In a healthy competitive market, this doesn't work. In a Ronald Reagan / Robert Bork / Consumer Welfare Standard market, where the idea that antitrust policy should promote competition is scoffed at and all M&A is allowed so long as a business can scribble with crayons on butcher paper a tall tale about how their merger will totally reduce prices (pinky promise!), an unhealthy low-competition market is the intentional and inevitable result.
Image companies A & B wish to merge for example, and claim lowered future consumer prices as a result of the merger. A government can shape this as a bet: proportional to your excess-price-over-prediction is positive, a government can institute a misprediction tax proportional to such excess. This places the prediction effort correctly with the companies instead of the government (if you believe governments were intrinsically better at predicting than companies, you'd be a communist).
Re: crystal ball, a biography of Louis Brandeis would suffice. It turns out we had this exact same problem with the Robber Barons. The arguments were the same, the talking points were the same (they didn't even update the story about Standard Oil lol), time is a flat circle when it comes to American antitrust. In any case, the Robber Barons were defeated in the early 20th century and Reagan was just bringing back the policy that served them well using the excuses that served them well. He was not inventing something brave and new that might reasonably have been expected to behave differently. Reagan and Bork knew exactly what they were doing.
Let me inflation adjust that for you: https://fred.stlouisfed.org/graph/?g=1XUpo. Even better, as a percentage of disposable income: https://fred.stlouisfed.org/graph/?g=1XUpt
> real hourly wages, only 3%
Median usual weekly real earnings: Wage and salary workers: 16 years and over: https://fred.stlouisfed.org/graph/?g=1XUpE. Doesn't look so dire to me?
Whenever I see someone quoting economic statistics I look them up on FRED and zoom out a little. Usually I close the article at that point. The "Ongoing collusion" table in this article is interesting, though. Capitalism breaks down without competition.
Repeat the exercise using a real deflator and the results are different. Ideally, this would mean constructing a basket of things you (or the people in question) want to buy. In practice, nobody has time for that so people just use an asset with a reputation for holding value (gold) or a proxy for their most important aspiration (housing). These both have problems, but the problems are not nearly as bad as the circular logic in the CPI.
Unfortunately alternative measures are worse. Gold increased in price 37% in the last year. What does that tell me about the price of groceries? Housing prices depend on government committees approving what can be built where. We have no idea what a free market would produce.
Hypothetical YIMBY parallel universes have no place in an inflation discussion. If NIMBYs inflated the price of houses and you want a house, it's inflation that is relevant to you, end of story. As for the volatility of gold, yeah, that disqualifies gold from being a good measure on short timescales. Fortunately, we have a good short-timescale inflation measure: CPI. But gold compounds correctly whereas CPI does not. In the short run, volatility is everything, in the long run, compounding is everything. Don't use gold to figure out how much inflation happened last year and don't use CPI to figure out how much inflation happened last decade.
Reminder: I presented gold and housing as dirty hacks. The correct methodology is to construct a basket of things you care about and track them. If the dirty hacks have dirty hack problems, well, such is the nature of dirty hacks.
Complaining about CPI to defend using nominal values poorly is not improving the article's analysis.
You posted an incorrect interpretation of the FRED real wages line. All I owe the discussion is an explanation of why I believe your interpretation was incorrect. Which I gave. The fact that I went above and beyond to provide and defend both a theoretical alternative and practical alternatives is a nice extra. Your complaints that the practical alternatives aren't simultaneously perfect and easy is praise by faint damnation. Perfect and easy aren't the ways of this world. No, they only have to be better than CPI on long timescales to be good alternatives -- but the CPI methodology places that bar very low and both gold and housing clear it easily.
I can tell you know the topic well, but we're at the same place CPI criticism always come back to: "It's flawed, but the alternatives are worse, don't exist, or in some way not practical."
Also breaks down when few individuals command tremendous power. Tax policy has been //fantastic// for the very wealthy.
If you use asset price inflation, in the last 2 decades, most people's real income consistently dropped.
Oh, perfect! So what about solving every problem by going $40 more trillion in debt, to reach $80 T in debt?
That way everything will be good inflation adjusted?
> Every pattern above can be explained without conspiracy.
(… and in a section titled "Ongoing collusion", too!) but conspiracy also explains some of it: the egg price increases were industry collusion[1]; Americans lost something like $3B to $6B in egg prices due to it. The DOJ permitted them to settle for what effectively amounts to "don't do that again".
Did I try avoiding eggs while they were $6/dz? Absolutely, but meanwhile Tyson ate one of our local meat suppliers, and those prices immediately went up 50%.
[1]: https://en.wikipedia.org/wiki/Egg_Clearinghouse#Price_fixing
Ancedota I know, but the author is writing like Big Business has 100% coverage of the whole market.
In fact, your comment could be read as the exception that proves the rule: you haven't been affected by rising costs because you stick to staples and avoid "frivolous" purchases (that is, you live frugally, as suggested by the article).
https://www.bls.gov/charts/consumer-price-index/consumer-pri...
Energy stands out as actually being noteworthy, but is not discussed in the article compared to food, consumer goods. It is pretty inelastic for most people, especially gas/diesel.
If I want to get $5/lb ground beef, I have to stick to 73/27 rolls, and they have to be 5lb or larger.
I have started seeing beef/pork mixes for $4/lb, but alas, those are not to my taste.
In oz I have only seen this kind of packaging for pet food or lunch meat (colloquially 80/20 in this case would probably refer to the meat to sawdust ratio).
