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Speaker 1: Hey, everybody, guess what if you didn't hear already, it's

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Speaker 1: time you knew. We're going back on the road doing

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Speaker 1: live shows somewhere near you.

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Speaker 2: That's right. May twenty ninth, thirtieth, and thirty first, we

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Speaker 2: will be in Medford, Mass then Washington, d C. Then

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Speaker 2: New York City, New York City, that's right. Following that up,

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Speaker 2: we're going to be in Chicago on the seventh of August,

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Speaker 2: Minneapolis on the eighth of August, and Indianapolis on the

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Speaker 2: ninth of August, and then we're gonna wind out the

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Speaker 2: year in September in Durham, North Carolina in the fifth

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Speaker 2: and then right here in Atlanta on September seventh. Please

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Speaker 2: come out and see us live. It's a great show.

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Speaker 2: You're gonna have a great time, and we look forward

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Speaker 2: to seeing everybody.

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Speaker 1: Yes, And for tickets and information, just go to link

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Speaker 1: tree slash SYSK live or go to stuff youshould Know

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Speaker 1: dot com and click on the tour button and we'll

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Speaker 1: see you guys this year.

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Speaker 2: Welcome to Stuff you Should Know, a production of iHeartRadio.

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Speaker 1: Hey, and welcome to the podcast. I'm Josh and there's

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Speaker 1: Chuck and Jerry's here somewhere and this is stuff you

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Speaker 1: should know. The Timely Topical Edition. I haven't done one

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Speaker 1: of these in a while.

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Speaker 2: Job. Yeah, Fight the Power Edition.

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Speaker 1: I guess. So kind of seems that way, doesn't It

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Speaker 1: Like there's really very few ways to discuss this and

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Speaker 1: not kind of come out on that side.

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Speaker 2: Yeah. I'm kind of glad you picked this one because

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Speaker 2: with all the talk of you know, food grocery store

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Speaker 2: prices and stuff, in the back of my mind, I've

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Speaker 2: been thinking, like, all right, I know there were some

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Speaker 2: reasons for this, but I also wonder if they just

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Speaker 2: raised prices a lot because they could, right, and that's

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Speaker 2: kind of what happened.

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Speaker 1: Yeah, it true seems that way, Like I think, kind

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Speaker 1: of at the end of the day, the discussion over

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Speaker 1: what we're talking about, which is called greedflation, which is

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Speaker 1: a fairly new right. The idea isn't that food companies

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Speaker 1: made massive profits over the last few years, starting in

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Speaker 1: the pandemic, right, Like, There's just basically no way you

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Speaker 1: can argue that that didn't happen. It's been documented. The

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Speaker 1: issue at hand is whether that constitutes something beyond the

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Speaker 1: norm of capitalism, or is that just that's what happens

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Speaker 1: in the free market when there's you know, weirdness to it.

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Speaker 1: You know, that's the that's the question. In my mind.

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Speaker 1: What it really comes down to is your interpretation of

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Speaker 1: whether there's I don't know, maybe some sort of basic

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Speaker 1: moral responsibility for certain kinds of companies or companies that

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Speaker 1: deal in certain kinds of goods to not just make

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Speaker 1: as much money as they possibly can. I don't know.

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Speaker 1: I think that's the that's the actual debate over it.

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Speaker 2: Now, let me ask you this, is it possible to

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Speaker 2: be a person who says, you know, I'm at that

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Speaker 2: percent behind capitalism and let it run amok and that's

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Speaker 2: just let it work itself out, and then also complain

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Speaker 2: about food prices like can those things co exist?

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Speaker 1: Yes? Those people are called the worst.

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Speaker 2: Okay, so it can co exist. I think so people

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Speaker 2: you don't want to hang out with.

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Speaker 1: Right exactly?

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Speaker 2: Okay?

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Speaker 1: Yeah. I think conversely too, you can be totally pro

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Speaker 1: capitalists and still be like the idea that it's just

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Speaker 1: business is kind of a moral.

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Speaker 2: Yeah.

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Speaker 1: I don't think you have to you have to pick

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Speaker 1: one side or the other. I think that it's a

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Speaker 1: little grayer than that.

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Speaker 2: All right, shall we jump in.

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Speaker 1: Yeah, let's so. Ultimately what we're talking about are increases

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Speaker 1: and prices at the grocery store on levels that we

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Speaker 1: just haven't seen before. Like, you're not crazy, the prices

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Speaker 1: at the grocery store are bonkers. Apparently, in twenty twenty

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Speaker 1: two in America, the inflation for food at grocery stores

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Speaker 1: increased eleven point four percent, and then in twenty twenty

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Speaker 1: three it added another five percent, and that was, you know,

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Speaker 1: half a little a little more than half of what

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Speaker 1: the increase had been in twenty twenty two, but it

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Speaker 1: was still double with the normal annual increases of two

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Speaker 1: point five percent, that's how much food typically inflates year

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Speaker 1: over year at the grocery store. Instead, in two years,

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Speaker 1: it inflated by almost seventeen percent. Wow. Yeah, And there

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Speaker 1: were reasons for this, Like there's a standard narrative, which

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Speaker 1: is there's just a handful of reasons that everybody points

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Speaker 1: to like this is why.

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Speaker 2: Yeah, and there's you know, we're going to talk I

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Speaker 2: guess a little bit about kind of the standard explanations

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Speaker 2: that we've been hearing for the past couple of years,

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Speaker 2: which we're not saying is you know, bunk or anything

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Speaker 2: like that, because, as you'll see, I think is a

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Speaker 2: pretty even handed episode. We might get a hot hot

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Speaker 2: under the collar, but I think there's reason to be

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Speaker 2: So here we go. So one thing you will hear

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Speaker 2: and have heard a lot is, you know, the pandemic's

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Speaker 2: obviously a big reason for all this, the biggest driver

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Speaker 2: of it, and the disruptions to the supply chain. Whether

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Speaker 2: you were building a house or whether you were a

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Speaker 2: food company marking up your goods, the supply chain squeezed out.

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Speaker 2: It seems like everything on the planet, and there were

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Speaker 2: food item shortages, there were ingredient shortages, and that was

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Speaker 2: one of the drivers for inflation.

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Speaker 1: Yeah, even packaging shortages. Like a good example is that

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Speaker 1: caffeine free coke was temporarily discontinued because there was a

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Speaker 1: shortage of aluminum, which meant that coke had to basically

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Speaker 1: ration their cans, and regular coke sells more than caffeine

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Speaker 1: free coke, so they just basically focused on coke for

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Speaker 1: a little while. Yeah, that caused a shortage. It was

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Speaker 1: just that sort bizarre and meandering in some cases, right.

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Speaker 2: Yeah, which had nothing to do with raising prices, But

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Speaker 2: that's just a side.

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Speaker 1: Note, right, it's true. Yes, you're right.

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Speaker 2: So people ate at home a lot more during the pandemic, obviously,

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Speaker 2: so there was more demand that you know, these goods

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Speaker 2: were in shorter supply, and all of a sudden, there's

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Speaker 2: more demand for fewer those goods. And that is just

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Speaker 2: inflation one on one as far as how things get

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Speaker 2: out of control.

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Speaker 1: Right. And then so if you are a processed food company,

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Speaker 1: you have to use ingredients, and a lot of ingredients

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Speaker 1: were scarcer, and the cost of the ingredients went up, right,

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Speaker 1: So that means that they raised their cost because they

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Speaker 1: raised the prices of their products because their costs increased,

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Speaker 1: So their marginal cost, which is the cost to put

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Speaker 1: everything together and deliver it and all that stuff package

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Speaker 1: it increased, which means they increased their markup their profit,

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Speaker 1: which means you put those two together, the price increases

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Speaker 1: in unnecessary clue GI economic terms.

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Speaker 2: Yeah, and we're going to talk more in depth about

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Speaker 2: this stuff, obviously, but you know, usually if there's like

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Speaker 2: if it's you know, if it's not a pandemic, and

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Speaker 2: they're just happens to be an ingredient that is getting squeezed,

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Speaker 2: and so the cost of making a bag of Cheetos

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Speaker 2: or something costs more. They're not gonna companies aren't gonna

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Speaker 2: be like, oh, we've got to raise a price. Then

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Speaker 2: they'll just sort of absorb that to keep the prices

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Speaker 2: kind of steady and keep things flowing. That wasn't the

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Speaker 2: case during the pandemic.

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Speaker 1: Though, No, and Chuck, that is that is a key

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Speaker 1: thing to understand, is what we are seeing those markups,

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Speaker 1: the difference in the price and the cost of the

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Speaker 1: company's pay to actually produce the product. Like that, that's

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Speaker 1: we've just never seen anything like this before. Economists are like,

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Speaker 1: I've never seen anything like this before in my forty

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Speaker 1: years of studying you know, food delivery and food supply

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Speaker 1: chain stuff.

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Speaker 2: Yeah, and then people said, you've been studying that for

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Speaker 2: forty years, and.

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Speaker 1: The guy's like, yes, someone please let me stop exactly.

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Speaker 2: And then another thing that we heard here and there was,

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Speaker 2: you know, people got stimulus checks. A lot of people

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Speaker 2: did when unemployment was just so staggering during the pandemic.

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Speaker 2: So the government issued these checks. People had a little

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Speaker 2: more money in their pocket to spend, which was the idea,

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Speaker 2: and demand increased and so that push prices higher. The

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Speaker 2: thing is though Europe experienced the same inflation we did,

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Speaker 2: sometimes even worse as far as food costs go, and

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Speaker 2: they didn't get stimulus checks. So that one is a little,

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Speaker 2: I don't know, confusing.

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Speaker 1: I guess it is. This way to say it, it is,

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Speaker 1: but just based on classic economic theory, there's just no

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Speaker 1: way it didn't have some impact, you know what I mean? Yeah, sure,

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Speaker 1: in a way. You can also point to it as

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Speaker 1: being a very unusual factor that took place within the

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Speaker 1: context of a larger unusual period, which was the pandemic. Right,

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Speaker 1: you also had other things going on at the same time,

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Speaker 1: Like the pandemic wasn't enough. There were tons of bouts

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Speaker 1: of Avian flu that was killing hens left and right,

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Speaker 1: and I guess friar roasters, Yeah, the kind you eat too,

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Speaker 1: those chickens. So there was less chicken to go around

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Speaker 1: and less hens to lay eggs, which meant the price

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Speaker 1: of eggs and poultry would increase. What's interesting about that

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Speaker 1: is that as more hens were hatched and started laying

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Speaker 1: more eggs and the supply came back, the price of

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Speaker 1: eggs went down, And that is weird in the context

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Speaker 1: of what's been going on lately too.

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Speaker 2: Yeah, absolutely, and we'll talk about eggs more because, believe

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Speaker 2: it or not, eggs are a big story yet, you

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Speaker 2: know story. And then, of course, the thing we heard

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Speaker 2: a lot about was the war in Ukraine. That was

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Speaker 2: another sort of coexisting situation alongside the pandemic, which disrupted

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Speaker 2: wheat exports. You know, when you're a European country the

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Speaker 2: United States and you squeeze sanctions onto Russia, there's gonna

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Speaker 2: squeeze right back, and well, we've got oil that we're

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Speaker 2: not going to supply you anymore, and that's just going

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Speaker 2: to that squeezes everything. And all of a sudden, grain exports,

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Speaker 2: especially wheat, went up, which affects the cost of a

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Speaker 2: lot of foods.

