Reply to Why is everything so expensive (general rant)

Forum Index » Off-Topic

Reply to "Why is everything so expensive (general rant)"

Subject:

Emoticons





More smilies

Text Color: Font: Close Marks

[quote=Anonymous][quote=Anonymous]Here's my enlightened centrist take:

Both the political right and left are correct. There are winners and losers in economic policy, whether Biden or Trump, and the middle class is getting squeezed, at least the presumed white collar, professional-managerial class. In fact, I think the whole concept of the college educated white collar middle class is about to face a real reckoning.

Biden's and Democratic policies have been a win for blue collar service economy workers to an extent. Their wages have gone up, in many cases significantly, and LMC had more social safety nets during the pandemic. There have also been laudable efforts to give the worst-off people a break: forgiving $10K of student loan debt (makes much more of a difference for those who never finished their degrees or went to CCs or lower tier schools with fewer opportunities than someone with an expensive degree), child tax credits, stimulus payments, etc. I don't actually think this all contributes as much to inflation as the right thinks, I really do think inflation originated more with supply chains and then just continued because of the "vibe" and companies knowing they can get away with it. But generally yes, blue collar/service worker people have been somewhat better off.

The other winners from both Biden AND Trump Covid and post-Covid policies are the corporate executives. Airlines for example got huge bailouts and there were no enforcement mechanisms to ensure they held onto their end of the bargain and not lay off people. The thing that the right wing understands but the idealist left does not, is that there is [b]virtually no government regulation or economic policy that can force down executive pay or limit shareholder profits.[/b] There simply isn't. Every restriction, tax, regulation, impact fee, you name it, imposed on businesses will be pushed back to the consumer. Every. Single. One. Yes, I hate it too. But it's true. So the left is correct that "corporate greed" is the source of inflation but the left is wrong that they can do anything about it. The only thing they can do is respond to incentives.

Now back to the white collar middle class. The "losers" of this economy are the traditional knowledge-economy, middle management, corporate ladder but non-C-suite jobs. They see prices going up, executive bonuses going up, service workers wages going up, but their own wages are stagnant. As all kinds of products and services go up in cost, companies are cutting other costs elsewhere, such as professional services, consulting, IT, anything knowledge and "analysis" based that doesn't connect to raw materials or jobs affected by minimum wage hikes. So your white collar analyst/consultant/middle manager making $75K-150K is not going to be making any more money if they are even lucky enough not to be laid off. They are finding their earning power to be closer to that of a fast food worker than the corporate ladder they aspired to. The uncomfortable truth is that the market actually calls for much more makers and doers than thinkers and analyzers. And this is doubly unfortunate for people who took out student loans to get into the knowledge economy. We'll see where AI fits into the mix but really, recession-era millennials were really sold a bad batch of goods when they were told that college degrees and knowledge economy were the surefire tickets to the American Dream. Hustle, skills, and luck are, and there is nothing the government can do to change that. [/quote]

What about consumer protection rules, antitrust, etc? It would be even worse without these. And if they were more robust, things would be better…[/quote]

Options

	Disable HTML in this message
	Disable BB Code in this message
	Disable smilies in this message

Review message

Search Recent Topics Hottest Topics