The economy’s strength and stability — defying many of the most optimistic predictions — represents a remarkable development after seemingly endless crises
As 2023 winds to a close, Powell and his colleagues are far from declaring victory on inflation. They routinely caution that their actions could be thwarted by any number of threats, from war in the Middle East to China’s economic slowdown. Americans are upset about high costs for rent, groceries and other basics, which aren’t going back to pre-pandemic levels. The White House, too, is quick to emphasize that much work remains.
Yet the economy is ending the year in a remarkably better position than almost anyone on Wall Street or in mainstream economics predicted, having bested just about all expectations time and again. Inflation has dropped to 3.1 percent, from a peak of 9.1. The unemployment rate is at a hot 3.7 percent, and the economy grew at a healthy clip in the most recent quarter. The Fed is probably finished hiking interest rates and is eyeing cuts next year. Financial markets are at or near all-time highs, and the S&P 500 could hit a new record this week, too.
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
This isn’t capitalism failing to function, this is capitalism working as intended.
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
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.
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.
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.
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.
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.
You’re ignoring both the rise in demand and the increase in available spending money, and misunderstanding the relationship between profits and price.
Yo ngl I cannot care one iota about the S&P 500 when food costs nearly double what it did before the pandemic and rents are skyrocketing.
Where I am, the $5 eggs are back down to $1.80, and the $6 milk is $2.89. Feels the same as before-times.
It’s hard to find restaurant lunch under $15, which is around 50% more than 2019, and even the gyro counter added a default tip when they stopped accepting cash. That’s sad, but I cook more now.
2 years ago yogurt was 40 cents, today it’s 80. Bacon was $3 a pound, today the cheapest is $4.50 unless it’s on sale. Frozen pizzas were $4, $5 on the top end, now they’re $6-$15… for a frozen pizza. Ramen was 20 cents, today it’s 55. String cheese was $4, today it’s $7. A small bag of shredded cheese was $4, now it’s $8. Cereal was $3, today it’s $5 and you get less. Have you seen how expensive a bag or Doritos is? A small bag costs more than what a party size bag used to cost, and that’s true for all chips.
I have dozens of items that are out of reach today that were common fare 3 years ago. Milk and eggs have come back down, yes, but not the rest of it.
Here from Europe, a similar situation.
Some things are still expensive, but a lot of things have gotten better.
Moreover, salaries did increase, so I can’t complain too much.
We are extremely fortunate to have so easily beaten this round of inflation.
It’s mostly the same here.
Grocery prices have definitely gone up overall in my part of the world, but outside of outliers (or outright liars), prices aren’t double. But lots of people around here will claim their grocery bill is double what it was before covid. In general, I’m not willing to say any specific person’s “twice as much” isn’t true, I don’t know their circumstances, but my experience and pretty much all the reports I’ve seen don’t bear that out (again for my part of the world).
The egg thing was a prime example. People were going around saying “eggs are $10 now” but then when I’d look at the local grocers, it was only the premium brands’ free range, organic, woman-owned, holistic, fair-trade type eggs that were anywhere close to that – and it was always the type of person that you know never bought those types of eggs to begin with.
I have seen a lot of convenience and luxury grocery items that I used to buy have gone up around 50% or gone down the shrinkflation route. And for sure, there’s been an uptick in temporary shortages and price spikes.
Restaurants around here are also like you mentioned. Prices have really gone up there. I don’t eat fast food often, but a month ago I was traveling and decided to get fast food breakfast at one of my old favorites. A biscuit and a drink used to cost around $3, now it’s nearly $8. Last year, I had a craving for Wendy’s and it was similar, the food that used to cost me just over $4 back in the day is now a bit more than $11. But then again, eating out is a luxury in pretty close to all circumstances.
It’s not just the stock market. There’s a wide range of metrics which are showing an improvement, and they’re comparing with what didn’t happen, which was a recession.
