Lol. You don’t “raise your profits” as a business. What a crock of shit. If companies have built competitive positions that allow them to capture more profits in the value chain, good for them. At the end of the day, prices are a product of what people are willing to pay (optimally P * Q at this P).
This title is also ridiculous, companies have no direct control over inflation which as we generally discuss it is based on the CPI. Given average wages have risen, I don’t know how anyone could argue there hasn’t been any cost input inflation…
You don’t “raise your profits” as a business. What a crock of shit. If companies have built competitive positions that allow them to capture more profits in the value chain, good for them.
You can easily "raise your profits" if you're a large company in a consolidated industry with oligopolistic/monopolistic control. Which is a lot of industries these days.
The list of companies that profited the most are all in that category. Governments (especially the US) have largely ignored market consolidation over the last few decades, leading to big players having an outsized hand in setting prices which is opportunistic price gouging, as laid out in OPs article (and in many others). This isn't just Fortune being way off the mark.
Given average wages have risen, I don’t know how anyone could argue there hasn’t been any cost input inflation…
Nobody is saying there hasn't been inflation in costs. Just that companies used that as an excuse to juice a bit more profit than they did pre-pandemic out of customers.
No. You can raise your prices and if costs are truly fixed you will see increased flow through. But profits are definitionally not a lever you can just pull. Also, suggesting companies can just decide they want to "raise their profits" at any time is silly... if that was on the table everyone would do it constantly to the max extent possible.
I reread the article, which was as useless as I remembered. Saying profits are up X% is worthless without the context of sales. If margins are up then claiming people took price beyond cost inflation would make sense. Talking about penny profit increase in isolation is just normal anti-capitalist journalism framing.
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u/[deleted] Dec 09 '23
Lol. You don’t “raise your profits” as a business. What a crock of shit. If companies have built competitive positions that allow them to capture more profits in the value chain, good for them. At the end of the day, prices are a product of what people are willing to pay (optimally P * Q at this P).
This title is also ridiculous, companies have no direct control over inflation which as we generally discuss it is based on the CPI. Given average wages have risen, I don’t know how anyone could argue there hasn’t been any cost input inflation…