1. Everyone is talking about rising prices and there are a lot of factors that contribute to inflation but one important factor is almost never discussed: concentrated corporate power
Follow along if interested
popular.info/p/how-concentr…
Follow along if interested
popular.info/p/how-concentr…
2. In a competitive economy, profit margins should approach zero (as long as there are reasonable substitutes)
In the US, corporate profits as a share of the American economy have risen dramatically over the last two decades, from 5% of GDP to nearly 12%
popular.info/p/how-concentr…
In the US, corporate profits as a share of the American economy have risen dramatically over the last two decades, from 5% of GDP to nearly 12%
popular.info/p/how-concentr…
3. In other words, corporations are not being *forced* to raise prices to stay afloat.
They are choosing to raise prices to maintain large profit margins because they have enough market power to do so without losing customers
popular.info/p/how-concentr…
They are choosing to raise prices to maintain large profit margins because they have enough market power to do so without losing customers
popular.info/p/how-concentr…
4. Let's take @ProcterGamble as an example. It produces a large range of consumer goods, including diapers.
In April, it announced that it would be implementing price increases in the mid to high single digits to offset "rising costs for raw materials"
popular.info/p/how-concentr…
In April, it announced that it would be implementing price increases in the mid to high single digits to offset "rising costs for raw materials"
popular.info/p/how-concentr…
5. But in its last quarterly earnings report, P&G reported $5 billion in profits on margins of 24.7%. The profit margin INCREASED by about 5% since it was jacked up prices. @ProcterGamble also spent about $3 billion buying its own stock
popular.info/p/how-concentr…
popular.info/p/how-concentr…
6. How can P&G get away with selling diapers at large margins? The diaper market isn't very competitive. The market is dominated by P&G and Kimberly Clark, which also raised its prices.
Consumers don't have options.
popular.info/p/how-concentr…
Consumers don't have options.
popular.info/p/how-concentr…
7. It's not just P&G. PepsiCo, Coca-Cola, Whirlpool, Conagra, Hasbro, and Chipotle all announced both price increases and reported increased profits.
popular.info/p/how-concentr…
popular.info/p/how-concentr…
8. Kroger CEO Rodney McMullen was quite open about his intention to exploit inflation to increase profits. "A little bit of inflation is always good in our business," McMullen said.
popular.info/p/how-concentr…
popular.info/p/how-concentr…
9. For in-depth reporting on how corporations use and abuse power, subscribe to my newsletter, Popular Information.
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