I would be interested in seeing the data that everyone actually does do better under supply side economic policies. Because intuitively it feels like propaganda to push for deregulation and tax structures that favors wealthy bankers and the expense of services like schools, infrastructure, health care, social safety nets, pretty much anything except for law enforcement and the military. It also feels like the only thing the “producers” are producing are hedge funds and self-serving technology platforms designed to enhance their own wealth.
Everyone isn’t getting “richer” if only the top 1% realizes rapid growth while most other people’s growth barely keeps pace with inflation.
No, I won’t do that either. There is some effect, but your original link was presenting an extreme version of what happened. Your Bank of Canada link says the opposite of what you said–that while markups increased, they didn’t contribute to inflation:
We show that, counter to what we would expect if firms were using their market power to raise prices, increases in the markups of Canadian firms do not coincide with the high inflation in 2021 and 2022. Rather, the data suggest that the contribution of changes in markups to inflation was limited.
We find that firms’ measured markups did grow after the onset of the COVID-19 pandemic. However, our results do not indicate that this markup growth was inflationary. Most of the growth in markups occurred during 2020, a year characterized by low inflation. Moreover, markup growth began to decline in 2021 as inflation started to increase, suggesting that the contribution of changes in markups was mild and decreasing. Specifically, our estimates suggest that markup growth accounted for less than one-tenth of inflation in 2021. Furthermore, by 2022, when inflation reached its highest levels in recent history, growth in markups was near zero or negative. The fact that markup growth was not aligned with the dynamics of inflation indicates that the recent rise in inflation was driven primarily by changes in costs rather than by firms leveraging their market power to increase prices.
As long as the world economy remains dependent on the dollar, there will only be misplaced concerns, and the borrowing and spending binge can continue.
But as a multipolar world emerges, then there might.
