ApexNomad

Basically, you argue that the rise in markups and market power is not linked to excessive market concentration or anti-competitive behavior, and that factors such as firms’ expectations of future costs explain the increase in prices, while questioning the effectiveness of antitrust interventions and price controls. Multiple, respected studies, including those by De Loecker, Eeckhout, and Unger (2020), as well as Philippon (2019), show strong correlations between rising markups and increasing market concentration. These studies cover a wide range of industries, particularly sectors like pharma and tech, where market concentration has led directly to higher markups. The evidence suggests that, rather than being driven by future cost expectations, these price increases reflect the diminished competition and market power of dominant firms. Cowen has critiqued De Loecker’s approach, particularly in how profit and markup definitions can be complicated by industries with high fixed costs and economies of scale. However, the core insight of De Loecker’s study—the dramatic increase in the average “pure profit” rate since 1980—remains a valuable contribution to understanding market dynamics. De Loecker’s study shows that the overall trend of rising markups, even after adjusting for fixed costs, highlights a shift in market power toward larger firms, particularly in industries with less competition. This has been corroborated by other influential economists, such as Philippon, who also links rising markups with increased market concentration and lower levels of competition. Furthermore, while criticisms of the methodology are common in economic studies, the consistent findings across multiple independent studies, including those supported by the IMF, suggest that this rise in markups reflects more than just industry-specific quirks. It indicates a broader structural shift where dominant firms are able to exert more market power, not just profit from economies of scale, but also from reduced competition and barriers to entry. To dismiss these findings entirely would be to overlook how the data fits within a larger context of increasing market concentration across various sectors. To claim that history cannot demonstrate the positive outcomes of antitrust measures because fairness is politically disputed is simply incorrect. Antitrust actions—like the breakup of Standard Oil in 1911—resulted in increased competition, lower prices, and a more balanced market. These are not hypothetical outcomes; they are well-documented historical facts. The institutional context in which antitrust bureaucrats operate may be imperfect, but that does not negate the fact that antitrust measures have historically restored fair competition and benefited consumers. Furthermore, price controls, when applied strategically in sectors like healthcare or utilities, have proven effective in protecting consumers from monopolistic pricing. Fairness disputes should not overshadow the tangible benefits of these measures. If we dismissed all interventions simply because fairness is disputed, we would be ignoring the clear lessons of history on how to maintain competitive, just economic environments.

I completely understand how you feel. I also never book less than two hours, and I want it to feel like more than just a transaction. It’s totally natural to hope for an experience that feels a bit more genuine and connected. Not sure what city you’re in or if you’re into tops, bottoms, or vers, but I’d be happy to recommend someone if that helps. The best providers won’t make it feel like a transaction and the best ones will listen - really listen - if you’re nervous. (And they will know too.) And don’t worry too much about the nerves—that’s normal and often gets easier with the right person. (I still get nervous with my first encounters, too.)

What is it you think about your encounters that leaves you feeling disappointed?

While I see the points you’ve made about the potential productivity gains from larger firms, other evidence suggests that increased concentration can indeed translate into augmented market power with significant impacts on prices and consumer welfare. Firstly, while national concentration data may suggest mixed trends, local market concentration often tells a different story. Research from economists like De Loecker and Eeckhout indicates that rising concentration in certain sectors, particularly those dominated by “superstar” firms, does lead to higher markups, not entirely explained by productivity gains. For instance, in the food processing and pharmaceuticals sectors, dominant players have leveraged their control to raise prices beyond what production costs alone would justify, impacting both consumers and smaller competitors. Further, while higher employment in sectors with rising concentration might seem encouraging, it doesn’t necessarily reflect competitive conditions. For example, large firms can create local monopolies or oligopolies that force smaller companies out or reduce their ability to set competitive prices. The EPI has argued that concentrated markets often allow dominant firms to engage in price-setting behavior rather than price-taking, which can drive up prices without improving consumer welfare. As for government intervention, I agree it’s a complex area. But in cases where market power becomes excessive, strategic antitrust action can help restore competition. While blunt price controls might not be ideal, targeted interventions can prevent monopolistic practices, especially in industries with inelastic demand like healthcare or food. Rather than assuming intervention undermines consumer welfare, history has shown that regulatory action, when carefully applied, can enhance fairness and economic stability.

