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This Is Biden’s Soft Landing, and He Deserves Some Credit
(newrepublic.com)
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this post was submitted on 19 Nov 2023
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The markets say one thing, but grocery receipts say another. Consumers are still hurting, and most choose not to look beyond today and their own pocketbooks.
But grocery receipts are not an indicator of inflation, only of corporate greed and record profits. The Democrats need to a better job pointing the blame where it really lies.
I think one caveat here (and I’m not disagreeing with you, just adding a bit of clarification) is that the grocery stores aren’t the ones engaging in this. Generally, they have pretty tight profit margins. The massive growth of Aldi and other discount grocers in the USA over the past 10-20 years has made the profit margins remain tight. It’s the upstream producers where you see more of the greed.
Most people reading this probably haven’t even heard of a company like Cargill, even though they control a massive chunk of your meat.
Edit: maybe I should have said they produce most of your meat (or the plurality, not sure the exact numbers. They’re the biggest in North American beef, maybe other meats too)
I work in the corporate office for a grocery, you're not wrong at all chief.
This entire year one of our biggest corporate goals has been how to either drive down prices for our customers or how to increase value for them so that they'll feel their dollar went further.
Kinda curious what percert do. Fediverse isn't exactly a random sample. I'd imagine it was be a small minority of the general population who know that. Honestly mostly only became aware of Cargill because of how much of the Venezuela food market they used to control (and the possible abuse of that position).
Ooo-er……
And the rest of your meat is under the control of a handful of larger consumer goods companies, the five fingers of big tech, and the chubby paws of a few other companies in key industries. Together, they have your meat in a vice.
what do you think "inflation" means to consumers? it's the increase over time of the cost of the things they buy. Nobody cares if it's coming from corporate greed or climate change or whatever else. They only care that they've already been living pay check to pay check and now they're cutting back on food into ever more shitty options.
or housing. or any of a dozen other necessary-to-live things.
That’s fine but it has fuck-all to do with Biden’s policies and it’s beyond any President to change those things. It’s like when people judge a president by the price of gas during the administration. The reasons housing and food are expensive as fuck currently is
Maybe “nobody cares if it’s coming from corporate greed” but that’s just basically saying voters are incredibly stupid. It’s rather unwise to blame it on Biden, vote him out, and then get a Republican (especially the unholy moron in the lead currently) who will do absolutely worse about the real issues in every way possible.
I dunno, he certainly could go after monopolies, breaking up companies like walmart, kroger, cargil, and amazon, and all the other joints that have the power to fix prices... he could also direct the US DOJ to go after price gouging and other anti-competitive practices that absolutely are illegal, work out more favorable trade deals (a lot of produce comes up from Mexico, for example avocados and tomatoes); and he could work with congress to bring SNAP benefits to more people; or increase SNAP benefits to people already on it.
Gee, if only there was some way to mandate some sort of guaranteed wage... maybe we could call it a minimum... wage... yeah he'd have to work with congress to get that done. But that's... kinda part of his job.
maybe they should make federal laws against price gouging, huh? sounds like something a president might be able to work on (most states have laws against price gouging, however)
The problem is that those things are quite complicated legislatively and politically, and/or are the purview of Congress, not the executive branch. And true, Democrats could be much better on minimum wage and restraining big business. But so what, as usual - you’re going to elect a Republican instead, when they’re much worse on all of those issues?
"These things are too complicated" when it's something that might help people. Not a concern when building Trump's wall for him or shoveling money to the IDF.
"oh pity poor me, I can't do ANYTHING!" is a bad look for a president. He's done a fair bit, most of it is of the 'taking care of business' variety.
Yes, he needs to work with congress- that's part of his job. I'm not asking him to do anything that isn't part of being... you know... the president. Just because he's better than a field of alternatives, doesn't mean he's not also worse than... I don't know, a progressive democrat? By and large, the president sets the political course for his party; at least while in office.
but again, there's things he CAN be doing. Like, going after monopolies; breaking up companies that are much too large- actions that increase competition and bring direct price actions. they can go after people for unfair (or fraudulent) practices in the sectors hurting people most. Instead hes focused on... ticketmaster... and airlines. yeah, they're scummy companies. they should be dealt with. What about Kroger, Cargill, Nestle. Student loans. predatory landlords.
There's a lot that Biden could be doing. Or more specifically, directing his federal agencies to be doing.
The FTC just wrapped up a major antitrust suit against Google. Not sure how you missed that one.
