Your numbers are accurate, but you're manipulating the data. The point is that while inflation is trending downward, things still cost 3% more than they used to and not a single Congressional elected not the President and his administration have done a damn thing to claw back the windfall gains corporate profiteering engendered in the past two years. This was "greedflation" for the sole purpose of making the already morbidly wealthy even richer.
Paul, Prof. Reich has had at least one entire piece about the price-gouging which is where I heard about it first. Somehow, though the media has mostly ignored it while they keep cheering on the Fed.
Pat, I suspect a whole lot of people want to believe it is our government that is somehow messing things up with our economy, not their precious corporations that, of course, have their best interests at heart, after all, they are rich, aren't they?
Welll... but if the government would tax Big Corp and Big Pharma and Big Tech appropriately, we would not be in this pickle. So, in that respect, it is the government's "fault" - especially when they stay quiet about it.
Speak to the Republicans who are keeping “government” tied up in knots and have been for quite some time now, and before that, they’ve been dragging their feet and making a reasonable and fair economy tough to achieve since at least the Reagan era.
When people speak of “government” as though it were monolithic, they tend to aim annoyance at the “party in power,” but too often, they don’t KNOW which party actually HAS the power to bollix things up.
Right now, Democrats are in the WH. Democrats create the “agenda” for the Senate. Republicans are making a mockery of the House.
BUT, this president does not toss out decree after decree like TFG did. And this Senate does not have a filibuster-breaking majority. And Dems have almost no power in the House.
So, who has the power?
Talking about “government” creates a false impression.
To edit a little: “Well, if Republicans would allow Big Corp and Big Pharma and Big Tech and Big Oil to be taxed appropriately ....”
It would actually fall to the Congress, they have the power of instituting tax levels and at this point, the Republican majority in the House will NOT create a tax level against their owners in the corporate and uber wealthy world. So, until we are able to stop the fascists in the Republican Party from this destructive level of taxing the rich, we are screwed.
It's about "being rich!" If you "made it" in SPITE OF Government regulations and Socialist hand-out mentality, then you are, in essence, a REAL Patriot and $WORTHY$ of the accolades set aside exclusively for the "rugged Individualist"
The rich are the ones that are getting the most social help. But nobody seems to want to acknowledge that. The billionaires, millionaires and corporations are the biggest theifs. They steal by buying politicians,
judges of the Supreme Court changing laws in their favor and asking help from the government when they are going under.
The unfettered capitalist system that preys on all of us (and eventually will consume itself), has been mythologized as the "real" ameriKKKa! Supply and Demand is more "science" to them then gravity or, for that matter, TRUTH! Anyone that even suggests that we address wealth inequality is branded as subversive and a danger to the "rugged individualism" (another myth), that puts them on top of the food chain...
When the game is rigged, any tinkering with the rules becomes unwanted "socialist" hand outs! Always remember: They EARNED IT... YOU and I have apparently squandered our "equal" opportunity to be filthy rich like them... OH WELL!?!
btw: Had an uncle I never knew named Teofilo who was killed in Italy during WWII (they called him Towey) - have a military picture and his Purple Heart
People are deeply confused, and it's not an accident. The capitalists have convinced workers that they too are capitalists. And in the capitalist system, workers must sacrifice so that the "job creators" can live lavish lifestyles. If Bezos doesn't have five super yachts, he'd have no reason to even get out of bed. And if Bezos doesn't get out of bed, who would create all those low-paying jobs?
If you don't have capital, you ain't a capitalist.
The President is also fighting against people from the same party that created the huge deficit raise and debt bloat( Republicans). President Biden and his administration has been cleaning up after a huge economic disaster foisted upon America by the Republicans again.
Our debt problem is mostly the result of Bush and Trump tax cuts but monied interest will try to shift the burden of paying the debt onto the population with high interest rate loan terms. The Fed will raise rates more to drive unemployment up and wages down then banking typically offers people strapped for cash high interest loans. International banking has done that for centuries. The Fed is international banking interest in the US.
Actually, the debt problem has been on the creep, starving Social Security AND the General Fund since the Reagan era, when taxes on wealth were slashed to picayune levels.
I thought Bill Clinton balanced the budget two years after taking office though Ronald's slashing taxes and Nancy's lavish spending racked up a lot of debt during his administration.
Clinton balanced the budget, but on whose back? I’m trying to remember the specifics. He did NOT attend to the many warnings about the overheating real estate markets and markets in general. He allowed Glass-Steagall to fade out of existence. He wasn’t so great, in my book, though I think he dd somethings right. Other things, very wrong.
Once you open that up, you'll also find another excellent article by Eric Levitz from the Daily Intelligencer referenced in it, which I highly recommend. He deconstructs greedflation, too.
(I could try to summarize both articles, but I worry that I would botch it, so, if interested, please read and see what you think. Sad to say, I found myself having to lower the pedestal I put Professor Reich on at least when it comes to economics. He's a lawyer by training and a university professor, and he knows a lot about economics, but he's not a macroeconomist by trade.)
Apparently you don’t buy groceries or are well off enough not to feel the impact. There are a lot of corporations stealing from the poor and working class.
