The State of the Economy Thread - “Falling inflation, rising growth give U.S. the world’s best recovery”

[CousinsCowgirl84]

4 hours ago, Jabbyrwock said:

 

well, I won’t be clutching my pearls… 

[China]

 

[Cooked Crack]

 

[88Comrade2000]

Maybe Aldo should get a Prius.

[CousinsCowgirl84]

What’s wrong with high gas prices abs low EV prices? Let’s triple the gas tax to build charging infrastructure and larger EV incentives.

[skinsmarydu]

I have to have natural gas.  

Now, I have to shop around for best prices.  Got the notice yesterday that I'm going from .59/therm to .85/therm.  That's one helluva shot.  Anyone else?

[goskins10]

20 hours ago, Cooked Crack said:

 

 

 

Hmm... let me see - I don't give a **** about his so called problem. How about not driving monster gas guzzlers. As far as I am concerned people like this POS can go **** themselves. I had a guy whine abotu the cost of health care - that ACA was too expensive and would change his life. He promptly retired from his job and went on a 18 month vacation all around the country with his new wife. Whining just to whine - and they should just shut the **** up. 

 

You can't get both rising wages and good labor market and have no inflation. It's not how it works. I have a friend who is the store manager for a target on the eastern shore - hard core right wing cesspool. She is seeing record sales in this "democrat destroyed" economy. Many of those people are getting child credit checks every month. A bunch of idiots. 

[Larry]

27 minutes ago, goskins10 said:

You can't get both rising wages and good labor market and have no inflation.

Been saying for over a decade that raising the minimum wage will be inflationary as hell. 
 

Not as bad as the sound bite crowd likes to claim. No, raising the min wage by 50% will not cause 400% price increases. But yes, inflation is guaranteed. 
 

And yes, inflation will be hard on a lot of "ordinary people". At least in the short run. 
 

But I also firmly believe that the net impact, after things adjust, will be a plus. 

[goskins10]

2 minutes ago, Larry said:

Been saying for over a decade that raising the minimum wage will be inflationary as hell. 
 

Not as bad as the sound bite crowd likes to claim. No, raising the min wage by 50% will not cause 400% price increases. But yes, inflation is guaranteed. 
 

And yes, inflation will be hard on a lot of "ordinary people". At least in the short run. 
 

But I also firmly believe that the net impact, after things adjust, will be a plus. 

 

All the data shows that raising wages alone while raising inflation are not "inflationary as hell" - assuming that means run away inflation of multiple double digits by month. I do not see inflation being hard on anyone unless it is run away inflation which this is not. Many of the people who would be most impacted are also getting child credit checks to offset any inflation and more. So in the end it's the upper middle class and top earners that are hit the most. But that is not "hard" on them It can be easily absorbed, especially as thier wages will go up even more. 

 

I do agree with the overall that the overall impact is positive but they may be some settling time. 

[The Evil Genius]

 

[Larry]

37 minutes ago, goskins10 said:

 

All the data shows that raising wages alone while raising inflation are not "inflationary as hell" - assuming that means run away inflation of multiple double digits by month. I do not see inflation being hard on anyone unless it is run away inflation which this is not. Many of the people who would be most impacted are also getting child credit checks to offset any inflation and more. So in the end it's the upper middle class and top earners that are hit the most. But that is not "hard" on them It can be easily absorbed, especially as thier wages will go up even more. 

 

I do agree with the overall that the overall impact is positive but they may be some settling time. 

 

My other way of looking at the current situation is that I think there's some negotiation going on, between labor and capital.  A long overdue negotiation, that isn't quite as one sided as it's been for the last several decades.  

 

Short-term painful and disruptive.  But very needed.  

 

 

[skinsmarydu]

On this issue from my side, I'm good with it.  I'm making about half of what I used to, but I stocked up so well when I could (I vacuum-froze a bunch of meat that I bought on sale), and I don't need to worry now...I'll be good for a long while. 

Working in a restaurant doesn't hurt...having access to free & fresh salad stuff on the daily is always awesome.

[CousinsCowgirl84]

1 hour ago, Larry said:

 

My other way of looking at the current situation is that I think there's some negotiation going on, between labor and capital.  A long overdue negotiation, that isn't quite as one sided as it's been for the last several decades.  

 

Short-term painful and disruptive.  But very needed.  

 

 

If prices raise more then wages who wins? What is your definition of “short term”?

 

So far prices are rising more that wages. I think that will continue as the sellers have more alternatives than the wage earners. 
 

antedotal, my prices have risen by 2/3 over the pandemic and I am still very busy. I have had to pay people more but not that much more. About a 25 percent increase in labor costs. 

Edited November 24, 2021 by CousinsCowgirl84

[tshile]

2 hours ago, goskins10 said:

You can't get both rising wages and good labor market and have no inflation. It's not how it works.

Yeah. The problem is I recall many-a-discussions about living wage and how it won’t cost us cause it’ll come out of the business owners pockets. 
 

because if the business owners could charge more for their product, then they would. So what they’re currently charging is all the market will bear, therefor it must come out of the owners pockets. 
 

I specifically recall “burgers” being the main widget everyone used as an example. 
 

and I recall laughing in their face about how naive of a position that was. 
 

And now we see wages rising snd prices rising and those same people are saying “duh that’s how it works”

(not saying you’re one of these people but there are plenty here that are/were/will be)

 

Just interesting watching things like that unfold. 

Edited November 24, 2021 by tshile

[Larry]

30 minutes ago, CousinsCowgirl84 said:

If prices raise more then wages who wins? What is your definition of “short term”?

