Surface level is listening to the reports. The deception level is the stats behind the reports. The clarity level is how the stats were calculated. The correction level is to remove as much manipulation as possible to the stats. Aaron Brown level walks through the levels to dismantle and fixes the report.
^ ABSO-FUCKIN-LUTELY RIGHT! came to comments to say the same amazing series.. when Reason releases a new episode of Wrong Number, I cannot wait to watch it..
Hayek was a fascist lunatic, lol. Chicago School economics is pure corporate totalitarianism. Yes if socialists ACCEPTED that all that matters in the world is increased capital in the hands of financiers, then they'd not be socialists. When you ignorantly take a quote out of context you will be hammered by people like me, who actually read the books.
I make a product that costs $10 to produce, and charge $12. 5 years later, cumulative inflation doubles the cost of everything. I pay $20 and charge $24. OMG! Record profits!
It's even worse than that. Say your costs are $92 and you sell for $100, a typical profit margin. 14% inflation comes along and you get $114 for your product. You haven't really received more, the $114 has the same purchasing power as the $100 you used to get. But your costs were incurred in the past, so they're still $92. Your profit has grown from $8 to $22, 175% increase! That's why Casey's claim that 14% inflation led to 75% increase in profits is not meaningful. In this example, the producer is actually worse off because it will pay higher taxes for getting the same purchasing power.
Right? This is no more evident than in the small business. I do one event per year and have to gradually increase my prices because my materials cost more. It isn’t rocket science.
@@aaronbrown1242 Not to mention that with inflation comes (usually by government decree) wage increases. Because purchasing power is reduced for everyone else too. Which companies then have to pay payroll etc. on the higher number. Meaning they are getting it from both ends every time the value of the dollar goes down.
"Is there some society you know of that doesn't run on greed? You think Russia doesn't run on greed? You think China doesn't run on greed? What is greed?" "What kind of society isn't structured on greed?" "The problem of social organization is how to set up an arrangement under which greed will do the least harm, capitalism is that kind of a system." - Milton Friedman
@@theevermind But you have to be careful. I think you're using "greed" to mean desire for good things or ambition to make life better. But there's also a negative sense of "greed" meaning obsessive accumulation of things that are unneeded and bring no happiness, like Scrooge. Well-rounded, happy humans balance a desire to get things that make them happy, to support themselves and their loved ones, with a realization that there are other important things in life.
Yes we can legislate against it. Ever heard of Anti-Trust laws? Greedflation is only a thing in monopolized markets where monopolies use pretext of inflation to push their profits into the sky while cutting jobs. In a competitive market that would not happen
@@tedarcher9120Problem is there is no such thing as a monopoly in the absence of a government grant of monopoly power. So your solution of regulation to solve the problem of monopolies runs into the problem of the government that created the monopoly.
I mean, greed is an issue, but it's greed at the government and Federal Reserve level. It's the height of irony that Politicians are trying to deflect responsibility for inflation.
I find greed is rarely useful in political discussions. It usually means someone acted in her own interests rather than yours. Properly speaking, greed is a character flaw--narrow focus on personal gain that makes the greedy person unhappy--rather than a sin that harms others. A person who simply loves money or something else, whose wealth makes him happy, should not be called greedy. We may disagree with his tastes, we may prefer that he balanced his desire for money with other satisfactions like love, friendship and altruism, but he's just pursuing happiness like everyone else, which is his right. And for-profit corporations exist to pursue profits--hence the name--so it cannot be greed.
I would avoid saying greed is an issue. That would imply greed is a bigger problem now than it was before. Greed is a ever-present universal fact of humanity. Not everyone is greedy, but there are greedy people everywhere and always will be. You can't get rid of greed. But you can frame policy so that greedy people can only pursue their self-interest by helping others. That is the principle behind truly free markets.
The 2021 - 2022 bout of inflation had several causes including government deficits and low interest rates. But it was a worldwide phenomenon (although lower in more fiscally prudent countries like Switzerland and Norway) so it can't all be blamed on US overspending and loose monetary policy.
@@aaronbrown1242 It is for the dollar. All government spending is taxation. All debt spending is inflationary, and they did way too much while also destroying all productivity. Government is lies, theft and violence. And it's the ONLY cause of inflation by not having a sound currency and limited spending.
@@beware3586 the *only place inflation comes from is government increasing the monetary supply by printing money. It's introduced to the monetary supply by spending or borrowing, but unbacked currency entering the monetary supply is the sole source of inflation.
When inflation was low, the corporations, businesses and every producer collectively forgot greed, but now inflation is high because they remembered greed. So please vote for me and give me more of your money.
Blaming inflation on greed is SO stupid. When have corporations ever not been greedy? Why is "greedflation" such a big problem now? It is unbelievably obvious that any politician that blames inflation on corporate greed is actually just trying to cover up for their own, or their own party's bad policies.
All true, although I would say the high inflation of 2021 and 2022 had many causes, some of them beyond the control of US politicians. It was a worldwide phenomenon--although muted in fiscally prudent countries like Switzerland and Norway--and was partly a result of CoVID disruptions. But none of it was caused by a sudden outbreak of greed from corporations.
People have a hard time with the idea that if prices are increasing, increasing your prices to get ahead of your supply cost curve is not greed, it's a calculated risk.
Actually that is one valid conclusion from comparing PPI to CPI. If the cost of oil is expected to rise--say due to escalation of mideast conflicts, producers of goods that need oil will notice immediately and raise their wholesale prices. Retailers can't track all the supply chains of everything they sell, they will raise their prices later--after actual oil prices have risen, and the additional costs have worked themselves through the economy, and actual prices paid by retailers have gone up. If CPI is rising faster than PPI--as it did in 2022--it's because the PPI already incorporated the inflation from events in 2021, while the CPI is just catching up.