I saw a microcosm of this when I worked in a nonprofit hospital. A new CEO came in and joined with another hospital so we could continue to make a profit, which was offset their poor financial condition. And how did they make more money? Freezing salaries. Reducing hours. Reducing benefits. Letting long time hard working well liked employees go. Eliminating their position. Renaming it and hiring someone to fill it with someone that was starting at the bottom. Without the skills and years of experience. Buying cheap supplies that didn’t work. (These people are interested in the short term.). This has nothing to do with inflation but it is a close up and personal view of how greedy some people have come. Of course they had a well paid union buster on staff. This stuff is real.
Oh, yes, greed is certainly part of human nature, and I suppose always will be. But since it's always been there, "greedflation" would have occurred long ago, but it didn't.
The surface problem is capitalism, but the real driver is selfish human nature, which is our innate struggle to survive and because the future is always uncertain, we grab and keep more than we need. It's how we roll.
But for more economics and less philosophy, read the two articles I recommended above. They argue, successfully I think, that greedflation is not really a thing. The problem is deeper and more serious than some passing phenomenon.
Thanks for responding. With our heads put together, we'll figure this out, at least enough to improve and raise above our current condition; then it'll be rinse and repeat, as the shampoo bottle's instructions tell us. The movie never ends, nor does the uphill climb.
Another factor driving inflation that I believe does not get enough attention is the ever-increasing wealth gap in society. (I’m surprised Reich doesn’t focus more on this, given his involvement with Inequality Media.)
It stands to reason that, as a greater percentage of the nation’s funds are siphoned up to the top, producers would shift production toward this market, with more profitable higher-priced goods and services — and shift production away from the lower and middle segments of society who have less and less of the money. And of course the latter results in shortages and higher prices for the little that remains.
I believe the above could substantially be resolved with a progressive wealth tax, but good luck getting that passed under the current power structure.
I've a different perspective, based on Modern Monetary Theory (MMT): We don't need taxes at all to spend on helpful, necessary things for the economy. Our fiat currency, not backed by any commodity, is created by keystrokes; thus, funding is never a problem now. However, we can create too much money: That's when the economy is running full-throttle and there's zero unemployment; neither condition is now extant.
However, those people in power believe that the federal economy is just like a household's or corporation's or even a state government's. It isn't. Nonetheless, they won't allow the federal government do what it can do to resolve many of our serious problems. We restrain ourselves unnecessarily. It's maddening, but ignorance of MMT's new insights is rampant.
To appreciate all this "madness," you'll need to immerse yourself in MMT. A good start is to read Dr. Stephanie Kelton's "The Deficit Myth." You'll find free YouTube seminars, too, by Drs. L. Randall Wray, Bill Mitchell, et al.
God bless you James! So many people – even pundits, leaders, and academics – seem not to fully understand how today’s money works. Your comments are all spot on!
It was so good that I saved it. You came up with some very effective ways to explain MMT. (Which isn't really that difficult, but people, like you imply, just can't make the gestalt switch from household economics to macroeconomics, not even economists, like Larry Summers.) I doubt that the majority of Americans will ever get big money, particularly the new, valuable insight of MMT. I didn't: I had to read and read and read and think and think and think to finally understand.
I wish Stephanie Kelton had a major platform to tell the MMT story or that she might become Secretary of the Treasury, but that's unlikely. Too bad: Victory is within reach, but we're not making the effort to extend our hand. So we'll continue to muddle along using bad economic theories.
James Muncy -- sometimes I try to read these things and I do persevere, until I just want to pull my hair out. The idea of greedflation is that corporations have been doing what they did FIRST because there were real market forces driving prices up -- we all agree supply chain problems contributed to it, among other influences concurrent with the pandemic. Folks keep arguing now that suggesting prices are being kept high just because corporations want to make higher profits doesn’t make sense. One argument against greedflation is that corporations could have done that all along, and they didn’t, because it doesn’t work for them. “The market” would knock them down for it.
Baloney. Corporations couldn’t just up and impose gouging prices on a whim! They needed a smoke screen to get things started, and they kept up the high prices after the markets began to rebound, and they found out they could get away with keeping prices up BECAUSE people blamed “inflation” and “too much money in the markets” and did NOT put the blame on them {the greedy corporations}, and that’s not seriously considered in the parts of this article that I struggled to continue to read.
{Hey. I remember the phony gas shortages and OPEC-devised soaring prices in the 70s, bringing the price of a gallon of gas into the “dollars”-sphere, where only European has been paying that kind of money for refined petroleum! But people back then said, once you get people paying a buck and a half for gas for a while, the price will never go down again, and even though there was no real oil shortage, they right abut the price ... And the ensuing soaring of Oil Company profits ever since ... They needed an excuse ... OPEC game ‘em one. And the rest is history.
I tend to see economists trying to see the principles of the economic endeavor as fixed or predictable, and it only is that until it isn’t. Economics is every bit as much psychology and a confidence game as it is anything scientific or predictable. It’s predictable only in so much as human nature is malleable and gullible and thus to a degree predictable.
But this writer cited above seems to want to agree that greedflation IS a thing, and that it it NOT a thing, both at the same time. I stopped reading. Maybe I’ll pick it up again, when I have a lot of time to waste.
Yes, besides, there are other, better ways to control inflation, such as a windfall profits tax, price caps on items with fixed demand, like gas, medicine, utilities, etc., and boycotts.
Inflation may be tempering per economists and Fed adjustments may have had something to do with this, but... I’m a senior on a very fixed income and I am, for the first time since I retired in 2012, struggling economically. Other family and friends are in similar situations. For those of us trying to put still-WAY-too-expensive food on the table, there’s no end to increases in the price of meat (especially) and other food staples that go toward a healthy diet. BigFood is price gouging consumers.
