Is Corporate Greed Causing Inflation?

In reply to GameboyRMH :

That's a tough row to hoe and I hate that you are having to deal with it. 

I wonder if the US would be more friendly toward foreign skilled employees. 

In reply to Toyman! :

Only from certain countries, I just sat through a company wide training about being wary of Asian nationals working for us. They brought in a FBI speaker from DC and shared effectively whats listed below. Also mentioned the Russians, Cuba, Nigeria, and a few others as suspicious ties.

https://www.fbi.gov/investigate/counterintelligence/the-china-threat

It did have some racist vibes. 

Mr_Asa said:

As share prices drop, Target, Aldis, and Wal Mart are all dropping prices on thousands of items.

Many are asking "so why are you doing this now, instead of earlier?"

Considering that this thread has "proven" that corporate greed isnt to blame for these prices rising, I'm curious as to what is.

I would suspect it is the result of not wanting to sell at a loss. They need to sell inventory purchased higher prices to consumers at a higher price. Once the sell off the higher priced inventory if they restock at lower prices from their suppliers then they can lower their selling price. 

alfadriver said:

Wow, this devolved. 

Have fun. 

Not quite sure why you sound surprised. The fact that it did not get locked early, well...

Soooo how do we feel about corporate stock buybscks and their impact here. 

Fueled by Caffeine said:

Soooo how do we feel about corporate stock buybscks and their impact here. 

Boeing did a lot of stock buybacks and they still can't get the Starliner off the ground. And the 737 MAX still sucks. It just sucks.

GameboyRMH said:

Also, regarding housing, you can't buy a 1975-sized house today for inflation-adjusted 1975 house money. Not even if it's in rural area that's no different than it was in 1975.

Oh boy here we go again..... OK. 

This house used to be a barber shop in the bottom and apartment up top. I know because I got my hair cut there for almost 20 years as a kid/young adult.

The man that owned it, used to brag that he "paid cash for this place in 1978 for $25k and I make that much in rent and the shop per year! Best investment I ever made." I remember because he was a bit of an annoying braggart about things like that. Now, I know that's not "1975" as you stated, but it's close. Guess what $25k adjusted to inflation works out to be? 

So once again.... your claim is unfounded and flat untrue. But wait, I'm sure I'm "cherry picking" again right? Average home price in 1975 was 39300 nation wide. That adjusted for inflation is 229k. Average home size in 1975 was around 1700sq ft. Here is a list of just Indianapolis meeting that requirement:

Now, people complaining that new construction homes are more expensive than 1975, you're right. But they're also much larger. Average home size for 2023 is 2657sq ft, 47% more house than you got in 1975. Average cost per sq ft would have been about $23.15, so a 2600sq ft house in 1975 would have been about $60k. That means about $350k in todays money. Using THIS CHART you can find dozens of states much much cheaper. Indiana's home price is almost $100k less than what that would have cost in 1975. 

prowlerjc said:

GameboyRMH said:

Tom_Spangler (Forum Supporter) said:

Boost_Crazy said:

In reply to Hungary Bill (Forum Supporter) :

My beef with my wages today isn't their "adjusted for inflation rate", it's I have less buying power than I would have had at the same job in the 1970's.  And while I can't say it's the same everywhere, I can compare my current position to my grandfathers:
 

There are a lot of problems with these "good ol' days" comparisons. They almost always center on the cost of housing, and almost always compare apples and oranges. No, the same house in the same location in 1975 is not comparable to 2024, as the location has likely changed dramatically. It's not that the wood holding the house together is more valuable, it's mostly the location that is more valuable. But let's give you the housing. How about everything else? Who would honestly trade the 2024 standard of living with 1975? Healthcare, access to entertainment, knowledge, clean air, etc. etc.. People take for granted the things they have in their daily lives that no amount of money could have purchased in 1975. Ironically, one of the big changes has been much greater access to everyone to the wealth building strategies that used to be only accessible to the wealthy. 

Not to mention technology. Try comparing what you got for your money 30-40 years ago to today in terms of TVs, computers, audio gear, etc. Not to mention the stuff that wasn't even available then, like smartphones. I look at what I used to spend on that stuff in the 80s and 90s, when I made way less money, and just shake my head.

This is what I call the "hidden value in technology" theory, and it doesn't pan out.

Cake pans out.

Guys, you kind of ran in a different direction than I intended.  This wasn't a "back in the good ol days... " post, but more an argument that "there's more to it than 'inflation adjusted wages'".  Housing being a requirement for most of us, I was comparing the buying power of my single income grandfather to my single income family who lived and worked in the same industry and area as anecdotal evidence of how much less buying power I have today in comparison (the logic being, I had to pay a much larger % of my income towards my housing versus when he was working).

