Why is there so much inflation at the grocery store?

Author: IwantRooseveltagain

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#1
IwantRooseveltagain
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If you answered Biden or Democrats you are an idiot.

We all know or should know that inflation is fundamentally caused by an imbalance between supply and demand. With increasing wages, low unemployment and an economy rebounding from the Covid-19 shutdowns we have higher demand. With supply disruptions, worker shortages, the War in Ukraine and an effort to punish Russia with sanctions, global and regional supply is constrained.

So how do we bring supply and demand back into balance? This is not a question any Republicans have made an attempt to answer.

How to lower demand?

We could trigger a recession and job losses that will curb demand. We can increase borrowing costs to consumers to curb demand but that might restrict supply by making it more expensive to buy new equipment to increase productivity. 
We could curb demand by cutting the wages of those who have jobs and we could raise taxes leaving less money in peoples pockets to buy with.

We all remember the last time we had this high of inflation in 1982 under Reagan. Paul Volker, the Fed Chair pushed up the prime rate to 20% to knock down demand. The result was 10% unemployment and a recession. Is that what people want today? I guess it depends if you are one of the people to lose your job.

How to increase productivity and supply?

We need more workers. We need immigrants.
We need corporations to do their jobs, not to try to make more money by producing less like the oil companies do. Capitalism is failing.
We need the war in Ukraine to end.
Farmers get a lot a money and support from the government. Is this money going in their pockets or helping to lower prices?
We haven’t built a new refinery in the United States since 1973. Maybe the government should buy and operate one or two to keep the oil companies honest. It would be run like a public utility.

#2
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Only idiot on this website is you!
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#3
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@TWS1405
Hi LCpl.
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@TWS1405
Obviously Hitler is to blame.
#5
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With increasing wages, low unemployment...worker shortages....
Lol, the ramblings of a madman.
#6
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So how do we bring supply and demand back into balance?
drill baby drill.
#7
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We need more workers. We need immigrants.
So import slaves, ok

We need corporations to do their jobs, not to try to make more money by producing less like the oil companies do.
Making money by producing stuff is their only job.

Capitalism is failing...
Crony Capitalism is still in full swing with the recent subsidies to corporate green energy and the shutting out of the competition of fossil energy.

We need the war in Ukraine to end.
Politicians and corporate government contractors do not.

Farmers get a lot a money and support from the government. Is this money going in their pockets or helping to lower prices?
Both. But it's along the lines of the broken window fallacy as we don't know how much lower prices for non-subsidized goods would be if farmers were free to grow what they wanted to without the financial incentives from the government.

We haven’t built a new refinery in the United States since 1973. Maybe the government should buy and operate one or two to keep the oil companies honest. It would be run like a public utility.
Unlikely as then politicians would lose their jobs for "destroyin da planet"
It's the same reason NEPA restrictions are never rolled back.
Also the same reason no modern Nuclear plants are not considered.

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#8
IwantRooseveltagain
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Making money by producing stuff is their only job.
Right, but they are making money by NOT producing stuff, to cut supply and drive up prices. That’s my point. The airline industry does this too. By supplying less seats we make more money by driving up the price. Marine if power companies did that. Now whoever can pay the highest price gets electricity and others have to go without.

Crony Capitalism is still in full swing with the recent subsidies to corporate green energy and the shutting out of the competition of fossil energy
That’s nonsense. Coal companies are the ones looking for welfare. And oil companies  get tons of welfare from the government too.

Unlikely as then politicians would lose their jobs for "destroyin da planet"
It's the same reason NEPA restrictions are never rolled back.
Also the same reason no modern Nuclear plants are not considered.
Not true

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#9
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drill baby drill.
You sound like that idiot from Alaska

The oil companies have plenty of places to drill. They are choosing not to drill to drive up prices and profits

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They are choosing not to drill to drive up prices and profits
Most jarheads can understand how much more expensive it is to drill in 2022. We can make an exception for you though as a special case.
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@IwantRooseveltagain
So your solution is to tell people not to eat and work harder? And you hate corporations why?
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@Public-Choice
I would ask every person who says "oil companies can drill, they just choose not to because it makes more money," to apply for a small business loan, go through the very expensive permit process, and then explain as a small independent oil driller exactly how not drilling while still making loan payments is in any way profitable.

If you were to also tell the bank of your business plan, explain how you could possibly be granted a business loan for not drilling?


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@Greyparrot
apply for a small business loan, go through the very expensive permit process, and then explain as a small independent oil driller exactly how not drilling while still making loan payments is in any way profitable.