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Speaker 1: Yeah, because the global economy is so interconnected that like

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Speaker 1: if if Europe is paying higher energy prices, that's definitely

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Speaker 1: going to affect the price of the things that American

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Speaker 1: companies are importing from Europe, right. Yeah, So all those

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Speaker 1: things put together added up to that unprecedented increase in

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Speaker 1: prices in the grocery store.

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Speaker 2: All right. So those are a lot of the reasons

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Speaker 2: that we've been hearing about, you know, over the past

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Speaker 2: few years. But as far as like, what this actually

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Speaker 2: looks like in a grocery store. I thought, you know,

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Speaker 2: we thought it'd be helpful if we break down just

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Speaker 2: what this looks like for just a person walking in

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Speaker 2: a grocery store.

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Speaker 1: Okay, so I'll be that person walking. Yeah, I've got

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Speaker 1: a hat on. Just imagine I have a cool hat on. Okay,

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Speaker 1: I don't I'm walking into the ground.

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Speaker 2: I don't know that I've ever seen anywhere hat.

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Speaker 1: Weirdly though, like I look weird right now.

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Speaker 2: Well, it's because you're wearing a hat and.

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Speaker 1: I'm walking in place.

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Speaker 2: But weirdly, I think I've seen you walk in place,

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Speaker 2: but I've never seen you where I hat. So if

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Speaker 2: you talk to the USDA, they will say the price

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Speaker 2: of food in the United States is twenty five percent

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Speaker 2: higher this last year in twenty twenty three than it

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Speaker 2: was in twenty nineteen. What and that was higher than

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Speaker 2: every other category on the planet except for transportation. And

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Speaker 2: that's why people are probably like you should also do

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Speaker 2: one on why airline by it costs, you know, one

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Speaker 2: thousand dollars to fly from Atlanta, New York. Now it

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Speaker 2: doesn't really a no, that's not true, but just airline

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Speaker 2: tickets are ridiculous now. Yeah.

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Speaker 1: Do you remember when you used to like get on

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Speaker 1: a plane and to be like a third full and

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Speaker 1: they'd still take off. They didn't cancel it.

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Speaker 2: Yeah, Which that's no good, Like let's fill the planes.

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Speaker 1: Up, for sure. But I mean, like, but true. Now

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Speaker 1: it's just cutthroat. It's like the oppas. It's like, oh,

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Speaker 1: you paid for your ticket a month ago, ts you're

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Speaker 1: off the flight.

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Speaker 2: Yeah yeah, and the expense anyway, all that to say

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Speaker 2: that food food prices rose over that three year period

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Speaker 2: or four year period, more than any other category except

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Speaker 2: for transportation. And I believe you already talked about the

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Speaker 2: food increase percentage wise. But if you're in a grocery store, sir,

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Speaker 2: with a hat weirdly walking in place, why don't you

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Speaker 2: start coming forward?

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Speaker 1: Okay, here, I come take off.

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Speaker 2: Your hat when you entered like a good gentleman.

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Speaker 1: No, I'm going to leave the hat on. Okay, sure,

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Speaker 1: it's a really cool hat.

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Speaker 2: And you might notice that that loaf of bread over there,

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Speaker 2: just that white sandwich bread is twenty two percent more

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Speaker 2: expensive than it was just two years ago. God, and sir,

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Speaker 2: I see you're thinking, like, well, forget that I'm gonna

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Speaker 2: bake my own bread. Well, good luck with that too,

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Speaker 2: because that all purpose flour is twenty one percent more

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Speaker 2: expensive and butter is thirty one percent more expensive. So

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Speaker 2: I don't even think about baking a birthday cake.

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Speaker 1: I can't even get a break on butter.

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Speaker 2: I can't even I know butter is. I mean that

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Speaker 2: stuff right off the stick.

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Speaker 1: So so okay, I'm still the guy in the hat.

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Speaker 1: I'm moving down another aisle. I'm like nuts. To make

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Speaker 1: it my own bread, I'll just eat a bunch of

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Speaker 1: ultra process stuff because that's dirt cheap. Everybody knows that.

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Speaker 1: Surely that hasn't increased in price.

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Speaker 2: No, no, And since you said nuts, why don't you

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Speaker 2: go ahead and get some of those nuts because they're

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Speaker 2: about sixteen percent more expensive.

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Speaker 1: Well, they make me pack on too much weight anyway,

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Speaker 1: so I'm fine with that.

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Speaker 2: And by the way, sir with the hat, I want

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Speaker 2: to remind you that these stats for process foods are

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Speaker 2: just over one year. WHOA, from twenty twenty two to

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Speaker 2: twenty twenty three. You're paying sixteen percent more for the salties,

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Speaker 2: sixteen percent more for those cookies, eighteen and a half

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Speaker 2: percent more for that granola bar you think is held.

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Speaker 2: And if you want a little fruit snack, almost twenty

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Speaker 2: four percent more expensive. Not the fruit snacks, yes, the

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Speaker 2: fruit snacks.

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Speaker 1: Chuck. This skit has gotten.

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Speaker 2: Really dark, as dark as Halloween.

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Speaker 1: Pretty dark. Oh actually, no, you're right. Halloween was a bloodbath,

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Speaker 1: especially if you're talking fun sized Snickers, because get this,

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Speaker 1: this is crazy. I mean even Halloween. Normally Halloween prices

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Speaker 1: are beyond nuts. But this is just really bad. A

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Speaker 1: bag of fun sized Snickers went from twenty twenty two,

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Speaker 1: or sorry, went from twenty twenty one to twenty twenty two,

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Speaker 1: It increased by one hundred and forty percent. You could

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Speaker 1: have gotten a bag of fun sized Snickers for five

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Speaker 1: bucks in twenty twenty one. You paid twelve dollars the

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Speaker 1: next year.

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Speaker 2: All right, well there's nothing fun about that.

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Speaker 1: Okay, So the skits over and scene or end scene,

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Speaker 1: depending on your view. And I'm gonna keep wearing my

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Speaker 1: hat though, Okay, all.

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Speaker 2: Right, keep that hat on. That's a good setup, and

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Speaker 2: we'll be right back with more.

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Speaker 1: Okay, So there's something to remember too, Like it sucks

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Speaker 1: to pay a lot at the grocery store, but if

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Speaker 1: you are a low income family or a low income country,

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Speaker 1: it hits you even worse because food prices increases in

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Speaker 1: food prices are regressive. They have the largest impact on

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Speaker 1: the people who have the least amount of money because

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Speaker 1: those people spend a far greater proportion of their household

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Speaker 1: budget or their national budget on food than wealthier people do.

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Speaker 1: They just have less money, so they still need food.

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Speaker 1: It's not something that you can skip very easily, and

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Speaker 1: eventually you're going to have to eat, so it's an

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Speaker 1: essential thing to buy and you don't really have much

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Speaker 1: of a say in it if the food prices keep rising.

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Speaker 1: So it's really important to keep that in mind that

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Speaker 1: it's not just an annoyance, it's not just in your pocketbook.

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Speaker 1: It actually has pushed people into poverty classes in different

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Speaker 1: countries and developed countries because food prices got They were

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Speaker 1: kind of close on the border to begin with, and

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Speaker 1: then the pandemic came along and as the food prices increased,

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Speaker 1: they were pushed into poverty categories.

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Speaker 2: Yeah, if you look at the Food Price Index, the

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Speaker 2: five categories meat, dairy, cereals, vegetable, oils, and sugar increased

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Speaker 2: fifty seven percent all over the world. Over a two

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Speaker 2: year period from twenty twenty to twenty twenty two, and

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Speaker 2: then a couple of years later here in twenty twenty four,

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Speaker 2: some prices have come down some quite a bit, eggs especially,

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Speaker 2: and again we'll talk about eggs a little more. They're

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Speaker 2: ones that really kind of reset back down again, but

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Speaker 2: not everything. And just over a two year period, a

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Speaker 2: fifty seven percent increase in meat, dairy, cereals, vegetable oil,

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Speaker 2: and sugar is going to have a real impact, like

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Speaker 2: you said, on families in the United States that don't

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Speaker 2: have as much money, and certainly hundreds of millions of

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Speaker 2: people all over the world in countries that didn't have

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Speaker 2: so much money to begin with.

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Speaker 1: Right, So that's that's one side of it. Like this

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Speaker 1: is actually affecting and impacting people in very extreme ways. Yeah,

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Speaker 1: So on the one hand, you have people who are

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Speaker 1: being pushed into poverty. On the other hand, you have

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Speaker 1: the food producers who are benefiting tremendously, like again, in

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Speaker 1: like record degrees in some cases.

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Speaker 2: You mean these hundreds and hundreds of corporations that own

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Speaker 2: all these food companies, right.

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Speaker 1: No, Chuck, do you have five fingers and five toes

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Speaker 1: on each hand? And foot still. Yes, well, then you

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Speaker 1: can more than count the number of conglomerates essentially running

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Speaker 1: the food supply in the developed world.

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Speaker 2: Yeah. I mean, we were being kind of cheeky there,

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Speaker 2: but we've talked about this before the fact that they're

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Speaker 2: just a handful of huge corporations that own almost every

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Speaker 2: food And you know, this is obviously discounting the little

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Speaker 2: indie brands and stuff like that. They're out there doing

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Speaker 2: their thing. Most of those are trying to get bought

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Speaker 2: by one of these companies.

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Speaker 1: Yeah, yeah, I was going to say more and more.

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Speaker 1: They're a portfolio of one of these larger brands.

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Speaker 2: Yeah, looking for that you know, big big money exit

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Speaker 2: and you know, good for them. But point is, there

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Speaker 2: are just a handful of these big corporations and if

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Speaker 2: you ask, if you sit down any of their CEOs

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Speaker 2: and grill them over this cost increase, they're going to

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Speaker 2: talk about those things we talked about at the beginning.

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Speaker 2: They're going to be the pandemic demic. Inflation was out

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Speaker 2: of control and there wasn't anything we could do. We

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Speaker 2: were forced to raise our prices to remain profitable. And

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Speaker 2: we're not saying that you shouldn't make a profit or

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Speaker 2: anything like that. Like, we get it that these are

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Speaker 2: for profit company, and those costs definitely did go up,

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Speaker 2: and they maybe could not take that all on the chin.

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Speaker 2: We're not arguing for that. But if they then raised

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Speaker 2: those costs and said, all right, well we have to

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Speaker 2: account for this to so we don't lose our profit margins,

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Speaker 2: and they accounted for that, then their profit margin should

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Speaker 2: have been about the same and they should have been like,

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Speaker 2: all right, well, we didn't lose a lot of money.

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Speaker 2: We stayed about the same because we accounted for those costs.

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Speaker 2: But that's not what happened.

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Speaker 1: Yeah, their profits didn't didn't increase in step with their costs.