The "good 'ol days" as I'm often quoted as saying "are often old, but were hardly ever 'good'".

bobzilla said:

 

Now, people complaining that new construction homes are more expensive than 1975, you're right. But they're also much larger. Average home size for 2023 is 2657sq ft, 47% more house than you got in 1975. Average cost per sq ft would have been about $23.15, so a 2600sq ft house in 1975 would have been about $60k. That means about $350k in todays money. Using THIS CHART you can find dozens of states much much cheaper. Indiana's home price is almost $100k less than what that would have cost in 1975. 

Don't forget increases in building standards and additional features.  Things like better insulation and windows help with heating/cooling costs but add to the initial buy in.

Similar to how cars have more and more tech (either by choice or mandate) that continues to increase the cost.  

I agree the sentiment about housing that it's apples to oranges. Indianapolis is a great example. I'm from Atlanta. My generation is sad they can't afford to buy houses in ultra-high demand parts of the country where all of us seem to be moving to. I can't afford the Bay Area. I can't afford downtown Atlanta. Those high-cost parts of the country are completely different places compared to the past. But I CAN afford downtown Indy. In fact, it was literally cheaper to buy a $160k house in the sticks outside Indy than it was to rent something similar, and so I did, at 25 years old after saving from my first job. That was in 2016, and the market was "crazy" back then too. I now choose to live in Atlanta, and even out in the cheaper suburbs, I'm sure paying more for it. 

But the point is we all have choices to make, and we have more options than we realize if we keep our minds open. My generation expects to live better lives than the past generations, and that conflicts with the apparent cost of living. But we are living so differently than the past. We have computers in our pockets more powerful than anything that existed in 1978. We have cheap used minivans quicker than any car available in 1978. We don't have to waste entire weekends shopping in stores in person. We don't think about the cost of long distance calls. Phone bills are barely part of a budget anymore. Most major cities today are safer than they ever have been in their entire historie. Every establishment you enter to today is air-conditioned and allows all races and genders. We haven't been drafted for war. You can't simply use the numbers to compare how good we have it vs past generations. And we have it really, really good. We just seem to want even more. 

Many, many years ago, I heard a wise old gentleman say "Excuses are like buttholes, everybody's got one."

It still applies today.

In reply to GameboyRMH :

I'm not going to quote the longer post you made in response to Steve Jones, but that's what this is related to. 

Now you have 3 years experience in Canada to support your foreign experience and add credibility to it. 

Are you learning new tech, developing new skills, or gaining new responsibility? If you aren't doing any of those things your value is not increasing, and may actually be decreasing.

You need to actively manage your career and take control of your advancement.  It's probably time to leverage the last 3 years and look for your next role. Start looking for something that offer's opportunity for growth in skill or responsibility, increase your value to employers so your income will grow.

Using this approach to determine when to move to a new role and what to look for has led to average income growth of approx 10% annually over the last 15 years for me. Typically there have been Peaks and valleys based on moves, with some years being 3% and others been >15%, but always looking to increase my value to employers. 

The increase in your value doesn't just create income, it also creates flexibility, and the ability to have more control over your career. The challenge it taking an active role in managing your career development and stepping outside your comfort zone to add that value. 

 

06HHR (Forum Supporter) said:

Pete. (l33t FS) said:

GameboyRMH said:

In reply to Pete. (l33t FS) :

There isn't the same amount of stuff or same supply, we're not competing for a static amount of manna falling from heaven. Supply for most things has increased and is easily capable of increasing further. Economies of scale make them cheaper...and possible to produce with less labor.

Housing isn't getting any cheaper.  And the cheap ones get snapped up by investment companies to flip for a profit.  $140k homes in my area are now $300k.

 

If I want to buy a home, I have to price my labor at a rate that affords me this.

This is something this discussion hasn't really touched on.  PE, investment companies and developers have snapped up a ton of rental properties and private residences in the last decade.  This has not only driven up the price of starter homes, it's fueled a massive increase in rental rates across the board.    

