“And in Paris, you can buy a beer at McDonald’s®.” – Pulp Fiction
Interesting fact: women in Arabic cities like Paris don’t need car insurance. They’re already covered.
Greedflation.
It’s an ugly word for several reasons. The first reason it’s ugly is because I generally support the free market as the best tool for setting prices. You see that at gasoline stations regularly – no station that charges a quarter more for a gallon of gasoline will be able to sell much gasoline. The price for a commodity like gasoline, in a relatively free market, sets itself.
That’s nice, because the very price mechanism that sets the price also allows the gasoline to flow to the consumers that value it the most, which according to my research are groups of post-nuclear war barbarians who hang out in Australia.
I hear they’re filming the sequel on location in Los Angeles.
Some people don’t get this. I recall having extended conversations when I was in my twenties with an elderly gentleman about gasoline prices. He was upset because after some price shock, the gasoline prices all jumped $0.50 the next day.
“They didn’t pay that much for the gasoline!”
Well, no, they didn’t. But because the supply was thought to be limited, the gasoline was worth more. Besides, the merchant was going to have to refill that storage tank at a higher price, and nobody was going to buy his high-priced gas if he charged more than the market when the price invariably went down.
“Besides,” I asked, “If you had an ounce of gold that you bought for $50, would you sell it for that, or would you want the (then) current price of $500 an ounce?”
Of course he said he’d want the $500. But he still couldn’t understand why gas prices went up.
And I only got to take him on one walk.
I wanted to establish that, because I’m going to tear into the larger corporations for lying about prices. That’s greedflation.
An example of this would be McDonald’s®. I’ll pick on them because, like illegal aliens, they’re everywhere and more numerous than they should be at this stage in the economy. McDonald’s™ built its reputation on food that was fast, tasty, and inexpensive – a place a dad could take the kids for a quick treat on the way back from the zoo on a Saturday afternoon.
At least in Modern Mayberry, McDonald’s© has ceased to be fast, and inexpensive. McDonald’s® prices are so high that a “meal deal” costs the better part of the price of a pound of ribeye. To me, that’s not a deal, or at least not a good one.
The stripper said she was stripping in order to feed her kids, so why did she get mad when I tipped her in Cinnamon Toast Crunch™ coupons?
And these prices have pushed people away – McDonald’s™ insinuated that these price hikes were due mainly to inflation and blamed the franchise owners for the ultimate pricing.
The result?
McDonald’s® ended up with declining burger sales, but with record profits. In fact, between 2014 and 2024, their prices doubled. Most of the increase was before the pandemic and inflation. Everyone’s doing it, right? No, mainly McDonald’s® was McLovin’™ it.
The average increase in prices for other fast-food restaurants during that same time period was more in the 55%-ish percent, and more or less in a straight line. They were raising their prices much faster than inflation, but McDonald’s™ was leading the pack.
The result: A lot of “inflation” is just corporations adjusting prices to the point of maximizing their profits. Sell fewer burgers and yet make more money?
Why not! Especially if we can insinuate that it’s really all beyond our control. Perfect!
I actually don’t mind that they’re increasing prices to increase profits. I get that. I mean, if they could sell just one burger and make sixteen billion dollars in profit, they’d be all in. Oh, wait, Lockheed-Martin™ is already doing that with jet fighters.
Don’t worry if the F-35 gets rained on. That only costs about $50 million to fix.
What I mind is the insinuation this is due to outside forces instead of a planned extraction of the greatest amount of profit that can be generated per sale. It’s a lie.
One of the components of the monthly “Misery Index” that I put together is tied to inflation. Inflation destroys the value of currency, and makes people feel, day by day, shabbier and poorer. However, to blame outside forces for your increased prices instead of saying, “Hey, we think this burger is worth it,” is execrable.
The Wilder household has responded by purchasing prepared foods outside of the house only rarely. Once a week – at most. Instead, we’re cooking at home. It’s likely healthier, and I can get exactly the right amount of chocolate sauce on my bacon cheeseburger.
I think many Americans have reacted the same way. And for us, it’s made us less miserable, rather than more miserable, plus the food is better.
The problem, though, is that when big business reaches a size that it can extract all the wealth it wants on a whim and keep posting record profits year after year. That’s not competition, that’s a Wealth Pump as defined by Peter Turchin, and it is a prime factor in the creation of misery and the road to Civil War.
The initial example that I gave of gas stations all competing to get my dollar is the way the markets work best. There are a number of different sellers all trying to get me to come to their station, though they haven’t figured out that if they had hot girls in bikinis they could probably double their business.
And they don’t look like they speak Arabic.
And no, McDonald’s™ rarely forces people to eat there, so there still is competition from substitutes, like a ribeye. I have the choice of whether or not to go to McDonald’s™. Please, Golden Arches, raise your prices to your heart’s content!
Just don’t lie about it, and just don’t expect consumers to hang around, though it seems to be working for you right now. And McDonald’s™ innovates, since I heard that they had a failed beef version of their McRib©.
Who says they don’t learn from their McSteaks®?
2 Liter coke used to be had on sale for a one dollar. Two dollars regular price. Now it is four dollars for a two liter bottle and goes on sale for two dollars. As someone who only bought it it for one dollar on sale, now I walk the supermarket and it is usually four dollars and not on sale very often.