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Speaker 1: They increased plus some right, plus a lot, right, plus

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Speaker 1: a lot. So Tyson Foods a huge producer of chicken

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Speaker 1: in the United States, and the first quarter of twenty

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Speaker 1: twenty one to the first quarter of twenty twenty two,

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Speaker 1: they doubled their profits, not their revenue. Their profits. Yeah doubled. Okay,

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Speaker 1: one hundred percent times two doubled. Yeah, that's important, and

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Speaker 1: that's one year, year over year. Gill another huge conglomerate.

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Speaker 1: They had a record six point sixty eight billion dollar

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Speaker 1: profit in twenty twenty two, double its profit two years before.

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Speaker 2: Yeah, and overall, food corporations had their largest profits during

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Speaker 2: the pandemic, during peak inflation, when everyone was getting squeezed

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Speaker 2: and hurt. The most food corporations recorded their largest profits

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Speaker 2: in seventy years.

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Speaker 1: Right, And some of them even did while they were

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Speaker 1: losing sales, like General Mills. Sales were declining by like

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Speaker 1: nine percent in twenty twenty one and another four percent

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Speaker 1: in twenty twenty two, and yet at the end of

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Speaker 1: twenty two twenty two, their profits were up ninety seven

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Speaker 1: percent over the twenty twenty one I believe. So here's

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Speaker 1: where the sticking point is, Chuck, this is where where

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Speaker 1: views diverge because this is documented fact. Is that is

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Speaker 1: that just to be expected? Like, do people who are

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Speaker 1: mad about this greedflation idea not understand and basic capitalism

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Speaker 1: or do they have a point in saying like this,

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Speaker 1: this is approaching and probably has passed a morality?

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Speaker 2: Yeah, I mean that's a question if you look we're

391
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Speaker 2: talking about corporations, but if you look at people. There

392
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Speaker 2: were sixty two new new food billionaires over that two

393
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Speaker 2: year span from twenty twenty to twenty twenty two, and

394
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Speaker 2: they calculated this is Oxpam who calculated this stuff. That

395
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Speaker 2: the food billionaires, which that those two words is interesting

396
00:21:33,240 --> 00:21:38,080
Speaker 2: together food billionaire, those food billionaires made more money during

397
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Speaker 2: the two years of the pandemic than they did in

398
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Speaker 2: the previous twenty three years combined. That's I mean, that's

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Speaker 2: the stat of the show.

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Speaker 1: So economists like have started to dig into this, and

401
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Speaker 1: just like about anything else, there's liberal economists, that's a

402
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Speaker 1: conservative economists, And depending on where you fall, you probably

403
00:21:55,520 --> 00:21:58,679
Speaker 1: either agree, like, yes, this is greedflation or you're like, no,

404
00:21:58,720 --> 00:22:01,200
Speaker 1: people don't understand, this is just basic capitalism.

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Speaker 2: Yeah, we can look at actual numbers though, to help

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Speaker 2: people make up their own mind. There's a nonpartisan group

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Speaker 2: called the Economic Policy Institute that we talked about before

408
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Speaker 2: on the show, and they looked at factors that contributed

409
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Speaker 2: to these higher prices over the last few years, and

410
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Speaker 2: they identified three major components of costs for a category

411
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Speaker 2: goods and services, which food was a part of. Which

412
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Speaker 2: are unit labor costs, which are you know, the workers,

413
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Speaker 2: what you pay a worker, their salary, their benefits, stuff

414
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Speaker 2: like that. The non labor costs energy costs, transportation, debt payments,

415
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Speaker 2: tax i imagine for the food part, like the actual

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Speaker 2: food stuff is in there, right, sure, yeah. And then

417
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Speaker 2: profit margin, which is that markup that we talked about

418
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Speaker 2: that you know, that's what's going to generate the profit

419
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Speaker 2: for the company. And so they looked since twenty twenty,

420
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Speaker 2: and prices in the non financial corporate sector, which like

421
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Speaker 2: we said, foods are part of that group, have increased

422
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Speaker 2: six six point one percent a year on average, which

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Speaker 2: is three times the pre pandemic rate of one point

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Speaker 2: eight a year.

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Speaker 1: Right, Okay, So they said, like under normal, normal circumstances,

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Speaker 1: all these costs are actually pretty well represented in a

427
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Speaker 1: steady way across the non financial corporate sector. Like inflation increases,

428
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Speaker 1: You can attribute increases in price, which is inflation to

429
00:23:33,440 --> 00:23:39,680
Speaker 1: those three things labor, non labor, and profit. You can

430
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Speaker 1: divide them up pretty pretty clearly. Normally, the largest contributor

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Speaker 1: to price increases are labor costs. In a normal economy,

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Speaker 1: they contribute about sixty two percent to inflation. The non

433
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Speaker 1: labor cost which is like you said, the costs that

434
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Speaker 1: to actually make the product and deliver it and all

435
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Speaker 1: that stuff, that's about twenty seven percent, And normally the

436
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Speaker 1: profit represents about eleven point four eleven and a half percent,

437
00:24:06,880 --> 00:24:09,920
Speaker 1: and you put all those things together, and that explains

438
00:24:09,960 --> 00:24:13,480
Speaker 1: the increase in prices year over year, which we call inflation, right.

439
00:24:13,840 --> 00:24:16,080
Speaker 2: Yeah, and that, by the way, was over a forty

440
00:24:16,280 --> 00:24:16,960
Speaker 2: year period.

441
00:24:17,280 --> 00:24:19,639
Speaker 1: Yeah, So that's, yes, exactly, That's what I'm saying, Like,

442
00:24:19,680 --> 00:24:22,440
Speaker 1: it's pretty stable or what has been stable over the

443
00:24:22,520 --> 00:24:28,320
Speaker 1: last forty years. Where it became totally unhinged from normalcy

444
00:24:28,960 --> 00:24:32,120
Speaker 1: is starting in the pandemic. It's starting about Q two

445
00:24:32,200 --> 00:24:37,760
Speaker 1: of twenty twenty, where everything just kind of went haywire

446
00:24:37,880 --> 00:24:41,840
Speaker 1: basically according to that normal forty year trend.

447
00:24:42,480 --> 00:24:45,399
Speaker 2: Yeah. So labor costs, which over that forty years previously

448
00:24:45,440 --> 00:24:48,960
Speaker 2: accounted for about sixty two percent of increase in costs,

449
00:24:48,960 --> 00:24:53,000
Speaker 2: accounted for less than eight percent this time. Right. The

450
00:24:53,040 --> 00:24:56,080
Speaker 2: non labor cost previously, if you remember, was twenty seven

451
00:24:56,119 --> 00:24:59,240
Speaker 2: percent that is now thirty eight percent.

452
00:25:00,200 --> 00:25:03,359
Speaker 1: So that's that that's that narrative of like the supply

453
00:25:03,520 --> 00:25:06,520
Speaker 1: chains and like Ukraine and all that stuff. That's what

454
00:25:06,600 --> 00:25:09,160
Speaker 1: that cost, that increase in cost represents.

455
00:25:09,440 --> 00:25:12,919
Speaker 2: Yeah, and then the you know what's coming everybody, uh,

456
00:25:13,200 --> 00:25:17,600
Speaker 2: that eleven point four percent over forty years of you know,

457
00:25:17,680 --> 00:25:20,639
Speaker 2: of the markup of the corporate profit that accounted for

458
00:25:20,640 --> 00:25:24,000
Speaker 2: an increase in prices went to almost fifty four percent.

459
00:25:24,560 --> 00:25:27,280
Speaker 1: And that nuts, I mean, there it is. Yeah, so

460
00:25:27,320 --> 00:25:30,320
Speaker 1: it's about five times the normal rate. During a pandemic,

461
00:25:31,440 --> 00:25:35,680
Speaker 1: food companies made about five times what they normally make

462
00:25:35,880 --> 00:25:37,119
Speaker 1: in profits on food.

463
00:25:37,840 --> 00:25:39,840
Speaker 2: Yeah, the end, can we stop?

464
00:25:41,040 --> 00:25:44,600
Speaker 1: Pretty I mean pretty much, there's because everything else is

465
00:25:44,680 --> 00:25:47,800
Speaker 1: just basically a matter of opinion at that point, there's

466
00:25:47,880 --> 00:25:50,800
Speaker 1: no there's no right answer to tell you the truth.

467
00:25:50,840 --> 00:25:53,840
Speaker 1: It's I think what's going to happen is a large

468
00:25:53,920 --> 00:25:57,399
Speaker 1: enough group will decide on what they consider the right answer,

469
00:25:57,400 --> 00:26:01,080
Speaker 1: and that that will be how things move forward. Yeah,

470
00:26:01,080 --> 00:26:02,840
Speaker 1: and it looks like the drum beat seems to be

471
00:26:03,840 --> 00:26:06,720
Speaker 1: pretty greed flation. He like people against greed flation.

472
00:26:07,400 --> 00:26:09,600
Speaker 2: Yeah, and that, like you said, that's a pretty catchy word.

473
00:26:09,600 --> 00:26:14,360
Speaker 2: There's an actual, like economics term. Like if you said, well,

474
00:26:14,400 --> 00:26:16,199
Speaker 2: you can probably get away with saying greed flation in

475
00:26:16,200 --> 00:26:17,640
Speaker 2: an ECON class these days, but.

476
00:26:17,880 --> 00:26:19,920
Speaker 1: Sure everybody will think you're really cool.

477
00:26:21,040 --> 00:26:23,520
Speaker 2: Previously, they say, look at the guy in the hat

478
00:26:23,520 --> 00:26:26,520
Speaker 2: walking in place saying things like greed flation.

479
00:26:26,920 --> 00:26:27,439
Speaker 1: Back at it.

480
00:26:28,720 --> 00:26:31,639
Speaker 2: The previous term for that was seller's inflation. There was

481
00:26:31,680 --> 00:26:34,680
Speaker 2: a guy in nineteen fifty eight named Abraham Lerner and

482
00:26:34,800 --> 00:26:41,240
Speaker 2: economists who he's a he's a Keensian guy. And we've

483
00:26:41,240 --> 00:26:44,760
Speaker 2: talked about the Keynsian approach to economics and what was

484
00:26:44,760 --> 00:26:45,240
Speaker 2: the other one?

485
00:26:45,840 --> 00:26:52,040
Speaker 1: It's another guy, Oh, Milton Friedman, the Chicago School guy.

486
00:26:52,240 --> 00:26:53,119
Speaker 2: No, I can't remember.

487
00:26:53,960 --> 00:26:57,600
Speaker 1: Adam Smith, Yeah, that was it, the classical the guy

488
00:26:57,600 --> 00:26:59,040
Speaker 1: who came up with capitalism.

489
00:26:59,400 --> 00:27:02,160
Speaker 2: Yeah. Yeah, those are sort of the general big two

490
00:27:02,200 --> 00:27:07,359
Speaker 2: schools of thought. And Keensians generally think that if there's

491
00:27:07,440 --> 00:27:09,399
Speaker 2: a lot of inflation going on, that means there's too

492
00:27:09,480 --> 00:27:12,920
Speaker 2: much money in the economy, and so the Fed comes in.

493
00:27:13,680 --> 00:27:16,600
Speaker 2: They operate on the Keynesian theories and they want to

494
00:27:16,640 --> 00:27:20,760
Speaker 2: slow that inflation, so they'll raise interest rates to kind

495
00:27:20,800 --> 00:27:23,080
Speaker 2: of cool things down and try and get people to

496
00:27:23,200 --> 00:27:25,879
Speaker 2: instead borrow and spend to kind of save a little money.