So when I worked for a small pool construction company, because my owner was a familiar face he was fast tracked. But when I went in for him, it was a nightmare and they needed all these sorts of verifications I didn't have.

There's a secret system in place for those who already use it a lot that gives them special advantages that newbies don't have.

Not to mention the fact that these corporations and billionaires practically buy out politicians at the state and local level and there you have it. Fast tracking everything.

While the rest of us wait in line, they basically run the line and control the requirements for the line. 
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a small independent oil driller exactly how not drilling while still making loan payments is in any way profitable.
Ya, that’s the problem dummy - the small independent oil drilling companies. They totally dictate the price of oil and gas. (sarcasm)

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@Public-Choice
So when I worked for a small pool construction company, because my owner was a familiar face he was fast tracked. But when I went in for him, it was a nightmare and they needed all these sorts of verifications I didn't have.
Now that’s crony capitalism aka good ole boy club.

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Here you go genius - oil companies reluctant to drill.

“… a sizable number of oil and gas executives are saying they won't increase production at any price, according to a survey released this week by the Federal Reserve Bank of Dallas.“

“…many companies are choosing to enjoy their high profits rather than increase the supply of oil.”

“…major oil companies are also sending $50 billion in dividends to shareholders, and are on track to buy back $38 billion in stock this year, a move that further boosts investors' coffers by increasing the value of their holdings.”

“The Dallas Fed survey echoes recent comments from fossil-fuel CEOs, many of whom have pledged not to increase output in order to preserve profits”


In the Age of Information, ignorance is a choice.
#17
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Ya, that’s not the problem- the small independent oil drilling companies. They totally do not dictate the price of oil and gas
Very true, so why are they not drilling since, as you say, small independent drillers can't lower the price of oil by drilling? 

Obvious answer is obvious, even to a jarhead.

A quick lookup showed you can lease an oilwell yourself for a few hundred thousand a year. Your very own oil well. Why are you not doing that if you think you can make so much money right now?

Obvious answer is obvious.
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#18
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Very true, so why are they not drilling since small independent drillers can't lower the price of oil by drilling? 
Are you stupid? Never mind I already know the answer to that. 

Who says they aren’t drilling? But Small drillers don’t matter when it comes to influencing the price of gasoline. We are talking about the big oil companies refusing to drill so they can keep prices elevated, pad profits, pay dividends to investors, and do stock buybacks.

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Small drillers don’t matter when it comes to influencing the price of gasoline
I don't give a shit about the price. I care about the supply. And you have no answer for why independent drillers are not drilling right now.

Mike Oestmann, CEO of private-equity-backed Tall City Exploration, said "he isn’t concerned about running out of inventory but estimates the costs to drill a well and bring it online are up about 40% over past year(2021) because of soaring costs for material and labor"

Oh whoopsie, did Biden accidentally break something again? whoopsie doodle doo

So these small oil companies go up to him and say "Yo Joe, you know that whole lockdown and then paying people to not work plus printing trillions and devaluing the dollar that kinda screwed us...can we like, get some relief on permit costs or something?"

Old Joe: "Nah, we good, but I heard Exxon was hiring, I might know a guy"

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I don't give a shit about the price. I care about the supply. And you have no answer for why independent drillers are not drilling right now?
Who says small drillers aren’t drilling?

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I don't give a shit about the price. I care about the supply. And you have no answer for why independent drillers are not drilling right now.
Mike Oestmann, CEO of private-equity-backed Tall City Exploration, said "he isn’t concerned about running out of inventory but estimates the costs to drill a well and bring it online are up about 40% over past year(2021) because of soaring costs for material and labor"
Oh whoopsie, did Biden accidentally break something again? whoopsie doodle doo
So these small oil companies go up to him and say "Yo Joe, you know that whole lockdown and then paying people to not work plus printing trillions and devaluing the dollar that kinda screwed us...can we like, get some relief on permit costs or something?"
Old Joe: "Nah, we good, but I heard Exxon was hiring, I might know a guy"
Oh the brain power! 
#23
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I 'would think that Covid and the Russian situation,
Are large contributors to inflation.

I don't see a need to bring in more immigrants,
More immigrants means the worker is less valued, get's paid less,

"the rural worker indeed demanded and received higher payments in cash (nominal wages) in the plague’s aftermath. Wages in England rose from twelve to twenty—eight percent from the 1340s to the 1350s and twenty to forty percent from the 1340s to the 1360s."
I'm cherry picking, and did not read the entire article.

. . .