Yup. Greedflation. Though I remember that in 1980 a case of soda pop cost my dad $20.
Silence of the Lambos. John, your wit cracks me up.
Your main point is about Corporate Wealth Pumps and I agree heartily. I keep an eye on Arby’s (my own fast food fav along with Wendy’s) and monitor their inflation CWP meter as I drive by. Just this week they’ve hit “2 for $7” in their advertising. I’m getting old, I can remember “2 for $2”.
Your mention of Paris prods me to mention a story there unrelated to CWPs. Scores of teen girls there and all across France were attacked and injected from behind with date rape drugs this week in attacks organized over social media during a nationwide music festival.
https://www.dailymail.co.uk/news/article-14836701/twelve-people-arrested-145-syringes.html
Evil wins when you have a Silence of the Rambos.
Paris has fallen . . . due to the corporate wealth pump.
Have a friend that owns 3 restaurants (one lunch/dinner Italian, one dinner $$$ & one lunch place selling semi-expensive sandwiches/entrees). He notes that there are only 3-4 large vendors like Sysco that he can buy from, and they seem to price fix in unison.
So, the Mickey D’s effect impacts the entire “let’s eat out” food chain. I’ll eat lunch at a rural mom ‘n pop on I-77 when I have business up in Charlotte. Pre-scamdemic, meat & 3 was $9. Now, it’s $16.
Back home, we might eat out 2-3 times a week. Sometimes not at all. Having a large garden helps. We trade tomatoes & other veggies for eggs with our neighbors.
When the economy does go south, Wendy will be hooking in her town’s red light district. And Ronald McD will join the circus.
Exactly. Or! Corporate profits will deflate as prices drop.
Natural disasters lead to hyper greedflation. Hotels, restaurants, rental companies…you name it, all raise prices to take advantage of the windfall. It lets everyone know where the prices will be reached in a few years of regular greedflation. Of course, it’s unsustainable, and if government money is involved, the loss of the revenue will be overnight, but even with regular inflation/greedflation, it eventually destroys an economy.
Look at the number of $300 a night hotel rooms your tax dollars are paying for in NYC for illegals.
““They didn’t pay that much for the gasoline!”
Well, no, they didn’t.”
The problem is that they increase prices the instant a disaster hits, but once the disaster is over they don’t bring the prices down immediately. I read a guy from within the petro industry saying that is how they make most of their money, that profit margins are slim due to competition, but they can make 70% of their profits in a week if the market is bouncing up and down. Which means instability is great for profits. In case any one has wondered why it seems as if those running this clown show seem to choose instability at every chance…
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The problem isn’t greedflation, the problem is stupidflation. The people that put up with it and keep coming back for more. I’ve been to McDs maybe 4 times since the Covidioning, and it was very entertaining. Poor service, slow, food is terrible. Once the employees almost got in a fight with each other, another time an employee almost got in a fight with a customer. It was like ghetto fireside theater.
Stupid people are on the increase for various reasons, and corps will increasingly take advantage of that. The best us non-stupid people can do is look for opportunities to take advantage of that, and to avoid the problems raised.
Yup – instability is great for the petroleum industry.
Here’s my recipe for great home-barbecued burgers (I expect these to taste great with your chocolate sauce because what doesn’t?):
1 lb. hamburger
2-3 cloves chopped garlic (more if you live alone and expect that to continue)
2-4 tablespoons black pepper (more if you like Salma Hayek, less if you’re into that ‘girl’ from “The Story of Us”)
couple dashes of paprika
a few splashes of Tabasco
Form 3-5 patties, depending on how big you want ’em. Cook. Enjoy.
All the home-fixin’s you want make this much better than anything from a fast food joint. A spicy, flavorful burger that goes great on an onion bun.
I used to love these with red hamburger relish, but no stores carry that anymore.
Mmmm.
What an interesting thought exercise, John.
The Ravishing Mrs. TB enjoys eating out so I have a bit of observational experience. What is interesting is that the pricing for a great many restaurants is largely the same (and, by the way, a great deal more expensive than it was even four years ago). Subtract out the cost of overhead for a facility, and something like a food truck or cart and a restaurant are largely equivalent. To Lamont’s point above, it is quite likely they are pulling from the same three or four wholesalers.
What do they have to compete on then? Actual product, or novelty. And neither of those is really enough to maintain an income stream on with expense going up.
This is, I think, currently reflected in a lot of other discretionary spending as well. People are going and doing less, or not at all.
Yes. And it seems to be in line with the “you’ll have nothing and like it” ethic of The Powers That Be.
FIFY:
https://i.imgur.com/hUFnAKR.jpg
Ha!
30 years ago, a Sausage McMuffin with Egg and Cheese cost $1.47, and were regularly on sale 2 for $2.00.
That’s because 30 years ago, a dollar was worth almost 5.3¢, whereas now it’s only worth 0.6¢.
The cost of paper, ink, and printing is now greater than the value of the printed article.
Yup. Compare that to the cost of the underlying elements – they sure think those are worth a lot.
I suppose it must be considerable so
It do be that way.