Prices would go down if the government was serious about taking on the monopolies in the supply chain (meat packing, industrial farmers, grocers with local monopolies, etc.). If they were serious about antitrust, prices would go down and you wouldn’t get a recession, on the contrary, it would create jobs and grow the economy.
Fat chance of that happening under this administration (or an alternate universe Harris one either).
I’m not disagreeing with your suggestion, but in that situation what would actually happen over the short term is prices would stay the same for much longer. Which is healthy for an economy.
Over a longer term people will make more money and $10 eggs won’t feel as expensive.
It’s not as exciting of a proposition, which is why most people don’t bother explaining it.
Prices for other goods have gone down (TVs, computers, etc) in the past without being disastrous for the economy. You’re right if we’re talking about deflation generally (ie. ALL goods), but that’s not what I’m talking about. I’m talking about tackling prices in specific, anti-competitive sectors like food, health care, etc, where there’s plenty of room for prices to go down. And all of those things are necessities where consumers can’t delay spending on them, so deflation wouldn’t even have its disastrous effect there (which is customers withholding spending because they can get more with the same money if they wait a month).
If you were to introduce competition within the whole chain all at once between farmers and consumers, prices would definitely go down. Obviously that will never happen because the government acts slowly and it can take a decade for a case to make it all the way through the courts, so within the current political context of the USA you’d never see prices go down. Economics itself doesn’t dictate that, and it wouldn’t be harmful if say the prices of eggs halved overnight due to more competition in the market or price controls, as long as it’s still profitable for the producers of the good.
Monopolies don’t necessarily mean higher prices and breaking them up wouldn’t immediately solve high prices and would probably cause prices to go up further (as you’re creating instability).
Not that going after monopolies is bad, and long term would help, but it isn’t going to fix the current situation.
prices always go up over time in a healthy economy
LOL that sounds like a massively over simplified statement. would you care to elaborate?
prices go up, period–that’s true, but calling an economy “healthy” because of that is like saying “healthy people eat food”
i think the average american has very little understanding of what money actually is and why inflation is even a thing, rather, they just take it as a fact of life. like school shootings. like “yea, it’s not fun, but there’s nothing we can do” LOL
According to Piketty, anyway, general inflation did not actually start until the industrial revolution. The price level was otherwise stable throughout history up to that point. It’s not just an incontrovertible fact of life, although it seems that way now.
Prices go down due to competition. So the government can’t lower prices, unless it destroys demand so the existing levels of competition cause lower prices. The government can lower demand by raising taxes, or if the fed raises interest rates. Eventually leading to enough unemployment to lower demand.
In short, if the government makes prices go down, people tend to burn down the government before that happens. So it’s not really something they can do. Increasing prices is a whole different thing, inflation pisses people off in smaller doses, and keeps them in jobs, so they’re too busy to grab pitch forks and torches.
If an entire industry is bankrupt, it is no longer needed and has been supplanted by a better industry. And that usually ends in lower prices. Tractors are way, way cheaper than oxen.
The industry goes bankrupt because it can’t compete with a government producer that doesn’t pay taxes, leading to a government program running without competition, paid for by deficit funding.
If you’re a currency issuer then your government programs don’t run on any funding. They are allocated a maximum amount of new currency.
But modern monetary theory aside, government competitors only eliminate shitty competition, not entire industries, unless those industries are themselves useless like the insurance industry.
This is a terribly written headline and article. Might be AI slop. In short it says:
Historically prices don’t go down unless there is an economic depression (for some reason that isn’t explained).
There is little government policy can do to bring prices down (for reasons that aren’t explained).
trump’s tariff and deportation policies will make prices much higher.
What the average American doesn’t understand is that
The government only has control over inflation when it comes to prices
Controlling inflation only controls the RATE of rising prices
Once prices are up, they don’t go down because prices always go up over time in a healthy economy.
Prices would go down if the government was serious about taking on the monopolies in the supply chain (meat packing, industrial farmers, grocers with local monopolies, etc.). If they were serious about antitrust, prices would go down and you wouldn’t get a recession, on the contrary, it would create jobs and grow the economy.
Fat chance of that happening under this administration (or an alternate universe Harris one either).
I’m not disagreeing with your suggestion, but in that situation what would actually happen over the short term is prices would stay the same for much longer. Which is healthy for an economy.
Over a longer term people will make more money and $10 eggs won’t feel as expensive.
It’s not as exciting of a proposition, which is why most people don’t bother explaining it.
Prices for other goods have gone down (TVs, computers, etc) in the past without being disastrous for the economy. You’re right if we’re talking about deflation generally (ie. ALL goods), but that’s not what I’m talking about. I’m talking about tackling prices in specific, anti-competitive sectors like food, health care, etc, where there’s plenty of room for prices to go down. And all of those things are necessities where consumers can’t delay spending on them, so deflation wouldn’t even have its disastrous effect there (which is customers withholding spending because they can get more with the same money if they wait a month).
If you were to introduce competition within the whole chain all at once between farmers and consumers, prices would definitely go down. Obviously that will never happen because the government acts slowly and it can take a decade for a case to make it all the way through the courts, so within the current political context of the USA you’d never see prices go down. Economics itself doesn’t dictate that, and it wouldn’t be harmful if say the prices of eggs halved overnight due to more competition in the market or price controls, as long as it’s still profitable for the producers of the good.
Monopolies don’t necessarily mean higher prices and breaking them up wouldn’t immediately solve high prices and would probably cause prices to go up further (as you’re creating instability).
Not that going after monopolies is bad, and long term would help, but it isn’t going to fix the current situation.
LOL that sounds like a massively over simplified statement. would you care to elaborate?
prices go up, period–that’s true, but calling an economy “healthy” because of that is like saying “healthy people eat food”
i think the average american has very little understanding of what money actually is and why inflation is even a thing, rather, they just take it as a fact of life. like school shootings. like “yea, it’s not fun, but there’s nothing we can do” LOL
According to Piketty, anyway, general inflation did not actually start until the industrial revolution. The price level was otherwise stable throughout history up to that point. It’s not just an incontrovertible fact of life, although it seems that way now.
Let’s be honest, if you’re clicking on headlines that end in “hErE’S WhY”, your news sources are all wrong
Prices go down due to competition. So the government can’t lower prices, unless it destroys demand so the existing levels of competition cause lower prices. The government can lower demand by raising taxes, or if the fed raises interest rates. Eventually leading to enough unemployment to lower demand.
In short, if the government makes prices go down, people tend to burn down the government before that happens. So it’s not really something they can do. Increasing prices is a whole different thing, inflation pisses people off in smaller doses, and keeps them in jobs, so they’re too busy to grab pitch forks and torches.
Instead of lowering demand, they could increase supply.
Bankrupting entire industries doesn’t end with lower prices.
If an entire industry is bankrupt, it is no longer needed and has been supplanted by a better industry. And that usually ends in lower prices. Tractors are way, way cheaper than oxen.
The industry goes bankrupt because it can’t compete with a government producer that doesn’t pay taxes, leading to a government program running without competition, paid for by deficit funding.
If you’re a currency issuer then your government programs don’t run on any funding. They are allocated a maximum amount of new currency.
But modern monetary theory aside, government competitors only eliminate shitty competition, not entire industries, unless those industries are themselves useless like the insurance industry.