Posted on Feb 8, 2024
Lt Col John (Jack) Christensen
11
11
0
For those coming down on the Biden administration for the high cost of everything, it might be wise to look at what's most likely the real reason....corporate greed. Just one example: Chipotle recently announced that its raising prices again. This will be their 5th price increase in 2 years. Chipotle brought in $2.5 billion in the last quarter of 2023 and its profits soared, largely due to higher prices and lower wholesale cost of food items.
https://www.forbes.com/sites/dereksaul/2023/04/26/heres-why-chipotle-stock-is-soaring-its-all-about-higher-prices-and-avocados/?sh=5edaea7717bc
401031c9
Posted in these groups: 88aeadf Political Opinions
Avatar feed
Responses: 16
SFC John D.
13
13
0
Edited 2 mo ago
Cd533270
F2494f36
Jack, are you believing the chart because it feeds into ideology, or did you do any research or it to see if it was true? Since MSG Stan Hutchison gave his comment below, I'll include him with this because obviously he did all the research and understands the information behind the graphs based on his comments.

Here's the information from the FRED referencing the chart in the meme. I like the way the meme does the "propaganda" display of the chart to imply to the uniformed that "100" is the floor of the profits (they edited the chart on FRED and selected "scale to 100" for the end of Q1 for 2012 ... nice manipulation). I was going to adjust the "green pandemic zones" to be accurate but left them the same as your meme.

Not only is the chart portrayed so the uninformed looking at it would think "Wow! That's something like a 500% profit", but even if you do look at the numbers, you would think it's a 60% to 70% increase in corporate profits (Hey, they title of the meme is Corporate Profits, so it MUST be true).

Now, you are correct that the profits after the pandemic are higher, but your implication is that this is how much they made which is of course incorrect. I understand that the left wants to throw out whatever red meat they can to the masses to distract from the facts.

If you compare how much actual profit was made on the right ($2.60 trillion) instead of the misinformation (using the left's favorite term, but this time it accurately describes the meme) to the point that was just before the pandemic ($2.22 trillion) you'll see there is actually a 17.1% growth. Your chart implies that there was an actual 58% growth in profits.

Let's see ... what else grew over 17% since Biden took office? Come on class, we know this one. Anyone? Anyone? It starts with a "I" and ends with "nflation". Thanks Joe, you did that!

Stan, I await the attack of denial from the left somehow disputing the information. I don’t really expect you to provide any information that contradicts it aside from some opinion piece you can dig up with rhetoric saying it’s all due to corporations. Please provide some actual information and I’ll be happy to have a conversation instead of your normal snarky comments that provide nothing other than showing how little critical thinking is done by your side. Is the information used from the Fed wrong? Is there some secret fund from the ‘Corporate Cabal’ that has all the money hidden away that you have proof of? Anything?

I await the crickets that normally accompany the lack of response when I get off on a fact-finding tangent and club the progressives over the head with facts.

To pile on with the “you have to lead the left by the nose because they don’t apply critical thinking” lesson, this administration asked the Federal Reserve to look into the abuse of corporate profits and a report was published by Dino Palazzo, a Principal Economist on the Board of Governors of the Federal Reserve System. I copied some of the report down below, but you should actually read it so you understand it. I know, it's not as easy as throwing up a meme and saying "See! They made a lot of money!"

https://www.federalreserve.gov/econres/notes/feds-notes/corporate-profits-in-the-aftermath-of-covid-19-20230908.html

Here are the key points, but I don’t want you to take my word for it, look at the detailed breakdown by the Fed about corporate profits. I know – it’s not going to fit your narrative, so as the left’s Patron Saint of Obfuscation, Nancy Pelosi, says “I reject your facts for my opinion”.

“Our analysis shows that much of the increase in aggregate profit margins following the COVID-19 pandemic can be attributed to (i) the unprecedented large and direct government intervention to support U.S. small and medium sized businesses and (ii) a large reduction in net interest expenses due to accommodative monetary policy. Once we adjust for fiscal and monetary interventions, the behavior of aggregate profit margins appears much less notable, and by the end of 2022 they are essentially back at their pre-pandemic levels.”

and

“Corporate profit margins were not abnormally high in the aftermath of the COVID- 19 pandemic, once fiscal and monetary interventions are accounted for. This conclusion is supported by the behavior of the net capital share, which remained well below its historical high levels, and by firm-level profit margins across different size categories, which behaved broadly in line with their pre-COVID trends. If there is any anomaly to note, it should probably be that the aftermath of the COVID-19 pandemic has been characterized by a persistent weakness in the profitability of middle-sized publicly traded firms.”