In this instance, I wish you and your fellow economists would step out of your ivory towers, actually mingle with the great unwashed, go grocery shopping with them to see that too many who were minimally okay financially two or three years ago are now having to make difficult decisions between rent, food, clothing, etc.
Unfortunately, without reining in the greed of corporations as Biden has suggested needs to occur, but the GOP refuses to allow, prices aren't going to go down for many items now that we are paying them currently.
A win in 2024 is how we guarantee that real change in how corporations are taxed can happen.
All government officials and employees should have to give up (not postpone-give up totally) two months salary, investment income, savings etc to Live On food stamp allocation, welfare, or social security for their states average “benefit”. What’s good for “the struggling goose” should be good for the “fatted, privileged ganders”!
Walking a mile in our shoes might give the rich, often ignorant congressional “leaders” a bit of perspective.
CEOs jobs are to make themselves and their shareholders money. Having so many CEOs elected to run this country (since Reagan) Has and Is no way to run a country!
A country IS NOT a corporation, an LLC, or any form of business! This country - IS WE THE PEOPLE; not some profit margin or dividend.
We NEED elected officials to realise the pledge of office they take IS The Pledge and Oath to the people...us!!
As far as I am concerned. Look what Biden has done to our
country, he has the border wide open and we are paying a lot of money for these people, they are getting more free things but
our citazions are getting treated like crap, Biden took office and shut down our pipeline, all the parts of the wall are sitting there getting rotten, all because he hates Trump. Well I am not liking Biden one darn bit, all the Democrats can go to you you know where. Have a great night
Or you could stop reading/watching/listening to the rabid right wing propaganda fascist ministers and actually involve yourself in actual fact based reporting. Nothing on those wonderful rabid rabble rousing right wing ChristoFascist organs of propaganda are speaking fact, they are simply pushing conspiracy bull shit off to people like you who actually believe the lies and crap of propagandists who couldn't find their ass with two hands and a flashlight if they were mandated to speak with FACT not bull shit.
Diane, the border has NEVER been “wide-open.” Republicans are lying when they say it is. I don’t know what people you think we are paying a lot of money or giving free things to, or what pipeline you think Biden has shut down. But according to Politifact.com, President Joe Biden’s decision to cancel the planned Keystone XL oil pipeline, which was not in operation, DID NOT CAUSE the recent increases in U.S. gasoline prices.
I don't mean to be rude, but how do you distinguish, by looking at someone, between someone like yourself and a lazy Welfare Queen who gets a lot of food stamps and is, therefore, more fortunate than you? Every time you use your food stamps card, people may presume the same about you unless you explicitly tell them otherwise and they have compassion for you.
Differentiations like yours, judgmentalism, and finger-pointing among the poor lends fuel to every political desire to eliminate all government handouts to "the poor." Government handouts to the rich are different.
Just as a cashier or customer who sees your food stamps card may not understand your story or how hard you work, neither do you know the whole story of anyone who may fit the most hated stereotype of the Welfare Queen.
P.S. Meat is bad for your health, the environment, and the factory farmed animals.
The prices have NOT stopped rising. It is price gouging! This is what monopolies do: create poverty, and eliminate middle class workers by eliminating jobs. Monopolies are Not compatible with Democracies!
Our government, order, or whatever lifestyle you had is being dismantled right before our eyes. The problem is the politicians keep the Corporations tax free, and they get paid back. They all do. Then they blame the unemployed, the disabled, the immigrants, the Blacks, Mexicans, Asians, Latins, etc. They never admit they are the cause of the problems, Nor the solution. They create problems, and make a big fuss over solving them. They create problems to justify their job. In essence, they do nothing. This gives them job security. They stay in their positions for eons. All along, the do Nothing!
But packaging sizes have decreased with prices holding and the corporate food supply chain “price gouging” via reduced food volume at that higher cost to us. They( corporate food manufacturers and suppliers are literally banking on and hoping that we are all too dumb to really see/know what has happened. Someone please tell me what else we can do to overcome this other than vote. It’s such a doomsday feeling.
I was also pleased when I heard the new data about inflation for June. At the same time, though the reporter had to mention that the Fed planned to raise interest rates one or two more times to get to the magic number. My immediate response to my apartment walls was "why?" Then I thought, we would probably have reached the magic 2% mark Powell set if the rich corporate price-gouging had been halted in its tracks. It wasn't and should be. However, Powell, the one-trick pony can't or won't even notice what those corporations have been doing along with their immense profits. I have to remember he is a Republican appointed by a Republican president, and kept by Biden in a moment of trying for bipartisanship. I would say (not that I have any pull whatsoever) that if Powell goes for raising the interest rate again, Democratic senators need to work to get him removed. I am disappointed, though with the willingness of the rest of the Fed to go along, knowing its impact on working families.
Know you’re not alone wondering what is wrong with all of us to let this character just keep boosting and boosting interest rates and sapping and sapping our incomes!!!
Inflation is similar to tax hikes, only the extra "revenue" goes to the private sector instead of our democratically elected representative government. Same with rising interest rates. When the private sector gets hungry, it has a feast. This year, the private sector has wiped out every penny of percentage increase I thought I was going to gain on my limited income, and then some.