Aaron, are you implying that a politician would be anything less than totally honest? That's INCONCEIVABLE! (in Vizzini's voice from the Princess Bride)).
Unfortunately, it takes 2 seconds to say "Corporate Greed!" And it emotionally resonates wih so many Americans who are feeling the strain on the wallet right now. And it takes a video that is 7:49 long to set someone straight.
Agreed. It's much easier to point fingers at villains--particularly shadowy ones rather than specific people who can defend themselves--than think things through and look at the data.
That's too often true. No one says his sister had an outbreak of greed when she asked for a raise, or that dairy farmers are greedy for wanting $23 rather than $22 per cwt of milk. But "corporations" can be blamed without thinking about individuals. Is it the shareholders who are greedy? The board? The managers? Everyone who works for the corporation?
Almost half of our economy is small businesses. If these huge companies were price gouging you would expect to see an increase in traffic to small businesses. People aren't going to pay more just because of the brand name especially when most American's admit that they are feeling the squeeze financially. Except small businesses have also all had to raise prices. That sort of invalidates the argument of cooperate greed. Its not some big conspiracy prices are going up for everyone. People are stupid though, they would rather vote for a big government because of political lip service than to admit that the government is the one responsible for most of their problems.
We are looking to ramp up production with Aaron Brown! Hoping to produce once a month or so instead of once every few months. More Wrong Number with Aaron Brown is coming!
Imagine going on a road trip and stopping at a restaurant. Your mom tells your dad to park in the shade, but he says it'll be fine and parks in the sun. An hour later, you all get back in the car, and everyone is miserable because it's scorching hot. Your mom say, "I told you to park in the shade!" And your dad says, "Don't blame me. I didn't make the car hot, the sun did!" The democrats are like Dad.
Just add one more sentence to make the comparison more exact--the shadowy villain. It's not just the sun's fault, it's the fault of evil greenhouse gas emitters.
It is greedflation. The greed of government spending ever larger amounts of our extorted labor, whether tariff, tax, penalty, fine or simple debt spending.
Labor's share of income went from 78 to 73/74 over 4 years. Love the use of 5 years when it will benefit their argument. Thomas Sowell has been saying to look at the trend prior, to see if their argument is valid.
No doubt there are people of low intelligence and liars, but I think the main cause is willingness to believe that problems are caused by shadowy villains rather than one's own choices. The nice thing about greedflation is you don't have to do anything hard about it--cut spending, raise taxes, raise interest rates--you can just bully a few Mr. Monopolys and Scrooge McDucks into sharing a little of their piles of gold.
These analyses are my favorite at reason. So much of political discourse is just name calling (even from Reason). It’s nice to have a not boring “here’s the numbers” approach. steve ballmer is doing a similar series but it feels more partisan.
I noticed this and so many people blindly believe what he tells them. I can’t believe there’s not more fact checks on him. He is definitely a team player in swaying voters opinions.
If companies are able to drive up the prices on literally everything, just because a few of them are greedy, then that shows there's a barrier preventing competition which is usually resulting from excessive regulations. Like with pharmaceutical companies. Or, it's just the government printing too much money to increase the debt.
Even if you believe their analysis, if inflation is caused by corporate greed, then wouldn't it be great to return to Trumponomics, where there was virtually no inflation, and therefore we can conclude that there was no notable corporate greed?
It is basic maths. Too much money was printed. This led to devalued currencies. Companies - to make marginal profits, had to start getting non-marginal profits at face value, but once inflation adjusted, were the same as usual. Governments then pointed the finger at the companies taking what looked to be 30-40% profits, when adjusted for inflation, was barely ever over 5%.
Agreed, although "too much money was printed" is a shorthand for a variety of fiscal and monetary policies that increase money supply and reduce purchasing power. And it's true that inflation can create fictitious profits, especially if you quote figures that don't adjust for inventory valuation and capital consumption.
I present economic information to fellow employees every 1 - 2 weeks and explore various topics. I had a session earlier this year on this topic and presented very similar information to the attendees. It was clear from the questions and discussion during the session that many "bought" the 'greed-flation' argument without taking any additional steps to verify those claims. While some still tried to hang onto the 'greed-flation' narrative, all attendees had their eyes opened. That is one thing that I emphasize - don't believe what anyone tells you (me included), do your own research and use source material for which clear definitions are available, crunch your own numbers, and come to your own conclusion.
Even if corporate profits *did* go up, that's a GOOD THING. More profit is good for all shareholders which includes those of us who are contributing to (or pulling from) our retirement accounts.
All these graphs are denominated in dollars so, over time the more the fed floods the market with new dollars everything denominated in such will be going up if everything else is equal, including corporate profits. This guy IS a treasure.
I've seen firsthand the price of a cup of coffee in argentina go from 2 pesos to 3,000 pesos in just 15 years. The only "greed" that drove these changes, was coming from the government, who consistently printed more money, thus debasing the value of the currency. Prices don't rise, the value of the money declines. Even a child knows this. Its sucks that the algorithms keep pushing these stupid ideas. that pass the buck. People deserve the truth. Thank you all for trying to be a voice of clarity!
Mr. Cherry Picker here, Please do a video on Fast food prices in the last 5 years. I'd love to hear how the price of everything doubled and how it's always been that way.
During the pandemic it was housing and used cars that went up the fastest. These were being sold by consumers (home owners and vehicle owners) not corporations.