Finally, the second chart I put up was the exact same timeframe but looking at the profit compared to the previous year as a percent change. So during the shutdown you can see that the profits were negative for two quarters in 2020 and then skyrocketed when the economy was opening followed by the whipsaw effect until it starts to flatten down in a more predictable pattern.

What you don’t see are “greedflation” numbers. I know it’s a great talking point to distract from the ‘fantastic success’ of Bidenomics, but most aren’t buying it .. except for the die-hard supporters on the left (roughly 30% of the country). You know, that other 70% of Americans are just too stupid to know how good they have it because they are basing their opinion wrongly on how they are living in the economy instead of knowing what they should think because they aren’t listening to the White House.

Household debt is rising sharply and so is credit card lateness as people burn through their savings in order to afford things in Biden’s “booming economy”.
Job numbers are good. There is also a significant increase of those coming from the creation of government jobs, not jobs in the private sector.

***********
Here’s some of the key intro comments from the Fed’s report if you can’t be bothered to follow the link to the whole thing (it might contradict the narrative you are trying to spin).

September 08, 2023
Corporate Profits in the aftermath of COVID-191
Berardino Palazzo†

Overview

This note documents the behavior of corporate profit margins during and in the aftermath of the pandemic. As the traditional measure of corporate profit margin is heavily affected by fiscal support and its withdrawal, it also proposes an alternative measure. The note also provides insights on the dynamics of profit margin at firm level.

In the aftermath of COVID-19, inflation increased to levels that the U.S. economy has not witnessed for more than 40 years. This phenomenon has spurred a large quantity of policy commentary and academic research discussing its causes.2 One popular narrative goes as follows: in the aftermath of the COVID-19 pandemic, and amid a surge in demand and contemporaneous supply chain bottlenecks, corporate businesses increased the price of their final goods and services above and beyond what was justified by changes in labor costs and input prices. The outcome was a marked increase in profit margins that has contributed to overall inflation.3

But were corporate profit margins abnormally high in the aftermath of the COVID-19 pandemic? The answer depends on measurement. Using a measure of nonfinancial corporate profits from the national income accounts–before tax profits with capital consumption adjustment–we find that nonfinancial corporate profit margins, or profits over gross value added, increased sharply to about 19% in 2021q2 and slipped back to 15% in 2022q4, compared to about 13% in 2019q4. This contrasts sharply with the steep dive in margins that normally occurs during a severe economic contraction.

Our analysis shows that much of the increase in aggregate profit margins following the COVID-19 pandemic can be attributed to (i) the unprecedented large and direct government intervention to support U.S. small and medium sized businesses and (ii) a large reduction in net interest expenses due to accommodative monetary policy. Once we adjust for fiscal and monetary interventions, the behavior of aggregate profit margins appears much less notable, and by the end of 2022 they are essentially back at their pre-pandemic levels.
(13)
Comment
(0)
MSgt Steve Sweeney
MSgt Steve Sweeney
2 mo
A96dbfe6
SFC John D. - Ok, Milton, where are you getting average annual profit of 4.3%? You are confusing average with the annual rate of growth. Here is the after tax US corporate profits for the last 5 years - Source: US Bureau of Economic Analysis. You can clearly see US Corporate profits have been well above 4.3%. Long term average is cited as 7.18% average (not growth).

It doesn't take a genius to see corporations are making money hand over fist... so either they are gouging their prices to squeeze out excess profit, or Biden's economy is just that fricken good that business is booming. Which is it?
(2)
Reply
(0)
SFC John D.
SFC John D.
2 mo
5faa1e70
MSgt Steve Sweeney – smh … I'll keep the snark to a low level since you didn't go overboard and actually (for once) came back with information to contradict what I said. If you want to see an average over a range, divide the first value by the last value, multiple by 100, and then divide by the range.

What you're showing is NOT the percent profit the corporations made. I'll chalk this one up to a honest mistake instead of you just grabbing anything that will look like it's reinforcing your view.

I couldn't figure out how the heck you got the “corporations are making 10.93% profit” depicted in the graph until I read the fine print in the chart and double-checked it on Y Charts (recognized the format of the chart).

The 10.93% is showing the percent of GDP that corporate after-tax profits (without IVA and CCAdj outlays) were, NOT an average percentage of profits they were making.