497
00:27:26,080 --> 00:27:28,879
Speaker 1: Yeah, and this actually can control inflation a lot, like

498
00:27:28,960 --> 00:27:33,640
Speaker 1: a lot. But what greedflation is showing us, and what

499
00:27:33,720 --> 00:27:36,440
Speaker 1: some economists who study this kind of thing, seller's inflation,

500
00:27:36,800 --> 00:27:40,800
Speaker 1: have known for a while that kind of monetary policy

501
00:27:40,920 --> 00:27:45,840
Speaker 1: can't control corporate decisions to increase prices.

502
00:27:45,960 --> 00:27:47,920
Speaker 2: In other words, seller inflation.

503
00:27:48,400 --> 00:27:51,480
Speaker 1: Right, So that's seller induced inflation, another word for greedflation.

504
00:27:51,600 --> 00:27:54,200
Speaker 1: It just is saying like, the companies who sell these

505
00:27:54,240 --> 00:27:56,520
Speaker 1: products are deciding they want to make more money than

506
00:27:56,560 --> 00:27:58,480
Speaker 1: they did before, and they're going to see if you're

507
00:27:58,480 --> 00:28:01,000
Speaker 1: willing to pay it. Here's the thing, and this is

508
00:28:01,000 --> 00:28:03,720
Speaker 1: why the pandemic changed everything. This is why the pandemic

509
00:28:04,680 --> 00:28:10,320
Speaker 1: takes these standard economic narratives and theories and just turns

510
00:28:10,320 --> 00:28:12,399
Speaker 1: them on their head in a lot of situations. And

511
00:28:12,440 --> 00:28:16,240
Speaker 1: the reason why is in a normal economy where companies

512
00:28:16,280 --> 00:28:21,239
Speaker 1: are competitive with one another, that urge to increase their

513
00:28:21,240 --> 00:28:24,399
Speaker 1: price and make more profit is kept down from the

514
00:28:24,480 --> 00:28:27,160
Speaker 1: concern that their competitor is going to keep their price

515
00:28:27,240 --> 00:28:30,840
Speaker 1: the same, and so people shoppers, being very price sensitive,

516
00:28:30,920 --> 00:28:34,359
Speaker 1: especially with food, will be like, oh, I'll eat this

517
00:28:34,920 --> 00:28:38,440
Speaker 1: generic wheat flakes rather than wheaties because it's a dollar less.

518
00:28:38,760 --> 00:28:40,480
Speaker 1: So I'm just going to become I'm just going to

519
00:28:40,520 --> 00:28:43,200
Speaker 1: go eat these from now on and just abandon wheaties.

520
00:28:43,320 --> 00:28:45,920
Speaker 1: They don't want that to happen, so they're really really

521
00:28:45,960 --> 00:28:49,960
Speaker 1: touchy about raising prices in a normally competitive economy. The

522
00:28:50,080 --> 00:28:53,240
Speaker 1: thing is the pandemic offered in a lot of people's

523
00:28:53,280 --> 00:28:58,320
Speaker 1: opinion including CEOs as we'll see, basically once in a

524
00:28:58,400 --> 00:29:02,880
Speaker 1: generation opportunity for everyone to raise their prices for no

525
00:29:03,120 --> 00:29:05,760
Speaker 1: good reason, essentially because they wanted to.

526
00:29:06,600 --> 00:29:08,920
Speaker 2: Yeah, I mean, there's a there's a sweet spot if

527
00:29:08,960 --> 00:29:12,000
Speaker 2: you're a company, you know, and you're making a box

528
00:29:12,040 --> 00:29:14,880
Speaker 2: of granola bars or whatever, where like you want to

529
00:29:14,960 --> 00:29:18,080
Speaker 2: have that price as much as it can be without

530
00:29:18,600 --> 00:29:21,840
Speaker 2: getting someone to not buy it, right, And that's just

531
00:29:21,880 --> 00:29:24,680
Speaker 2: sort of the sweet spot where they have maximized their

532
00:29:24,720 --> 00:29:29,320
Speaker 2: profit and anything beyond that might get them, like you said,

533
00:29:29,320 --> 00:29:31,280
Speaker 2: to look at another brand or maybe to not get

534
00:29:31,280 --> 00:29:34,120
Speaker 2: it at all, like to make that hard decision. So

535
00:29:34,320 --> 00:29:36,400
Speaker 2: they don't they don't fluctuate in their prices a lot.

536
00:29:36,440 --> 00:29:38,440
Speaker 2: They want to keep it kind of at that maximum

537
00:29:38,600 --> 00:29:40,440
Speaker 2: price where you're still going to buy it, but you

538
00:29:40,440 --> 00:29:43,480
Speaker 2: you know, like it what essentially is quote unquote fair

539
00:29:43,480 --> 00:29:47,120
Speaker 2: for everybody. But like you said, during the pandemic, and

540
00:29:47,160 --> 00:29:48,600
Speaker 2: I don't I don't think you know, I don't think

541
00:29:48,600 --> 00:29:51,680
Speaker 2: anyone is saying they these like five or six corporations,

542
00:29:51,840 --> 00:29:54,520
Speaker 2: like the evil heads of them all got together on

543
00:29:54,560 --> 00:29:57,320
Speaker 2: a call and said, on the count of three, we're

544
00:29:57,360 --> 00:30:01,280
Speaker 2: all going to raise our prices together. It just sort

545
00:30:01,320 --> 00:30:05,680
Speaker 2: of happened that way in that you know, there isn't

546
00:30:05,720 --> 00:30:07,960
Speaker 2: a lot of competition like when there's only a handful

547
00:30:08,000 --> 00:30:10,320
Speaker 2: of companies, So it's not like you had to have

548
00:30:10,360 --> 00:30:14,560
Speaker 2: some big, wide ranging conspiracy. You just had to basically

549
00:30:16,600 --> 00:30:20,320
Speaker 2: individually agree that this pandemic was a great cover to

550
00:30:20,520 --> 00:30:22,560
Speaker 2: raise prices that will never go back down.

551
00:30:22,920 --> 00:30:26,080
Speaker 1: Yeah, I think that you don't need collusion. Any CEO

552
00:30:26,280 --> 00:30:29,960
Speaker 1: worth their salary would see the pandemic as a great

553
00:30:30,000 --> 00:30:34,680
Speaker 1: opportunity to raise prices because there was really highly publicized

554
00:30:34,920 --> 00:30:38,920
Speaker 1: reasons for why prices would go up, like the supply

555
00:30:39,120 --> 00:30:43,440
Speaker 1: chain shortages, the war in Ukraine, energy prices going up.

556
00:30:43,800 --> 00:30:46,800
Speaker 1: They had this cover. The pandemic gave them cover to

557
00:30:47,000 --> 00:30:49,240
Speaker 1: raise their prices just because they wanted to. They didn't

558
00:30:49,280 --> 00:30:51,200
Speaker 1: need to say I'm going to do this. They knew

559
00:30:51,200 --> 00:30:52,880
Speaker 1: that everybody else is going to do this at the

560
00:30:52,920 --> 00:30:56,920
Speaker 1: same time, which provided additional cover. It decreased the risk

561
00:30:56,960 --> 00:30:59,280
Speaker 1: that they were going to lose market share. And then

562
00:30:59,320 --> 00:31:01,600
Speaker 1: the other thing that kind of came together to make

563
00:31:01,600 --> 00:31:05,320
Speaker 1: this a perfect storm of terribly high food prices is

564
00:31:05,320 --> 00:31:09,800
Speaker 1: something you touched on. Competition is less today than it was, say,

565
00:31:10,200 --> 00:31:13,360
Speaker 1: ten years ago. Fifteen years ago, twenty years ago, because

566
00:31:13,400 --> 00:31:17,080
Speaker 1: the Federal Trade Commission and the Justice Department have kind

567
00:31:17,160 --> 00:31:19,960
Speaker 1: of long been for several decades open for business. Like,

568
00:31:20,000 --> 00:31:22,520
Speaker 1: if you want to have a merger, they'll probably let

569
00:31:22,520 --> 00:31:24,720
Speaker 1: you do it, and you'll become a bigger corporation and

570
00:31:24,760 --> 00:31:27,680
Speaker 1: a bigger corporation and a bigger corporation, and as you grow,

571
00:31:27,920 --> 00:31:30,200
Speaker 1: you control more and more market share to where some

572
00:31:30,400 --> 00:31:34,920
Speaker 1: you know, today I think three main companies produce seventy

573
00:31:35,040 --> 00:31:37,040
Speaker 1: or eighty percent of the cereals on the shelves in

574
00:31:37,040 --> 00:31:41,080
Speaker 1: American grocery stores. That's not competition. That really lowers the

575
00:31:41,160 --> 00:31:44,080
Speaker 1: risk of losing market share because you control so many

576
00:31:44,120 --> 00:31:46,400
Speaker 1: different brands, you can monkey with them as much as

577
00:31:46,440 --> 00:31:50,440
Speaker 1: you want, so lower competition because of consolidation. Plus the

578
00:31:50,480 --> 00:31:55,160
Speaker 1: cover that the pandemic gave basically presented this perfect opportunity

579
00:31:55,240 --> 00:31:59,600
Speaker 1: for everybody to raise prices basically in unison, essentially just

580
00:31:59,720 --> 00:32:03,360
Speaker 1: to increase their profits. That's what we're seeing. And again,

581
00:32:03,680 --> 00:32:05,760
Speaker 1: I know I've been hammering this. We come to this

582
00:32:06,680 --> 00:32:09,640
Speaker 1: question again, is that a moral or is that just

583
00:32:09,760 --> 00:32:10,800
Speaker 1: normal capitalism?

584
00:32:11,320 --> 00:32:13,840
Speaker 2: Yeah, and again we're not saying cover profits because all

585
00:32:13,840 --> 00:32:17,520
Speaker 2: those reasons were real. We're not saying raising their costs

586
00:32:17,560 --> 00:32:21,360
Speaker 2: to so they wouldn't like start losing money. We're talking

587
00:32:21,360 --> 00:32:23,600
Speaker 2: about like the kind of increases that we saw, which

588
00:32:23,640 --> 00:32:29,400
Speaker 2: was fifty plus percent profit increase. If you are the

589
00:32:29,440 --> 00:32:33,840
Speaker 2: Groundwork Collaborative think tank, you can go over transcripts from

590
00:32:33,880 --> 00:32:39,240
Speaker 2: these corporate earnings calls from these companies and they're flat

591
00:32:39,240 --> 00:32:42,200
Speaker 2: out saying it, you know, like they're saying, basically, this

592
00:32:42,800 --> 00:32:45,680
Speaker 2: is our chance at a market reset, like an adjustment.

593
00:32:46,600 --> 00:32:50,800
Speaker 2: We thought our products were too inexpensive before, so this

594
00:32:50,920 --> 00:32:53,040
Speaker 2: is our chance to really raise these profits because we

595
00:32:53,080 --> 00:32:56,480
Speaker 2: have all this cover. One of the exec sit ConAgra

596
00:32:56,600 --> 00:33:00,880
Speaker 2: even said the consumers will welcome the increased prey, which

597
00:33:00,960 --> 00:33:03,240
Speaker 2: is I mean, if that's not just out of touch,

598
00:33:04,280 --> 00:33:06,800
Speaker 2: you know, I don't even know what to say about that.