These people have no clue at all how economics works in reality. Lets make an example, me and my 4 buddies we all own all of the gas stations in the country together. Now we want to make a lot of money so we set up this scheme that we will just work together and increase prices and increase our profit. Now i have a friend who is of average IQ, we have increased prices for a while but he figures "wait a second, if i lower my prices back to where they were, all the customers would come to my gas stations instead, i will make a lot of money" so that is exactly what he does. So now me and 3 of my friends makes no money at all, and we still have to pay for staff, heating, rent,, we are losing a lot of money. So here greed lowered prices. My friend wanted to make more money and upset the whole balance. My greedier friend just lowered the prices.
This is mind blowing because tribal us vs them heuristics really make me want to blame corporations for how high our grocery bills are. Like it made intuitive sense to have a bad guy out there
It's a combination of inflation and greedflation. The companies will use the excuse that due to inflation and rising cost the price has to go up, but when the price of the materials needed goes down the price never goes down. The manufacturers know that people will pay that money for the same product. And if they struggle to do so they will keep the packaging the same and put less volume in or slightly change packaging to trick people to think that they're getting the same exact product
This is the kind of corrective that more people need to see. But even if you don't go to this kind of effort to understand the numbers being used and abused, the proponents of greedflation forget that consumers are not mindless buying machines. Changes in prices change consumer spending in unexpected ways that neither economists nor businesses can easily predict. if prices rise 10% across the board due to inflation, people don't cut their spending of items 10% across their budget, but will change brands and switch to substitute goods to stay within their budget. Instead of "laughing all the way to the bank", businesses are exasperated about their losses and trying to figure out how stay in business and profitable.
That's a good point. Sellers always want to get more money. It's not greed for a worker to ask for a raise, a farmer to want more for her crop, a canned tomato producer to want more for each can. When they do raise prices, it's not because they suddenly got more greedy, it's because someone was willing to pay the higher wage, more for the crop, more for a can of tomatoes. It takes two--buyer and seller--to raise a price.
>Corporations pass along increases in price onto their consumers >THIS IS NEW AND EXCITING DATA literal law of economics and she's talking about it as if she's discovered a whole new world.
When i was in Elementary School, we watched a movie which explained how unit-price worked, and at the time, the US mostly sold domestically, so 3x Unit Price was considered the minimum level of pricing to turn an actual profit, but, ideally 5x UP was the mfg's price. This permitted tiers of quality from similar brands and the (Domestic) Market could support this internal/domestic competition. If the two 1's cancel-out, that leaves 2.4, which is sub-3x -- or, the old version of minimum profitable pricing. I suppose that sourcing goods became easier in a Globalist market, but folks still can't understand that Profit fuels the Economy.
4:58 Excellent analysis! Using a number above zero for the baseline is a common trick to visually exaggerate something on a graph. Back in the day, I called out Reason magazine for doing this once in an article.
It’s the cost of gas. The United States is able to produce MORE gas than the Middle East which is why the economy crashed and prices went up. The ruling party switched from production to importing fuel.
Inflation is money becoming worth less. If corporations and large companies were increasing prices without the money supply increasing, the money would be worth more.
The problem is how we define inflation. The CPI and other government indicators are completely broken. If they simply measured inflation by the amount of money currently in supply divided by how much was added that year, you would have a very good idea what is actually going on. On what is going on has nothing to with "greedy" businesses and everything to do with bad fiscal and monetary policy.
I'm suddenly craving some chili. Mmmm. Hey! WTF! Has Reason been infiltrated by Big Bean!?! Peddling that delicious tomato-y goodness on unsuspecting consumers! I'm alerting sen. Warren to she can take action!
Groceries and household consumables are rising faster than inflation due to cargo theft, often referred to as "supply chain issues", caused during the COVID-19 pandemic and continued unabated, rising each year.
It's mostly because of bad regulation that many people can't afford healthcare, (for example,) greedy corporations only enter the picture as a result of cronyism/corruption.
It most definitely is greed driven but it's not the only factor. Coming out of the pandemic, most companies feared a recession and so prices were hiked to compensate for lower future revenues. This hike in prices was only tolerated due to the perfect storm of supply shortages, pandemic recovery, and increased market concentration, where most industries have only a few players in it. CEOs said vocally on earnings calls they were shocked that consumer were accepting the price hikes, so it empowered them to do more. We need to break up large corporations and restore proper competition in all sectors of the market. That means companies having 10+ players in them, not 2-3, where they can tacitly collude more easily. We also need to increase regulation on the stock and trading markets, where everything is focused on short-term, quarterly focused gambling. We need to discourage CEOs and execs to be paid in stocks, where they become only beholden to shareholders, and not workers who got companies there in the first place. Our highly financialized market system is extracting value from the economy, not creating it.
great video! I've also notice so-called experts using gross profit as the standard of measurement to show apparent greedflation. Ummmm no. That said, I understand why people are frustrated, and I do think that large corporations should've ate more of the inflation
If corporate greed is the cause of the prices rising then why is there a hiring freeze? Why are stores closing? How do they explain the M2 money supply chart? I can clearly see the lagging correlation. Why is it that corporate greed didn't cause these problems until after the panda?
3:35 I do not understand the trendline for cost of chili. Is this suggesting the cost is increasing by over 10% each year? Is there a way to get this chart on the Federal Reserve Economic Database?
Greedflation can’t be accurate because if it was true then small businesses should be booming as profit margins have a nice buffer. However small businesses are having a hard time implying that profit margins are too lean.
When you increase the money supply without a proportionate increase in production, the value of each unit of money decreases, and prices then increase in proportion to that decrease in per unit purchasing power. Also, over the long run wages must always increase by less than prices increase, because wages are a cost of producing goods and services, and the price of goods and services must always be higher than the cost or the producer will go out of business. None of this is greed - it's math. You can't out-legislate math. Math always wins.