The Fed is frustratingly insistent on raising interest rates, and one must wonder WHY that would be so? WHY are they so single-minded about this? It’s not for the good of the people, that’s for damned sure ...
Pat, I suspect the Fed members are rather mediocre folks who believe they have one tool, raising or lowering interest rates, and what they do seems to me to be generally for the benefit of the already-rich corporate world. There is no evidence that I can tell that they care anything for ordinary Americans. They along with Powell are a one-trick pony. They could use their position to get the word out about the massive price-gouging and who is doing it, but somehow, they just can't do that trick.
Ruth, thanks for taking the words out of my mouth. These "economists" live in their little thought bubbles, crunching numbers. But they have no idea how their sledge hammer approach destroys lives. Clueless or could care less? Not sure.
Bill, I suspect, having been paying attention to this crew for a while that it is both, are clueless, and just don't care. More care should be taken when picking people for the Fed because what they do or don't do has enormous impacts on our lives.
Yep, Stan, exactly what I am thinking. Powell should never have been left in office. This bipartisan thing right now is a joke. Republicans are all about money, power, and general cruelty, usually all at once. We can't give them power because they will use it to feed their addiction and we'll all pay. Look at DeJoy at the Post office too and the many R. governors and state legislatures. They are not good caring people, they are severely addicted child-adults looking for their next hit.
It’s sadly the tool they have. They never have been able to do much else.
I remember Paul Volcker and Reagan’s inflation policy had interest rates at 20% in 1981. And unemployment was at 7.8%. Never have been sure why so many Americans think Reagan was a great President. I still don’t.
That Was Ugly.
I was a young single mom and making $8000.00 a year.
They are the ones wanting to reset the economy, since the dollar is worth so little now. There's no choice but to have a big crash to fix the fiat system.
DK, keep up with inflation! It doesn't even keep up with the cost there would be if I counted how much time it took to "read" the actual interest I gained per month.
The real driver of inflation, the part below the price gouging, is the Republican tax cuts that drive the deficit that the FED finances by printing money. The FED is run by financial elites of the corporate class, so they blame it on wage demands of poor people. Those cuts compound every tax year and total much more than the one-time Covid relief. Those tax cuts for the rich fund bribes for representatives, senators and judges, unlike the Covid relief that created job that generate tax revenues. We cannot solve our problems without dealing with the core issue, Republican tax cuts for the financial elites who fund (purchase) their party. It's long past time to start explaining this to the ignorant masses. It must be repeated ad nauseam until it sinks in.
You can't fix stupid at the FED. Fix the real cause of inflation, Republican spending on payoffs to their donors instead of investing in the economy and infrastructure that actually pays back. Fix the tax code, and the FED won't have the excuse to steal the gains of the working class like a common loan shark.
Morals in the USA are on the downhill slide and have been for quite some time. This is primarily evident in the political class, but also within the very wealthy class as well. Think about the individual rights and freedoms that are being ripped away and the ones still in force but being legislated out of viability. Think about this, with the Republican Governor states, where the rights of an individual are sitting right now. Hell even here in the Old Dominion (Virginia), our new corporate liar Governor Youngkin is pushing ever so steadily in removing every single benefit that has been implemented in this state over the past several decades. He is another corporate executive type what some voters think will bring good governance, well, bull shit. Every corporate executive I have ever seen rise to the higher level in politics has been nothing but destructive. While there are a few corporate types who actually give a damn about the citizens, the super majority of then would prefer that we simply vote for them and then shut the hell up until the next election cycle. Morals be damn, especially in the political world of the new Fascist Republican Party. Just look at those states where the Republican has control.
AAnd when political and corporate leaders ignor moraks their actions are adopted by the population at large. There are wealthy who do donate in all kinds of ways to level the playing field but there are many more who simply count their money to no end.
You write: "But it’s time to stop, because higher (interest) rates will slow the economy — and a slower economy will hurt lower-wage workers." What you did NOT say is: "The inflation rates have already hurt the lower-wage workers AND those on a fixed income." Everyone who is talking about the "wonderful economy" is acting as if the prices for daily necessities (ie, food, lodging, utilities, etc) have magically reset to pre-pandemic prices. This has not, and will not happen. So please take off your rose colored glasses. This is why Biden's approval rating is so low, people are STILL hurting. The truth is that the higher interest rates cut into large corporations' & billionaires' disgustingly inflated profit margins (greed-flation). Billionaires & mega-corporations want cheap money when borrowing, & little to no taxes being imposed on their profits, and to hell with the plight of the poor & middle class.
When an average CEO makes over $24 million a year (24,000,000) and the average employee for that same company makes $35,000 a year- That’s a problem.
That same CEO most frequently then serves on the Board of Directors of several other corporations... and gets paid & gets those companies stock options...
You can tell Exactly how much they Really care about being in those exclusive CEO “clubs” - and how very very Little they care about their workers.
Your numbers are accurate, but you're manipulating the data. The point is that while inflation is trending downward, things still cost 3% more than they used to and not a single Congressional elected not the President and his administration have done a damn thing to claw back the windfall gains corporate profiteering engendered in the past two years. This was "greedflation" for the sole purpose of making the already morbidly wealthy even richer.
Paul, Prof. Reich has had at least one entire piece about the price-gouging which is where I heard about it first. Somehow, though the media has mostly ignored it while they keep cheering on the Fed.
Yet he's ignoring it today. No action in the past so time to move on?