I understand your view about the challenges of government intervention, especially in an already heavily regulated industry like pharma. However, just because government action is complex doesn’t make it irrelevant, especially when we consider the broader implications of market concentration. I’m not as hip or fancy - I don’t know how to do the here and here hyperlink stuff. So, in the meantime, “The Fall of the Labor Share and the Rise of Superstar Firms” (Autor et al., 2019) makes a compelling case that the concentration of market power in certain sectors—such as pharmaceuticals, food processing, and retail—has allowed dominant firms to exert significant pricing power. Even in a regulated environment, companies like Pfizer, J&J, and Cargill can push prices beyond what rising input costs would justify, leveraging their market dominance. This goes beyond simple supply-and-demand economics: concentrated market power means that firms have the leverage to impose higher prices while enjoying record profits, as seen in both the pharmaceutical and food industries. While it’s true that there’s no one-size-fits-all solution for government intervention, the broader issue is that market concentration enables a form of price-setting that disregards consumer welfare. The EPI and others argue that as fewer firms dominate more industries, the opportunity for price manipulation increases, often at the expense of consumers. That’s why the conversation around “greedflation” and corporate pricing power is so critical. It’s not about eliminating market forces; it’s about ensuring those forces don’t lead to exploitative practices that undermine fairness and competition. It’s also worth noting that a lack of perfect regulation doesn’t justify unchecked price hikes. When few firms control most of the market, it’s inevitable that they will use that power to push prices higher, regardless of whether the cost structure actually supports it.

The assertion that “there is no clear correlation between market concentration and higher markups” has been widely debated. While it’s true that market concentration doesn’t always guarantee price increases, there is significant evidence suggesting that in certain sectors, concentrated markets can indeed lead to higher prices. For instance, in the food processing industry, companies like Cargill, Tyson Foods, and General Mills have seen increased control over food commodities such as meat, grains, and packaged goods. Research by economists like Jan De Loecker and Jan Eeckhout shows that when market concentration increases, these companies are often able to raise prices beyond what would be expected due to increases in production costs alone. Their work demonstrates that firms in more concentrated industries have the ability to raise prices through their pricing power, leading to higher markups and profit margins. Cargill, for example, has control over much of the global grain market and can influence prices for both farmers and consumers alike. In other sectors, such as pharmaceuticals, dominant firms like Pfizer, Johnson & Johnson, and Merck have been able to raise prices on essential drugs, even when production costs have not changed significantly. These companies have significant market power, and as concentration has increased, so has their ability to push through price hikes, particularly on brand-name drugs. The Economic Policy Institute has also pointed out that market concentration contributes to companies’ ability to extract higher profits. In industries with fewer competitors, firms like Amazon in retail or Conagra in food processing can set prices that reflect both their dominance in the market and their ability to raise markups independent of rising input costs. While it may not be purely a “morality tale,” the idea of “greedflation” does raise moral concerns. Concentrated market power enables firms to set prices beyond what cost increases would justify. This situation often raises questions about fairness, as the drive for profit can overshadow consumer well-being, highlighting a clash between corporate practices and societal values of equity.

No experience here. He’s young and perhaps is new to this—maybe he’s trying to build a clientele and attract a steady stream of regulars.

I don’t take economic advice from Whoopi either, but there’s more to this topic than just dismissing it as “nonsense.” Greedflation is a complex concept, and it’s important to separate the roles of grocery retailers and food producers. Food inflation stems from multiple factors, like labor shortages, transportation costs, and rising raw material prices. Some economists argue that certain companies—especially at the production level—use inflation as cover to elevate prices beyond cost increases, which is the basis of the “greedflation” argument. In grocery retail, competition should, in theory, keep prices in check. However, the influence of major players, like Walmart and Kroger, who control a large share of the market, can affect pricing on a broader scale. While they don’t hold monopoly-level control, their significant market share allows them some price-setting power. Companies across the food supply chain (from production to retail) have reported strong earnings during this period, which suggests that prices could be elevated beyond what input costs alone would justify. This issue is nuanced, and examining data across the supply chain is more constructive than dismissing it outright.

Same handle?

Agreed. However, I will go out of my way not to let that affect the mood. Our time together is finite. PS, I love your buns. I mean, puns. 😘

Would you happen to know if he also escorts? Thank you.

I honestly can’t remember if a provider has ever counted the cash in front of me—I don’t think one ever has. Personally, I wouldn’t mind if they did (it might feel a bit awkward if they did at the beginning, but I’d adjust). I always leave the cash in an envelope on a table where they can see it as they walk in. This approach helps avoid any initial conversation about it. Most of the men I see are regulars, so this has become a kind of shorthand. But when I meet someone new, I never hand the money directly to them.

Ragtime feels especially relevant today. Sadly.

While grocery price increases are influenced by global and logistical issues—such as the pandemic, war, labor shortages, and supply chain disruptions (hurricanes, etc.)—there is also evidence that corporations have kept prices high, leveraging both market power and the narrative of inflation for profit. Some economists and consumer advocates argue that corporations, particularly in monopolized markets, are using the inflationary environment to justify price increases beyond what’s necessary (aka, Greedflation Theory). This narrative has gained traction as companies report strong earnings while consumers face high costs.

Mike is not 38. He’s a NYC staple. He’s been around.

I hate being made to feel that I was a number that day. Or squeezed in. My favorite is when they ask to use the shower because they just came from another appointment. Uh… sure, shower is right over there… I’ll just wait on the bed while you clean the other man’s ass off your cock. Take your time. The truly best providers will never leave you guessing if you were their first or third client that day.

And a good reason why I avoid the straights.