I get what your saying, but its still strange that the richest people keep getting magnitudes of times more wealthy and the companies are breaking profit records, while income for average workers remains relatively the same. Obviously I don't agree with something as dumb as price control, but I still think there some truth to it. I feel like anyone who has worked for a corporation knows how they can be.
You can turn it around as you like - there was a time where we the people (workers) have been the soul of every corporate. Now there are only shareholders. Wealth gap brings problems, it should be corrected, also greed from companies including management salaries. Long story short - Greed is a problem, it’s the source of a lot evil like polluted waters (mostly from faming), forest clearing, oil spill or a lot of antibiotics in meat. So being against greed is good - if this is aligned with in inflation is irrelevant. Would be nice if Harris get elected, Trump is unelectable - but you know, USA need a working democracy in the first place. May have a look like we do in Switzerland
I'm not sure what you mean. The main reason to look at PPI versus CPI is PPI tends to be a leading indicator, while CPI tends to be a lagging indicator. That's why PPI shot up in 2021, while CPI caught up in 2022. Wholesale prices can be adjusted quickly, and are set by professionals looking carefully at data about cost increases along the supply chain. Retail pricing decisions are more complex. A supermarket manager cannot look at the entire supply chains for every item in her store. She balances the wholesale price she sees quoted, with the consumer demand of her store's customers. If CPI is increasing faster than PPI, it's usually because PPI has already incorporated inflation, while CPI will adjust later.
the graph comparison @1:49 to 2:28 makes absolutely no sense. How does a bar graph showing that CPI "grew faster" than PPI every single month for a year equate to a line graph in which PPI is higher than CPI all those same months? The y-axis values switch from 0-8 to 1-1.3 with no explanation; if the 2 graphs measure different things, why are they being presented as if they measure the same thing? Without a more detailed explanation or at least labeling, this is just incomprehensible.
To be honest with you Casey is an empty suit but he has people around him that will give him information he can parrot and he has lots of people who are willing to listen to him. If ever there was someone in lockstep with the Democratic Party who has no original thoughts on his own it’s Bob Casey who ran in the footsteps of his father who was a much better honest politician and he’ll ever be. You can count on Bob for a vote of stupidity. Most people don’t even understand supply and demand. If they actually knew anything at all they wouldn’t get hosed every time they buy a new vehicle. All the information to figure things out is out there you just have to look for it.
Aaron Brown is a god damn treasure. Bring him back more often.
Came here to say this!
Surface level is listening to the reports.
The deception level is the stats behind the reports.
The clarity level is how the stats were calculated.
The correction level is to remove as much manipulation as possible to the stats.
Aaron Brown level walks through the levels to dismantle and fixes the report.
^ ABSO-FUCKIN-LUTELY RIGHT!
came to comments to say the same
amazing series.. when Reason releases a new episode of Wrong Number, I cannot wait to watch it..
We are so glad you enjoy it!! We are looking to ramp up production for this. So lots of new Wrong Number to come!
@@ReasonTV Yes more Wrong Number please.
"If Socialists understood economics, they wouldn't be Socialists." - F.A. Hayek, economist.
Hayek was a fascist lunatic, lol. Chicago School economics is pure corporate totalitarianism. Yes if socialists ACCEPTED that all that matters in the world is increased capital in the hands of financiers, then they'd not be socialists. When you ignorantly take a quote out of context you will be hammered by people like me, who actually read the books.
@@johnsmith1474I think you don’t understand the definitions of “fascist”, “lunatic”, “totalitarianism”, or “hammered”.
@@johnsmith1474 Interesting, you realize that until he was about 23, Hayak **was** a socialist?
@@johnsmith1474 - "Everybody I disagree with is a fascist!"
@@johnsmith1474
Looks like you got “hammered”
I make a product that costs $10 to produce, and charge $12. 5 years later, cumulative inflation doubles the cost of everything. I pay $20 and charge $24. OMG! Record profits!
It's even worse than that. Say your costs are $92 and you sell for $100, a typical profit margin. 14% inflation comes along and you get $114 for your product. You haven't really received more, the $114 has the same purchasing power as the $100 you used to get. But your costs were incurred in the past, so they're still $92. Your profit has grown from $8 to $22, 175% increase! That's why Casey's claim that 14% inflation led to 75% increase in profits is not meaningful. In this example, the producer is actually worse off because it will pay higher taxes for getting the same purchasing power.
Right? This is no more evident than in the small business. I do one event per year and have to gradually increase my prices because my materials cost more. It isn’t rocket science.
@@aaronbrown1242 Not to mention that with inflation comes (usually by government decree) wage increases. Because purchasing power is reduced for everyone else too. Which companies then have to pay payroll etc. on the higher number. Meaning they are getting it from both ends every time the value of the dollar goes down.
"Is there some society you know of that doesn't run on greed? You think Russia doesn't run on greed? You think China doesn't run on greed? What is greed?"
"What kind of society isn't structured on greed?"
"The problem of social organization is how to set up an arrangement under which greed will do the least harm, capitalism is that kind of a system." - Milton Friedman
Always good to hear from Friedman.
Exactly
Self-interest. It’s not only what every society runs on but what every human being runs on.
Greed is a part of the human condition. Any system without greed is a system without humans.
@@theevermind But you have to be careful. I think you're using "greed" to mean desire for good things or ambition to make life better. But there's also a negative sense of "greed" meaning obsessive accumulation of things that are unneeded and bring no happiness, like Scrooge. Well-rounded, happy humans balance a desire to get things that make them happy, to support themselves and their loved ones, with a realization that there are other important things in life.
