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massive inflation now if we had higher labor costs . the only thing holding the line on it is the fact that we all have to make decisions as to whether to buy this or that and not this and that.
with the huge rise in commodities the only thing holding price increases to a min is wage costs.
Although I agree in theory with you mahtjak..I also understand that although things would cost more if we paid higher wages and provided everyone with benefits, our society would be much better off. Sure you pay $10 for a cup of coffee, but your compensation would also go up. Everything costs more BUT everyone is paid more AND have better benefits.
You are paid X amount more and pay $10 for coffee, the barista gets paid much more and has lots of benefits, who in turn pays more for whatever it is they buy, and on and on. When you are worried about paying $10 for a cup of coffee, you are forgetting the other side of the equation: People are paying it...and can afford to pay it, otherwise it would not be $10.
I don't think we should be mandating everyone gets paid minimum $20 per hour, I think we should be mandating a wage that must also include full benefits, no matter what the job. If you work, you get full benefits, and if costs go up because of it..so be it..we are better off as a society. The reality is we pay for it indirectly in taxes already..and its far more inefficient/wasteful/expensive that way.
I am not afraid of inflation as much as others...if prices go up, they can only go up so much that the market can support it. Commodoties only go as high as people can pay...and that's how it should be.
And I don't think that the purchasing decisions are quite that linear.
Just as in economic down times, people downgrade their purchasing decisions (store brand vs name brand, Hyundai vs Lexus, McD coffee vs Starbucks), during better times, they'll do the opposite. It's not an automatic assumption that consumers would automatically buy "more".
I don't think they would automatically do anything...consumption will change as we go through different economic cycles, and as a result so will pricing. For example, if the economy goes down, and less people are buying Lexus and more are buying Hyundai..pricing will change for both, so it all balances out. Less people buying Lexus = price drops, more people buying Hyundai = price increases. This is all healthy and normal.
But to relate this back to topic, rents in NYC are now detached from expenses, as a direct result of rent control and stabilization...which is not healthy and normal. The costs of running a building, such as heating/water/repairs are completely detached from rents...rents can continue to be $500 a month for apts, while expenses can quadruple....and because of the rente regulations, rents can only go up whatever it is the board decides. Normal? Healthy? Good for NYC? Clearly it is not, and leads to big problems, many of which we have seen for decades: deteriorating buildings, abandoned properties, high rents for the few market rate tenants to make up for low rent tenants, and on and on.
I agree with that..and that's mostly because our economy has not changed. You have to fundamentally change our economy from the capitalist/few rich at the top everyone else poor/consumption basd/one bubble to the next bubble farce of an economy we have now FIRST. Otherwise it will be $10 cups of coffee, with an elite few able to afford it, while the other 90% of the population struggles to buy a gallon of milk for $15.
And that's primarily why our economy remains in the toilet...unless there is another bubble to spur artificial growth, we have nothing to drive our economy. We are now a 1 trick pony..one bubble to the next...and we are out of bubbles so there is no spending....and since 70% of our economy is consumption..well...there you have it. Get used to this economy..it will be here for awhile...that is unless our total economy changes (unlikely) or until the next bubble..whatever/whenever that is.
massive inflation now if we had higher labor costs . the only thing holding the line on it is the fact that we all have to make decisions as to whether to buy this or that and not this and that.
with the huge rise in commodities the only thing holding price increases to a min is wage costs.
I don't get it, a raise in wages would bring about inflation, yet three decades of stagnant wages have seen major inflation. It seems like either way we are going to have inflation and apparently the wages aren't what is causing it. At the sametime those at the top have seen a larger share of profit. OOOh, I got an idea, since we've sacrificed our wages and have been productive workers so that they may have a wider profit margin...why don't they sacrifice a portion of their profits? I mean, they still would make profit, but wait...then I'd be punishing success. Hmmm, well, I guess they can have it their way, with or without vaseline. Its the stagnation of wages while people are forced to depend on credit and pay 1/2 their income on housing, that isn't natural.
This is what I don't understand about the fundamentalist free market ideology, or any fundamental ideology. Its all dogmatic and provides no REAL solutions..."Get rid of rent control because its fundamentally wrong" "Keep rent control because market rates are unfair." There has to be a middle ground that is to be considered, the working class/middle class has sacrificed the most. I don't mind if inflation occurs due to a raise in the standard of living, thats natural.
wrong, we have not had major inflation at all. in fact deflation is and was a bigger fear. the rise in commodities has money being spent in some areas and pulled from others.core inflation is rather low.
inflation is still very tame believe it or not. if you lived thru the 70's and early 80-'s you would understand what inflation is.
even though commodities have risen by alot the wheat in a loaf of bread as an example accounts for only 10% of the price of a loaf of bread.
labor,production costs ,shipping and advertising account for 90%.. when those other costs shoot up then you will see real inflation .labor being the biggest cost is the biggest factor in the price of most finished goods.
while commodities have soared in alot of items 40-60% on wholesale levels ,on retail levels most products have moved 5-10% in price with the average around 7%.
many big budget things barely moved at all over the last few years and may have actually gone down like rents and housing costs.
most of us now spend more on food and energy so we may not have as much money to spend on other things. we all pretty much have a fixed amount to spend with out raises so by definition inflation is to much money chasing to few goods and that cant happen at this point.
our fear now is not inflation its deflation. with food and energy consuming more of our available dollars a slide backwards is possible if it keeps up.
look at the long term bond markets. after fear of soaring rates they fell to some of the the lowest levels in history as the words double dip recession are starting to rear its head again.,
we should get back on topic.
Last edited by mathjak107; 06-23-2011 at 05:46 PM..
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