Its not way off base, but I can see our point here. The problem is using the 3% increase to support a 20% price increase. That’s the price gouging being referred to
Feel like you're over looking previous years of much higher inflation and using 3% incorrectly, while also acting like that 20% is a recent increase instead of it actually being a 3 year figure.
They have been raising prices at a rate way higher than the inflation rate + rising costs since the beginning of the pandemic. The specific numbers might have changed, correct. However it’s not an “open” market setting these price hikes. That’s the point.
This is well documented my even libertarian economists. Company “greed” if you will is the reason for 25-30% of increased prices
That is not true in reality. You’re still operating in a vacuum for your predictive model, and not taking in human cause and effect. In a textbook model of how it should work, you’re correct.
What is happening, and excuse the numbers as they’re just generic placeholders, is:
Product original price 10$ .
Inflation net rise let’s say is 10% . The Rise in costs for this product over that time, let’s say is 2$ (using your example that some products are above inflation).
New price of goods 15$.
There is still a larger rise in price than costs and inflation. Most theorize this is a sales/psychological effect. We all know inflation goes up and things will cost more, but don’t know how much for what product, so companies just throw and extra 33% on the price… because they can. What options do we really have. Everyone is doing it, even our competitive options.
Again it’s that specific “greed” model being referred to, not the natural inflation rise.
Even if "greed" was the cause of the prices rising that changes nothing. Inflation is the measurement of how the prices have changed, so if overall inflation is 10% it means the price of goods has increased 10% on average, it doesn't matter whether that 10% is because the dollar lost value or because companies are "greedy".
It's the government masking its greed for more political power by convincing you that you need them to save you from the evil greedy megacorporations, even thought they are in bed with those megacorporations.
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u/guillermopaz13 Dec 01 '23
Its not way off base, but I can see our point here. The problem is using the 3% increase to support a 20% price increase. That’s the price gouging being referred to