Whatever the market will bear...

[kentuck]

It's not only gas prices. It is food prices. It is healthcare costs. It is insurance. It is almost every product in our marketplace. There's been a lot of veritcal integration with companies and they are able to legally manipulate the marketplace.

At the bottom of it is greed. They will make as much money as possible, as quick as possible, off whomever is possible. That is the new corporate creed. Maybe it is not so new? Maybe they have simply found a way to master the market?

Perhaps there is no longer the competition that we depended on before to control prices on products? The only thing that will stop these spiraling prices is when people no longer can afford their products. It is unfortunate that many of these products are necessities. What choice do the people have?

[JHB]

1. Just to pitch a thought: the lower taxes on very high incomes palys a part in this...

When the marginal taxes on the highest incomes (equivalent of incomes today in the millions) were in the 70-90+% range, it was a dis-incentive for those in the economic stratosphere to squeeze every last dime the could. They could get more by growing the value of real assets (and selling them as capital gains -- the only way a lower CG tax has made any sense to me). Part of what made that value was an effective work force. The gains from squeezing your own people were not so hot.

Lowering the taxes make it much easier to simply pocket huge amounts. All those employee paychecks was money not in in the owner's accounts. Counterbalances to exorbitant executive pay were removed. Financial games where leveraged buy-outs were used to buy companies and strip their assets became much more profitable when the wheeler-dealers no longer faced losing most of the look to Uncle Sam.

In short, "trickle down economics" failed because it removed the mechanisms that actually plowed the wealth back into the general national economy -- the things that actually did the "trickling" down.

[zeemike]

2. There is another component to that and is worth considering.

And that is the incentive for more expensive things...for instance.
If you are a car salesman and you sell a little cheep car you will make a few hundred dollars....but if you sell an expensive car you make thousands....and so the seller wants to sell the most expensive things they can.
Same thing is true with houses....a small 900sf house will net you a profit of thousands, but a half million dollar one will net you tens of thousands....so you want to build and sell big Mc Mansions.
And the TV is the most important thing in creating the want of big and expensive things.

[formercia]

3. Start wiping your ass with new Dollar bills

When the workers at the treatment plant start recovering them from the filters and the word gets out, perhaps people will get the message.

[tavalon]

4. By vertical integration, I'm assuming you mean price gouging?

[Squeech]

5. Vertical integration

is when one company (or its subsidiaries) controls the whole chain of production involved in a given product-- like how Exxon runs the drilling rigs, the supertankers, the refineries, and the friendly neighborhood gas stations with the prices that spin like slot machines. With that much control of the whole process, there are no incentives anywhere along the chain to save money by instituting efficiencies or introducing competition.

There are many industries where vertical integration supports price gouging. Archer Daniels Midland has its own farms, but it also controls the middlemen who collect and broker the corn grown all over Kansas, and it has inserted itself front and center in the subsidy trough for corn-based ethanol. So it extracts money from farmers, motorists, taxpayers, and the manufacturers and consumers of Cheetos-- a perfect storm of economic concentration.

It was the Teddy Roosevelt administration that enacted antitrust law to stop this sort of thing. It was the Reagan administration that very pointedly stopped enforcing that body of law.

[tavalon]

11. Oh, I guess I should have looked that up,

But thank you for the explanation. I appreciate it.

[snappyturtle]

6. What choice do we have?

I hate to admit that this past weekend I thought about this exact question...a lot! The only way out for me, to get back on my own, is to take have little I have left and develop a product/service aimed at those who still have some discretionary money. THAT bothers me but I don't know what else to do.

[JHB]

7. We pressure politicians for laws (and stricter enforcement of existing ones)...

...to reverse the sort of consolidation and mergers that have aided this gouge-them-at-every-turn system.

Pushing against this isn't even "socialism", it's better capitalism. The basic tension in capitalism is that competition is in the best interest of the overall system, but what is best for for any particular company is eliminating competition.

[snappyturtle]

10. Agreed. nt

[Tippy]

8. Greed dirves sane people insane.......

There is a lot I can nolonger purchase...there is a big difference between wants and needs. Like when I get may ad's for groceries...I go through them and make my list, I always have a lot of wants on that list, but when I go I take the list with only the sale items on it, I look for these and don't even bother looking at the others....

[starroute]

9. The right-wing rants about taxes and redistribution muddy a very important point

A healthy economic system is one in which money flows freely -- passing from hand to hand, creating markets for goods and services as it does.

A system in which money accumulates and stagnates in the hands of a few is basically unhealthy. That unused cash is like the gold in Scrooge McDuck's vault -- fine to swim around in, but not being put to any useful purpose.

The right tries to convince us that "investment" creates jobs -- but the uber-wealthy are not investing in new ideas and innovative products. They're far more interested in putting their money into ripping off existing value.

A system that pries the excess wealth out of their clutches and redistributes it throughout the society is essential to counteract the tendency towards stagnation. But that system is exactly what they've done their best to label as "socialism" and demonize.

Redistribution isn't socialism -- it's the essential lifeblood of healthy capitalism. And they're killing it.