599
00:33:07,240 --> 00:33:10,080
Speaker 2: People might accept it and live with it because it's

600
00:33:10,080 --> 00:33:12,560
Speaker 2: food they need, right, but no one's no one welcomes

601
00:33:12,960 --> 00:33:14,280
Speaker 2: a price increase on this something.

602
00:33:14,480 --> 00:33:16,760
Speaker 1: It was a really bizarre word to use, but this

603
00:33:16,920 --> 00:33:19,960
Speaker 1: was this was like these transcripts of CEOs talking to

604
00:33:20,000 --> 00:33:23,000
Speaker 1: their shareholders and major investors and then basically taking like

605
00:33:23,400 --> 00:33:26,000
Speaker 1: a victory lap, saying like look at this, this is nuts,

606
00:33:26,040 --> 00:33:27,560
Speaker 1: Like we're able to do this. We were able to

607
00:33:27,560 --> 00:33:30,480
Speaker 1: like make all these extra profits for nothing without without

608
00:33:30,520 --> 00:33:33,840
Speaker 1: our costs like increasing. We just raised our prices and

609
00:33:33,880 --> 00:33:36,880
Speaker 1: here's why. And you said something important. A lot of

610
00:33:36,920 --> 00:33:40,920
Speaker 1: the story that you hear from CEOs and corporations and

611
00:33:41,000 --> 00:33:44,480
Speaker 1: the people who typically defend them is that, like you said,

612
00:33:44,480 --> 00:33:47,520
Speaker 1: the prices were too low before, so this would this

613
00:33:47,600 --> 00:33:50,560
Speaker 1: gave them a chance to correct the market. And then

614
00:33:51,040 --> 00:33:54,680
Speaker 1: we us continuing to buy these products at the higher

615
00:33:54,720 --> 00:33:58,440
Speaker 1: price sends the signal to those companies like, Okay, this

616
00:33:58,520 --> 00:34:01,360
Speaker 1: is a fair price. Still like like, consumers are willing

617
00:34:01,400 --> 00:34:04,360
Speaker 1: to pay this, and well, they pay a little bit more,

618
00:34:04,440 --> 00:34:07,000
Speaker 1: let's find out, and they'll increase prices again. And then

619
00:34:07,000 --> 00:34:08,840
Speaker 1: eventually we get to a point where people are like,

620
00:34:08,880 --> 00:34:11,880
Speaker 1: I'm not paying anymore. Demand goes down, maybe the price

621
00:34:11,920 --> 00:34:13,719
Speaker 1: goes down or they hold it at that point.

622
00:34:14,520 --> 00:34:16,640
Speaker 2: Yeah, But and that goes back to the previous thing

623
00:34:16,680 --> 00:34:19,800
Speaker 2: we're saying, where people that are upper middle class and

624
00:34:19,920 --> 00:34:24,400
Speaker 2: higher can maybe complain about the cost of something, but

625
00:34:24,480 --> 00:34:28,320
Speaker 2: it doesn't change how they're necessarily buying groceries. The people

626
00:34:28,360 --> 00:34:30,880
Speaker 2: that are really getting pinched are the people at the bottom.

627
00:34:30,960 --> 00:34:37,000
Speaker 2: And that's We've just seen that happen all over, you know,

628
00:34:37,080 --> 00:34:41,399
Speaker 2: from gas costs to food costs. Like I remember when

629
00:34:41,440 --> 00:34:44,000
Speaker 2: gas I can't remember when it was. Veieler was in

630
00:34:44,040 --> 00:34:47,000
Speaker 2: like the late nineties or early two thousands, Yes, when

631
00:34:47,160 --> 00:34:49,960
Speaker 2: gas jumped like fifty or sixty cents over a year

632
00:34:50,040 --> 00:34:53,200
Speaker 2: or two. Yeah, And I remember telling my friends at

633
00:34:53,200 --> 00:34:55,839
Speaker 2: the time, like, it's never going to go back down

634
00:34:56,200 --> 00:34:59,719
Speaker 2: because over the previous maybe as long as there was gas,

635
00:34:59,800 --> 00:35:02,440
Speaker 2: but with the previous at least decade or so, it

636
00:35:02,520 --> 00:35:05,680
Speaker 2: fluctuated up and down like a nickel two three cents,

637
00:35:05,760 --> 00:35:08,080
Speaker 2: up maybe as high as a dime, then back down again.

638
00:35:08,560 --> 00:35:10,840
Speaker 2: And then it just it just ramped up like fifty cents.

639
00:35:11,120 --> 00:35:12,920
Speaker 2: And I just remember thinking I didn't even know why.

640
00:35:12,920 --> 00:35:15,799
Speaker 2: I knew nothing about it. I just remember thinking this

641
00:35:16,000 --> 00:35:20,160
Speaker 2: was what was it? Was it? Jeesu? Was it nine

642
00:35:20,160 --> 00:35:23,200
Speaker 2: to eleven? Maybe now before that, there was something that

643
00:35:23,280 --> 00:35:25,840
Speaker 2: happened and they took a huge jump, and I just

644
00:35:25,880 --> 00:35:28,439
Speaker 2: remember thinking, like, this is going to be the cover

645
00:35:28,719 --> 00:35:31,799
Speaker 2: and the gas will never be below like a buck

646
00:35:31,880 --> 00:35:33,480
Speaker 2: seventy five again or whatever it was.

647
00:35:33,680 --> 00:35:36,040
Speaker 1: Right, Yeah, And so that's a really cynical view, but

648
00:35:36,080 --> 00:35:38,239
Speaker 1: it's entirely possible. You're correct that.

649
00:35:38,560 --> 00:35:39,240
Speaker 2: It was correct.

650
00:35:39,960 --> 00:35:44,600
Speaker 1: Yeah, it They used an opportunity to raise prices and

651
00:35:44,640 --> 00:35:48,239
Speaker 1: maybe raise them beyond what they really needed to. And it,

652
00:35:48,280 --> 00:35:50,480
Speaker 1: sure it came down, It fluctuated up and down, but

653
00:35:50,520 --> 00:35:52,960
Speaker 1: it reset to a new normal, a new baseline.

654
00:35:53,040 --> 00:35:53,919
Speaker 2: Yeah, that's what I'm saying.

655
00:35:53,960 --> 00:35:57,120
Speaker 1: And it didn't really ever drop below that. And then

656
00:35:57,239 --> 00:36:00,040
Speaker 1: that new baseline gave them an opportunity later on to

657
00:36:00,280 --> 00:36:02,440
Speaker 1: ratcheted up to a new normal and so on and

658
00:36:02,440 --> 00:36:06,359
Speaker 1: so forth, and under normal conditions, that's just inflation, right,

659
00:36:06,440 --> 00:36:11,080
Speaker 1: Like the prices are supposed to grow over time. It's

660
00:36:11,120 --> 00:36:13,919
Speaker 1: like a sign of a healthy economy, but it needs

661
00:36:14,000 --> 00:36:16,359
Speaker 1: to be around two to three percent something like that.

662
00:36:16,520 --> 00:36:19,960
Speaker 1: What we're talking about is well beyond that. But that

663
00:36:20,000 --> 00:36:23,120
Speaker 1: does seem to be what we're seeing here too. And

664
00:36:23,800 --> 00:36:26,719
Speaker 1: at least one of the CEOs from their earnings call

665
00:36:27,200 --> 00:36:30,680
Speaker 1: said something like this is this is giving us a

666
00:36:30,760 --> 00:36:34,600
Speaker 1: chance to create this new normal, to normalize higher prices. Essentially,

667
00:36:34,680 --> 00:36:36,600
Speaker 1: people are going to get used to it. Sure we're

668
00:36:36,640 --> 00:36:39,440
Speaker 1: mad about it. Sure some people are being forced in poverty.

669
00:36:39,520 --> 00:36:43,040
Speaker 1: Now they'll get used to it. And the other terrible

670
00:36:43,040 --> 00:36:47,840
Speaker 1: thing about it, Chuck, is that they're driving inflation. They're

671
00:36:47,880 --> 00:36:52,239
Speaker 1: making it. They're making everything more expensive, like inflation is

672
00:36:52,320 --> 00:36:57,480
Speaker 1: outpacing its normal rate because of higher prices. Some economists

673
00:36:57,520 --> 00:36:59,319
Speaker 1: are like, nope, it's the other way around. But it

674
00:36:59,360 --> 00:37:04,560
Speaker 1: seems to be lopsided this time, where the higher prices

675
00:37:04,600 --> 00:37:08,960
Speaker 1: are causing higher inflation rather than higher inflation causing higher prices,

676
00:37:09,160 --> 00:37:10,400
Speaker 1: at least in the food world.

677
00:37:11,280 --> 00:37:14,919
Speaker 2: All right, let's take another break, then we'll talk about

678
00:37:14,960 --> 00:37:16,200
Speaker 2: more of this stuff right after this.

679
00:37:45,680 --> 00:37:50,040
Speaker 1: So thus far we've been leaving grocery stores kind of

680
00:37:50,080 --> 00:37:54,040
Speaker 1: out of the conversation and under normal circumstances that would

681
00:37:54,040 --> 00:37:54,520
Speaker 1: make sense.

682
00:37:54,840 --> 00:37:57,000
Speaker 2: Oh okay, I was wondering if we were gonna get

683
00:37:57,000 --> 00:37:58,200
Speaker 2: the grocery stores.

684
00:37:58,040 --> 00:38:01,080
Speaker 1: Right, because grocery stores, if I kind of a check

685
00:38:01,120 --> 00:38:05,120
Speaker 1: on food manufacturers, like the big chains and probably even

686
00:38:05,480 --> 00:38:09,080
Speaker 1: mid size chains, they have entire departments whose job it

687
00:38:09,120 --> 00:38:13,120
Speaker 1: is is to basically reconstruct all of the costs that

688
00:38:13,239 --> 00:38:17,239
Speaker 1: the food producers have to get a general idea of

689
00:38:17,280 --> 00:38:20,680
Speaker 1: how much they're marking up their product right. Because the

690
00:38:20,680 --> 00:38:23,720
Speaker 1: grocery stores don't want to pay any more than anybody else.

691
00:38:23,760 --> 00:38:27,000
Speaker 1: Because they're the ones whose stores we actually go to,

692
00:38:27,320 --> 00:38:31,480
Speaker 1: they have the most to lose. And then so normally

693
00:38:31,480 --> 00:38:34,600
Speaker 1: that ends up being like a check on how much

694
00:38:34,920 --> 00:38:40,239
Speaker 1: food companies mark up. Makes sense. The thing is, it

695
00:38:40,280 --> 00:38:42,520
Speaker 1: turns out that, at least according to the Federal Trade

696
00:38:42,520 --> 00:38:46,680
Speaker 1: Commission in the United States, grocery stores were profiteering from

697
00:38:46,680 --> 00:38:47,560
Speaker 1: the pandemic too.

698
00:38:48,360 --> 00:38:49,080
Speaker 2: Can you believe it?

