American Economics Thread

[HighGround]

Consumer prices are not as simple as you are making out. Egg producers are at the behest of retailers, who can use their enormous purchasing power to force passing costs on to them.

Retailers have tiny margins. This is why food prices are so responsive to changes in the supply. So no, they can't just magically make prices go up or down on a whim.

It doesn't even need to be the producers taking the loss, it could be the supermarkets themselves. The concept of a loss leader is a proven business practice for essentials like bread, milk, eggs and soap.

Whether you will acknowledge it or not, operating costs for the agriculture and retail sector have increased significantly. If you don't see a corresponding price increase in the end product, some form of manipulation is occurring. In other words, it is the capitalist equivalent of Soviet era price controls. America isn't much of a welfare state so things must be bad if they're resorting to this.

What's likely is that it's all three, producers, suppliers and the consumer all taking a loss - hence the modest rise in prices.

It's also very convenient that we're seeing mass culling of chickens to prevent avian flu. It certainly would be fortunate given it's probably more economical to kill the birds than to sell them or their eggs to the supermarkets.

You can't sell sick birds. That's why there's a chicken and egg shortage. There is a massive epidemic among bird flocks in America, causing the prices to sky rocket.

And I don't know why you're so worried about the agriculture and retail sector. Both have had record profits during this pandemic.

 

[Abominable]

Retailers have tiny margins. This is why food prices are so responsive to changes in the supply. So no, they can't just magically make prices go up or down on a whim.
You can't sell sick birds. That's why there's a chicken and egg shortage. There is a massive epidemic among bird flocks in America, causing the prices to sky rocket.


And I don't know why you're so worried about the agriculture and retail sector. Both have had record profits during this pandemic.

That bit you said was right, but for the wrong reasons - margins become irrelevant when volume is big enough. It's better to sell 10,000 of something at a 1% margin than 1,000 at a 10% margin.

The real reason is a big fluctuation in price will affect consumer demand. It's why posting a screenshot of the price of a tomato in Walmart is a red herring, you're completely disregarding the economic dynamics at play.

If something doubles in cost to manufacture or produce, for everything to remain the same you'll need to see a corresponding increase in price of the end product.

The point isn't my concern about Walmart, but the shareholders concern. Nor does the temporary panic buying during covid change anything.

Do you think shareholders are going to sit around and think, okay we're losing money on eggs right now, but we made a lot of money during the toilet paper wars so it's okay to make less money now?

No, they'll want to maximise their profits.

You can't sell sick birds. That's why there's a chicken and egg shortage. There is a massive epidemic among bird flocks in America, causing the prices to sky rocket.

Missing my point.

I suspect the birds aren't really sick, they're killing them because it's become uneconomic to produce eggs.

 

[HighGround]

That bit you said was right, but for the wrong reasons - margins become irrelevant when volume is big enough. It's better to sell 10,000 of something at a 1% margin than 1,000 at a 10% margin.

Margins absolutely are relevant, and the reason for why margins are so low, is because there competition on the retail level is high. There is unlikely to be collusion when the are this many competitors and customers who are price-sensitive.

The real reason is a big fluctuation in price will affect consumer demand. It's why posting a screenshot of the price of a tomato in Walmart is a red herring, you're completely disregarding the economic dynamics at play.

Mate, I posted a screenshot of a tomato because people refused to believe statistics and asked for my "personal" experience. I didn't do it because I am economically illiterate.

If something doubles in cost to manufacture or produce, for everything to remain the same you'll need to see a corresponding increase in price of the end product.

The point isn't my concern about Walmart, but the shareholders concern. Nor does the temporary panic buying during covid change anything.

Do you think shareholders are going to sit around and think, okay we're losing money on eggs right now, but we made a lot of money during the toilet paper wars so it's okay to make less money now?

No, they'll want to maximise their profits.

Missing my point.

The shareholders aren't losing money on eggs. Retailers, because their margins are low, increase and lower prices depending on their suppliers. Prices increase because of the shortage. It's not arbitrary. It's a natural response to changing market conditions.

I suspect the birds aren't really sick, they're killing them because it's become uneconomic to produce eggs.

There is no reason to believe this. The Avian Flu has been widely documented by third party analysts, by various jouranlists, by USDA, and more importantly, they are affecting pretty much everyone. So the way chicken farms operate, is that there are a huge a number of individual farmers, who sell their stock to various food processors. Now there are only a few very large, very powerful meat processor firms with familiar names like Koch, Sanderson, etc. But there are thousands of farmers.