But anyway, could Biden be less of a corporate Democrat and work more effectively as a populist? Sure. I’m not sure who you think was disagreeing with that. As far as breaking up large corporations in 5 different industries all at once though, and taking executive action on duties of the legislative branch, I think you’re expecting a bit much, which is not even remotely the same thing as “pity me I can’t do anything”.
I think this thread has lost sight of the original argument. We shouldn’t elect a republican because breaking up a monopoly is so politically complicated that we know they cannot pull it off, therefore any republican promise to do so should be treated as a farce.
They don't want to work with him. Or have you forgotten that the only Republican goal anymore is "own the libs?"
He ran on being able to work with them. Which was a giant crock of shit, just like all the "he's the most progressive evar" nonsense we're expected to buy now.
Who would have believed that? Republicans supporting a Democratic president and helping pass legislation? It was hard enough to get Manchin, a supposed Democrat, to go along with it and typically zero Republican senators will.
1.4% of Americans are on minimum wage so I'm not sure this will have the impact you think it will.
This is going to need some proof.
Apparently Walmart and Kroger BOTH have a monopoly on grocery retail.
Is there something wrong with that? Voters elected Trump with the help of the electoral college. Over the last several decades, they're the ones who repeatedly voted in people who've enacted policies that have lead to the trend of lack of wage increases and increased regulatory capture that has allowed the current inflation problems.
Why can't the conclusion simply be voters are stupid, so they'll make decisions based on whims and feels that may not have a strong connection to the policies of the specific person?
A lot of people want prices to return to what they were before the pandemic. But that would be deflation. While the prices would get lower, if you actually managed to push the economy into deflation it would be an economic catastrophe. And the lower prices at the grocery store would be little comfort with massive job losses and the economy in free fall.
What people should want is for inflation to return to its steady slow rate. Which it has. The month to month inflation was 0.2% compared to a month prior on September 2023. Going forward that would imply a rate of 2.4% over the course of the next year, very close to the 2% inflation target. For October the month to month rate was flat or slightly negative. The inflation number reported in the news always is very misleading, that tells you the total amount of inflation that occured over the past 12 months (3.2%). But it was actually 0 from September 2023 to October 2023. When people hear those headlines they think it means prices raised 3.2% again over the last month, which is not the case.
The remarkable thing is that inflation was slowed to this extent without the economy going into freefall with soaring unemployment or other problems that can happen with raised interest rates. They seem to have struck the perfect balance to wrangle inflation but prevent a recession at the same time.
Wage growth has also increased and is now growing faster than inflation. That's what you want! For the wages to catch up and make the higher prices a moot point. A deflationary spiral that lowered prices would be devestaring for the economy and most people would actually end up way worse off.
Outside of a socialist centrally managed economy with price controls and production control etc which has its own issues, I don't know how they could have done a better job than this coming out of the inflation problems created by covid and doing it all without going into recession. But the popular perception is just, why isn't everything cheaper again, I want everything cheaper again, must be Biden's fault, I guess. Even though things getting cheaper again isnt realistic, and would likely be devestating for lots of other reasons that would hurt people if it actually was happening.
I hear about how deflation is supposedly the death knell for an economy, but have never heard an actual explanation for why. Inflation just seems preferred since it gives an invisible paycut to workers and allows holders of assets and debt (e.g. overwhelmingly the rich) to benefit at the expense of the value of money.
The idea is that with inflation, money today is worth more than tomorrow, with deflation it's the opposite. So, in an inflationary regime, you'll spend money before it loses value, either by buying things, or buying stocks AKA investing. In a deflationary regime, money gains value, so people keep it, nobody buys, nobody invests, and the economy starts shutting down.
Okay but I’m still gonna buy groceries if they’re cheaper because I need to eat
Sure, but you'll buy them even if they're not cheap, because you need to eat. But on a large enough scale, the effects are, well, large.
https://www.economicshelp.org/blog/1888/economics/deflationary-spiral/
https://www.investopedia.com/terms/d/deflationary-spiral.asp
This is a good explanation. And the great depression involved deflation if that gives you an idea of how bad it can be. What happens basically is if you need something in an inflationary environment, it's best to buy it now. It's likely going to be slightly more expensive over time anyways.
In a deflationary environment, the logical thing for any one person to do is to wait as long as possible to make any purchase of an item or service. Why should I buy it if it'll get cheaper over time? I'll just wait. So this is a problem, any transaction that involves the transfer of money, people are avoiding if possible. So revenue to employers is plummeting, they start firing people, they don't need as many now. People have even less money than before, prices sink lower to try and attract business because everyone is running low on cash now, and around and around it goes. Businesses are going bankrupt and closing up, leading to more job losses. There's tons of people looking for work and not many jobs, so pay decreases because there's way more workers than needed.