699
00:38:49,760 --> 00:38:53,080
Speaker 1: Yeah. The FTC recently conducted a study of nine different

700
00:38:53,200 --> 00:38:58,160
Speaker 1: grocery stores and food wholesalers that includes Kroger, Amazon, and Walmart.

701
00:38:58,880 --> 00:39:00,760
Speaker 1: And they found that as an end street, they didn't

702
00:39:00,800 --> 00:39:03,440
Speaker 1: they weren't able to get like individual company data, but

703
00:39:03,480 --> 00:39:06,359
Speaker 1: they found that as an industry their profits went up

704
00:39:08,040 --> 00:39:10,440
Speaker 1: out of step with their costs.

705
00:39:10,440 --> 00:39:12,640
Speaker 2: Oh geez, here we go, just like.

706
00:39:12,640 --> 00:39:15,239
Speaker 1: The food producers, although it wasn't nearly as dramatic as

707
00:39:15,280 --> 00:39:21,200
Speaker 1: the food producers. For example, in twenty fifteen, the peak markup,

708
00:39:21,320 --> 00:39:25,400
Speaker 1: the peak profit was five point six percent across the industry,

709
00:39:26,160 --> 00:39:29,440
Speaker 1: and then in twenty twenty one it went over six percent,

710
00:39:30,040 --> 00:39:32,520
Speaker 1: and then two years later it hit over seven percent.

711
00:39:32,680 --> 00:39:34,799
Speaker 1: No boy, And again this is out of step with

712
00:39:34,880 --> 00:39:39,120
Speaker 1: their costs. And they also found that the large chains

713
00:39:40,480 --> 00:39:44,440
Speaker 1: used their clout to basically get their hands on scarce

714
00:39:45,080 --> 00:39:49,200
Speaker 1: products and edged out smaller competitors, so they basically created

715
00:39:49,520 --> 00:39:54,640
Speaker 1: mini monopolies in their areas in their regions, temporary mini monopolies.

716
00:39:54,880 --> 00:39:58,440
Speaker 1: So that's a thing too. For sure. We're getting gouged

717
00:39:58,920 --> 00:40:02,360
Speaker 1: both by the food companies and the grocery stores. It seems.

718
00:40:02,880 --> 00:40:04,520
Speaker 2: Yeah, I mean I can tell when I go to

719
00:40:04,520 --> 00:40:06,360
Speaker 2: the grocery store. It's a big difference.

720
00:40:06,640 --> 00:40:06,839
Speaker 1: Right.

721
00:40:07,640 --> 00:40:09,840
Speaker 2: One thing we should mention kind of quickly here is

722
00:40:09,880 --> 00:40:13,480
Speaker 2: this idea of shrink inflation, because that kind of figures in.

723
00:40:13,560 --> 00:40:17,040
Speaker 2: That's another sort of sneaky way to increase profits. That is,

724
00:40:17,080 --> 00:40:20,880
Speaker 2: when you pay the same price for less of something

725
00:40:20,920 --> 00:40:25,520
Speaker 2: that you used to get, whether it's you know, five

726
00:40:25,680 --> 00:40:32,399
Speaker 2: less dishwasher detergent inserts that come in the packet, or

727
00:40:32,440 --> 00:40:36,640
Speaker 2: whether it's ounces off of a chocolate bar or ounces

728
00:40:36,680 --> 00:40:39,279
Speaker 2: out of a coke bottle, the price is the same

729
00:40:39,840 --> 00:40:42,600
Speaker 2: and it's generally just like there's nothing illegal about it.

730
00:40:42,640 --> 00:40:44,759
Speaker 2: But it's like, oh boy, maybe they won't notice if

731
00:40:44,800 --> 00:40:48,759
Speaker 2: we make the two liter coke one point seventy five

732
00:40:48,840 --> 00:40:51,239
Speaker 2: leaders if we just keep the price the same, and

733
00:40:51,280 --> 00:40:52,160
Speaker 2: that's what happens.

734
00:40:52,360 --> 00:40:55,359
Speaker 1: Yeah, it's another form of inflation, even though the price

735
00:40:55,360 --> 00:40:58,719
Speaker 1: doesn't go up like the as a whole the unit price,

736
00:40:58,800 --> 00:41:01,080
Speaker 1: like to say, the per ounce price has gone up

737
00:41:01,120 --> 00:41:04,799
Speaker 1: because you get less for the same price, right right.

738
00:41:04,960 --> 00:41:08,160
Speaker 1: People who attrack inflation actually adjust for that because it's

739
00:41:08,160 --> 00:41:11,440
Speaker 1: so widespread. Shrink flation is. But one thing that's not

740
00:41:11,680 --> 00:41:16,960
Speaker 1: typically tracked is something related called skimpflation, where the ingredients

741
00:41:17,360 --> 00:41:21,240
Speaker 1: or the packaging or something degrades or downgrades to save money,

742
00:41:22,400 --> 00:41:25,160
Speaker 1: and that actually affects the price or the value or

743
00:41:25,200 --> 00:41:29,320
Speaker 1: the quality of what you're paying for. That's not tracked

744
00:41:29,360 --> 00:41:31,560
Speaker 1: as part of inflation. So there's still a way to

745
00:41:31,640 --> 00:41:33,920
Speaker 1: kind of wiggle through without making it seem like you're

746
00:41:33,960 --> 00:41:35,200
Speaker 1: ripping the customer off.

747
00:41:35,640 --> 00:41:39,440
Speaker 2: Yeah, so you mentioned other schools of thought. We're going

748
00:41:39,480 --> 00:41:41,640
Speaker 2: to talk about some of those, because there is no

749
00:41:41,800 --> 00:41:46,120
Speaker 2: arguing that during the pandemic that the prices just went

750
00:41:46,160 --> 00:41:49,680
Speaker 2: way way up, like that's just it's a fact. But

751
00:41:50,000 --> 00:41:53,120
Speaker 2: there are economists at the FED, the Federal Reserve Bank

752
00:41:53,120 --> 00:41:56,560
Speaker 2: of Kansas City that wrote a paper about these corporate

753
00:41:56,560 --> 00:41:59,319
Speaker 2: profits during the pandemic, and they started looking at the

754
00:41:59,400 --> 00:42:03,480
Speaker 2: dates and the timing of this stuff and they noticed

755
00:42:03,480 --> 00:42:07,800
Speaker 2: something interesting, which was that the biggest price hikes happening

756
00:42:08,000 --> 00:42:10,959
Speaker 2: in twenty twenty through about the first quarter of twenty

757
00:42:11,000 --> 00:42:15,280
Speaker 2: twenty one, and the inflation didn't get really bad until

758
00:42:15,800 --> 00:42:18,839
Speaker 2: later on in twenty twenty one and just devastatingly through

759
00:42:19,120 --> 00:42:23,080
Speaker 2: twenty twenty two. And so the Kansas City economists basically

760
00:42:23,160 --> 00:42:26,640
Speaker 2: said that they raise these prices early because they thought

761
00:42:27,239 --> 00:42:29,680
Speaker 2: they saw the future that higher costs were coming down

762
00:42:29,760 --> 00:42:32,759
Speaker 2: the line. So instead of waiting until that happened for

763
00:42:32,840 --> 00:42:36,480
Speaker 2: a big spike in prices, let's start raising these prices now.

764
00:42:36,680 --> 00:42:38,520
Speaker 2: It's kind of smooth things out over time.

765
00:42:38,680 --> 00:42:42,360
Speaker 1: Yeah, instead of one big increase, maybe five smaller increases

766
00:42:42,360 --> 00:42:45,719
Speaker 1: that equal that seem big increase, right, Yeah, and that

767
00:42:45,800 --> 00:42:50,200
Speaker 1: makes sense. That actually is pretty smart. I mean, like,

768
00:42:50,239 --> 00:42:52,000
Speaker 1: if you're a business, of course you want to predict

769
00:42:52,200 --> 00:42:56,200
Speaker 1: increases in cost. The thing is is the fact that

770
00:42:56,440 --> 00:42:59,319
Speaker 1: prices don't normally come back down. What we were talking

771
00:42:59,400 --> 00:43:02,759
Speaker 1: about with your anecdote about a gas going up. Yeah,

772
00:43:03,120 --> 00:43:06,520
Speaker 1: that when prices like of a certain type of item

773
00:43:06,600 --> 00:43:10,200
Speaker 1: or whatever go up but tend to not come back down.

774
00:43:10,280 --> 00:43:14,359
Speaker 1: Really that they're called sticky, or they're in economic terms,

775
00:43:14,400 --> 00:43:17,200
Speaker 1: those prices are downwardly rigid. They don't like to come down, right,

776
00:43:17,840 --> 00:43:23,680
Speaker 1: So as riggs, right, eggs are the miracle. So as

777
00:43:23,760 --> 00:43:28,319
Speaker 1: they're as companies like costs, their marginal costs to create

778
00:43:28,360 --> 00:43:31,520
Speaker 1: and deliver the product go down, those prices aren't going

779
00:43:31,560 --> 00:43:33,960
Speaker 1: to come down accordingly, so their profits are just going

780
00:43:34,000 --> 00:43:37,640
Speaker 1: to be nicer and nicer. That is an explanation that's

781
00:43:37,760 --> 00:43:39,880
Speaker 1: definitely more in step with the idea like this is

782
00:43:39,960 --> 00:43:44,400
Speaker 1: just normal capitalism. Like it happened to be a seller's

783
00:43:44,440 --> 00:43:48,560
Speaker 1: market during the pandemic because demand went up and companies

784
00:43:48,600 --> 00:43:51,520
Speaker 1: were there to fulfill that demand, and demand drove prices up,

785
00:43:51,520 --> 00:43:54,160
Speaker 1: and their costs didn't increase in steps, so they were

786
00:43:54,200 --> 00:43:57,080
Speaker 1: able to reap a higher profit. That's kind of like that.

787
00:43:57,080 --> 00:43:58,760
Speaker 1: That what that explanation is saying.

788
00:43:59,360 --> 00:44:02,439
Speaker 2: Yeah, for sure, there are people that are like, hey,

789
00:44:02,520 --> 00:44:06,360
Speaker 2: this greedflation thing, I don't agree with it. There's a

790
00:44:06,400 --> 00:44:10,160
Speaker 2: guy named Eric Levittz at New York Magazine who had

791
00:44:10,360 --> 00:44:14,560
Speaker 2: a very long piece critique basically on the greed plation

792
00:44:15,000 --> 00:44:17,440
Speaker 2: argument and said a bunch of things that we're going

793
00:44:17,520 --> 00:44:20,200
Speaker 2: to go over now. But the person was that, Hey,

794
00:44:20,280 --> 00:44:24,719
Speaker 2: these we've had corporate consolidation for a while now, and

795
00:44:24,840 --> 00:44:28,480
Speaker 2: they could have just raised these prices whenever. So I'm

796
00:44:28,520 --> 00:44:32,160
Speaker 2: not buying that this happened just during the pandemic. But

797
00:44:32,360 --> 00:44:35,959
Speaker 2: what we're and a lot of people, including Robert Reich,

798
00:44:35,960 --> 00:44:38,719
Speaker 2: who's a very smart guy, are pointing out it's like, no,

799
00:44:39,239 --> 00:44:40,880
Speaker 2: what they're saying is it gave him the cover to

800
00:44:40,920 --> 00:44:43,919
Speaker 2: do that, and they've sort of admitted this on the call.