The implication that greed is a definable phenomenon that we can actually LEGISLATE against is an extremely dangerous assertion.
It’s like “hate” legislation.
Yes we can legislate against it. Ever heard of Anti-Trust laws? Greedflation is only a thing in monopolized markets where monopolies use pretext of inflation to push their profits into the sky while cutting jobs. In a competitive market that would not happen
🧐 @@Individual_Lives_Matter
@@tedarcher9120Problem is there is no such thing as a monopoly in the absence of a government grant of monopoly power. So your solution of regulation to solve the problem of monopolies runs into the problem of the government that created the monopoly.
I mean, greed is an issue, but it's greed at the government and Federal Reserve level. It's the height of irony that Politicians are trying to deflect responsibility for inflation.
I find greed is rarely useful in political discussions. It usually means someone acted in her own interests rather than yours. Properly speaking, greed is a character flaw--narrow focus on personal gain that makes the greedy person unhappy--rather than a sin that harms others. A person who simply loves money or something else, whose wealth makes him happy, should not be called greedy. We may disagree with his tastes, we may prefer that he balanced his desire for money with other satisfactions like love, friendship and altruism, but he's just pursuing happiness like everyone else, which is his right. And for-profit corporations exist to pursue profits--hence the name--so it cannot be greed.
I would avoid saying greed is an issue. That would imply greed is a bigger problem now than it was before. Greed is a ever-present universal fact of humanity. Not everyone is greedy, but there are greedy people everywhere and always will be.
You can't get rid of greed. But you can frame policy so that greedy people can only pursue their self-interest by helping others. That is the principle behind truly free markets.
Greed is a constant. It's not something fluctuating based on market forces.
Greed is integral to human nature, there is no set of rules that can change that.
Greed is fine if it's constrained by your own productivity and risk taking.
Why is the government involved in the price of anything? BTW the biggest cause of inflation is government spending...especially deficit spending.
The 2021 - 2022 bout of inflation had several causes including government deficits and low interest rates. But it was a worldwide phenomenon (although lower in more fiscally prudent countries like Switzerland and Norway) so it can't all be blamed on US overspending and loose monetary policy.
@@aaronbrown1242 It is for the dollar. All government spending is taxation. All debt spending is inflationary, and they did way too much while also destroying all productivity. Government is lies, theft and violence. And it's the ONLY cause of inflation by not having a sound currency and limited spending.
Could argue for tailwind on price increases due to supply shock from 2020 lockdowns. But also, let’s not forget stimmy checks
And printing money. Which they also have been doing at record levels of late.
@@beware3586 the *only place inflation comes from is government increasing the monetary supply by printing money. It's introduced to the monetary supply by spending or borrowing, but unbacked currency entering the monetary supply is the sole source of inflation.
"Costs go up $2 and they charged $3" Lady that's how markup works. Who the hell eats a cost increase at cost?
When inflation was low, the corporations, businesses and every producer collectively forgot greed, but now inflation is high because they remembered greed. So please vote for me and give me more of your money.
Blaming inflation on greed is SO stupid. When have corporations ever not been greedy? Why is "greedflation" such a big problem now? It is unbelievably obvious that any politician that blames inflation on corporate greed is actually just trying to cover up for their own, or their own party's bad policies.
I would love politicians to tell me a time when corporations haven't been greedy. Dates would be sufficient.
@@waterzap99 "They weren't greedy once we raised their taxes and put heavy regulation on them to NOT be greedy." --Politicians
Hey buddy, cool it with the logic over here. All that thinking could be dangerous.
All true, although I would say the high inflation of 2021 and 2022 had many causes, some of them beyond the control of US politicians. It was a worldwide phenomenon--although muted in fiscally prudent countries like Switzerland and Norway--and was partly a result of CoVID disruptions. But none of it was caused by a sudden outbreak of greed from corporations.
@@aaronbrown1242 Covid only had a significant economic hardship because it was confronted with bad economic policies.
Greed flation is just another classist word which is unproven but ignites emotions over logic
People have a hard time with the idea that if prices are increasing, increasing your prices to get ahead of your supply cost curve is not greed, it's a calculated risk.
Actually that is one valid conclusion from comparing PPI to CPI. If the cost of oil is expected to rise--say due to escalation of mideast conflicts, producers of goods that need oil will notice immediately and raise their wholesale prices. Retailers can't track all the supply chains of everything they sell, they will raise their prices later--after actual oil prices have risen, and the additional costs have worked themselves through the economy, and actual prices paid by retailers have gone up. If CPI is rising faster than PPI--as it did in 2022--it's because the PPI already incorporated the inflation from events in 2021, while the CPI is just catching up.
Aaron, are you implying that a politician would be anything less than totally honest? That's INCONCEIVABLE! (in Vizzini's voice from the Princess Bride)).
Unfortunately, it takes 2 seconds to say "Corporate Greed!" And it emotionally resonates wih so many Americans who are feeling the strain on the wallet right now. And it takes a video that is 7:49 long to set someone straight.
Agreed. It's much easier to point fingers at villains--particularly shadowy ones rather than specific people who can defend themselves--than think things through and look at the data.
I was not surprised to see this phrase probably used for the first time on social media by Robert Reich.
I believe greedflation exists but not from corporations. It comes from politicians. . .
Because they have the “legitimate monopoly of force”. Coercion distorts the signal between the consumer and the provider.
All you need to say is "corporations!" and most people will turn off their brains and accept any claim as long as "corporations" are to blame.
That's too often true. No one says his sister had an outbreak of greed when she asked for a raise, or that dairy farmers are greedy for wanting $23 rather than $22 per cwt of milk. But "corporations" can be blamed without thinking about individuals. Is it the shareholders who are greedy? The board? The managers? Everyone who works for the corporation?
