Christianomics: A blog on economics, politics, and law

  Spoken like someone who has never managed the costs of running a business. Profit = price - costs Costs include but are not limited to: employees, certifications, facility mortgages, materials, gas, electricity, and taxes. Profit is becoming a demonized word, but the reality is if a company cannot make a profit then it cannot provide employment opportunities and it cannot provide goods and services to people in the local community. Most companies in the US. only make 8% profit. (1) With such a slim margin, if any of the above costs go up, then the average company has no choice but to raise prices just to stay afloat. It is absurd that the administration does not get such basic economics 1. https://wordsandnumbers.libsyn.com/you-just-hate-the-poor...

  "It’s increasingly impossible to deny that both in the US and globally, prices are on the rise. Why does this matter? Well, inflation acts as a stealth tax on everyday people. Other consumers are getting hit with “shrinkflation” as stores shrink the size of packages for a given price, a sneaky approach for retailers wary of the backlash that comes with raising sticker prices. Inflation doesn’t come out of nowhere. It’s what happens when the government prints money to pay for spending, rather than directly raising taxes. Either way, we all lose." Source: https://fee.org/articles/we-just-got-proof-global-inflation-is-surging/?utm_source=zapier

(4) I hate inflation. To be more specific, I hate when government fails at basic budgeting and steals from its people by creating (printing) new dollars out of thin air. And last year the presses were busy. Nearly a quarter of all US dollars ever to exist were printed in 2020.(1) Looking at this in terms of supply and demand, when the supply increases, the demand (and resulting value) will decrease. This is why the pastry in the picture costs so much more in April 2020 than it did in March 2019. Nothing changed with respect to the pastry itself. It has the same ingredients and the same nutritional value. The only thing that changed is the value of the paper used to purchase it. Simply put, the government is stealing from people’s savings accounts. But rather than taking a measurable quantity of money, it is imperceptibly taking away the money’s quality. And this is what makes inflation so insidious. By the time the effects of inflation are being felt, the damage has already been done....

This past week has seen lots of eagerness and angst directed at Gamestop, hedge funds, Reddit, and Robinhood. There are plenty of explanations for what is happening and the various legalities (and illegalities). I’ll provide a link to Ben Shapiro’s summary which I found to be succinct and clear.(1) But what I want to cover is [1] this emerging idea that the stock market doesn’t improve economic prosperity, [2] that the stock market is just gambling, and [3] how the government got us into this situation. [1] In the traditional sense of investments and buying stocks, there are tangible economic gains to be made for both the companies and the investors. It’s the same reason I went to the bank to ask for a lot of money to buy a house, and the bank said “Okay.” My house provides shelter, heat, air conditioning, a place to hang out with friends and makes my life better and more comfortable than before. The bank is similarly going to profit because it will recoup all the money it gave to me, ...