The farmers have no reason to lie, and it's hard to organize collective action when you have thousands of farmers vs a few big individual firms. The Avian Flu is hitting the farmers, who have every incentive to maximize yield, vs chicken processors, who are the ones who would be interested in constraining supply.

 

[Abominable]

Mate, I posted a screenshot of a tomato because people refused to believe statistics and asked for my "personal" experience. I didn't do it because I am economically illiterate.

You're just proving what @KYli was saying. Screenshots of tomatoes and your personal shopping experience IS anecdotal, the point he was making.

What are you even arguing about? Do you believe the cost production cost of an item can increase without it's effects being felt elsewhere?

You're starting to sound a lot like a sleepy alt. If you are, congratulations, you momentarily got me.

The shareholders aren't losing money on eggs. Retailers, because their margins are low, increase and lower prices depending on their suppliers. Prices increase because of the shortage. It's not arbitrary. It's a natural response to changing market conditions.

Even if they aren't selling at a loss, they are making a loss on profits.

There is no reason to believe this. The Avian Flu has been widely documented by third party analysts, by various jouranlists, by USDA, and more importantly, they are affecting pretty much everyone. So the way chicken farms operate, is that there are a huge a number of individual farmers, who sell their stock to various food processors. Now there are only a few very large, very powerful meat processor firms with familiar names like Koch, Sanderson, etc. But there are thousands of farmers.

The farmers have no reason to lie, and it's hard to organize collective action when you have thousands of farmers vs a few big individual firms. The Avian Flu is hitting the farmers, who have every incentive to maximize yield, vs chicken processors, who are the ones who would be interested in constraining supply.

This has to be a sleepystudent alt. I have to give it to you, making a few pro-Russian posts in the Ukraine before unleashing your economic autism on us was a smart strategy.

 

[KYli]

Yes, it is.

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.

Steadily high unemployment is a result of stagflation not a prerequisite of stagflation. If you have a problem, you can argue with Cambridge.

I gave you the numbers for core inflation. What do you think CPI minus food and energy is? It's 0.3% for December, it's literally all in the report. It's fact, that inflation has been significantly lower over the last 3-6 months. Your argumentation is just either dishonest or you don't actually read my replies.

"And speaking of core inflation, even 0.2 positive inflation minus food/energy, represents a massive drop."

That is what you said. I just corrected you that December core inflation is 0.3%.

What goal posts am I moving? You literally said that inflation was still "very high" and that Fed's inaction in early 2022 caused inflation to go out of control. I provided data that directly contradicted you. Inflation stabilized in the last 3-6 months.


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Do you have reading comprehension problem? I said that in late 2021 and early 2022, the Fed claimed the inflation is just transitory and took no action which caused the inflation to get out of control. So now you wanted to argue that 6% to 9% inflation is normal and the Fed didn't fuck up during late 2021 and early 2022 when it had the chance to tame inflation but did nothing. So you think a 6.5% inflation on top of high base in Dec 2021 7% inflation is fine. I don't know what world you live in but it isn't the real world.

The only thing that's "laughable" is your inability to counter data that's publicly available, that directly contradicts you. What's next? You're going to post up Shadowstat as proof of what the real inflation number is? Lol.

The joke is on you and your delusional world and thinking. I provided my data to back up what I said. you on the other hand keep moving the goal post.

Uh yeah, they don't. Do you even know what MMT is? lol

Whatever if that made you feel better.

No it didn't. Lol. Jesus Christ, why are you debating what is literally measurable. Inflation pre-Ukraine can be characterized either just as intense as post-Ukraine, or more intense. This is for both CPI minus food and energy and CPI with food and energy.

I don't know what you are smoking. In 2021, monthly inflation is picking up every month compare with 2020.

1.4​

1.7​

2.6​

4.2​

5.0​

5.4​

5.4​

5.3​

5.4​

6.2​

6.8​

7.0​

What an absurdity.

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Just look at the numbers As it clearly indicates. Core inflation was actually less intense over the whole year in 2022, especially in the latter half of 2022 than in 2021. And overall inflation was also measurably less.