The blind spot in this argument, other than its factually wrong, is it also implied that corporations were less greedy under trump
Almost half of our economy is small businesses. If these huge companies were price gouging you would expect to see an increase in traffic to small businesses. People aren't going to pay more just because of the brand name especially when most American's admit that they are feeling the squeeze financially. Except small businesses have also all had to raise prices. That sort of invalidates the argument of cooperate greed. Its not some big conspiracy prices are going up for everyone.
People are stupid though, they would rather vote for a big government because of political lip service than to admit that the government is the one responsible for most of their problems.
if there WAS greed-flation, the solution would be FREER markets to encourage competition, not more regulation..
It's always a pleasure to see Reason post something from Aaron Brown. As a mathematician myself, you guys should do more math.
Thank you for the kind words.
The notion that corporations making profits is bad is beyond ridiculous.
Dear Reason: More Aaron Brown please
We are looking to ramp up production with Aaron Brown! Hoping to produce once a month or so instead of once every few months. More Wrong Number with Aaron Brown is coming!
@@ReasonTVhells yeah. He's the best I've seen on the channel in a while.
Imagine going on a road trip and stopping at a restaurant. Your mom tells your dad to park in the shade, but he says it'll be fine and parks in the sun. An hour later, you all get back in the car, and everyone is miserable because it's scorching hot. Your mom say, "I told you to park in the shade!" And your dad says, "Don't blame me. I didn't make the car hot, the sun did!"
The democrats are like Dad.
Just add one more sentence to make the comparison more exact--the shadowy villain. It's not just the sun's fault, it's the fault of evil greenhouse gas emitters.
Great graphics, great ideas, thank you!
Glad you enjoyed the video! Look for more content from Aaron Brown soon!
It is greedflation. The greed of government spending ever larger amounts of our extorted labor, whether tariff, tax, penalty, fine or simple debt spending.
Labor's share of income went from 78 to 73/74 over 4 years.
Love the use of 5 years when it will benefit their argument.
Thomas Sowell has been saying to look at the trend prior, to see if their argument is valid.
The people claiming this are either stupid or lying.
No doubt there are people of low intelligence and liars, but I think the main cause is willingness to believe that problems are caused by shadowy villains rather than one's own choices. The nice thing about greedflation is you don't have to do anything hard about it--cut spending, raise taxes, raise interest rates--you can just bully a few Mr. Monopolys and Scrooge McDucks into sharing a little of their piles of gold.
If they weren't stupid or lying, they wouldn't be leftists
Nothing like Inflation to convince Corporations (and too many investors) into thinking that their profits are up.
These analyses are my favorite at reason. So much of political discourse is just name calling (even from Reason). It’s nice to have a not boring “here’s the numbers” approach. steve ballmer is doing a similar series but it feels more partisan.
We are hoping to do even more videos like this with Aaron Brown! Keep an eye out.
Robert Reich is the one who helped started the notion of greedflation.
I noticed this and so many people blindly believe what he tells them. I can’t believe there’s not more fact checks on him. He is definitely a team player in swaying voters opinions.
They started with the result they wanted and made the data fit their argument.
"We're fighting for honesty. I'm fighting for it, Kamala Harris is fighting for it..." what an absolute liar.
If companies are able to drive up the prices on literally everything, just because a few of them are greedy, then that shows there's a barrier preventing competition which is usually resulting from excessive regulations. Like with pharmaceutical companies.
Or, it's just the government printing too much money to increase the debt.
Or both.
Greedflation, how to tell me you don’t understand economics without telling me you don’t understand economics.
I benefit from everything Brown puts out.
Glad you enjoyed!
When prices drop no one states that corporations are not greedy now.
This is great content. More of this please!
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Even if you believe their analysis, if inflation is caused by corporate greed, then wouldn't it be great to return to Trumponomics, where there was virtually no inflation, and therefore we can conclude that there was no notable corporate greed?
All these politicians "misunderstand" so often.
Greed is definitely causing inflation. It's just not from companies.
Political greed - the craving of power over others - that is the problem. Leftists crave power.
It is basic maths.
Too much money was printed.
This led to devalued currencies.
Companies - to make marginal profits, had to start getting non-marginal profits at face value, but once inflation adjusted, were the same as usual.
Governments then pointed the finger at the companies taking what looked to be 30-40% profits, when adjusted for inflation, was barely ever over 5%.
Agreed, although "too much money was printed" is a shorthand for a variety of fiscal and monetary policies that increase money supply and reduce purchasing power. And it's true that inflation can create fictitious profits, especially if you quote figures that don't adjust for inventory valuation and capital consumption.
Deflection deflection deflection. - government
Greed is good. It’s a driving force for all the nice things we have. Greed is also constant. If greed drove inflation, we would never see price cuts.
These type of videos are the “meet and potatoes“ of this channel. I wish they got more views. Thank you for keeping them.
We are glad you enjoy them! We are going to try to do them more often, more like once a month, instead of one every few months.
I present economic information to fellow employees every 1 - 2 weeks and explore various topics. I had a session earlier this year on this topic and presented very similar information to the attendees. It was clear from the questions and discussion during the session that many "bought" the 'greed-flation' argument without taking any additional steps to verify those claims. While some still tried to hang onto the 'greed-flation' narrative, all attendees had their eyes opened. That is one thing that I emphasize - don't believe what anyone tells you (me included), do your own research and use source material for which clear definitions are available, crunch your own numbers, and come to your own conclusion.
Even if corporate profits *did* go up, that's a GOOD THING. More profit is good for all shareholders which includes those of us who are contributing to (or pulling from) our retirement accounts.