801
00:44:44,040 --> 00:44:46,600
Speaker 2: So I just say throw that one out right away.

802
00:44:46,680 --> 00:44:49,840
Speaker 1: Yeah, it totally discounts the idea that brands try to

803
00:44:49,880 --> 00:44:53,640
Speaker 1: cultivate goodwill with their customers, that they just wouldn't care

804
00:44:53,719 --> 00:44:56,080
Speaker 1: that their customers didn't like them. TS, you're going to

805
00:44:56,120 --> 00:44:59,040
Speaker 1: buy our stuff anyway because we're consolidated. I agree to

806
00:44:59,080 --> 00:44:59,680
Speaker 1: throw that one.

807
00:44:59,560 --> 00:45:02,680
Speaker 2: Out all right. The next one was, and this is

808
00:45:02,760 --> 00:45:04,800
Speaker 2: kind of what you were talking about, but that fifty

809
00:45:04,840 --> 00:45:10,520
Speaker 2: four nearly fifty four percent increase in corporate profits. He

810
00:45:10,760 --> 00:45:16,280
Speaker 2: argues that it's it's the effect of inflation, not the cause,

811
00:45:16,800 --> 00:45:19,040
Speaker 2: and that we've got it backwards. Josh and Chuck have

812
00:45:19,160 --> 00:45:20,680
Speaker 2: it backwards right exactly.

813
00:45:20,719 --> 00:45:24,000
Speaker 1: That the companies were there to offer the products at

814
00:45:24,000 --> 00:45:25,920
Speaker 1: the higher price and they just happened to make this

815
00:45:26,000 --> 00:45:28,799
Speaker 1: windfall and that's just it was in their favor, right,

816
00:45:30,280 --> 00:45:35,360
Speaker 1: I mean, it's a it's a legitimate explanation it's just again,

817
00:45:35,920 --> 00:45:38,680
Speaker 1: it skirts that issue of whether that's okay.

818
00:45:38,760 --> 00:45:40,320
Speaker 2: I guess yeah.

819
00:45:40,360 --> 00:45:43,839
Speaker 1: And then the other thing that Levits eventually settles on

820
00:45:43,960 --> 00:45:47,160
Speaker 1: is he's like all that stuff that people say, that

821
00:45:47,280 --> 00:45:51,800
Speaker 1: pandemic narrative for higher prices, all that's correct. Demand was high,

822
00:45:52,000 --> 00:45:56,040
Speaker 1: supply was tight, people had way more money than they

823
00:45:56,080 --> 00:45:58,759
Speaker 1: normally do. All of a sudden, Uncle Joe Biden sent

824
00:45:58,920 --> 00:46:03,240
Speaker 1: a bunch of checks and that corporations have always been greedy,

825
00:46:04,080 --> 00:46:08,000
Speaker 1: and that I take this to basically say, like, if

826
00:46:08,040 --> 00:46:11,759
Speaker 1: you don't if you don't like what you're seeing, if

827
00:46:11,800 --> 00:46:15,120
Speaker 1: you don't like being price gouged for food during a pandemic,

828
00:46:15,400 --> 00:46:19,720
Speaker 1: then don't live through a pandemic in a capitalist country. Sorry, right,

829
00:46:21,719 --> 00:46:22,000
Speaker 1: you know.

830
00:46:22,800 --> 00:46:25,960
Speaker 2: Sure that's pretty inconvenient for a lot of people, exactly.

831
00:46:26,040 --> 00:46:28,080
Speaker 1: Yeah, And a lot of people are saying, like, no,

832
00:46:28,320 --> 00:46:31,759
Speaker 1: we've got to do something about this. There's a Society

833
00:46:31,880 --> 00:46:37,759
Speaker 1: general banker economist named Albert Edward or Edwin, I can't

834
00:46:37,760 --> 00:46:41,880
Speaker 1: remember Edwards, I think, and he said that what he's seeing.

835
00:46:41,880 --> 00:46:43,319
Speaker 1: This is the guy who said he's been at this

836
00:46:43,400 --> 00:46:45,359
Speaker 1: for forty years and he's never seen anything like it.

837
00:46:45,520 --> 00:46:50,800
Speaker 1: He said that it's unprecedented and astonishing levels of corporate

838
00:46:50,800 --> 00:46:53,560
Speaker 1: greed that we're seeing as a result of these price

839
00:46:53,640 --> 00:46:57,120
Speaker 1: increases in these profit margins that we're seeing are eye popping.

840
00:46:57,320 --> 00:46:59,440
Speaker 1: This guy's an economist student for forty years. He's like,

841
00:46:59,680 --> 00:47:03,439
Speaker 1: this is just wrong. And he threw out something that

842
00:47:03,920 --> 00:47:06,200
Speaker 1: a lot of people on both sides of the political

843
00:47:06,200 --> 00:47:09,319
Speaker 1: spectrum do not like to hear. He said, we should

844
00:47:09,520 --> 00:47:12,680
Speaker 1: consider price controls, Like if corporations are going to go this,

845
00:47:12,920 --> 00:47:17,000
Speaker 1: be this reckless with people's lives and you know, budgets,

846
00:47:17,480 --> 00:47:19,759
Speaker 1: then we need to control them. The government needs to

847
00:47:19,760 --> 00:47:22,040
Speaker 1: step in and say you can't charge over this amount

848
00:47:22,040 --> 00:47:22,920
Speaker 1: for this product.

849
00:47:23,920 --> 00:47:29,200
Speaker 2: Yeah, And I mean they're even like super capitalist Keynsian

850
00:47:29,440 --> 00:47:34,520
Speaker 2: economists who agree about Parch part of that, which is like, hey,

851
00:47:34,560 --> 00:47:37,680
Speaker 2: if there's a like a real bottleneck of a commodity

852
00:47:37,719 --> 00:47:42,560
Speaker 2: that only a handful of people control, you should cap

853
00:47:42,600 --> 00:47:46,400
Speaker 2: that commodity price so they don't get together and gouge

854
00:47:46,440 --> 00:47:50,520
Speaker 2: people when there's a real squeeze on like a particular

855
00:47:50,600 --> 00:47:55,120
Speaker 2: specific thing, right, not not like an overall like cap

856
00:47:55,120 --> 00:47:56,760
Speaker 2: on the price of cereal or something.

857
00:47:57,040 --> 00:47:59,640
Speaker 1: So the thing is is that there's there's plenty of

858
00:47:59,719 --> 00:48:03,280
Speaker 1: story worries of horror stories from the past where capitalist

859
00:48:03,360 --> 00:48:06,680
Speaker 1: economies have tried to use price controls and that they

860
00:48:07,000 --> 00:48:10,640
Speaker 1: can lead to scarcity because suppliers would be like, I'm

861
00:48:10,680 --> 00:48:12,799
Speaker 1: not going to get into this business any longer. I'm

862
00:48:12,800 --> 00:48:15,000
Speaker 1: getting out of it because I can't make more than

863
00:48:15,040 --> 00:48:16,920
Speaker 1: what the government's saying I can make. And all of

864
00:48:16,920 --> 00:48:20,319
Speaker 1: a sudden, that product, say bread, is now really hard

865
00:48:20,320 --> 00:48:23,040
Speaker 1: to come by because nobody's making it, and demand spikes

866
00:48:23,040 --> 00:48:25,200
Speaker 1: and people have to stay in line. No one likes

867
00:48:25,239 --> 00:48:30,200
Speaker 1: price controls, but there's not there's not a lot of

868
00:48:30,239 --> 00:48:34,520
Speaker 1: alternative ideas, Like there's a sense of helplessness and everybody

869
00:48:35,080 --> 00:48:37,480
Speaker 1: who tends to rely on the federal government to solve

870
00:48:37,520 --> 00:48:44,880
Speaker 1: like major massive problems like food suppliers gouging customers. You

871
00:48:45,000 --> 00:48:50,279
Speaker 1: got basically either price controls or to me, the more legitimate,

872
00:48:50,840 --> 00:48:54,480
Speaker 1: the more legitimate answer, which would be to tax those

873
00:48:55,040 --> 00:48:58,640
Speaker 1: windfall profits at a higher rate. Like Okay, if you're

874
00:48:58,719 --> 00:49:01,759
Speaker 1: just doing like the normal capitalist thing as a corporation

875
00:49:02,800 --> 00:49:05,400
Speaker 1: and you you can't help it, that's just what your

876
00:49:05,440 --> 00:49:08,680
Speaker 1: profits are. If it's a during a pandemic or during

877
00:49:08,719 --> 00:49:11,520
Speaker 1: a crisis, or people are really hurting and you're making

878
00:49:11,520 --> 00:49:14,400
Speaker 1: these profits we're going to tax above you know, X

879
00:49:14,440 --> 00:49:18,120
Speaker 1: percentage higher than everything below that is your profit.

880
00:49:19,640 --> 00:49:22,759
Speaker 2: Now is that trigger? Is that like U during a

881
00:49:22,800 --> 00:49:27,520
Speaker 2: specific time or is it like a specific like a

882
00:49:28,000 --> 00:49:31,000
Speaker 2: percentage increase in profits triggers it or both?

883
00:49:31,080 --> 00:49:34,040
Speaker 1: I think both. I think if you have a situation

884
00:49:34,120 --> 00:49:38,000
Speaker 1: where normal competition is being is just kind of like

885
00:49:38,200 --> 00:49:41,080
Speaker 1: gone haywire for some reason, say like the pandemic, then

886
00:49:41,120 --> 00:49:43,840
Speaker 1: it would probably kick in because windfall profits are a

887
00:49:43,920 --> 00:49:48,880
Speaker 1: real possibility. And then say anything over you know, a

888
00:49:49,160 --> 00:49:52,160
Speaker 1: twenty percent increase in profits is going to get taxed

889
00:49:52,200 --> 00:49:54,600
Speaker 1: at ninety percent or something like that, Like, yeah, you

890
00:49:54,600 --> 00:49:56,160
Speaker 1: can make the profits, but we're going to take away

891
00:49:56,160 --> 00:49:57,759
Speaker 1: more of it because we got to help out these

892
00:49:57,800 --> 00:50:00,840
Speaker 1: people who are hurting. While your benefit, we need to

893
00:50:00,920 --> 00:50:04,360
Speaker 1: keep things a little more even then these guys are benefiting,

894
00:50:04,440 --> 00:50:07,680
Speaker 1: these guys are starving, which is the current narrative.

895
00:50:08,080 --> 00:50:11,000
Speaker 2: What you're forgetting, though, Josh, is when corporations have these

896
00:50:11,040 --> 00:50:14,799
Speaker 2: huge windfalls of profits, they pass that along to their

897
00:50:14,880 --> 00:50:19,120
Speaker 2: employees by raising their wages and to the consumer eventually too. Right, Sure,

898
00:50:19,280 --> 00:50:21,640
Speaker 2: sure isn't that How isn't that how it works? Yeah?

899
00:50:21,680 --> 00:50:23,480
Speaker 1: They drop their prices, right.