Thank you for taking ACTION!
When, when, WHEN will the American people wake up to that reality!!!
Pat, I suspect a whole lot of people want to believe it is our government that is somehow messing things up with our economy, not their precious corporations that, of course, have their best interests at heart, after all, they are rich, aren't they?
Welll... but if the government would tax Big Corp and Big Pharma and Big Tech appropriately, we would not be in this pickle. So, in that respect, it is the government's "fault" - especially when they stay quiet about it.
Speak to the Republicans who are keeping “government” tied up in knots and have been for quite some time now, and before that, they’ve been dragging their feet and making a reasonable and fair economy tough to achieve since at least the Reagan era.
When people speak of “government” as though it were monolithic, they tend to aim annoyance at the “party in power,” but too often, they don’t KNOW which party actually HAS the power to bollix things up.
Right now, Democrats are in the WH. Democrats create the “agenda” for the Senate. Republicans are making a mockery of the House.
BUT, this president does not toss out decree after decree like TFG did. And this Senate does not have a filibuster-breaking majority. And Dems have almost no power in the House.
So, who has the power?
Talking about “government” creates a false impression.
To edit a little: “Well, if Republicans would allow Big Corp and Big Pharma and Big Tech and Big Oil to be taxed appropriately ....”
It would actually fall to the Congress, they have the power of instituting tax levels and at this point, the Republican majority in the House will NOT create a tax level against their owners in the corporate and uber wealthy world. So, until we are able to stop the fascists in the Republican Party from this destructive level of taxing the rich, we are screwed.
They are not going to do it!
Sad, but true, no? :(
We need campaign finance reform!!!!
Totally agree with you, Ruthie. If only, though, right?
YES, Ruth...
It's about "being rich!" If you "made it" in SPITE OF Government regulations and Socialist hand-out mentality, then you are, in essence, a REAL Patriot and $WORTHY$ of the accolades set aside exclusively for the "rugged Individualist"
TO THE VICTORS, THE SPOILS!!!
“Socialist “hand out” mentality? Is that anything akin to Capitalist Owner-Hoarded Mentality?
The rich are the ones that are getting the most social help. But nobody seems to want to acknowledge that. The billionaires, millionaires and corporations are the biggest theifs. They steal by buying politicians,
judges of the Supreme Court changing laws in their favor and asking help from the government when they are going under.
The unfettered capitalist system that preys on all of us (and eventually will consume itself), has been mythologized as the "real" ameriKKKa! Supply and Demand is more "science" to them then gravity or, for that matter, TRUTH! Anyone that even suggests that we address wealth inequality is branded as subversive and a danger to the "rugged individualism" (another myth), that puts them on top of the food chain...
When the game is rigged, any tinkering with the rules becomes unwanted "socialist" hand outs! Always remember: They EARNED IT... YOU and I have apparently squandered our "equal" opportunity to be filthy rich like them... OH WELL!?!
btw: Had an uncle I never knew named Teofilo who was killed in Italy during WWII (they called him Towey) - have a military picture and his Purple Heart
B*I*N*G*O*
Your prize is a position with a multi-billion dollar corporation
(at minimum wage of course), in order to ensure maximum profit margins...
***CONGRATS***
People are deeply confused, and it's not an accident. The capitalists have convinced workers that they too are capitalists. And in the capitalist system, workers must sacrifice so that the "job creators" can live lavish lifestyles. If Bezos doesn't have five super yachts, he'd have no reason to even get out of bed. And if Bezos doesn't get out of bed, who would create all those low-paying jobs?
If you don't have capital, you ain't a capitalist.
The President is also fighting against people from the same party that created the huge deficit raise and debt bloat( Republicans). President Biden and his administration has been cleaning up after a huge economic disaster foisted upon America by the Republicans again.
Our debt problem is mostly the result of Bush and Trump tax cuts but monied interest will try to shift the burden of paying the debt onto the population with high interest rate loan terms. The Fed will raise rates more to drive unemployment up and wages down then banking typically offers people strapped for cash high interest loans. International banking has done that for centuries. The Fed is international banking interest in the US.
Actually, the debt problem has been on the creep, starving Social Security AND the General Fund since the Reagan era, when taxes on wealth were slashed to picayune levels.
I thought Bill Clinton balanced the budget two years after taking office though Ronald's slashing taxes and Nancy's lavish spending racked up a lot of debt during his administration.
Clinton balanced the budget, but on whose back? I’m trying to remember the specifics. He did NOT attend to the many warnings about the overheating real estate markets and markets in general. He allowed Glass-Steagall to fade out of existence. He wasn’t so great, in my book, though I think he dd somethings right. Other things, very wrong.
Paul, Robert has hammered the subject you mention numerous times in the past.. almost a mantra..slap the corporations around and get them to step up
How many times have Rs voted against taxing the Mega Rich, tax the extreme profits, voted against stopping price gouging. (especially gas pricing)
ALL of them. Every Time.
Absolutely agree with you.
Didn't Prof.Reich go before Congress to speak about the windfall tax? If I remember correctly,...
I, too, was pushing the "greedflation" idea until I read this:
https://open.substack.com/pub/freddiedeboer/p/greedflation-is-a-proxy-battle-in?r=phhcn&utm_campaign=post&utm_medium=web
Once you open that up, you'll also find another excellent article by Eric Levitz from the Daily Intelligencer referenced in it, which I highly recommend. He deconstructs greedflation, too.