What hasn’t happened is a rollback of the Reagan-era change in distribution of wealth and income. That requires getting congress to act.
That falls on your local economy and state and local elected officials. Rent is always due to local officials and how the zone the city. Local and State Corporate taxes also play a role in higher prices. If I were you, I’d check the local city council schedule and speak on those concerns.
Plus, counterintuitively, rent is starting to fall in many major metro areas because we’re finally seeing a notable uptick in inventory. The price of a dozen eggs is back in the neighborhood of where it was pre-Covid, and the price of a gallon of gas has wiped away almost all of its 2023 gains and is now back to roughly what it was before Russia invaded Ukraine. Not saying people across the board aren’t struggling since the pandemic, because I’m sure they still feel it in a very real way, but prices are very obviously stabilizing across the board and the S&P is obviously responding to really solid underlying trends.
Wasn’t there a big controversy regarding price-fixing with national rental management companies? Yes, local policies will have a significant effect on local areas… but they’re far from the only ones affecting it.
The meat industry was fixing prices in 2022. The White House addressed the issue and called them out on it.
Can’t really price-fix in the housing market if there’s an increase in supply - it’s the same problem we’ve had since the teens. We are not building enough.
Cool. Now lower interest rates so I can at least dream about the prospect of owning a house again.
Oh no, they’re only going to lower interest rates when the economy takes a shit again
I can’t pay my bills and I’m eating peanut butter sandwiches so I don’t starve.
Yay, we avoided recession.
And some day you’ll be out of college.
I’m in my 30s, so take that “sharp wit” and smug superiority and slice your anus with it.
that way out: pretend the stock market is the only thing that matters.
fuck these people
A recession is a specific problem; avoiding a recession does not mean that all economic woe is alleviated.
To throw out a shitty analogy, stating that a hurricane hasn’t happened doesn’t mean that there hasn’t been any bad weather at all.
No, they’re looking at a broad set of measures of economic well-being. The stock market is only one metric.
What they’ve done is pretty amazing, even if it doesn’t roll back the Reagan redistribution in favor of the wealthy, which would require congressional action.
Who tf is downvoting you? You’re exactly right, to them the only thing that matters is the market, and we’re doing fine because the market is still breaking records.
a large contingent of internet facing humans have invested in one way or another in the market. the biggest swindle in history was when companies somehow pushed their entire retirement portfolios to this external hunk of lying shit.
tax every trade. you want to call it a market, lets fucking tax it like one. no ‘dark markets’, no secret trading… 100% in public and taxing every fucking trade.
whats that? it would kill all the big players? ya dont say…
It might take another six months before it is felt across the board, but prices are noticeably lower than last year in Colorado.
That doesn’t mean your wages are high enough for you to afford the lifestyle you want.
For a while gas in COS was absolutely bananaballs. It’s come down rather nicely again. Filling my Impreza was painful there for a minute.
Happy I can drive into CostCo without wait 15 minutes for the line for gas to stop blocking the entrance at the Barnes location. It was $2.19 this morning. It was $3.42 last year at this time ($5.41 in July 2022)
I mean - there are no guarantees. Everyone claiming we are out of the woods, but if inflation stays above 3% the fed isn’t going to lower rates very fast. We could see a recession hit.
Printing trillions of dollars isn’t a solution. The only reason it works is because we are the reserve currency of the world still because of oil sales. Once that changes, we are fucked.
It’s all about gas prices, nothing more.
So the inflated price should come down right? …right…
Damn when a pound of onions cost $2.50 I don’t really call this progress or “Finding a way out”
Ending inflation doesn’t mean that prices come down. It means that they stop rising. (or, more realistically, go back to rising at 2% to 3% per year)
Deflation is when prices drop. It’s bad; what happens is that it’s more valuable to hold onto cash than to invest it in starting or expanding a business, so the economy as a whole craters like the US did in the Great Depression. You probably don’t want that.