If you have any sort of debt (face it most of us do), deflation is also devastating. Normally inflation helps with debt by making the debt value decrease relatively over time, it gets easier to pay. In deflation the opposite is true, and it gets harder and harder to pay over time. If deflation was like 4%, well then add another effective 4% interest to any rate to get the true interest rate on debt you already own or any new debt you take out. So now it's extremely difficult to get credit or loans. People are mass defaulting on loans. More people losing jobs. Housing, cars, new businesses, storefronts, retail space, building projects, government projects, anything that relies on financing collapsing because no one can afford the debt. Even less money flowing into economy, etc etc. There's more problems that crop up too.
It's a feedback loop of an economic death spiral that can be hard to break out of, as seen in the great depression. Barring a radical restructuring of the entire world economic system or something, the best place to be in for most people is where we are now, a small amount of yearly inflation (~2%) with workers highly in demand so wages are rising.
Any economic downturn will involve the risk of deflation because lack of demand will cause prices to go down, but that is merely a symptom, not the cause of the great depression. While you talk about the logical choice of waiting for purchases, this doesn't work out the same way in real life because people generally just buy when they want something. A key example is technology. Technology is inherently deflationary because it's designed to be cheap to manufacture, so initial high prices are mainly to recoup R&D costs plus profits and it should only get cheaper from there, plus technological advances mean that you get a better product than before. However, people and businesses don't just wait around forever to purchase computers, TVs, phones, etc. Technology is the largest sector of the S&P 500.
As for debt, if deflation is expected then it'll be factored into the interest rate. What's the difference between a 4% loan at 2% inflation and a 0% interest rate at 2% deflation? The 2% inflation rate target is completely arbitrary, so why not target a 2% deflation rate? Consistency is key.
Inflation is better for people in debt since it makes it easier to pay back; a lot of farmers in the late 19th and early 20th century pushed for inflationary policies in part to make it easier to pay off bank loans.
Deflation is bad for two reasons. First, as mentioned, is that it doesn't encourage people to spend sooner in the market. Second is that it encourages investors to pull out their money from the market, since they may get better returns stuffing it in their mattress.
Boy are you underselling those problems.
Oh I know, tons of issues. It wasn't supposed to be the primary topic of the comment, was just pre empting the "well actually" comments from the relatively high amount of communism and socialism proponents on lemmy. I'm speaking about how this all works within our current capitalist economy and system. I don't think instituting price controls is a good idea. There are better ways.
The economy is not even close to being the main priority for me when I vote. I'm pissed about things like Roe and Jan 6.
And I'm pissed that the US does not offer universal healthcare, universal college-level education, universal PTO, universal family leave, etc.
You know, basic things in every other developed country in this world.
Zero chance I'm ever voting for a Republican. Democrats down the ballot for me.
I'm voting D too for the time being, but the Dems are never going to give us those things either.
The best Dems will offer is BS like means-tested limited family leave if you work for 3 years in an underprivileged school district first and then apply for a special program that will offset 25.7% of your lost wages via tax credits that can only be applied to the first $34,000 of income including HSA contributions but crediting back via deduction the first $500 spent on diapers as long as the diapers were 70% manufactured in the US blah blah blah
This Democratic party does not want universal healthcare. At best, they will grudgingly support universal "access" to healthcare. They do not want universal free college, nor free PTO, because that runs counter to the interests of their largest donors.
The best we can say about the current Democratic party is that they will, at times, pause the active arson that the GOP is inflicting on this country... maybe, sort of. They could have added DC and PR as states in the 2021-2022 session and given themselves a fighting chance in the Senate, but I guess they just kinda forgot to get around to it.
They exist to be a placeholder for whenever the GOP loses power, and a continuous fundraising lifestyle brand the rest of the time.
I think you're right in the issue, prices are higher now vs recent history and that feels bad, but there is an aspect to that which is more perception than reality.
Wages have been rising faster than inflation for a year and a half straight now, and real wages are currently higher than they were in Q4 2019.
So yes things cost more, but as a percentage of typical wage, they actually cost less vs 2019. Just doesn't feel that way.
https://fred.stlouisfed.org/series/LES1252881600Q
The Fed's job is to defend and grow the owner class's wealth at everyone else's expense, full stop.