(I could try to summarize both articles, but I worry that I would botch it, so, if interested, please read and see what you think. Sad to say, I found myself having to lower the pedestal I put Professor Reich on at least when it comes to economics. He's a lawyer by training and a university professor, and he knows a lot about economics, but he's not a macroeconomist by trade.)
Apparently you don’t buy groceries or are well off enough not to feel the impact. There are a lot of corporations stealing from the poor and working class.
I saw a microcosm of this when I worked in a nonprofit hospital. A new CEO came in and joined with another hospital so we could continue to make a profit, which was offset their poor financial condition. And how did they make more money? Freezing salaries. Reducing hours. Reducing benefits. Letting long time hard working well liked employees go. Eliminating their position. Renaming it and hiring someone to fill it with someone that was starting at the bottom. Without the skills and years of experience. Buying cheap supplies that didn’t work. (These people are interested in the short term.). This has nothing to do with inflation but it is a close up and personal view of how greedy some people have come. Of course they had a well paid union buster on staff. This stuff is real.
oh this hurts... disgusting how some are greedy like this and have to think this way...
Oh, yes, greed is certainly part of human nature, and I suppose always will be. But since it's always been there, "greedflation" would have occurred long ago, but it didn't.
The surface problem is capitalism, but the real driver is selfish human nature, which is our innate struggle to survive and because the future is always uncertain, we grab and keep more than we need. It's how we roll.
But for more economics and less philosophy, read the two articles I recommended above. They argue, successfully I think, that greedflation is not really a thing. The problem is deeper and more serious than some passing phenomenon.
Thanks for responding. With our heads put together, we'll figure this out, at least enough to improve and raise above our current condition; then it'll be rinse and repeat, as the shampoo bottle's instructions tell us. The movie never ends, nor does the uphill climb.
Another factor driving inflation that I believe does not get enough attention is the ever-increasing wealth gap in society. (I’m surprised Reich doesn’t focus more on this, given his involvement with Inequality Media.)
It stands to reason that, as a greater percentage of the nation’s funds are siphoned up to the top, producers would shift production toward this market, with more profitable higher-priced goods and services — and shift production away from the lower and middle segments of society who have less and less of the money. And of course the latter results in shortages and higher prices for the little that remains.
I believe the above could substantially be resolved with a progressive wealth tax, but good luck getting that passed under the current power structure.
I've a different perspective, based on Modern Monetary Theory (MMT): We don't need taxes at all to spend on helpful, necessary things for the economy. Our fiat currency, not backed by any commodity, is created by keystrokes; thus, funding is never a problem now. However, we can create too much money: That's when the economy is running full-throttle and there's zero unemployment; neither condition is now extant.
However, those people in power believe that the federal economy is just like a household's or corporation's or even a state government's. It isn't. Nonetheless, they won't allow the federal government do what it can do to resolve many of our serious problems. We restrain ourselves unnecessarily. It's maddening, but ignorance of MMT's new insights is rampant.
To appreciate all this "madness," you'll need to immerse yourself in MMT. A good start is to read Dr. Stephanie Kelton's "The Deficit Myth." You'll find free YouTube seminars, too, by Drs. L. Randall Wray, Bill Mitchell, et al.
Enjoyed communicating!
God bless you James! So many people – even pundits, leaders, and academics – seem not to fully understand how today’s money works. Your comments are all spot on!
If you’re interested, I published an article a couple years ago in which I use the hydrological cycle as an illustration of the way money works at the federal level. I think it still holds up! I also cite Kelton‘s book a couple times. The article is at: https://www.dailykos.com/stories/2020/8/1/1965590/-The-Myth-About-Federal-Funding-that-Thwarts-a-New-More-Benign-Society
Excellent article, Bill!
It was so good that I saved it. You came up with some very effective ways to explain MMT. (Which isn't really that difficult, but people, like you imply, just can't make the gestalt switch from household economics to macroeconomics, not even economists, like Larry Summers.) I doubt that the majority of Americans will ever get big money, particularly the new, valuable insight of MMT. I didn't: I had to read and read and read and think and think and think to finally understand.
I wish Stephanie Kelton had a major platform to tell the MMT story or that she might become Secretary of the Treasury, but that's unlikely. Too bad: Victory is within reach, but we're not making the effort to extend our hand. So we'll continue to muddle along using bad economic theories.
James Muncy -- sometimes I try to read these things and I do persevere, until I just want to pull my hair out. The idea of greedflation is that corporations have been doing what they did FIRST because there were real market forces driving prices up -- we all agree supply chain problems contributed to it, among other influences concurrent with the pandemic. Folks keep arguing now that suggesting prices are being kept high just because corporations want to make higher profits doesn’t make sense. One argument against greedflation is that corporations could have done that all along, and they didn’t, because it doesn’t work for them. “The market” would knock them down for it.
Baloney. Corporations couldn’t just up and impose gouging prices on a whim! They needed a smoke screen to get things started, and they kept up the high prices after the markets began to rebound, and they found out they could get away with keeping prices up BECAUSE people blamed “inflation” and “too much money in the markets” and did NOT put the blame on them {the greedy corporations}, and that’s not seriously considered in the parts of this article that I struggled to continue to read.
