“We may be looking at the end of capitalism.” Those words, from the pen of the loquacious Albert Edwards of Societe Generale, shocked the Wall Street analyst set last April and set Alberts on his way to becoming a financial press favorite for his witty turns of apocalyptic phrase. He was commenting on the phenomenon of “greedflation,” an economic bugbear previously beloved of progressive economists, not quite venerable 160-year-old French investment banks.
That makes them "greedy"?
Closed dining rooms due to covid and labor shortages greatly helped profits of the individual franchisees.
I thought there were supposed to be specific companies/examples? All I'm seeing is the same BS word salad the progs use to "define" greedflation along with unknown measurements like "dollar sales per square foot".Back to classic
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‘Greedflation’ caused more than half of last year’s inflation surge, study finds, as corporate profits remain at all-time highs
Fortune· Getty Images
Irina Ivanova
Sat, Jan 20, 20245 min read
151
“We may be looking at the end of capitalism.” Those words, from the pen of the loquacious Albert Edwards of Societe Generale, shocked the Wall Street analyst set last April and set Alberts on his way to becoming a financial press favorite for his witty turns of apocalyptic phrase. He was commenting on the phenomenon of “greedflation,” an economic bugbear previously beloved of progressive economists, not quite venerable 160-year-old French investment banks.
But after falling from its blistering pace in 2022, consumer inflation has gotten stubbornly stuck in the 3% range—rising unexpectedly for the last two months even as wholesalers’ prices stay flat or fall. That is greedflation’s music, offering a clear bit of evidence that excessive profit-taking is happening above the raw cost of goods. And yet another progressive economic study, this time from the Groundwork Collaborative, sheds light on the problem, arguing that more than half of the consumer price price increases in the middle of last year were due to excessive profits, according to the findings. Corporate profits, by the way, remain at all-time highs.
View this interactive chart on Fortune.com
Corporate profits drove 53% of inflation during the second and third quarters of 2023 and more than one-third since the start of the pandemic, the report found, analyzing Commerce Department data. That’s a massive jump from the four decades prior to the pandemic, when profits drove just 11% of price growth.
“Businesses were really, really quick, when input costs went up, to pass that on to consumers. [But] had they only passed on those increases, inflation would have been maybe one to three points lower,” Liz Pancotti, a strategic advisor at Groundwork and one of the report’s authors, told Fortune.
Less business, more money
In fact, corporate profits have been so good, companies may have backed themselves into a corner, Bloomberg Opinion columnist (and former Fortune editor) Justin Fox opined this week, citing Home Depot’s earnings, which saw an increase in dollar sales per square foot (thanks to rising materials prices) but also fewer transactions. Corporate profits have hit a new record in the most recent quarter, while the portion of national output going to workers is still below pre-pandemic levels, despite solid real wage growth.
That high-profit, lower-volume dynamic is even hurting workers—who are being scheduled for fewer shifts to service fewer shoppers, who are themselves put off by ever-increasing prices, Bloomberg Opinion writer Conor Sen wrote. In the short term, that trend may manifest itself in some positive changes, like a four-day workweek. But in the longer term, companies will refuse to give up their fat profit margins without a fight, and will try to cut wherever possible. The tech industry, while a small part of the overall economy, is prime evidence of this dynamic, with Google, Amazon and plenty of smaller companies this month announcing plans to shed the less-profitable parts of their workforce as they pivot to the hopefully-more-profitable AI sector.
yy off-form here. You're supposed to be saying this is Joe and Cackles' fault, right? Saying "Itz tha free Market" may be technically correct, but doesn't exactly help the "Free Minds and Free Markets" crowd win the election.you're not familiar with the phrase? or you'd like a breakdown by retail firms?
going after?? what are you talking about?
netflix
Did you know Netflix has deals they pay the big ISP’s like spectrum, ATT, Comcast, to mover their streaming along to you?
Netflix is a serious part of someone's monthly budget? If so, then that person might want to reconsider their priorities. I mean, my Paramount+ subscription went from $4.99/month to $5.99/month. That required some serious belt tightening in the budget!
ok