Are you kidding me? Crash the economy so hard it snaps in two. It’s time we put capitalism out of it’s misery
This is the kind of shit champagne socialists say as they sit back at brunch. Do you have any idea not only how many casualties this would cause, but how badly it would set us back from evolving past capitalism?
How will the people surviving paycheck to paycheck, barely getting enough food on the table, going to survive? An economic collapse means food logistics cease to exist. You can’t just go to the grocery store. What will everyday people eat? What will they drink when they run out of the chemicals needed for clean water?
Not to mention, the collapse would mean all logistics and supply chains stop working. You need a medicine by tomorrow afternoon or you’ll begin to die? Whoops, we have no idea when that’s coming in. Everyone who relies on medication to live will die. Even more who rely on it for quality of life will severely suffer. You’ll have brilliant minds that are incapable of helping design a more equitable system because they’re anxious wrecks. Any new injuries would probably be a death sentence.
Do you understand what this would mean? An economic collapse would be a massacre of the working class and anyone needing consistent healthcare. You need bright minds to develop a better system than capitalism. They’ll all be dead or held captive by their own bodies.
Seriously! Now tell us how much time you’ve spent understanding how working class Americans lived during the great depression and what parts you’re most interested in seeing repeated
The status quo already has us living in hoovervilles
I cannot imagine the level of privilege it takes to unironically make a statement like this. There are no words.
Far too many people think that they’ll survive and lead the masses in a glorious revolution that will fix all of our problems.
For starters, the masses wouldn’t exist. An economic collapse would massacre the working class. Way too many people are already barely making ends meet. They’d all starve to death.
This is the sort of pipedream that only the bourgeoisie think of.
That happened in 1929. Don’t. Do. It. Again.
If that’s what it’s gonna take to get a green new deal then maybe we should. Without a crisis like that, at the current trajectory both parties seem set on selling out the planet for there corporate donors.
The party that does it will end up out of power for a generation because it’s such a bad idea. People can make that mistake out of ignorance, but won’t do it willingly
That assumes what we are experiencing is inflation. Inflation is part of the equation, but another big part is just corporations are pushing up prices and making record profits. That part can result in prices going down without causing issues.
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Are you a politics mod too?
No, but I I studied a tiny bit of macroeconomics once.
You’re already ahead of 90% of Lemmy with that.
I wonder how many people here would agree with the idea of lowering taxes in order to reduce inflation.
Good, I’d hate for the mods here to delete points of view that they don’t agree with 🤪. Like the Climate sub!
It’s not a matter of disagreement; there’s room for legit disagreement about a lot of things. It’s a matter of joining in a active fossil-fuel-industry disinformation campaign. That gets me to take content down because it’s basically impossible to have a rational discussion when that’s part of it.
Thinking that humans are a net negative to the natural world and deserve the consequences of the climate apocalypse isn’t a fossil fuel industry disinformation talking point, you literally just disagree with my opinions and shadowbanned me without warning or way to appeal. Big difference in “taking content down” and the former.
Advocating mass genocide isn’t ok anywhere, no matter what.
This is why I shop at restaurant supply stores. 10 lbs. of onions for $5
At our local Wegmans a lb of onions is $0.90, $1.73, or $2.05, depending on if you want yellow, sweet, or red. It’s the exact same price at all their stores elsewhere in the US. White onions are $1.49/lb at other major grocery stores. White and yellow onions are being reported at $1.79 and $1.29 per pound, retail. Where in the heck are you paying $2.50/lb?
This guy’s onions. Are you Shrek? 😅
No, but I am, since I’m buying them by the 10 lb. sack.
Probably Whole
PaycheckFoods
They DID find a way out! They threw every other American citizen under the bus so they could save themselves! Claps all around, we fucking did it, the FED and their cronies won’t have to suffer the atrocity of skipping out on their daily caviar for budget reasons.
:) There is no economic problem in U.S. of A. :)
