nor cared about his wife or the women in his life. They were nothing more than chattel property. Then in the late 1960s, their eyes were opened to their patriarchal motivations, and the rest was history.
I swear to god this is what some feminists actually think.
It’s often implied.
Most feminists just need a good long deep dicking. Although too many of them are so fat and hideous that no man could become aroused for them.
Love me some Stossel and it’s even better in print where you get to read it in his voice. But now for a little criticism, shave the beard – your starting to look Doresyesque and the Stash is just too good to share that stage.
CNN’s Jeff Zucker resigns after getting caught fuckin’ office bitches.
Because of the patriarchy.
There’s a zucker born every minute…
Does that mean she’ll put out for the next CEO as well?
I’m surprised he was caught with a woman.
If you raise prices because of limited supply and people will still pay for it, it is still greed.
Never mind that it costs the business more to get the product also…
It’s greed all the way up.
But Greed isn’t to blame. It is the limited supply/increased demand.
You can call it greed if you want. But that motivation is exactly why capitalism (or markets if you prefer) works so well. It doesn’t require that people have unselfish motives to work towards everyone’s benefit.
As somebody once said, profits are the price we pay for efficiency.
MollyGodiva seems incapable of understanding the difference between self-interest and greed/selfishness.
It doesn’t matter that capitalism makes life better for the most people. It’s motives aren’t pure and that makes it evil.
Or so say proggie idiots.
If the goods are limited and they don’t raise prices, the supply completely disappears, and then no one has anything. God you are stupid and vapid.
So?
My issue with corporations, however, is that corporations are seldom pro-capitalism and never pro-free enterprise. They will lobby the government hard to save them and hurt the competition. Sure, it is the government’s choice ultimately, but these companies are certainly celebrating it.
Um, they’re doing more than “celebrating it” – the lobbyists are writing the damn laws. They’re buying political campaigns and will ‘primary’ anyone of any party who is sufficiently pro-corporate regulation.
Which is why I now reflexively hate any law or regulation supported by a corporation that is sold as a weigh to rein in corporations. What they almost universally do is hurt the little guy while giving the corporations more power and a government protected monopoly.
This is a major reason why the right has turned against them. It started with their turn against the chamber of commerce, and all signs point to a further separation of capital and enterprise.
Damn you nesting, meant for damikesc.
John Stossel, corporate America and Wall Street’s mop-up man: Don’t blame greedy corporations and banks (like Bank of America who is currently denying loan forgiveness to small businesses), blame the Gubmint!!!
Stossel is a clown.
Hey, someone with a brain. Refreshing to see in the midst of the normal stupidity on here.
Read Chumby’s response: “If you borrowed money from a bank, you should pay back the money you borrowed.”
Nothing clownish about that. The government earns the blame.
So do you and your fellow traveler above advocate for wage ceilings for pro athletes and entertainers? No one is more greedy than those people.
If you borrowed money from a bank, you should pay back the money you borrowed.
If you borrowed money for a student loan (from a bank), you should pay back the money you borrowed.
Not a cause of inflation – big banks denying loan forgiveness to small businesses.
“Deflection – it’s the only way we operate” Progs
Is t it greedy to take someone else’s money and not pay it back as promised?
As has been noted previously, People Usually Get The Sort Of Government And Results They Didn’t Vote Against.
Brilliant Stossell makes perfect sense again!
“In an untested experiment”
Oh, those always go well. Those grand, idealistic, societal wide, untested social experiments? Yeah… Although they tested socialism in the 20th century, only 100 million dead. Hey, maybe they kill 200 million this century……
“Sen. Elizabeth Warren (D–Mass.) tweeted: “Greedy corporations are charging Americans extra.” It’s “price gouging.””
You know, that dumb bitch actually said this in relation to major grocery chains. They make somewhere between 2 and 3 cents on every dollar I spend at their store. Meanwhile, the government makes 9 cents per dollar.
But, I have to ear about $1.30 before I have a dollar to spend at the store, so the government is actually making 39 cents on that dollar. Remind me who is being greedy again, senator?
People like Warren should have been convicted of treason for their Marxism long ago. She and her fellow travelers belong in landfills.
Literally the small hats on both sides, as freaking usual.
Good thing for them your life will be destroyed if you point out the obvious.
You and your children will be their slaves unless you wake the hell up, goyim.
“Dishonest scales are an abomination to the Lord,
But a just weight is His delight.” Proverbs 11:1
“Diverse weights and diverse measures, They are both alike, an abomination to the Lord.” PROVERBS 20:10
“Diverse weights are an abomination to the Lord, And dishonest scales are not good.” Proverbs 20:23
According to progressive thinking, greed may be constant, but the ability of corporations to act on it depends on economic circumstances. Under normal circumstances, profits are constrained to a small percentage of the “intrinsic value” of a product and compensate the manufacturer for their capital investment, but under exceptional circumstances, profits rise dramatically and corporations engage in “price gouging.” That is, they charge much more than they originally paid for creating the product.
This economic analysis isn’t actually wrong, it simply misunderstand the purpose of prices. It starts from the belief that certain levels of prices and profits are something people are entitled to, as opposed to being a market mechanism for communicating scarcity.
You can politically choose to treat and analyze prices the way progressives/socialists/fascists do, you just end up with shortages and widespread poverty.
An axiom: except for massive counterfeiting, government policy is always the reason behind widespread inflation.