I'll add my datapoint, that won't touch on the whole berkeley everyone but "investors" PE's et al., but I'll add there is a LARGE contingent of left coasters that are retiring and saying, "berkeley kalifornia and it's bullE36 M3" and moving east. 
The ex and myself rented a home to live in a hour east of Knoxville for $1300/mo. It was a 2k sqft 3bd/2bth place. Nothing fancy. Most everywhere it is a 160-210k home. This group of retirees grew the price to it finally selling at 324k. Why? Because they sold a 750k overvalued shack, got on their state funded retirement plan collecting obscene amounts of money (because kali), and largely nonexistent governmental bureaucratic bs. Then bitch that "someone" should "fix it". Start multiplying that out and we got outpaced in the market, even though I make decent money doing what I do.

This is why I am back in this E36 M3hole called Michigan. I hate it here, but right now, I can't move anywhere.

But back to PE's... I haven't figured out why they are legal. They are a Ponzi scheme. Is it just because there is a tangible asset involved that they will bleed dry to satisfy "investors"? They certainly don't set out to make anything or anything better. So berkeley vanguard, blackrock, and state street on top of that.

Ranger50 said:

06HHR (Forum Supporter) said:

Pete. (l33t FS) said:

GameboyRMH said:

In reply to Pete. (l33t FS) :

There isn't the same amount of stuff or same supply, we're not competing for a static amount of manna falling from heaven. Supply for most things has increased and is easily capable of increasing further. Economies of scale make them cheaper...and possible to produce with less labor.

Housing isn't getting any cheaper.  And the cheap ones get snapped up by investment companies to flip for a profit.  $140k homes in my area are now $300k.

 

If I want to buy a home, I have to price my labor at a rate that affords me this.

This is something this discussion hasn't really touched on.  PE, investment companies and developers have snapped up a ton of rental properties and private residences in the last decade.  This has not only driven up the price of starter homes, it's fueled a massive increase in rental rates across the board.    

I'll add my datapoint, that won't touch on the whole berkeley everyone but "investors" PE's et al., but I'll add there is a LARGE contingent of left coasters that are retiring and saying, "berkeley kalifornia and it's bullE36 M3" and moving east. 
The ex and myself rented a home to live in a hour east of Knoxville for $1300/mo. It was a 2k sqft 3bd/2bth place. Nothing fancy. Most everywhere it is a 160-210k home. This group of retirees grew the price to it finally selling at 324k. Why? Because they sold a 750k overvalued shack, got on their state funded retirement plan collecting obscene amounts of money (because kali), and largely nonexistent governmental bureaucratic bs. Then bitch that "someone" should "fix it". Start multiplying that out and we got outpaced in the market, even though I make decent money doing what I do.

This is why I am back in this E36 M3hole called Michigan. I hate it here, but right now, I can't move anywhere.

But back to PE's... I haven't figured out why they are legal. They are a Ponzi scheme. Is it just because there is a tangible asset involved that they will bleed dry to satisfy "investors"? They certainly don't set out to make anything or anything better. So berkeley vanguard, blackrock, and state street on top of that.

They are legal because the PEs own congressmen and even the Supreme Court. Because money is considered 'Free Speech', and because we live in a very corrupt country. It's the golden rule. He who has the gold, makes the rules.

As was mentioned previously, if corporate greed is causing our inflation, corporations would need to have been less greedy in the past...what changed?

"The inherent vice of capitalism is the unequal sharing of blessings. The inherent virtue of Socialism is the equal sharing of miseries." - Winston Churchill

We live in a capitalistic system, that's not going to change, it has served me well, everything I've done is available to all...learn how to benefit from it or get smoked.

In reply to Snowdoggie (Forum Supporter) :

Corporatism is a problem. There is a solution for it. We just have to be willing to institute it. 

In reply to RX Reven' :

If the system keeps smoking bigger and bigger fractions of the population, eventually a majority will decide to smoke the system.

GameboyRMH said:

In reply to RX Reven' :

If the system keeps smoking bigger and bigger fractions of the population, eventually a majority will decide to smoke the system.

Agreed.

The middle class (however we define it) is a dying breed and I'm very, very sorry to see that happen.

Having said that, the modestly successful investor class to which I belong constantly gets villainized which is both undeserved and only serves to distract.

Doing well by working hard and getting better at what you do is a good thing.

Doing well by bribing goverment officials in order to fix the game in your favor is something else entirely.

I was thinking about this chart and others being posted about how real-world buying power for the middle class seems to have peaked about 50 years ago and declined since. Most of those charts tend to start in the 40s after the war. So you're looking at about a 30 year period of relative abundance from say, 1945 to 1975. 