900
00:50:23,719 --> 00:50:25,920
Speaker 2: They just don't keep that for themselves, right.

901
00:50:25,920 --> 00:50:28,000
Speaker 1: No, not at all. Well, that's the problem, Like, that's

902
00:50:28,000 --> 00:50:29,799
Speaker 1: where a lot of people are like, Okay, we need

903
00:50:29,840 --> 00:50:32,920
Speaker 1: to figure out just even the basic structure of corporations.

904
00:50:32,960 --> 00:50:36,840
Speaker 1: If the point of a corporation is to maximize profits

905
00:50:36,840 --> 00:50:39,960
Speaker 1: for shareholders at all costs, at the expense of the economy,

906
00:50:40,120 --> 00:50:44,359
Speaker 1: at the expense of people's lives, health, well being, there's

907
00:50:44,400 --> 00:50:47,440
Speaker 1: something inherently broken about that, and we need to fix that.

908
00:50:48,200 --> 00:50:50,120
Speaker 1: And if you ask me, I don't think there's anything

909
00:50:50,160 --> 00:50:56,720
Speaker 1: inherently problematic about capitalism. I think people who who don't

910
00:50:56,800 --> 00:50:59,279
Speaker 1: care enough about other people or the planet or something

911
00:50:59,320 --> 00:51:01,879
Speaker 1: like that been allowed to come to power over the years,

912
00:51:01,880 --> 00:51:04,719
Speaker 1: and they're the ones who seem to represent capitalism more

913
00:51:04,760 --> 00:51:07,440
Speaker 1: than others. But I don't think that's necessarily like a

914
00:51:07,880 --> 00:51:12,840
Speaker 1: pure capitalist format. I think it can be much more

915
00:51:13,000 --> 00:51:16,240
Speaker 1: accommodating of the planet and of other people without reverting

916
00:51:16,320 --> 00:51:18,880
Speaker 1: to socialism or communism or anything like that. You can

917
00:51:18,920 --> 00:51:23,000
Speaker 1: still have capitalist a capitalist economy, but why can't you

918
00:51:23,120 --> 00:51:26,200
Speaker 1: also be like, you're making way too much money and

919
00:51:26,280 --> 00:51:29,279
Speaker 1: people are starving because of all this money you're making.

920
00:51:29,400 --> 00:51:30,800
Speaker 1: We need to help these people out with some of

921
00:51:30,840 --> 00:51:32,640
Speaker 1: that money, so we're going to tax it. It just

922
00:51:32,680 --> 00:51:35,160
Speaker 1: makes sense to me. I understand that a lot of

923
00:51:35,160 --> 00:51:37,319
Speaker 1: people revile that, and I'm not trying to shove my

924
00:51:37,760 --> 00:51:42,680
Speaker 1: opinion down anyone's throat. It just that particular answer makes

925
00:51:42,719 --> 00:51:45,000
Speaker 1: sense to me because this does seem like just such

926
00:51:45,040 --> 00:51:47,640
Speaker 1: a haywire weird situation.

927
00:51:48,520 --> 00:51:53,320
Speaker 2: Yeah, and this is especially sort of triggering for humans

928
00:51:53,400 --> 00:51:58,280
Speaker 2: because it's food. We're not talking about, you know, luxury

929
00:51:58,280 --> 00:52:02,080
Speaker 2: items or you know, other weird kinds of inflation that

930
00:52:02,560 --> 00:52:05,239
Speaker 2: I mean, this is something that people literally need to

931
00:52:05,280 --> 00:52:08,040
Speaker 2: live everywhere.

932
00:52:08,040 --> 00:52:12,160
Speaker 1: Right, you know, like recreational pontoons aren't what you're talking about,

933
00:52:12,239 --> 00:52:17,000
Speaker 1: you know, like it's really important stuff for sure. Yeah,

934
00:52:17,080 --> 00:52:18,880
Speaker 1: I agree. I think that that makes it a different

935
00:52:18,920 --> 00:52:20,960
Speaker 1: a different conversation than if we were talking about a

936
00:52:21,000 --> 00:52:22,799
Speaker 1: different commodity or different.

937
00:52:22,920 --> 00:52:25,319
Speaker 2: I mean, it seems like it. But geez, I'm sure

938
00:52:25,360 --> 00:52:28,480
Speaker 2: we'll hear from people that say that we don't know

939
00:52:28,560 --> 00:52:29,480
Speaker 2: what we're talking about.

940
00:52:29,480 --> 00:52:32,160
Speaker 1: And oh man, we're going to get some ugly emails

941
00:52:32,160 --> 00:52:34,680
Speaker 1: from people. It's fine, we can do it.

942
00:52:34,880 --> 00:52:37,520
Speaker 2: Those people don't complain about the cost of food.

943
00:52:37,560 --> 00:52:39,920
Speaker 1: I'm sure right, you have a right to your opinion.

944
00:52:40,080 --> 00:52:41,839
Speaker 1: You know, we have a right to our opinion too,

945
00:52:41,920 --> 00:52:44,400
Speaker 1: so don't get mad. You can share your opinion with us,

946
00:52:44,400 --> 00:52:46,319
Speaker 1: but don't get mad at us for sharing ours.

947
00:52:46,680 --> 00:52:50,560
Speaker 2: Yeah. We're just people. Yeah, we don't have some We

948
00:52:50,640 --> 00:52:55,399
Speaker 2: never took some oath of neutrality right to be podcasters.

949
00:52:55,440 --> 00:52:57,360
Speaker 2: I think people think that sometimes.

950
00:52:57,040 --> 00:53:00,480
Speaker 1: Right, Yeah, for sure, we're just a couple of regular dudes,

951
00:53:00,560 --> 00:53:02,920
Speaker 1: one of whom is wearing an awesome hat.

952
00:53:02,800 --> 00:53:05,320
Speaker 2: Right now, walking in place.

953
00:53:05,400 --> 00:53:09,880
Speaker 1: Weirdly, you got anything else? No, Well, go forth everybody

954
00:53:09,920 --> 00:53:13,359
Speaker 1: and decide is greedflation an evil thing? Or is it

955
00:53:13,440 --> 00:53:16,160
Speaker 1: just normal or what? And if you have other solutions

956
00:53:16,200 --> 00:53:19,160
Speaker 1: to the idea or the problem, then I would love

957
00:53:19,200 --> 00:53:22,399
Speaker 1: to hear those, said Tom. And in the meantime, I say, Chuck,

958
00:53:22,400 --> 00:53:23,640
Speaker 1: it's time for a listener maw.

959
00:53:24,800 --> 00:53:26,640
Speaker 2: All right, Hey, guys, just want to say thanks for

960
00:53:26,800 --> 00:53:30,600
Speaker 2: keeping me entertained since the pandemic. I've been the office

961
00:53:30,680 --> 00:53:33,279
Speaker 2: random facts guy. I'm already that guy.

962
00:53:34,000 --> 00:53:36,080
Speaker 1: This guy sends random facts to people.

963
00:53:36,680 --> 00:53:41,040
Speaker 2: No, no, no facts, gotcha. Yeah, that'd be funny though. It's

964
00:53:41,080 --> 00:53:45,000
Speaker 2: a good bit. People to just hear that sound, that

965
00:53:45,160 --> 00:53:48,839
Speaker 2: fact sound, and they're like, God, Gary's at it. I'm sorry,

966
00:53:48,840 --> 00:53:51,239
Speaker 2: it's Daniel, I'm already that guy when it comes to

967
00:53:51,320 --> 00:53:54,040
Speaker 2: a lot of the things I treat, but now it's

968
00:53:54,080 --> 00:53:57,840
Speaker 2: about all things. Because of long rides to Ohio to

969
00:53:57,880 --> 00:54:00,239
Speaker 2: see the family. My toddlers even asked for stuff, you know,

970
00:54:01,080 --> 00:54:05,680
Speaker 2: specifically the fire truck episode that's cute makes sense, which

971
00:54:05,719 --> 00:54:08,400
Speaker 2: can be tough to find since I'm currently working backwards

972
00:54:08,440 --> 00:54:11,000
Speaker 2: from newest to oldest. I even just found out that

973
00:54:11,080 --> 00:54:11,759
Speaker 2: Josh and I are.

974
00:54:11,640 --> 00:54:13,600
Speaker 1: Birthday buddies, so oh hey, happy birthday.

975
00:54:14,200 --> 00:54:16,759
Speaker 2: That's right, he says. And not cancers anymore. Did they change?

976
00:54:17,600 --> 00:54:18,320
Speaker 2: Did they change that?

977
00:54:18,400 --> 00:54:21,640
Speaker 1: I don't think so well, I'm to look into it.

978
00:54:22,080 --> 00:54:23,919
Speaker 1: I have felt a little different in the last couple

979
00:54:23,960 --> 00:54:24,319
Speaker 1: of years.

980
00:54:24,800 --> 00:54:27,440
Speaker 2: All right, Thank you all again for the hours of enjoyment,

981
00:54:27,560 --> 00:54:29,279
Speaker 2: laughs and learning. If you do end up reading this,

982
00:54:29,680 --> 00:54:32,359
Speaker 2: would you shout out my wife Lynn, who has become

983
00:54:32,400 --> 00:54:36,399
Speaker 2: a fan. So that is from Daniel Klein and Lynn

984
00:54:36,880 --> 00:54:37,680
Speaker 2: and their kids.

985
00:54:37,960 --> 00:54:41,040
Speaker 1: Nice. Thanks a lot, Daniel, thank you for indoctrinating your

986
00:54:41,160 --> 00:54:43,400
Speaker 1: children into stuff you should know. Universe.

987
00:54:44,040 --> 00:54:46,960
Speaker 2: That's right, and they're also listening now to Biblical time machine.

988
00:54:47,160 --> 00:54:49,200
Speaker 2: Okay from Dave Ruse.

989
00:54:50,160 --> 00:54:52,400
Speaker 1: Is it biblical or is it Bible time machine?

990
00:54:53,480 --> 00:54:56,279
Speaker 2: Daniel says biblical and I'm not sure and we're not

991
00:54:56,320 --> 00:54:56,759
Speaker 2: going to look it.

992
00:54:56,800 --> 00:54:59,640
Speaker 1: Up right either way. It's a top notch Dave Ruse

993
00:54:59,680 --> 00:55:02,040
Speaker 1: podc And by the way, Dave Ruth's helped us with

994
00:55:02,120 --> 00:55:06,720
Speaker 1: this episode too, so that's very appropriate. Double Dave yep again,

995
00:55:06,800 --> 00:55:08,239
Speaker 1: Thank you, Daniel, and if you want to be like

996
00:55:08,360 --> 00:55:10,560
Speaker 1: Daniel and get in touch with us, you can send

997
00:55:10,640 --> 00:55:13,960
Speaker 1: us an email to Stuff Podcasts at iHeartRadio dot com.

998
00:55:18,400 --> 00:55:20,680
Speaker 1: Stuff you Should Know is a production of iHeartRadio.

999
00:55:21,239 --> 00:55:24,359
Speaker 2: For more podcasts my heart Radio, visit the iHeartRadio app,

1000
00:55:24,600 --> 00:55:27,480
Speaker 2: Apple Podcasts, or wherever you listen to your favorite shows.