Otherwise prices in Australia are similar but for beef mince from the supermarket meat counter.
Beef on craiglist (1/4, 1/2 or whole) is averaging $6-12/lb for mostly grass fed beef raised <50 miles from me.
Is America Falling Out of Love With Beef? Surging prices are finally hurting demand for the country’s favorite meat - https://www.bloomberg.com/news/newsletters/2026-08-21/after-... | https://archive.today/2K1Rh - August 21st, 2026
Skyrocketing Beef Prices Finally Have Americans Reaching Their Spending Limit - https://www.bloomberg.com/news/articles/2026-08-16/skyrocket... | https://archive.today/9AYzx - August 16th, 2026
Tyson to Close More Beef Plants as Cattle Shortage Drags On - https://www.bloomberg.com/news/articles/2026-08-13/tyson-to-... | https://archive.today/KYI6P - August 13th, 2026
This seems like it’s getting causation backwards. Shortages directly result in corporate profits somewhere, because there are companies that can raise prices. Most recently, in the oil industry, and in memory chips, and so on. Also, housing.
If there’s enough competing supply then they can’t raise prices. If there isn’t, they can and usually will.
Strategy often means anticipating shortages and having something to sell when they happen, but not overdoing it. It might be temporary but it can take years to resolve.
Deciding not to build new factories in anticipation of a memory shortage is a strategy. Often it’s justified by saying the shortage won’t last.
The people saying that the AI bubble will collapse are justifying a wait-and-see strategy that makes it worse.
Right, key word there is "competing". Large firms collude via all sorts of means to avoid competing. Many such cases
In a K-shaped economy a business will not succeed by making quality goods at reasonable prices. Who are the customers for that? The middle class no longer exists.
Every successful business will do one of two things. Some will make ludicrous luxury goods at preposterous prices for customers that are not price conscious. Others will make mass produced garbage at insanely low margins in vast quantities.
The shortage is only the strategy in the sense that a large part of luxury goods is status. If you have a luxury product, you have to make it into a status symbol to get sales. Limited availability increases desirability. If something is too popular, wealthy people don’t want it anymore at any price.
The only solution is to end wealth inequality and restore the middle class. Tax the rich.
The US economy has outperformed every economy on earth for the last fifteen years.
China is at a permanent disadvantage because the United States and Russia are the largest producers of petroleum and natural gas on earth.
Anyone who thinks China is going to be passing the US anytime soon is uninformed.
In nominal dollars, not production/output
Russia:
https://www.atlanticcouncil.org/dispatches/russia-will-sacri...
https://www.euronews.com/2026/08/20/russia-runs-out-of-petro...
China:
The Next China Shock Is Here - https://news.ycombinator.com/item?id=49393566 - August 2026
> The biggest economic story in the world right now is China’s growing dominance across advanced manufacturing sector after advanced manufacturing sector — from electric vehicles to batteries to solar panels to software like A.I. and open models, where they’ve become a world leader. What is happening here is very different than what we call the first China Shock, when China became a big exporter of things that were not that important to advanced economies — things that mattered maybe for particular communities, for many jobs, but weren’t the frontier of economic growth. But now it’s different. China is very much at the frontier, and they’re dominating it, and that is going to transform geopolitics. It is going to transform the politics, many say of European countries, where China is pushing them out of manufacturing that has been the absolute cornerstone of their economies. So I think understanding this second shock is about as essential to understanding economics and geopolitics in the coming era as literally anything is.
https://www.axios.com/2026/08/21/europe-china-shock-manufact...
> U.S. tariffs have done little to slow China's export machine. Exports hit a record $3.8 trillion last year and are up 14% through July this year, even as shipments to the U.S. plunged.
https://ember-energy.org/data/china-cleantech-exports-data-e...
> In 2024, China produced around 80% of the world’s solar PV modules and battery cells, and 70% of electric vehicles.
https://news.ycombinator.com/item?id=49288393 (citations)
https://news.ycombinator.com/item?id=45496507 (citations)
https://www.aspi.org.au/report/aspis-two-decade-critical-tec... (August 2024)
> Now covering 64 critical technologies and crucial fields spanning defence, space, energy, the environment, artificial intelligence (AI), biotechnology, robotics, cyber, computing, advanced materials and key quantum technology areas, the Tech Tracker’s dataset has been expanded and updated from five years of data (previously, 2018–2022) to 21 years of data (2003–2023).
> These new results reveal the stunning shift in research leadership over the past two decades towards large economies in the Indo-Pacific, led by China’s exceptional gains. The US led in 60 of 64 technologies in the five years from 2003 to 2007, but in the most recent five years (2019–2023) is leading in seven. China led in just three of 64 technologies in 2003–2007 but is now the lead country in 57 of 64 technologies in 2019–2023, increasing its lead from our rankings last year (2018–2022), where it was leading in 52 technologies.
China Hunts for Scientific Talent. The U.S. Is Making It Easier. - https://www.nytimes.com/2026/08/17/business/china-scientific... | https://archive.today/vaapU - August 17th, 2026
> The US economy has outperformed every economy on earth for the last fifteen years.
"Past performance is no guarantee of future results."
"How did you go bankrupt?" "Two ways. Gradually, then suddenly." -- Hemingway
https://news.ycombinator.com/item?id=49379851 (citations)
China's New Five-Year Plan Preps the Nation for Peak Oil - https://oilprice.com/Energy/Crude-Oil/Chinas-New-Five-Year-P... - August 21st, 2026
Yes, it’s happening, just as it did in the seventies. Invest appropriately.