Why are you keep posting irrelevant data to this debate and attempt to move the goal post. Did you read my post? Or you live in your own dream world and didn't read and remember why you reply to me in the first place. My first post on this topic said that the Fed is too soft now could cause a resurgence in inflation next year. Did I say anything about inflation for the last few months. After a high base in late 2021 and all 2022, the inflation number for the last few months is obviously looking good. But this is irrelevant to the debate because I only made two statements. First, the Fed fucked up by calling the inflation is transitory in late 2021 and early 2022. Second, the Fed being soft now might send the wrong message and allow the inflation to resurgence next year. Don't try to move the goal post.

This is what I said and you disagreed with.
"A recession is better than stagflation. It is about the Fed's credibility on the line. Late 70s and early 80s is a very painful period for regular Americans. The Fed fought hard to tame the inflation and reestablish its credibility. A recession won't cripple the Fed's credibility but a resurgence of inflation next year would have dampened the Fed. Remember that for the last few recessions, it is the Fed and its softness that make the bubble bigger and more the popping of the bubble more painful."

All your friends have bad landlords.

Rent increases on average are 20% in New York, probably the 2nd most expensive metropolitan area in United States after LA.

NYT article has already provided the data that from Jan ,2021 to Jan, 2022, rent in NYC increased 25%. And we know for a recent data that rent from Nov, 2021 to Nov, 2022 increased another 16%. Now your so called average 20% increase in rent is just a joke. In the real world, most tenants in the NYC that renewed their 2 years or 3 years contract, their rent increase 50% for most of them.

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I didn't put anything in your mouth. You said it yourself. I'm happy to keep proving you wrong, and you're welcome to reject statistics. If you want to base policy on how you feel instead of what is reflective of reality, by all means. All I'm pointing out, is that your opinion, is not backed up by any numbers from anyone reputable.

You claimed that I lied about the rent got double. In the reality, I said that my friends got their rents increase by 50% and some got double. It is just pathetic that you now again to move the goal post.

Your data and statistics is irrelevant to the discussion for the most part. You just keep moving the goal post and twist my words. And when I provided data, you just ignore them.

 

[HighGround]

You're just proving what @KYli was saying. Screenshots of tomatoes and your personal shopping experience IS anecdotal, the point he was making.

I'm not the one who asked for those screenshots. I also posted the actual statistical price of Tomatos, which has remained static throughout the pandemic.

What are you even arguing about? Do you believe the cost production cost of an item can increase without it's effects being felt elsewhere?

I am arguing that inflation has been accurately measured, and that his claims of "doubled" costs or "50%" rise are hyperbolic (which they are). Prices have risen, in aggregate by 20%. Some goods like Eggs and Chicken, are extremely high because of factors outside of inflation, while other goods like Bananas have largely stayed the same price. In general, people have had an increase in living costs, but it is certainly not 50%.

You're starting to sound a lot like a sleepy alt. If you are, congratulations, you momentarily got me.

Even if they aren't selling at a loss, they are making a loss on profits.

This has to be a sleepystudent alt. I have to give it to you, making a few pro-Russian posts in the Ukraine before unleashing your economic autism on us was a smart strategy.

My posts are neither pro Russian, nor economic autism. I rely very heavily on data and observable facts, rather than anecdotal evidence and conjecture.

 

[Staedler]

I never denied there was inflation. In fact, I emphasized that we can quantify it. If you didn't have a measurable issue with my post, I am puzzled by your insistence to exaggerate and continue to debate this topic with me.



The government doesn't control the inflation rate. At least not in the sense that there is a cabal of executives all trying to minimize social security payments. The Fed doesn't even use CPI. CPI isn't a KPI. It's a measurable indicator that takes quite a bit of effort and money to obtain. Moreover, CPI itself isn't used by the SSA. Different social service programs can will often use different CPI indicators for their COLA adjustments. Indeed, CPI itself offers a lot of different measures based on which parameters are left out or left in.

One common criticism of BLS and CPI is that they don't properly calculate housing in CPI. Which ignores that of course, CPI has a metric that includes housing costs, and one that excludes housing, and breaks down different subsets of "housing", allowing critics to create their own metrics using the data.



There is an unemployment measure that includes discouraged workers or those out of the labor pool. It's called U7 unemployment. Moreover, the BLS, the same agency that provides unemployment data, also provides labor participation rate. All of this data is public, well publicized, and the LPR itself is regularly mentioned in monthly unemployment report.

Conversely, I also don't particularly give a hoot about the labor participation rate. It is a number that is simply not all that informative. There are a number of reasons why somebody would choose not to work. Even when the economy was universally considered "good" (whatever that means) by pundits, working people, and Trump supporters, the labor force participation rate was still static. The causes of this are interesting, from an economics level, but it is not particularly relevant when we look at the health of the economy.


