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ivape 6 days ago

[flagged]

Majromax 6 days ago | parent | next [-]

> I dont think it’s the tariffs. I really think the entire category of merchants looked at each other and figured it was fine to raise prices.

Those statements aren't contradictory. Pricing in non-commodity goods is always a human phenomenon, driven ultimately by the idea that a business can 'get away with it' without losing too many customers to competitors.

Tariffs, on the other hand, provide a good reason/excuse to raise prices. Affected firms see their cost structures blown up, so they have to raise prices at least somewhat. Unaffected firms see that their competitors are raising / must raise prices, so they know that they can raise their own prices in the now less-competitive market. That's how and why tariffs work: they give domestic firms protection to have profits in excess of what they would have under a free trade counterfactual.

Any argument that tariffs don't raise prices is a very long-term one, relying on the idea that it will be easy to open new firms and expand domestic production to ultimately return to a competitive market. This has nearly no effect on short-term pricing, and it's why the least-damaging changes to tariff policies are long-run and well-telegraphed plans, slowly implemented.

Lendal 6 days ago | parent | prev | next [-]

That's what tariffs do though. If you have a product that competes with another that now costs more due to tariffs, you're now free to raise your prices as well, in order to maximize profit. Your product may not have a tariff, but it does have greedy shareholders that see that they can now raise their earnings because competitors suddenly aren't so competitive anymore.

Try going on a shareholder earnings call. They're free. It's company executives trying to impress shareholders. It's the only place I've ever heard people brag about how much they've raised their prices.

ivape 6 days ago | parent [-]

We’re talking about a lot of domestic goods here. Why’s the BLT more expensive? It’s literally just bacon, lettuce and tomato.

Scams are scams, man. This is not economics, it’s human nature. Tariffs did not make the price of your BLT go up, it’s greed.

churchill 6 days ago | parent | next [-]

>Tariffs did not make the price of your BLT go up, it’s greed.

What do you want to do about it, Stalin? Use the power of the state to legislate away human greed? Imprison these greedy people? Impose price controls (which have a long, storied history of not working and only leading to shortages and queues)?

We build economic policy around human nature, not otherwise. Humans will always seek to maximize profit at all costs. If you lock out foreign suppliers from competing using tariffs, local suppliers will reason that they can charge more and will rightly do so. And tariffs in one area end up affecting so many other areas in unforeseen ways. That's how tariffs on chemical fertilizer might end up affecting the price of something as mundane as bacon, lettuce, and tomato.

That's why free markets are important. They give buyers options, and sellers then have to lower their prices reasonably to be chosen/picked from that sea of options.

If you want lower prices, remove tariffs and trade restrictions.

jurking_hoff 6 days ago | parent [-]

> What do you want to do about it, Stalin? Use the power of the state to legislate away human greed? Imprison these greedy people? Impose price controls

Fair enough

But in the same spirit, I will just murder you. What are you gonna do? Police human nature?

churchill 6 days ago | parent [-]

What are the odds that you lose your life in the process?

jurking_hoff 6 days ago | parent [-]

36.2%

Believing something so context dependent with so many variables can be given hard numbers is so stupid, I can’t believe it’s a real question.

But I guess lying is what you people do for a living.

churchill 6 days ago | parent [-]

Since I'm holding onto half the odds, it's closer to 50%. but, since I'm motivated to stay alive, your chances probably look worse.

ivape 6 days ago | parent [-]

Fighting amongst ourselves when we should be shaming the mayonnaise and baloney sandwich over-pricers. That’s the problem with the petite bourgeois and proletariat.

skirmish 5 days ago | parent [-]

Shaming is so effective, the sellers' faces will turn red with shame, and they will immediately drop prices by 2/3 at least. Hah, hah, no, they won't. Of course, they will overprice when you have no other options.

avgDev 6 days ago | parent | prev [-]

A lot of domestic goods can be affected by the tariff war US is waging. We are a part of a global economy. Additionally, ICE raids are adding to the issue.

Even for products made in the US if other things increase the cost of running a business those costs will get passed on to the buyer. It takes LABOR to get bacon, lettuce and tomato....have you heard about ICE raids and crops getting wasted because people are not showing up to work? That will affect prices as less produce = higher prices as demand increases.

If equipment gets more expensive, then cost of produce gets more expensive. I work for a manufacturing company...under Trump our cost has been spiking due to insane tariffs....those costs are passed to people who make equipment and to farmers, then to YOU.

xnx 6 days ago | parent | prev | next [-]

Business is always "greedy", but it's true that it took some external events to make them realize they could get away with higher prices because consumers had gotten lazy about comparison shopping and alternatives. Good on you for boycotting increases by eating simply.

Workaccount2 6 days ago | parent [-]

Because business is not a single monolith, and because it is greedy, it kills the naive idea that "businesses raise prices because they can".