All these graphs are denominated in dollars so, over time the more the fed floods the market with new dollars everything denominated in such will be going up if everything else is equal, including corporate profits. This guy IS a treasure.
The KING has returned!!! 😆
I've seen firsthand the price of a cup of coffee in argentina go from 2 pesos to 3,000 pesos in just 15 years. The only "greed" that drove these changes, was coming from the government, who consistently printed more money, thus debasing the value of the currency. Prices don't rise, the value of the money declines. Even a child knows this. Its sucks that the algorithms keep pushing these stupid ideas. that pass the buck. People deserve the truth. Thank you all for trying to be a voice of clarity!
Democrats and the media are lying? I'm shocked 😂
Thanks for the video
You're welcome.
Mr. Cherry Picker here, Please do a video on Fast food prices in the last 5 years. I'd love to hear how the price of everything doubled and how it's always been that way.
During the pandemic it was housing and used cars that went up the fastest. These were being sold by consumers (home owners and vehicle owners) not corporations.
These people have no clue at all how economics works in reality.
Lets make an example, me and my 4 buddies we all own all of the gas stations in the country together. Now we want to make a lot of money so we set up this scheme that we will just work together and increase prices and increase our profit.
Now i have a friend who is of average IQ, we have increased prices for a while but he figures "wait a second, if i lower my prices back to where they were, all the customers would come to my gas stations instead, i will make a lot of money" so that is exactly what he does.
So now me and 3 of my friends makes no money at all, and we still have to pay for staff, heating, rent,, we are losing a lot of money. So here greed lowered prices. My friend wanted to make more money and upset the whole balance. My greedier friend just lowered the prices.
Once again, the people who need to see this the most, never will. :(
Also the corporate profits count securities holdings iirc. " Printing money" causes inflation
Agreed, although "printing money" is a shorthand for a variety of fiscal and monetary policies.
These are some of my favorite videos to watch. Aaron kills it everytime.
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This is mind blowing because tribal us vs them heuristics really make me want to blame corporations for how high our grocery bills are. Like it made intuitive sense to have a bad guy out there
It's a combination of inflation and greedflation. The companies will use the excuse that due to inflation and rising cost the price has to go up, but when the price of the materials needed goes down the price never goes down. The manufacturers know that people will pay that money for the same product. And if they struggle to do so they will keep the packaging the same and put less volume in or slightly change packaging to trick people to think that they're getting the same exact product
This is the kind of corrective that more people need to see. But even if you don't go to this kind of effort to understand the numbers being used and abused, the proponents of greedflation forget that consumers are not mindless buying machines. Changes in prices change consumer spending in unexpected ways that neither economists nor businesses can easily predict. if prices rise 10% across the board due to inflation, people don't cut their spending of items 10% across their budget, but will change brands and switch to substitute goods to stay within their budget. Instead of "laughing all the way to the bank", businesses are exasperated about their losses and trying to figure out how stay in business and profitable.
That's a good point. Sellers always want to get more money. It's not greed for a worker to ask for a raise, a farmer to want more for her crop, a canned tomato producer to want more for each can. When they do raise prices, it's not because they suddenly got more greedy, it's because someone was willing to pay the higher wage, more for the crop, more for a can of tomatoes. It takes two--buyer and seller--to raise a price.
love this guy. Why do all these media outlets get these things so wrong? just for clicks?
Glad you enjoy Aaron Brown!
>Corporations pass along increases in price onto their consumers
>THIS IS NEW AND EXCITING DATA
literal law of economics and she's talking about it as if she's discovered a whole new world.
When i was in Elementary School, we watched a movie which explained how unit-price worked, and at the time, the US mostly sold domestically, so 3x Unit Price was considered the minimum level of pricing to turn an actual profit, but, ideally 5x UP was the mfg's price. This permitted tiers of quality from similar brands and the (Domestic) Market could support this internal/domestic competition. If the two 1's cancel-out, that leaves 2.4, which is sub-3x -- or, the old version of minimum profitable pricing. I suppose that sourcing goods became easier in a Globalist market, but folks still can't understand that Profit fuels the Economy.
4:58 Excellent analysis! Using a number above zero for the baseline is a common trick to visually exaggerate something on a graph. Back in the day, I called out Reason magazine for doing this once in an article.
It’s the cost of gas. The United States is able to produce MORE gas than the Middle East which is why the economy crashed and prices went up. The ruling party switched from production to importing fuel.
Someone once said: “lies, damn lies, and statistics”
Inflation is money becoming worth less.
If corporations and large companies were increasing prices without the money supply increasing, the money would be worth more.
The problem is how we define inflation. The CPI and other government indicators are completely broken. If they simply measured inflation by the amount of money currently in supply divided by how much was added that year, you would have a very good idea what is actually going on. On what is going on has nothing to with "greedy" businesses and everything to do with bad fiscal and monetary policy.
I'm suddenly craving some chili. Mmmm.
Hey! WTF! Has Reason been infiltrated by Big Bean!?! Peddling that delicious tomato-y goodness on unsuspecting consumers! I'm alerting sen. Warren to she can take action!
Greedflation was my new favourite buzz word… until I heard Kamala Harris was fighting against it… now i know the whole thing doesn’t even exist…
Groceries and household consumables are rising faster than inflation due to cargo theft, often referred to as "supply chain issues", caused during the COVID-19 pandemic and continued unabated, rising each year.
That chili looks disgusting.
"There's no evidence that greed is causing inflation" I haven't had a good laugh like that in a long time. ROFLMFAO!
If corporate profits are up way more than inflation, it’s greedflation.