{Hey. I remember the phony gas shortages and OPEC-devised soaring prices in the 70s, bringing the price of a gallon of gas into the “dollars”-sphere, where only European has been paying that kind of money for refined petroleum! But people back then said, once you get people paying a buck and a half for gas for a while, the price will never go down again, and even though there was no real oil shortage, they right abut the price ... And the ensuing soaring of Oil Company profits ever since ... They needed an excuse ... OPEC game ‘em one. And the rest is history.
I tend to see economists trying to see the principles of the economic endeavor as fixed or predictable, and it only is that until it isn’t. Economics is every bit as much psychology and a confidence game as it is anything scientific or predictable. It’s predictable only in so much as human nature is malleable and gullible and thus to a degree predictable.
But this writer cited above seems to want to agree that greedflation IS a thing, and that it it NOT a thing, both at the same time. I stopped reading. Maybe I’ll pick it up again, when I have a lot of time to waste.
Yes!
And ASK! the FED to track and measure profit increases as closely as they do wage/salary increases for their contributions to price increases.
Yes, besides, there are other, better ways to control inflation, such as a windfall profits tax, price caps on items with fixed demand, like gas, medicine, utilities, etc., and boycotts.
Inflation may be tempering per economists and Fed adjustments may have had something to do with this, but... I’m a senior on a very fixed income and I am, for the first time since I retired in 2012, struggling economically. Other family and friends are in similar situations. For those of us trying to put still-WAY-too-expensive food on the table, there’s no end to increases in the price of meat (especially) and other food staples that go toward a healthy diet. BigFood is price gouging consumers.
In this instance, I wish you and your fellow economists would step out of your ivory towers, actually mingle with the great unwashed, go grocery shopping with them to see that too many who were minimally okay financially two or three years ago are now having to make difficult decisions between rent, food, clothing, etc.
Unfortunately, without reining in the greed of corporations as Biden has suggested needs to occur, but the GOP refuses to allow, prices aren't going to go down for many items now that we are paying them currently.
A win in 2024 is how we guarantee that real change in how corporations are taxed can happen.
I am right there with you.
I even tried to get food stamps and they gave me $50.00 a month, it is better
than nothing, I buy some meat with it, I was embarrassed, but I worked all of life and look at all of the people who are on
Welfare never worked and
they get a lot of food stamps
All government officials and employees should have to give up (not postpone-give up totally) two months salary, investment income, savings etc to Live On food stamp allocation, welfare, or social security for their states average “benefit”. What’s good for “the struggling goose” should be good for the “fatted, privileged ganders”!
Walking a mile in our shoes might give the rich, often ignorant congressional “leaders” a bit of perspective.
CEOs jobs are to make themselves and their shareholders money. Having so many CEOs elected to run this country (since Reagan) Has and Is no way to run a country!
A country IS NOT a corporation, an LLC, or any form of business! This country - IS WE THE PEOPLE; not some profit margin or dividend.
We NEED elected officials to realise the pledge of office they take IS The Pledge and Oath to the people...us!!
Thank you, I did fine
until Biden took office,
As far as I am concerned. Look what Biden has done to our
country, he has the border wide open and we are paying a lot of money for these people, they are getting more free things but
our citazions are getting treated like crap, Biden took office and shut down our pipeline, all the parts of the wall are sitting there getting rotten, all because he hates Trump. Well I am not liking Biden one darn bit, all the Democrats can go to you you know where. Have a great night
Or you could stop reading/watching/listening to the rabid right wing propaganda fascist ministers and actually involve yourself in actual fact based reporting. Nothing on those wonderful rabid rabble rousing right wing ChristoFascist organs of propaganda are speaking fact, they are simply pushing conspiracy bull shit off to people like you who actually believe the lies and crap of propagandists who couldn't find their ass with two hands and a flashlight if they were mandated to speak with FACT not bull shit.
Diane, the border has NEVER been “wide-open.” Republicans are lying when they say it is. I don’t know what people you think we are paying a lot of money or giving free things to, or what pipeline you think Biden has shut down. But according to Politifact.com, President Joe Biden’s decision to cancel the planned Keystone XL oil pipeline, which was not in operation, DID NOT CAUSE the recent increases in U.S. gasoline prices.
I don't mean to be rude, but how do you distinguish, by looking at someone, between someone like yourself and a lazy Welfare Queen who gets a lot of food stamps and is, therefore, more fortunate than you? Every time you use your food stamps card, people may presume the same about you unless you explicitly tell them otherwise and they have compassion for you.
Differentiations like yours, judgmentalism, and finger-pointing among the poor lends fuel to every political desire to eliminate all government handouts to "the poor." Government handouts to the rich are different.
Just as a cashier or customer who sees your food stamps card may not understand your story or how hard you work, neither do you know the whole story of anyone who may fit the most hated stereotype of the Welfare Queen.
P.S. Meat is bad for your health, the environment, and the factory farmed animals.
YES! This, right here.
Prices have stopped going up but they have not gone done. Instead of about $50 for groceries, the same mixture costs me $80!!!!
The prices have NOT stopped rising. It is price gouging! This is what monopolies do: create poverty, and eliminate middle class workers by eliminating jobs. Monopolies are Not compatible with Democracies!
Our government, order, or whatever lifestyle you had is being dismantled right before our eyes. The problem is the politicians keep the Corporations tax free, and they get paid back. They all do. Then they blame the unemployed, the disabled, the immigrants, the Blacks, Mexicans, Asians, Latins, etc. They never admit they are the cause of the problems, Nor the solution. They create problems, and make a big fuss over solving them. They create problems to justify their job. In essence, they do nothing. This gives them job security. They stay in their positions for eons. All along, the do Nothing!