I will assume that people are telling "tall tales" because that's what they are if they are inconsistent with reality. This is exactly the case with your 6$ and 8$ eggs. Yes, I suppose it can occur in fairly rare and limited cases, but it is by no means the norm, despite people's attempts to convince us so.

Now I understand that people like to whine and exchange grievances when with friends or in bars, and that's fine. It is completely different when these same people go on Forum boards and attempt to pass this data off as a typical experience of an average American. As I said before, life is hard enough without these over exaggerations.

I literally look at the receipts and give you the numbers and you still insist it's an exaggeration. $6 and $8 eggs are an exaggeration? How about you try looking up the average egg prices in New York? You'll find it's not far off. Not to mention you're so focused on the exact price that you fail to notice I gave a pre and post price for a reason - to give an indication of the trend. Those exact prices will not be present across the entire country, but the trend is still there.

Imagine being so arrogant as to tell people that their lived experiences aren't true. So fuck off and let's stop talking with each other anymore Sleepy.

 

[9dashline]

I literally look at the receipts and give you the numbers and you still insist it's an exaggeration. $6 and $8 eggs are an exaggeration? How about you try looking up the average egg prices in New York? You'll find it's not far off. Not to mention you're so focused on the exact price that you fail to notice I gave a pre and post price for a reason - to give an indication of the trend. Those exact prices will not be present across the entire country, but the trend is still there.

Imagine being so arrogant as to tell people that their lived experiences aren't true. So fuck off and let's stop talking with each other anymore Sleepy.

I exported my Bank of America and Amazon purchases to excel, used a macro to line up similiar purchases, and I suffered over 20% inflation compared to last year for the things I actually purchased and was able to compare apples to apples

Sleepy probably works for CIA and a bored analysts at that

 

[HighGround]

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Stagflation is an economic cycle characterized by slow

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and a high unemployment rate accompanied by inflation. Economic policymakers find this combination particularly difficult to handle, as attempting to correct one of the factors can exacerbate another.

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In

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, stagflation or recession-inflation is a situation in which the

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is high or increasing, the

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rate slows, and

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remains steadily high. It presents a dilemma for

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, since actions intended to lower inflation may exacerbate unemployment.

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…however, many Western countries experienced “stagflation,” or simultaneous high unemployment and inflation, a phenomenon that contradicted Keynes’s view. The result was a revival of classical liberalism, also known as “neoliberalism,” which became the cornerstone of economic policy in the United States under President Ronald Reagan (1981–89) and in the United…

Here is the official Oxford Dictionary of Economic Terms. Pretty much as authoritative as you can get.

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The situation where a country persistently suffers from both high inflation and high unemployment.

I don't why you keep arguing, you can't even accept the commonly understood definition of a relatively well-known term.

Steadily high unemployment is a result of stagflation not a prerequisite of stagflation. If you have a problem, you can argue with Cambridge.

I'm not going to argue with you or Cambridge. I don't need to. You're simply wrong.

"And speaking of core inflation, even 0.2 positive inflation minus food/energy, represents a massive drop."

That is what you said. I just corrected you that December core inflation is 0.3%.

Okay? And how is 0.3% not a massive drop from 1%+ inflation we were seeing earlier?

Do you have reading comprehension problem? I said that in late 2021 and early 2022, the Fed claimed the inflation is just transitory and took no action which caused the inflation to get out of control. So now you wanted to argue that 6% to 9% inflation is normal and the Fed didn't fuck up during late 2021 and early 2022 when it had the chance to tame inflation but did nothing. So you think a 6.5% inflation on top of high base in Dec 2021 7% inflation is fine. I don't know what world you live in but it isn't the real world.

The Fed claimed that the inflation is transitory in early 2021. The first rate hike by the Fed was taken in March of 2022. I don't know where you're getting this ridiculous argument from, I never said high inflation was fine. All I did was point out that you were factually wrong. Inflation was high in 2021, but higher in early 2022, before it fell off a cliff in 2022. The War in Ukraine did have inflationary effects, which you are trying to brush off without any data backing you up.

The joke is on you and your delusional world and thinking. I provided my data to back up what I said. you on the other hand keep moving the goal post.

Whatever if that made you feel better.

