Has there actually been an occurrence of widespread price gouging in the US?

[Hardkill]

Many liberals and progressives, including president Biden, have been accusing big corporations including oil and gas companies of price gouging ever since the beginning of the pandemic. That's why they have been floating a windfall profit tax proposal on all corporate profits.

“Record profits today are not because they’re doing something new or innovative. The profits are a windfall of war,” Biden said from the Roosevelt Room, alongside Treasury Secretary Janet Yellen and Energy Secretary Jennifer Granholm. “Enough is enough.”

Bernie Sanders recently said "...In a time of soaring corporate profits, are you prepared to support a windfall profits tax, or you're going to allow prices to continue to rise? Are we going to move forward in addressing the absolute greed in the healthcare industry and in the pharmaceutical industry, which is driving up prices?"

 

Centrist economists including Zandi, Summers, and Furman say that the idea that corporations have been price gouging during the pandemic is all bogus and that a windfall tax would a costly mistake.

Summers just said, “I’m not sure understand the argument for a windfall profits tax on energy companies,” Summers said on Twitter Tuesday morning. “If you reduce profitability, you will discourage investment which is the opposite of our objective.”

“If it is a fairness argument, I don’t quite follow the logic since even with the windfalls Exxon has underperformed the overall market over the last 5 years,” said Summers.

 

What do you guys think is the truth?

 

Edited November 1, 2022 by Hardkill

[Gidiot]

People would stop caring about the economy if their survival needs were met. And that’s all I have to say really, the vast majority only care about this crap because it effects their survival $2 more dollars here and there for gas. Like it’s such a huge issue, I say undermine the whole worry about the economy. And I don’t know the reality, but human greed is a huge problem so I’m going to probably blame that. 

[avatarse]

IMO it's as easy as comparing inflation to increase in profits.  The data shows profits vastly higher then inflation.  (Depending on markets of course)

 

And one can argue free market, but what if corporations are colluding on prices?  In Canada that isn't close to unheard of with groceries.  In the US, tech companies colluded to suppress wages.

 

So I would say that a huge investigation is in order, at a minimum.

Edited November 5, 2022 by avatarse

[Hardkill]

Alright then, let's get the FBI and the SEC on top of this.

[Heart of Space]

Trump blew up the economy with overleverage.  The Trump initiated rollback of the Obama administration Dodd-Frank Act was catastrophically stupid. 

The FED supposed to be independent but Trump be like "hey FED lower interest rate so American citizens take out too many loans."  

Trump be like "I like taking out loans because while it's higher risk, it gives me more capital so that I can make investments."  

Obama be like "Some of these banking folks are little too focused on short term competitive advantage (higher risk) with more institutional leverage (credit/loans), so we want to regulate that down and make sure our large financial institutions can withstand recession events without completely collapsing the heart of our economic system (large banks)."

Trump be like "loans loans loans loans, nothing bad will happen loans loans loans, private loans, car loans, house loans *rap music beat* and don't forget bank loans, corporate loans, corporate thievery through stock buybacks is good cause it makes me and everyone I like rich."

 

If you knew how good this economic analysis was you'd put it on the front page.   

[Heart of Space]

The FED is an extremely innocent organization (genuinely). Although sometimes they make improper decisions based on bad predictions of the future.  Think the great COVID panic, they didn't need to turn down interest rates.  But hey, when you're predicting mass human behavior and are getting false indicators what can you do, eh?  You kind of have to count on the system being robust enough to handle times of strife, which was hurt by Trump economic policies prioritizing competitive advantage.  

The stimulus money, which was given to the government by the FED, was enough to solve the problems posed by the economic slow down due to COVID.  Trump exacerbated the size of the stimulus needed to fix the economy by making our financial institutions more wobbly due to allowing more leverage in the system.  Trump also somewhat influenced the FED to lower interest rates, although COVID was pretty spooky to economists at the time so we prepared for a Cat 5 hurricane instead of the Cat 3 that it was.  

The massive stimulus money, plus lower interest rate loans most notably shot up the value of house and car prices immensely ruining our economy (go check housing price index charts and car price index charts and be in shock of the mess).  

And then the democrats took office to clean up the massive pile of dookie left in the oval office chair.  There's a critique of the democrats policies too, though they are mostly pointed in the right direction.  Democrats tend to have a misappropriation of importance issue in their politics (like valuing the saving the environment over focusing on the immediate and far more relevant issues).  

[Topspin715]

Corporations are profit optimizing machines and many will do whatever they can to use their market and political power to maximize the bottom line.  to a large extent, american corporate law requires them to do that.  Many corporations will cross moral boundaries to do it sometimes, but definitely some more than others, and in industries like big pharma the opportunities for fraud are so large that they tend to do it more.

 

I'm not sure if that's been happening because of inflation the past year, its a cause of inflation, or some aspects of both.  the liberals are very critical of capitalism and business, especially in today's political climate, but you can be sure that much of what they say is an exaggeration.  I haven't yet figured out how valid their criticisms are but corporations will often exploit their customers and counterparties if they can.    

[Heart of Space]

2 hours ago, Topspin715 said:

Corporations are profit optimizing machines and many will do whatever they can to use their market and political power to maximize the bottom line.  to a large extent, american corporate law requires them to do that.  Many corporations will cross moral boundaries to do it sometimes, but definitely some more than others, and in industries like big pharma the opportunities for fraud are so large that they tend to do it more.

Corporations are ran by some of the most wise and intelligent human beings on earth.  They love their families, country, and are okay with the billions supplied to Africa for humanitarian purposes.  Definitely do not demonize our fine American business men and women.  Some of them would shock you with their brilliance and compassion.  

[Topspin715]

2 hours ago, Heart of Space said:

Corporations are ran by some of the most wise and intelligent human beings on earth.  They love their families, country, and are okay with the billions supplied to Africa for humanitarian purposes.  Definitely do not demonize our fine American business men and women.  Some of them would shock you with their brilliance and compassion.  

Wow is this serious?  the number of CEOs that fits that criteria is very small but they do exist.  Capitalism is the best economic system for the US right now but it is riddled with problems and abuses and corruptions