Drivers of inflation ...…

Labor Costs
--- 1979-2019 avg. ------> 61.8%
--- 2020 Q2 to 2021 Q4 ---> **7.9%**
Non-labor Input Costs
--- 1979-2019 avg. ------> 26.8%
--- 2020 Q2 to 2021 Q4 --> **38.3%**
Corporate Profits
--- 1979-2019 avg. ------> 11.4%
--- 2020 Q2 to 2021 Q4 --> **53.9%**



This is why I support demand side econ. The lies around supply side econ on this topic are incredible. And people were fooled en mas.

The labor inflation is driving most of the corporate profits inflation. The consumer base widening is incredible for corporations. The consumer and saver are returning. The Great American Middle Class is back.

The problem mostly monetary and somewhat fiscal was the over stimulation kicked in inflation in non labor input costs because demand is too strong in this period of time. We do not need corporate profits to inflate by 53.9% each year. Obviously.

Yes I do get you are using the second half of 2020 which skews the numbers too much.

The lie around supply side econ is that if labor does poorly corporate profits will be higher. That is just bloody ignorant.


In fact after inflation in the first half of 2022 labor is not doing as well and corporate profits growth is not as good.

As input costs decline with a stronger dollar labor will do better and corporate profits will increase strongly again.

If we kill inflation by stripping labor of renumeration we would see a decline in real GDP growth in the middle of a recession.

Giving the wealthy or corporations tax breaks would cause government cutbacks which effect labor primarily and we see a decline in corporate profits. Yes that fights inflation and kills the economy with a degree of austerity.

We will be moving towards major government infrastructure projects. If a global financial meltdown happens the demand for major projects will be loud.

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