Going back before the industrial revolution doesn't do us much good because the economy was drastically different then. So, from the late 1800s to the war, you were either a hardscrabble farmer, an industrial tycoon, or a factory worker or miner making barely anything in horribly dangerous conditions. There was a middle class of educated professionals like doctors, teachers and lawyers, but it was pretty small. Income equality and living conditions were much worse than they are now. Unions gained power in the 20s and 30s and drastically improved those things, then the war and the GI Bill, ushering in that "golden era" that we reference where someone with little or no education could get a factory job that would allow them to buy a house and 2 cars, send their kids to college, etc.

Anyhow, my point is: What if that 30-year period was the anomaly? This country has been around for 250 years, you're talking about a little over 10% of that time when things were relatively good for the "middle class" however that gets defined. Did things start to get worse in the 70s because corporate greed got worse? Or was it because the long post-war honeymoon where the US was relatively unchallenged as a manufacturing powerhouse finally ended? Looking at the auto industry, as an example, that's when the Japanese started making serious inroads. The same thing happened in all kinds of industries. Then in the 80s and 90s, the Koreans came in. Samsung is a ubiquitous brand in the US now, but 40 years ago nobody had heard of them. Then the Chinese. My point being that the "good old days" of the postwar period were never going to be sustainable once this country had to start competing on a global basis.

In reply to Tom_Spangler (Forum Supporter) :

In the scheme of human history, the American experiment is maybe 1%. Quite anomalous indeed.  I appreciate the conversation. It's a very compelling argument. 

Has "middle class buying power" actually declined since your defined "golden era"? Because I can talk into a magic cigarette-lighter-sized box and it will change my fridge temperature from a country away. No one was powerful enough to buy that in 1975. As I argued previously, I think we are just buying different things now that are incomparable to things of the past, even things that served the same purpose like housing and transportation. And overall I think we're able to buy more for the amount of work we put in. 

Tom_Spangler (Forum Supporter) said:

Anyhow, my point is: What if that 30-year period was the anomaly? This country has been around for 250 years, you're talking about a little over 10% of that time when things were relatively good for the "middle class" however that gets defined. Did things start to get worse in the 70s because corporate greed got worse? Or was it because the long post-war honeymoon where the US was relatively unchallenged as a manufacturing powerhouse finally ended? Looking at the auto industry, as an example, that's when the Japanese started making serious inroads. The same thing happened in all kinds of industries. Then in the 80s and 90s, the Koreans came in. Samsung is a ubiquitous brand in the US now, but 40 years ago nobody had heard of them. Then the Chinese. My point being that the "good old days" of the postwar period were never going to be sustainable once this country had to start competing on a global basis.

That argument could have merit if it were *only* measuring the single factor of increase in compensation. But this is comparing how much compensation increased compared with the increase in Productivity.

This is showing that workers have provided increased value to their employers, but have not gotten paid any more for providing more value.

This does show how anomalous the postwar days were compared to post 1980. Worker productivity increased 118% in that 30 year period, and only increased 60% in the subsequent 40 years.

The argument isn't that wages should have continued to rise at the same postwar rate, but that they should have risen closer to the rate of productivity.

Why has this happened? I'm sure it's a lot of reasons that can not be simply reduced to one thing.

maschinenbau said:

As I argued previously, I think we are just buying different things now that are incomparable to things of the past, even things that served the same purpose like housing and transportation. And overall I think we're able to buy more for the amount of work we put in. 

I think this may be the key point of contention that doesn't have a single obvious right answer:

Let's say I put in 40 hours of work. In one week, I generate $2,000 of gross revenue for my company, and I get compensated $1,000 for my time. Then there are improvements in technology or other systems that increase how productive I can be during that time. I am doing the same amount of work, but now I generate $2,500 in gross revenue for my company... How much should I be getting paid? Should I be paid the same because I'm doing the same amount of work? Or should I get paid $1,250 in proportion to how much more money I'm making for my company? Or somewhere in between?

Beer Baron 🍺 said:

Why has this happened? I'm sure it's a lot of reasons that can not be simply reduced to one thing.

As usual, this is the correct answer. People look for boogey men, or single reasons to blame for things. If only it were that easy. think of all the things that led to you (collective, not specific) being where you are. Look at your past and change just one thing.... are you still here? Probably not. It takes a ton of little things added together to get to where we are. There is no one answer. 

In reply to Beer Baron 🍺 :

You usually get paid the same - what about when you were training for 6 weeks and was useless costing the place money to train you.  It's supposed to all even out.  

In the hose world customers demand and expect free delivery.  That guy costs the company money and is offset by the highly profitable guy welding metal hoses.  

You're thoughts aren't bad and is why I'm in commission sales.