A WSJ article looked into the rise in food prices and said:
Many small manufacturers that have raised their prices have another explanation. They say they also are being squeezed by the distributors who act as gatekeepers to many supermarkets.
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These days, the chief executive of Yellowbird Foods relies on national distributors to ship his product to stores, a process he said is riddled with obscure costs that make it hard to know what, if anything, he'll be paid.
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Many smaller food makers complain they are being gouged, and that fees and other charges that stream in from distributors have forced them to raise their prices to stay in business.
So basically, every voice that said that greedflation was a conspiracy theory was wrong and Kamala was 100% right.
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I think "greedflation" is probably not a good explanation but there is documented evidence of rising concentration in certain industries and with it increased markups over the last few decades. There's no way that supermarkets are charging higher markups but it is plausible that distributors/wholesalers are.
A very common PE strategy these days are "rollups" where a PE fund will buy a bunch of independent operators and consolidate them into a single bigger business. They say it's about operational efficiency but it's not crazy to think they're also building and exercising market power.
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The distributors and wholesalers operate under tight margins, too.
This works in some markets. Food is not one of them.
Think about it this way: inflation is evidence that companies are charging more because they can or must.
But "it's macroeconomics" is a lot less satisfying than "some greedy dude," so I guess we're going with it.
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If a lot of people raise prices bc they can then there is tautologically inflation. Like I said I don't think rising markups are the main driver of inflation but it's a plausible mechanism at slower-than-business cycle frequencies.
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It's not tautological, it's cause and effect. Companies can't raise prices normally or they get priced out.
There are a ton of mechanisms that can raise prices. Greed is not plausibly one of them in the food sector.
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They can raise prices as they gain market power
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Everyone's prices are always as high as they can manage. Market realities force sellers to keep their prices in line with the value they individually provide, in competition with one another and always edging each other out. The only thing that can cause higher prices across the board is either less wealth for sale or more units of value measurement floating around.
Inflation is always and everywhere a monetary phenomenon.
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Markups are rising lol the world is not in perfect competition.
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Anyways Kamala's proposed solution of price controls on products is stupid af. Retail margins are fricking awful and the only thing price controls will do is just have most places stop stocking a lot of affected products.
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Dairy in leafland is price controlled, and it still costs you 8$ a gallon, retailers only keep it because they're forced to and no one makes money on milk.
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Yeah I think retail price controls is an r-slured idea but more aggressive antitrust enforcement is a good idea.
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When you dump new money in the economy, things don't immediately inflate everywhere at the same time. It's called the Cantillon Effect; those closest to the source of new money experience inflation before those farther away from the source of new money.
The net result is that cheap money flows away from those close to the money printer and wealth flows toward them. Those who get new money first benefit at everyone else's expense.
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How is this related to inflation? You read a comment from some rando and go on a rant about distributors magically and solely being the cause for higher prices. How dumb are you?
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If markups (prices) rise across the board then that is literally inflation lmao. Rising markups in aggregate tautologically cause inflation. I don't think that explains a quantitatively large share of inflation but it's a coherent mechanism.
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Yes, rising nominal prices are indicative of inflation. What causes that? It's not distributors, you r-slur. Where do you think money comes from? What controls the supply of money?
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lol saved
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