You came back with an argument (#176) about profit turning negative, yes? (I then started trying to form a view about profit. That, I think, was a mistake, on my part).
The thing is, that profits can turn negative under deflation is not an argument against my conjecture, AFAICS.
Profits relate to a producer. A producer's mirror is a consumer. Those are the symmetric entities I should have identified, and be debating. So let's do that.
My claim is that if inflation favours the producer (and so disfavours the consumer) then deflation disfavours the producer (and so favours the consumer).
But it seems to me that you've already argued deflation disfavours the producer, yes? And I assume you're of the opinion inflation favours the producer, yes?
So we are in agreement on this, yes?
Small
stable inflation favors producers (large 2-digit inflation cannot be stable by definition, let alone run-away inflation) and doesn't favor the consumer much (though it contributes to better employment overall). Deflation, on the contrary to what you say or may think, doesn't favor the consumer either, and most evident this becomes in the long run. You may think that profits and losses are not relevant to this, but here I should cite myself once again:
There are two things to understand why the collapse in aggregate demand is bad (and very bad at that). First, it is enterprise that creates value, so it comes before anything else. Secondly, when prices are falling, it becomes more risky to run it, since you may end up with less money than if you weren't engaged in enterprise altogether.
Since producers are more inclined not to reinvest their profits under deflation, thereby they have to cut production and lay off people (for reasons explained above). This directly hits on the consumer. Thus we have the consumer suffering in both cases, but deflation is more dangerous since it also hits hard on the producer. And not a trace of mirroring by any means.
And inflation doesn't favor borrowers since less lenders are willing to loan in the inflationary environment, and thus less credit overall due to higher interest rates and smaller number of lenders.