Why keep saying we need more and more people in the world?
Logically there's an 'eventual ceiling to the number of people,
People say 'AHHH Global Warming,
Maybe less people, less cars, would help with that.

Course a problem with less people is military rivalry with other nations.

. . .

Capitalism is doing fine.

. . .

Economy wise, I don't care about Ukraine War,
Human wise, it sucks,
Military Strategy wise, I don't know, face value it seems in USA interests that apparent Russian aggression be discouraged, that USA sphere of influence stay strong.

. . .

Government forces farmers to grow and not grow what Government wants, against farmers will.
. . .

I don't like big government having too much power,
But I'm not against new communities forming and acting as they plan.
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#24
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@Lemming
More immigrants means the worker is less valued, get's paid less,
But we need more workers in this country, right?

#25
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@IwantRooseveltagain
You want to combat inflation by flooding the job market which will cause decreased wages for Americans already struggling. 

Am I understanding this plan correctly? 
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@IwantRooseveltagain
But we need more workers in this country, right?
Wrong. This is the shit capitalists pull all the time when they are trying to depress wages. Pretend there are shortages

Programmers make a lot
Nurses make a lot
Truckers make a good income

And coincidentally the people that have to pay them fair wages are continually bitching that we need to start having free training for these occupations, hand out visas and lower requirements for people to get those jobs
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@IwantRooseveltagain
I don't understand why we would need more workers.

I don't understand economics very well,
I don't have much information either,
So my theories and conclusions on economics are likely flawed,
. . .

There 'is logic in immigration to me,

Power in relation to other countries,
In ancient China, during various conflicts of civil wars,
There is value in getting more people,
More people equal more farmers, craftsmen, soldiers.
Though I think it was more immigration 'within the country, than immigrants from without.

In costs,
I've heard the argument that when there are more people, goods are cheaper,
But I'm not sure if this is related to 'bulk sales somehow,
Or if when there are more people, they tend to spread out, giving access to more resource types.

There is also the argument of genetics,
Where one doesn't want too much inbreeding in a population,
But I don't know if there might be a certain size reached, where that's no longer a concern,
I'd 'think that it wouldn't need to be that large a size.

Argument of talent,
Countries want to steal intelligent and hard working people from other countries,
Which is good for the stealer, bad for the stolen.
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@PREZ-HILTON
You want to combat inflation by flooding the job market which will cause decreased wages for Americans already struggling. 
Am I understanding this plan correctly? 
yes, we need to bring the supply and demand for labor into balance. That’s how you stop inflation for any product or service.
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@PREZ-HILTON
This is the shit capitalists pull all the time when they are trying to depress wages. Pretend there are shortages
So you are a conservative who doesn’t believe in capitalism?

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@IwantRooseveltagain
yes, we need to bring the supply and demand for labor into balance. That’s how you stop inflation for any product or service.
You mentioned the things that caused inflation and it was things like sanctions on Russia. COVID protocols etc.

1. Why not just end the things causing it?

I think the depressing of American wages should certainly be  the last option on the table if liberals want to claim they are for the working class and keep the support of powerful lobbying groups such as almost every American Union which make up millions of workers. 

I wouldn't overfocus on the supply and demand framing of economics. The theory not only has a lot of problems, but it's generally just used as an easy method of helping children understand a complex topic. So supply and demand has a bit of merit, but when it comes to policy decisions, things get more complicated and some times you can see the predictions made using a supply vs demand model to predict the opposite of what happens in reality.

This is the shit capitalists pull all the time when they are trying to depress wages. Pretend there are shortages

So you are a conservative who doesn’t believe in capitalism?
I would differentiate capitalists from capitalism. You can have capitalists without capitalism. These are the people who tend to gravitate to the top of the food chain no matter what the economic structure of the system. Jack Ma would be a capitalist for example. A little too much of one which is why the Chinese government disappeared jack ma, but he is a capitalist none the less. 

It's true though that conservatives can hate capitalism while liberals love it and visa versa.

I am probably fascist when it comes to how businesses should operate. They should contribute and do what is good for American society, in my opinion.

What I am talking about here is actually a practice I learned about from studying under devout communists. They discuss what is called a capital strike. Where occasionally capitalists will go on capital strikes. They'll try to depress wages not only from the methods I mention but by doing things such as intentionally harming their own income by running on skeleton crews. They'll try to massively increase unemployment artificially because it gives workers a weaker position to negotiate salaries from. 

The stuff you hear about a labor shortage right now is just another capital strike. They want liberals to be stupid and see it as a need to import more cheap labor. They also hope conservatives are stupid enough to fall for it and start pushing hard for work training programs etc.