 

So far prices are rising more that wages. I think that will continue as the sellers have more alternatives than the wage earners. 

#1, I'm willing to bet that your source for that claim is attached to your body, and a few cherry picked numbers. 
 

#2, while it's certainly possible for sellers to raise prices any time they feel like it, there's this thing called the marketplace that exerts forces in the other direction, too. 
 

#3, it seems to be self evident that an increase in wages by X% cannot force the price of an item to increase by (X+10%)%. Because wages are not 110% of the item's cost. 
 

#4, I'll also observe that, if your statement that prices were rising faster than wages is true, then said price increases are not being caused by wage increases. See above. 

[CousinsCowgirl84]

5 minutes ago, Larry said:

#1, I'm willing to bet that your source for that claim is attached to your body, and a few cherry picked numbers.

 

you got hands and a googler machine.

 

https://www.google.com/amp/s/www.cnbc.com/amp/2021/11/10/inflation-has-taken-away-all-the-wage-gains-for-workers-and-then-some.html
 

 

 

 

 

5 minutes ago, Larry said:

 

#2, while it's certainly possible for sellers to raise prices any time they feel like it, there's this thing called the marketplace that exerts forces in the other direction, too. 

 

yes, I know. That’s why I didn’t call them price setters. But there already many alternatives to labor, especially American labor.

 

5 minutes ago, Larry said:

 

#4, I'll also observe that, if your statement that prices were rising faster than wages is true, then said price increases are not being caused by wage increases. See above. 

certainly not the only reason.

[Fergasun]

Isn't this the point where the Federal Reserve should be raising nterest rates?

[CousinsCowgirl84]

1 minute ago, Fergasun said:

Isn't this the point where the Federal Reserve should be raising nterest rates?

That is the million dollar question! 

[TradeTheBeal!]

6 minutes ago, Fergasun said:

Isn't this the point where the Federal Reserve should be raising nterest rates?

Yes.

[CousinsCowgirl84]

44 minutes ago, tshile said:

. 
 

because if the business owners could charge more for their product, then they would.
 

 

not necessarily. It might make more sense to sell 2000 burgers at a 1 dollar margin than 1000 burgers at a 1.25 dollar margin. It depends on many factors, the price elasticity of demand for one. However if your marginal costs go up (eg labor) how many burgers you want to produce changes.
 

So instead of just “eating the cost” you might eat of the cost, raise your prices, and produce less.

 

44 minutes ago, tshile said:

 

So what they’re currently charging is all the market will bear, therefor it must come out of the owners pockets. 
 

or from the “additional wages” wage earners are now making… or they could just choose to produce less and only serve higher wage earners. It’s completely possible for real wages to decrease and net profit to decrease, as well. There are numerous outcomes. 

 

 

 

Edited November 24, 2021 by CousinsCowgirl84

[Nerm]

4 hours ago, Larry said:

 

#4, I'll also observe that, if your statement that prices were rising faster than wages is true, then said price increases are not being caused by wage increases. See above. 

 

I have never taken an economics course at any level, so I don't understand many of the basics.  But, I am wondering if that is set in stone, or just your observation?

 

In the hamburger example... if a rancher has to pay more for feed because the feed company increases wages and passes that cost to ranchers, then they have to pay their employees at the ranch more due to increased labor costs also, then they pass both costs onto the food processor who buys their cattle, who pay their employees more, then have the food transported at a higher price due to drivers getting paid more, down the line to the McDonald's who are also paying employees more... it seems like it would be an a cumulative effect.

 

Are you just saying that if McDonald's increases wages 10%, that means them increasing prices by 15% can't be blamed on wage increases?

 

Honest question.  I'm not educated on this stuff.  

Edited November 24, 2021 by Nerm

[TradeTheBeal!]

Just want to point out that the “higher wages just mean higher prices” person in here wants to triple the gas tax because they own a Tesla.

[Nerm]

Oops mistake post

Edited November 24, 2021 by Nerm

[Larry]

50 minutes ago, Nerm said:

 

I have never taken an economics course at any level, so I don't understand many of the basics.  But, I am wondering if that is set in stone, or just your observation?

 

In the hamburger example... if a rancher has to pay more for feed because the feed company increases wages and passes that cost to ranchers, then they have to pay their employees at the ranch more due to increased labor costs also, then they pass both costs onto the food processor who buys their cattle, who pay their employees more, then have the food transported at a higher price due to drivers getting paid more, down the line to the McDonald's who are also paying employees more... it seems like it would be an a cumulative effect.

 

Are you just saying that if McDonald's increases wages 10%, that means them increasing prices by 15% can't be blamed on wage increases?

 

Honest question.  I not educated on this stuff.  

My point:  

 

Consider an item that sells for price X. 
 

The total labor cost of item X (call it XL) includes the labor spent assembling X, (direct labor) and the labor that went into all of X's components (indirect labor). 
 

However. The total labor cost of X - the direct, plus all of the indirect labor, no matter how far you go back in the chain - cannot be 100% of the cost of X. 
 

In fact, the only way the total labor cost of X can be 100% of X, is if X, and every single component of X, consists of nothing but labor, at every single stage. (This means, for example, that not one component of X ever makes a profit.)

 

Total direct and indirect labor costs of X might be 90% of the price of X. It might be 99%. But it cannot be 110%. 

 

Therefore, increasing the cost of labor by 50%, cannot force the price of X to increase by more than 50%. 

 

 

[China]

Canada taps into its strategic reserves

Edited November 25, 2021 by China