It's mostly because of bad regulation that many people can't afford healthcare, (for example,) greedy corporations only enter the picture as a result of cronyism/corruption.
It most definitely is greed driven but it's not the only factor. Coming out of the pandemic, most companies feared a recession and so prices were hiked to compensate for lower future revenues. This hike in prices was only tolerated due to the perfect storm of supply shortages, pandemic recovery, and increased market concentration, where most industries have only a few players in it. CEOs said vocally on earnings calls they were shocked that consumer were accepting the price hikes, so it empowered them to do more.
We need to break up large corporations and restore proper competition in all sectors of the market. That means companies having 10+ players in them, not 2-3, where they can tacitly collude more easily. We also need to increase regulation on the stock and trading markets, where everything is focused on short-term, quarterly focused gambling. We need to discourage CEOs and execs to be paid in stocks, where they become only beholden to shareholders, and not workers who got companies there in the first place. Our highly financialized market system is extracting value from the economy, not creating it.
Greed is a constant, human nature doesn't change.
Good work. Thanks.
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@@ReasonTV I'm subbed! Keep 'em coming! Love Arron Brown's explanations. :)
It's very generous of these companies to have given up profit before this. 😂
Right? I notice companies never get a pat on the back when prices go down. That's just the market, apparently.
RE" fighting for honesty" LMAO omg!
great video! I've also notice so-called experts using gross profit as the standard of measurement to show apparent greedflation. Ummmm no. That said, I understand why people are frustrated, and I do think that large corporations should've ate more of the inflation
I can totally understand a RUclips keyboard warrior making that mistake, but no expert is making that mistake. They're either lying or not an expert.
Inflation is always and everywhere caused by profligate government spending (printing money)
If corporate greed is the cause of the prices rising then why is there a hiring freeze? Why are stores closing? How do they explain the M2 money supply chart? I can clearly see the lagging correlation. Why is it that corporate greed didn't cause these problems until after the panda?
His argument is that yes inflation was really that bad.
3:35 I do not understand the trendline for cost of chili. Is this suggesting the cost is increasing by over 10% each year? Is there a way to get this chart on the Federal Reserve Economic Database?
Why is that companies are only greedy when the money supply outpaces goods & services?
Corporate gaslighting at its finest 👍
If greed is so bad why don't they just make it illegal?
how come the politicians don't show a chart of record tax receipts?
Greedflation can’t be accurate because if it was true then small businesses should be booming as profit margins have a nice buffer. However small businesses are having a hard time implying that profit margins are too lean.
When you increase the money supply without a proportionate increase in production, the value of each unit of money decreases, and prices then increase in proportion to that decrease in per unit purchasing power.
Also, over the long run wages must always increase by less than prices increase, because wages are a cost of producing goods and services, and the price of goods and services must always be higher than the cost or the producer will go out of business.
None of this is greed - it's math. You can't out-legislate math. Math always wins.
Now do one on how increased regulation drives up costs
I get what your saying, but its still strange that the richest people keep getting magnitudes of times more wealthy and the companies are breaking profit records, while income for average workers remains relatively the same.
Obviously I don't agree with something as dumb as price control, but I still think there some truth to it. I feel like anyone who has worked for a corporation knows how they can be.
... uh... you gonna eat that chili? I've got some dogs and some buns. Just saying.
You can turn it around as you like - there was a time where we the people (workers) have been the soul of every corporate. Now there are only shareholders. Wealth gap brings problems, it should be corrected, also greed from companies including management salaries. Long story short - Greed is a problem, it’s the source of a lot evil like polluted waters (mostly from faming), forest clearing, oil spill or a lot of antibiotics in meat. So being against greed is good - if this is aligned with in inflation is irrelevant. Would be nice if Harris get elected, Trump is unelectable - but you know, USA need a working democracy in the first place. May have a look like we do in Switzerland
Reminds me of President Gerald Ford's Whip Inflation Now pins.
CPI and PPI matching isn't an argument against greedflation, it's an argument against persistent greedflation
I'm not sure what you mean. The main reason to look at PPI versus CPI is PPI tends to be a leading indicator, while CPI tends to be a lagging indicator. That's why PPI shot up in 2021, while CPI caught up in 2022. Wholesale prices can be adjusted quickly, and are set by professionals looking carefully at data about cost increases along the supply chain. Retail pricing decisions are more complex. A supermarket manager cannot look at the entire supply chains for every item in her store. She balances the wholesale price she sees quoted, with the consumer demand of her store's customers. If CPI is increasing faster than PPI, it's usually because PPI has already incorporated inflation, while CPI will adjust later.
the graph comparison @1:49 to 2:28 makes absolutely no sense. How does a bar graph showing that CPI "grew faster" than PPI every single month for a year equate to a line graph in which PPI is higher than CPI all those same months? The y-axis values switch from 0-8 to 1-1.3 with no explanation; if the 2 graphs measure different things, why are they being presented as if they measure the same thing? Without a more detailed explanation or at least labeling, this is just incomprehensible.
The astounding ignorance of some of the people in the comments section is a text book exampe of the dunning kruger effect.
Present company excepted?
@@aaronbrown1242 🤣🤣🤣🤣 touché!
The video was well thought out :)
To be honest with you Casey is an empty suit but he has people around him that will give him information he can parrot and he has lots of people who are willing to listen to him. If ever there was someone in lockstep with the Democratic Party who has no original thoughts on his own it’s Bob Casey who ran in the footsteps of his father who was a much better honest politician and he’ll ever be. You can count on Bob for a vote of stupidity. Most people don’t even understand supply and demand. If they actually knew anything at all they wouldn’t get hosed every time they buy a new vehicle. All the information to figure things out is out there you just have to look for it.