Financial Expert Ron Insana on inflation
excerpt from podcast interview of Ron Insana of CNBC on Lincoln Project podcast
S E E D E D C O N T E N T
LP : let me ask a cynical question on the rising prices ,vis a vis inflation .
at what point does a producer raise prices to account for inflation versus a producer raising prices because they can?
Ron Insana : I think we’re in the second part of that ,which is they’re raising prices because they can and consumers by and large have adequate savings, or wages have gone up enough faster than inflation of late to make those purchases, and so we see that a good portion of the more recent increase in inflation is, even though it is slowing, the recent stickiness of prices may well be that corporations are holding on to their expanded margins. Their input costs ,if you will, have come down and they’re holding the line on prices and fattening those margins as you suggest.
And yeah it is a little cynical ,we see it at the grocery store when the president talks about shrinkflation . He’s not entirely wrong. We’ve all felt it . You know the candy Bar’s gotten a little bit smaller, the cereal box is a little less full , and there’s a little less detergent in the box as well. The president can’t mandate anything and there’s really nothing that governments can do about this. I think many corporations have purposefully fattened their margins and maintained them and that supported their stock price, kept their shareholders happy ,consumers not so much .
I have been a fan since the 1990s of the notion of stakeholder capitalism , that corporations , unlike what Vivek Ramaswami has been suggesting, where companies only exist to produce profits that are returned to shareholders, that companies shoul take into account not just their shareholders but their employees and certainly their customers ,and their communities, and this was something that was actually got that got wildly popular at the end of the 1990s and then went away almost as quickly as it was talked about. I wish that corporate CEOs would embrace that notion again of stakeholder value, stakeholder capitalism as opposed to just shareholder capitalism ,because I think at the end of the day it it could ultimately be a bit of a self-defeating process because people do get extremely angry when they’re left out of the conversation or don’t have a voice whether it’s employees ,customers, or the communities that support these companies.You start to see reactionsthat are certainly not favorable to the future of a company.
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price gouging
That is a bizarre comment
One persons opinion. Mine is that to blame high costs today, on just price gouging, is simply obtuse.
perhaps, but he's not a liberal ,and he is a financial expert , so I'll give him more credibility than the average person commenting on a social media site like this.
A good financial expert is like a good moderator. Introspective and unbiased. Tough to find those two traits these days in either of those jobs
Any first year Economics major realizes a big part of the inflation problem is related the Biden policy. The huge amounts of free money his policy has needlessly injected into the economy.
He’s just lucky Trump hired and he kept a good chairman of the Fed. Powell’s aggressive increasing of the Fed Fund Rate is the only thing keeping Biden policy marginally in check. The only thing.
A burger was 25 cents and a Coke was a nickel in 1960. Prices go up. They rarely go down. But yet, when they do, people bitch about that too...
Deflation is worse for an economy than inflation.
Suddenly debts become unsecured and banks close as people default on underwater loans...
Stocks drop and homes lose value. It ain't good.