Former Labor Secretary Robert Reich has written many articles on excessive corporate profits and/or CEO pay has contributed to high inflation. I won't go into specifics because I would probably mess up the details and misrepresent his ideas. But I believe one of his points is that CEOs will use the excuse of high inflation to keep prices higher, then instead of using the excess profits to raise employee pay or reinvest in capital equipment, the CEO will buy back shares of stock which increases the share price and helps get the CEO a bigger bonus because his compensation is tied directly to share price. Great short term not so great long term for the company and the people that work there. You can search for his articles, but Marj's idea has been theorized in the past.
Yes, it certainly has a part in inflation. But so does the global supply chain issues post Covid, the huge federal outpouring of money that pumped consumer demand and kept workers out of the labor market, the Fed keeping interest rates low for so long, the rent moratorium that eventually drove small landlords out of business so large companies now dominate the market (which feeds more greedflation) and the list goes on. It just isn't the singular reason for inflation that Marge was arguing on this week's Mincing Rascals.
When corporate profits and CEO salaries go up by more than the rate of inflation during an inflationary period, what does that tell us? That more than the money supply is involved.
Corporate CEO compensation has been skyrocketing over the past 20 years when inflation was flat. I am not defending corporate CEO pay, but just saying that if their pay is the only reason for inflation we would have had high inflation since the 90s.
Case in point is that this week she argued that "greedflation" and CEO pay is the singular reason for inflation.
Former Labor Secretary Robert Reich has written many articles on excessive corporate profits and/or CEO pay has contributed to high inflation. I won't go into specifics because I would probably mess up the details and misrepresent his ideas. But I believe one of his points is that CEOs will use the excuse of high inflation to keep prices higher, then instead of using the excess profits to raise employee pay or reinvest in capital equipment, the CEO will buy back shares of stock which increases the share price and helps get the CEO a bigger bonus because his compensation is tied directly to share price. Great short term not so great long term for the company and the people that work there. You can search for his articles, but Marj's idea has been theorized in the past.
Yes, it certainly has a part in inflation. But so does the global supply chain issues post Covid, the huge federal outpouring of money that pumped consumer demand and kept workers out of the labor market, the Fed keeping interest rates low for so long, the rent moratorium that eventually drove small landlords out of business so large companies now dominate the market (which feeds more greedflation) and the list goes on. It just isn't the singular reason for inflation that Marge was arguing on this week's Mincing Rascals.
When corporate profits and CEO salaries go up by more than the rate of inflation during an inflationary period, what does that tell us? That more than the money supply is involved.
Corporate CEO compensation has been skyrocketing over the past 20 years when inflation was flat. I am not defending corporate CEO pay, but just saying that if their pay is the only reason for inflation we would have had high inflation since the 90s.