‘Greedflation’ study finds many companies were lying to you about inflation
‘Greedflation’ study finds many companies were lying to you about inflation
Companies like Exxon Mobil, Shell, and Kraft Heinz enjoyed bumper profits as consumers struggled with historic inflation.
In April, Société Générale economist Albert Edwards released a scathing note saying he hadn’t seen anything like the current levels of corporate greed in his four decades working in finance. He said companies were using the war in Ukraine as an excuse to hike prices in search of profits.
“The end of Greedflation must surely come. Otherwise, we may be looking at the end of capitalism,” Edwards wrote. “This is a big issue for policymakers that simply cannot be ignored any longer.”
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Greed is not a new force in the world so anyone trying to sell recent increases in inflation as a function of greed is either mistaken, or lying to you.
So you're saying the unusual increases in profit corresponding to inflation is in error? The authors published their methodology. Please show your work.
Okay my work is basic logic.
Imagine a graph of greed over time. This graph is a horizontal line, like this:
“ _______
Now imagine a graph of inflation over time. This graph has a spike in it, like this:
______/
See the difference here? It makes no sense to argue that the spike in the second graph is a result of the variable being shown in the first graph, because one of those variables stayed instant and the other one did not.
Now here’s a graph showing the amount of competition between companies in the same time period. See if you notice any patterns:
———-\
Oh! Interesting. Looks like the competition between companies went down. Could it be that variable is somehow associated with the increase in inflation?
What could have caused that drop in competition between companies?
Well, let’s look at the graph of companies being forcibly shut down by the government, and see if there are any interesting patterns:
_____/_
Oh what’s this? What is that enormous spike in companies being forcibly shut down? Oh right, that’s when we forcibly shut down millions of small companies. We called it “the lockdowns”, and sure enough it destroyed huge numbers of companies, reducing the amount of completion in the market.
So, to recap:
Greed:
Inflation:
__________/Competition:
——————\I hope this has been an informative journey through the world of basic logic.
It's a good thing all of economics can be explained by a simple diagram consisting of underscores and a slash or this would have been a big wasted effort.
Yeah. It's a shame the authors of the study wasted their time with empirical data instead of just asking a random person on the internet for their "logic."