Any gouging price increase is a gaping hole for a competitor (businesses are greedy and therefore will take money from other businesses) to come in and steal business. This is something that is obvious to people who have been on the business side and mostly opaque to people who have only ever been on the consumer side.

sjsdaiuasgdia 6 days ago | parent [-]

I'll hold my breath for the fast food chain that lowers its prices to better compete with the chains that raised theirs.

We have plenty of examples, with documentation and receipts, of businesses participating in price fixing, collusion, and other cooperative behaviors that result in higher prices for consumers and reduced competition between businesses.

You are naively assuming that all businesses express greed in the same way. Some of them realize they can make quite a lot of money with a lot less work by working together to raise prices. Not all markets are easy for a newcomer to break into, competition is far from guaranteed if the established players are cooperating.

Workaccount2 6 days ago | parent | next [-]

>We have plenty of examples

The issue isn't that we have plenty of examples (which is actually a handful, people always go to the same 2 or 3 cases, but I digress), it's that we have orders of magnitude more counter-examples that are ignored.

It's important to not build your world view on headlines, because headlines are headlines because they are outliers. It's not news when companies competitively adjust prices, it happens thousands of times a day all over the economy. If there was an "undercut on price" button in business meetings, you wouldn't even be able to read the text on it it would be so worn out.

sjsdaiuasgdia 6 days ago | parent [-]

There's more than 2 or 3 here for you to review: https://en.wikipedia.org/wiki/List_of_price_fixing_cases

Your worldview is incredibly naive if it doesn't include substantial collusion and cooperation among the capital class.

Workaccount2 6 days ago | parent [-]

I don't know how you can call a list of ~50 cases over the last 30 years "substantial" when there are millions of active competitive markets.

amanaplanacanal 6 days ago | parent | prev [-]

Fast food chains are giant corporations. Where you would see the difference is in the mom and pop shop, who can now undercut the big chain and probably has better quality food.

sjsdaiuasgdia 6 days ago | parent | next [-]

Mom & Pop shops aren't present at most highway exits like the big chains, and would need to become unbelievably, impossibly successful locally to generate enough capital to expand widely. They can't effectively compete with major chains. It's not a meaningful expression of the other poster's point.

craftkiller 4 days ago | parent [-]

Are you a trucker? Maybe 0.3% of my meals come from highway exits. Most of my meals are from near my home.

> They can't effectively compete with major chains

I don't think they were suggesting a couple Mom & Pop shops become national chains. I think they were suggesting that collectively Mom & Pop shops could compete against the chains. If everyone replaced 50% of their chain fast food meals with mom & pop shops then each mom & pop shop might only see a small bump in orders but that would be devastating to the chains.

6 days ago | parent | prev [-]
[deleted]
aurareturn 6 days ago | parent | prev | next [-]

It’s the tariffs. You’re assuming that everyone will raise the price and have the same goals. Some businesses will see it as an opportunity to undercut and gain market share.

After all, total profit = sales margin * sales volume. You can increase your profit by increasing your volume because you kept your prices unchanged while your competitors decided to increase prices.

marknutter 6 days ago | parent [-]

Tariffs don't affect products that are produced locally.

myrmidon 6 days ago | parent | next [-]

Tariffs affect local product prices in a lot of ways.

1) They reduce competitive pressure so local producers can raise prices without losing market share (that is the actual point)

2) They increase local demand for production capacity and labor in general, driving up costs even in sectors that are completely unaffected by the tariffs themselves

marknutter 6 days ago | parent [-]

McDonald's was never sourcing chicken for their chicken nuggets from outside the country.

deeg 6 days ago | parent | next [-]

Tariffs raise the price in tangential ways. Tariffs on Chinese steel means US chicken wire producers switch to more expensive US sources. Increased demand for US sources make it even more expensive. Farmers buy the more expensive chicken wire, passing the added expense to McDonalds, which passes it on to you.

ivape 6 days ago | parent [-]

The chicken nuggets were edging past $5 dollars before the tariffs, during the Biden era. Mcdonalds owns Chipotle so they are well aware of premium pricing for regular food. They applied the same pattern to Mcdonalds, the same way Starbucks once convinced everyone coffee can be as much as $8. This is all before tariffs.

No one's giving tariffs a pass, but we are giving regular people a pass for some reason. It takes people to do all of this.

To further my point, the Gap owns Old Navy and Banana Republic. It's all the same material mostly, but it's tiered pricing (Old Navy cheapest, Gap, to Banana Republic most expensive). Over time, they raised the floor of pricing at Old Navy. Financial engineering is not just happening in the stock market.

The floor for prices on certain things have just gone up with no real reason other than "its about time we raised these prices", and it's happening in a collective way.

aurareturn 5 days ago | parent [-]

  The floor for prices on certain things have just gone up with no real reason other than "its about time we raised these prices", and it's happening in a collective way.
This invalidates every supply and demand theories. I'm unconvinced that you are right.
disgruntledphd2 5 days ago | parent [-]

In consumer markets, the notion of a rational consumer is a myth.

If we had rational consumers then the world would be very, very different.

aurareturn 4 days ago | parent [-]

I'm unconvinced that you can get every competitor to agree on a price increase.

