That’s because inflation is the relevant factor for considering consumer well-being, and because prices can go up for any number of reasons.
For example, prices can go up due to a shortage. Suppose there is a corn blight, and 90% of corn fields are destroyed one year. We expect the price of corn to go up, then, because corn is now scarce. People can switch to other grains for any deficiencies in nutrition they have - but we still need to ask, what should we do with our remaining corn? How much should go to corn on the cobb, creamed corn, corn meal, corn oil, or doritos? Some people want to make their family’s traditional corn bread for thanksgiving. Some people want to eat doritos more than anything else in life. Some people never eat corn anyway since it gives them a stomach ache. And some people exclusively eat corn instead of flour due to a gluten sensitivity that every doctor they’ve seen assures them isn’t real, but their osteopath/shaman confirmed using magic crystals. If corn stays the same price as before the shortage, the first person to get to the store buys it all and hoards it. But using the signalling mechanism inherent in higher prices, everyone is persuaded to only buy as much corn as they really need. And at the same time, farmers who might be economically devistated by their poor yeilds are able to recoup their losses, and are reassured that if they can find a way to fight the blight, a market for their product will still exist.
As for greed - we don’t talk about it because it is uninteresting. It is a constant. It would be like talking about the effect of gravity on crop yeilds - it isn’t going to change, so it doesn’t matter. What does matter is the anti-competitive practices you are describing, which should be controlled via strong regulations and regulatory bodies.
I’m not saying we measure inflation incorrectly, I’m saying I’m annoyed when people act like greed isn’t a part of it. And yes, by greed I mean “anti competitive practices”.
I have yet to meet anyone who had a strong opinion that anticompetitive practices were not happening. Usually when I talk about inflation, we discuss numerous factors like shortages, the fed interest rate, how some amount of inflation is reasonable to maintain a stable market, etc. And then one of us will say “and there is probably some price fixing going on that we don’t know about”, and everyone will agree that - knowing how profit-seeking companies work - this is probably the case, but we personally have not seen any strong evidence.
That’s because inflation is the relevant factor for considering consumer well-being, and because prices can go up for any number of reasons.
For example, prices can go up due to a shortage. Suppose there is a corn blight, and 90% of corn fields are destroyed one year. We expect the price of corn to go up, then, because corn is now scarce. People can switch to other grains for any deficiencies in nutrition they have - but we still need to ask, what should we do with our remaining corn? How much should go to corn on the cobb, creamed corn, corn meal, corn oil, or doritos? Some people want to make their family’s traditional corn bread for thanksgiving. Some people want to eat doritos more than anything else in life. Some people never eat corn anyway since it gives them a stomach ache. And some people exclusively eat corn instead of flour due to a gluten sensitivity that every doctor they’ve seen assures them isn’t real, but their osteopath/shaman confirmed using magic crystals. If corn stays the same price as before the shortage, the first person to get to the store buys it all and hoards it. But using the signalling mechanism inherent in higher prices, everyone is persuaded to only buy as much corn as they really need. And at the same time, farmers who might be economically devistated by their poor yeilds are able to recoup their losses, and are reassured that if they can find a way to fight the blight, a market for their product will still exist.
As for greed - we don’t talk about it because it is uninteresting. It is a constant. It would be like talking about the effect of gravity on crop yeilds - it isn’t going to change, so it doesn’t matter. What does matter is the anti-competitive practices you are describing, which should be controlled via strong regulations and regulatory bodies.
I’m not saying we measure inflation incorrectly, I’m saying I’m annoyed when people act like greed isn’t a part of it. And yes, by greed I mean “anti competitive practices”.
I have yet to meet anyone who had a strong opinion that anticompetitive practices were not happening. Usually when I talk about inflation, we discuss numerous factors like shortages, the fed interest rate, how some amount of inflation is reasonable to maintain a stable market, etc. And then one of us will say “and there is probably some price fixing going on that we don’t know about”, and everyone will agree that - knowing how profit-seeking companies work - this is probably the case, but we personally have not seen any strong evidence.
If you believe that greed is paying into inflation then I’m not talking about you, simple as that.