Since you get confused so easily (as shown by the video - simple financial concepts seem like confusing speech to you), I even created another chart for you showing the information off the FRED with the math calculations to make absolutely sure you are able to follow.
(5)
Reply
(0)
MSgt Steve Sweeney
MSgt Steve Sweeney
2 mo
Dcc60cac
SFC John D. - I see the though police have been around selectively editing my posts, so I will post this again...

I know how to find an average over range, and you are wrong. It isn't the first and last value, it is the smallest (minimum) and largest (maximum) values. But that happens to be the case for the range you used, so your mistake did not bite you. The math you provided only confirms the information I already gave to you. On the other hand, your chart is in whole dollar value and shows Corporations have been raking in over 2000 Billion in PROFIT since Q1 2020.

Corporate profit is commonly reported and measured as a component of GDP. If you have the data that supports your claim of 4.3%, lets see it.

Here is the same data set, less IVA and CCadj, and removing GDP from the chart. Drag it back to Q1 2012, and it looks pretty much like the chart Jack posted in the OP.
(1)
Reply
(0)
COL Randall C.
COL Randall C.
2 mo
MSgt Steve Sweeney - "thought police selectively editing". No, I just delete them outright anymore. You and others have been warned many times about adhering to the standards that when I came across posts/responses/comments from the habitual offenders (You too SFC John D.) that don't align with the rules/standards, I just delete them and move on.
(0)
Reply
(0)
Avatar small
1SG Clifton (Cliff) Webster II
11
11
0
Economics 101 - Inflation is caused by excessive government spending, and nothing else.
(11)
Comment
(0)
MSgt Steve Sweeney
MSgt Steve Sweeney
2 mo
1SG Clifton (Cliff) Webster II - So by "output" he is referring to government spending (so you say)... so the problem is more money is being made than the government can spend... ergo, more government spending would alleviate the problem. Increase the "output" at a commensurate rate. That is your hypothesis? Doesn't sound too "fiscally conservative".
(3)
Reply
(0)
SFC John D.
SFC John D.
2 mo
MSgt Steve Sweeney - "so the problem is more money is being made than the government can spend" - that's not what he said.

Apparently you don't understand the various economic theories on inflation because you completely butchered the monetarist view (Friedman) that the supply of money in the economy is the primary driver of both economic growth (when done correction) and inflation (when not).

Simply put, the base theory is that every supply will automatically create it's own demand.

When the available money supply exceeds the growth of something (products, services, and so on), then that produces inflationary increases because the value of the money is diminished when the supply is artificially increased.

So if you have widgets that go for some price that the existing economy has settled on (based on market demand), if you increase the money supply then the existing price is destabilized and increases until the equilibrium between demand and available money is reached again.

Personally, I don't subscribe to a pure monetarist view (I have more of a hybrid monetarist/Keynesian view), where it's not solely the money supply. It also depends on how that money supply is used by private entities and the government. Increasing the money supply in one sector won't necessary generate inflationary trends in another sector unless there is crossover between the two.

There are other economic models, some you might agree with because that's the way you view it after creating an informed opinion or because you were told by some talking head that this is what you are supposed to believe. Regardless, at least accurately portray what you are disagreeing with instead of creating a strawman you can attack.
(8)
Reply
(0)
LTC Self Employed
LTC (Join to see)
2 mo
SFC (Join to see) That's why economics 101 and finance 101 should be required by every single person in congress. Some people here get frustrated but I've had 3 semesters at economics. How about 3 semesters of finance and 2 specimeters of accounting so I can relate when you have economists and finance. People talk on fox business.

I just can't believe stupid. AOC who has an economics degree acts so dumb and says the rich. And does everything wrong because I know she's a manchurian candidate. Either that or she paid for her economics. Degree diploma has never actually went to class.
https://youtu.be/FmHFUzvY9XE?feature=shared

PO1 William "Chip" Nagel SFC (Join to see) SPC Jeff Daley, PhD CSM Chuck Stafford LTC Trent Klug LTC Trent Klug 1SG Clifton (Cliff) Webster II SFC John D.
(4)
Reply
(0)
1SG John Millan
1SG John Millan
2 mo
That’s part of it.
(1)
Reply
(0)
Avatar small
MSG Civilian Investigator
9
9
0
33288ced
Democrats defending Bidenomics.
(9)
Comment
(0)
Avatar small

Join nearly 2 million former and current members of the US military, just like you.

close