ROCKETS AND FEATHERS

 

Scott Gallivan

“Rockets and feathers” is economists’ name for how prices change in some less-than-competitive markets.

When company's costs go up for whatever reason... the prices they charge their customers go up like a rocket. But, when their costs go back down, their prices fall, but ever so slowly, like a feather.

The example most of us can relate to is the retail price of gasoline. What’s worse for consumers is when companies simply don’t cut their prices in response to lower costs, and enjoy higher profit margins as a result....and that is happening right now in the U.S. market

Dont believe me? The second quarter esrning are out and they show even larger profits. And CEOs are actually BRAGGING about how they are able to squeeze the consumers. They call it PRICING POWER.

What PRICING POWER means in 'Corporate Speak' is the ability to keep selling their product despite raising prices for their product. As long as consumers continue to purchase whatever is being sold there is no reason to lower prices.

THAT IS NOT INFLATION. THAT IS GREED.

I know I keep saying this, but there are two things everyone must do...

1. Call your Congressmen. Regardless whether Republican or Democrat..call them. Especially during election season.

2. Stop Purchasing Stuff.

Some people called that profiteering or greedflation, but to people like Samuel Rines, an investment strategist at Corbu L.L.C. in Houston.... it's just good business. “If you’re profit-maximizing you’re going to do that and you should do that."

If that isn't corporate greed...I'm a Republican.