All it takes is for one business to see it as an opportunity to lower prices to gain more marketshare for everyone else to also have to lower prices.

disgruntledphd2 2 days ago | parent [-]

> All it takes is for one business to see it as an opportunity to lower prices to gain more marketshare for everyone else to also have to lower prices.

This would again, be true in a very simplified world. A lot of the time your suppliers have committed to provide X widgets by Y date at Z place, and it's not trivial to swap out A widget provider for B widget provider.

And this is the easy case, how much would it cost to rebuild all your LLM based tools with Anthropic after building on OpenAI.

So, yeah in theory it requires perfect co-ordination but really if there are 4 big suppliers and 3 increase price, their profits will increase and the CEO of the other will probably be fired by the board.

myrmidon 6 days ago | parent | prev [-]

Yeah, but that does not really matter; everyone else that imported meat (or feed ) now competes for McDonalds suppliers, which means higher prices.

You can also expect to pay more for labor itself, because every bit of industry that you bring back (or scale up, at least) with tariffs competes with the essentially fixed labor pool, and there was not a lot of slack (unemployment) to start with.

skirmish 5 days ago | parent [-]

Fast food prices jump a lot whenever minimum wages increase. I am convinced this is a major contributor to McDonald's price rise.

rsynnott 6 days ago | parent | prev | next [-]

This is true if and only if those products have no imported inputs, and if tariffs aren't causing general inflation which is forcing up wages of the people making them via cost-of-living increases.

Ultimately, unless you're an autarky (in which case tariffs are in any case irrelevant), high tariffs should be expected to lead to broad price increases, even for goods which are not directly imported.

wtfwhateven 6 days ago | parent | prev | next [-]

Not even remotely true.

avgDev 6 days ago | parent | prev [-]

Wrong.

chasd00 6 days ago | parent | prev | next [-]

it works as long as all businesses are working together to fix prices, all it takes is one to undercut the other and reap the reward then it's every person/business for itself. I don't really care because, like you, my thought is go ahead and raise prices all you want I just won't be buying.

darksaints 6 days ago | parent | prev | next [-]

Goods are priced by what sellers can get away with, and when you have tariffs on your competitors, you can get away with more.

mapotofu 6 days ago | parent | prev | next [-]

Yes, stop going to McDonalds altogether and cook at home. For $6 I can get a pack of 4 pack of artisanal and locally made sausages and dip them in mustard for literally the same value, far more food, and 1000x better taste. Stop supporting these poisonous companies.

thisisit 6 days ago | parent | prev | next [-]

You are right. An entire category of merchants (made in USA) looked at others (importers) who now need to pay increase prices due an import tax and figured it was fine to raise prices. Those greedy businesses who figured that you can raise prices just below the import tariffs and make consumers pay. Oh wait, what were you saying about tariffs?

ivape 6 days ago | parent [-]

This was happening for years before the tariffs.

thisisit 6 days ago | parent [-]

Just because something is happening for years doesn't mean there cannot be extra incentive to make it worse today. But you just handwaved tariffs away. and did the inflation go up by 0.9% in a month in those years?

ivape 6 days ago | parent [-]

Do you not want to appropriate accountability to anyone that isn’t sitting around in a top hat and monocle?

WE are shitty greedy people. Shitty greedy people will use tariffs and become shittier and greedier. So yes, you are right, tariffs will make it worse.

This society lacks civil sense, moral sense, ethical sense, communal sense, common sense, from top hat to bottom bare feet.

This only gets fixed together.

ta12653421 6 days ago | parent | prev | next [-]

Honestly? Thats faaaar too cheap for an animal product.

And since this is super low qualy, there should be an additional markup of 30-50%

whoiskevin 6 days ago | parent | prev | next [-]

You don't think it is the one thing being wielded as a personal enrichment device by a giant man child that cheats at golf is the cause? Well okay good luck with that.

ivape 6 days ago | parent [-]

No. The price creep has been happening for years even under Biden. As someone mentioned, tariffs were just an excuse to accelerate it. The things in your grocery store are domestic goods.

We can look for mythical technical explanations as to what’s happening, but all things used to explain anything in our society is just to describe the state of your fellow man. Your fellow man is greedy. There.

terminalshort 6 days ago | parent | prev | next [-]

Why get mad about people selling things for more than you will pay? Just don't buy it and move on.

ivape 6 days ago | parent [-]

Because it’s getting bad. I’ve dealt with overpriced pizza where they try to save money on the sauce and cheese. They are beginning to nickel and dime customers the way banks and the tech industry engineer margins and fees.

I called some of these places and had to tell them to stop scamming customers. Fuck that, I’m buying a pizza oven.

ericmay 6 days ago | parent | prev [-]

I think it’s a combination of a number of things:

  Tariffs
  Price gouging and folks continuing to pay
  Lack of alternatives - have a garden? Know how to work on a car? Etc. 
  Genuine competition for resources around the world and increased demand for those resources