I don't know what you are smoking. In 2021, monthly inflation is picking up every month compare with 2020.

1.4​

1.7​

2.6​

4.2​

5.0​

5.4​

5.4​

5.3​

5.4​

6.2​

6.8​

7.0​

That's not monthly inflation. That's 1 YoY inflation aggregated over 12 months. MtM inflation is completely different.

Why are you keep posting irrelevant data to this debate and attempt to move the goal post. Did you read my post? Or you live in your own dream world and didn't read and remember why you reply to me in the first place. My first post on this topic said that the Fed is too soft now could cause a resurgence in inflation next year. Did I say anything about inflation for the last few months. After a high base in late 2021 and all 2022, the inflation number for the last few months is obviously looking good. But this is irrelevant to the debate because I only made two statements. First, the Fed fucked up by calling the inflation is transitory in late 2021 and early 2022. Second, the Fed being soft now might send the wrong message and allow the inflation to resurgence next year. Don't try to move the goal post.

Lol. I didn't move the goal posts. There are literal screen shots where what you claimed, was completely different from the actual reported numbers.

This is what I said and you disagreed with.
"A recession is better than stagflation. It is about the Fed's credibility on the line. Late 70s and early 80s is a very painful period for regular Americans. The Fed fought hard to tame the inflation and reestablish its credibility. A recession won't cripple the Fed's credibility but a resurgence of inflation next year would have dampened the Fed. Remember that for the last few recessions, it is the Fed and its softness that make the bubble bigger and more the popping of the bubble more painful."

Uh no. What I disagreed with was your assertion that an interest raise of 0.5% was "soft". I also pointed out that the stagflation itself was not as painful, as the "cure" that stopped inflation. A deep 2 year recession that resulted in higher unemployment.

You started digging the hole deeper by claiming that "the US growth is very slow and the inflation is very high," which was factually wrong. U.S. inflation largely stopped growing Month-to-Month in the last 3-6 months of 2022. When I presented you the numbers, you started claiming that the numbers are only good because of gas volatility. When I pointed out that even if we took the gas out, we still have 0.2% inflation (or 0.3% a 0.1% different isn't making or breaking the argument here), you started moving the goal posts in your argument.

If you actually paid attention to my posts, we wouldn't be having a problem, but I suppose because your credibility or whatever, is "on the line" you're insisting on trying to play a stupid game of gotcha instead of simply agreeing with my accurate assessment of the economy, or simply discussing a more relevant data point in a more civilized and productive manner.

NYT article has already provided the data that from Jan ,2021 to Jan, 2022, rent in NYC increased 25%. And we know for a recent data that rent from Nov, 2021 to Nov, 2022 increased another 16%. Now your so called average 20% increase in rent is just a joke. In the real world, most tenants in the NYC that renewed their 2 years or 3 years contract, their rent increase 50% for most of them.

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Uh no. That's not what the article says.

Specifically, the article notes that rent prices actually fell dramatically in November 2020 to their lowest point in 10 years. Because of that, the "Some New York renters who signed leases when rents were at their lowest saw 30 or 40 percent increases at the end of 2021."

The data source they used for the article, provides the data for all of us for free.

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You claimed that I lied about the rent got double. In the reality, I said that my friends got their rents increase by 50% and some got double. It is just pathetic that you now again to move the goal post.

Your data and statistics is irrelevant to the discussion for the most part. You just keep moving the goal post and twist my words. And when I provided data, you just ignore them.

Your own data sources don't support your conclusions.

 

[HighGround]

I literally look at the receipts and give you the numbers and you still insist it's an exaggeration. $6 and $8 eggs are an exaggeration? How about you try looking up the average egg prices in New York? You'll find it's not far off. Not to mention you're so focused on the exact price that you fail to notice I gave a pre and post price for a reason - to give an indication of the trend. Those exact prices will not be present across the entire country, but the trend is still there.

Imagine being so arrogant as to tell people that their lived experiences aren't true. So fuck off and let's stop talking with each other anymore Sleepy.

Are you telling me people never lie or overexaggerate? Go ahead and block me, but you're not proving any of your points. You're simply conceding that your "lived experience" is more valid than actual data.

I exported my Bank of America and Amazon purchases to excel, used a macro to line up similiar purchases, and I suffered over 20% inflation compared to last year for the things I actually purchased and was able to compare apples to apples

Sleepy probably works for CIA and a bored analysts at that

Which is in line with what you would expect. As I said, 20%.