The causes of the present inflation are not clear; even experts are in doubt.
They are more or less clear in their nature - what is more murky and in dispute is how much each of these factors contributed.
at least Democratic largesse tends to address that.
Not really. The largess is not really focused on income inequality as much as rewarding Dem Party constituencies. Take college graduates, They make significantly more, as a group, than non-graduates, but were promised (and Biden delivered, or at least is trying to deliver) largess on their behalf. A big part of B
3 was a massive tax cut for blue state rich (aka SALT deduction hike, which is highly regressive and mostly benefits those in high-tax blue states like California, NY and Taxachusetts). Most of the rest of B
3 are giveaways to parents. I fail to see why somebody making $100k who has 3 kids should get $900/month in extra benefits funded by somebody making $30k but who has no kids.
A major sub-debate in this thread is the extent of monopoly and oligopoly power in the U.S. Some Infidels seem to argue that since Pepsi is under price pressure from Coke, and vice versa, that this market is competitive rather than oligopolic. But that ignores the way that American mega-corporations actually operate today: Oligopolies are the norm.
There are other players, including store brands and including other types of beverages. Is there any evidence of excessive pricing in the soft drink space I wonder? And what would be the solution in your mind? Break up Big Bubble?
(This would be a topic for another thread, but for starters note that the shareholders of Pepsi are essentially the same set of institutions as those who own Coke.)
And a lot of those shareholders also drink Coke. Or Pepsi.
Even noisy data has central tendencies.
Especially if you apply motivated reasoning.
For truly laughable "research" try the American Enterprise Institute.
I'd take it over this dreck.
Lusiani has a Masters degree, with emphasis on Economics, International Law and Human Rights. His credentials are not to be sneered at, with several awards from his undergraduate studies at UCLA in International Development, etc.
In other words he has an unfocused master's degree and is not an economist. By the way, where did you get this description? His bio at Roosevelt merely states that he has a "Master’s degree from Columbia University’s School of International and Public Affairs.". Which is even more vague than what you wrote, so I wonder where you got it from.
In any case, he is all about things like "exploring the mechanisms by and extent to which firms, executives, and shareholders have gained, retained, and wield outsized power in our economy and politics, while also teeing up policies to promote shared prosperity and reclaim power for workers and the public by curbing corporate power." Hardly unbiased economic analysis.
To make sure we're on the same page, we're discussing the supply and demand of, say, widgets, in the context of a shortage of a prerequisite for widgets, e.g. steel.
For example. You give people who like widgets more money. Say $2,400/month for not looking for work. Or $300/month for not having used a condom that one time. At the same time, there is fewer widgets in the store. What happens? Prices rise.
Konczal and Lusiani argue that oligopolic power can lead to the higher widget prices, but you assume competition.
Too little competition can definitely lead to market inefficiencies, yes. To argue that this is the driving force of THIS inflation rather than huge amounts of government spending is ludicrous. 2020/21 did not see significantly less competition from people making and selling widgets, but it did see significantly more government spending.
Can you agree that the supply of steel is NOT completely inelastic? That businessmen would pay a premium, outbidding other buyers of steel, with the proper profit motive?
Which raises prices. And note that any response requires time. If widgets are made in China, and China shuts down the factory, then you would need to build and expand factories elsewhere for example. And by that time China might reopen, so is it financially worth it?
And you have to bring widgets to the consumers. A big part of the supply chain issues were about container ships. So now you have fewer widgets, for a while, and at the same time people clamoring for widgets have more money to spend, thanks to Uncle Moneybags, uhm, I mean Uncle Joe.
Result:
And thus, higher prices, and thus inflation.
In your opinion there is a new equilibrium for widgets with lower volume but higher profit margins. But if the widget market were competitive, these high margins would lead an entrepreneur to bid up the price of steel, and bring down the price of widgets.
Eventually things settle down yes. Either prices come back down because there are more widgets being produced/shipped, or labor costs increase reducing profits. But in the meantime, more profits are pocketed.