“Politicians” don’t keep corporations “tax free,”
REPUBLICANS keep lowering the corporate tax rate.
It’s corporate Greed-flation. Plain & Simple.
But packaging sizes have decreased with prices holding and the corporate food supply chain “price gouging” via reduced food volume at that higher cost to us. They( corporate food manufacturers and suppliers are literally banking on and hoping that we are all too dumb to really see/know what has happened. Someone please tell me what else we can do to overcome this other than vote. It’s such a doomsday feeling.
I was also pleased when I heard the new data about inflation for June. At the same time, though the reporter had to mention that the Fed planned to raise interest rates one or two more times to get to the magic number. My immediate response to my apartment walls was "why?" Then I thought, we would probably have reached the magic 2% mark Powell set if the rich corporate price-gouging had been halted in its tracks. It wasn't and should be. However, Powell, the one-trick pony can't or won't even notice what those corporations have been doing along with their immense profits. I have to remember he is a Republican appointed by a Republican president, and kept by Biden in a moment of trying for bipartisanship. I would say (not that I have any pull whatsoever) that if Powell goes for raising the interest rate again, Democratic senators need to work to get him removed. I am disappointed, though with the willingness of the rest of the Fed to go along, knowing its impact on working families.
Hear, Hear! Ruth!
Know you’re not alone wondering what is wrong with all of us to let this character just keep boosting and boosting interest rates and sapping and sapping our incomes!!!
Egad. Make him stop!!!
Inflation is similar to tax hikes, only the extra "revenue" goes to the private sector instead of our democratically elected representative government. Same with rising interest rates. When the private sector gets hungry, it has a feast. This year, the private sector has wiped out every penny of percentage increase I thought I was going to gain on my limited income, and then some.
Please tell that damn Powell to stop raising rates and stop his and other FED members their obsession to bring inflation down to 2.5 rate.
Obsession is never good policy!!
The Fed is frustratingly insistent on raising interest rates, and one must wonder WHY that would be so? WHY are they so single-minded about this? It’s not for the good of the people, that’s for damned sure ...
Pat, I suspect the Fed members are rather mediocre folks who believe they have one tool, raising or lowering interest rates, and what they do seems to me to be generally for the benefit of the already-rich corporate world. There is no evidence that I can tell that they care anything for ordinary Americans. They along with Powell are a one-trick pony. They could use their position to get the word out about the massive price-gouging and who is doing it, but somehow, they just can't do that trick.
Ruth, thanks for taking the words out of my mouth. These "economists" live in their little thought bubbles, crunching numbers. But they have no idea how their sledge hammer approach destroys lives. Clueless or could care less? Not sure.
Bill, I suspect, having been paying attention to this crew for a while that it is both, are clueless, and just don't care. More care should be taken when picking people for the Fed because what they do or don't do has enormous impacts on our lives.
Powell is a Republican, and it wouldn’t surprise me if he wants to crash the economy so that Republicans will win in 2024.
Yep, Stan, exactly what I am thinking. Powell should never have been left in office. This bipartisan thing right now is a joke. Republicans are all about money, power, and general cruelty, usually all at once. We can't give them power because they will use it to feed their addiction and we'll all pay. Look at DeJoy at the Post office too and the many R. governors and state legislatures. They are not good caring people, they are severely addicted child-adults looking for their next hit.
It’s sadly the tool they have. They never have been able to do much else.
I remember Paul Volcker and Reagan’s inflation policy had interest rates at 20% in 1981. And unemployment was at 7.8%. Never have been sure why so many Americans think Reagan was a great President. I still don’t.
That Was Ugly.
I was a young single mom and making $8000.00 a year.
This is ugly now - but That was brutal!
They are the ones wanting to reset the economy, since the dollar is worth so little now. There's no choice but to have a big crash to fix the fiat system.
My bank is still PAYING 0.1% interest for savings accounts. This doesn't even keep up with inflation.
DK, keep up with inflation! It doesn't even keep up with the cost there would be if I counted how much time it took to "read" the actual interest I gained per month.
The good news is that US banks don't (yet) charge us to keep money in accounts (as is done in some places).
...no further interest rate increases...they are not needed...the FED reacts often too late with the wrong outcome.
The real driver of inflation, the part below the price gouging, is the Republican tax cuts that drive the deficit that the FED finances by printing money. The FED is run by financial elites of the corporate class, so they blame it on wage demands of poor people. Those cuts compound every tax year and total much more than the one-time Covid relief. Those tax cuts for the rich fund bribes for representatives, senators and judges, unlike the Covid relief that created job that generate tax revenues. We cannot solve our problems without dealing with the core issue, Republican tax cuts for the financial elites who fund (purchase) their party. It's long past time to start explaining this to the ignorant masses. It must be repeated ad nauseam until it sinks in.
You can't fix stupid at the FED. Fix the real cause of inflation, Republican spending on payoffs to their donors instead of investing in the economy and infrastructure that actually pays back. Fix the tax code, and the FED won't have the excuse to steal the gains of the working class like a common loan shark.
Best post here. Greed is a major problem in US. Where are our collective morals?
Morals in the USA are on the downhill slide and have been for quite some time. This is primarily evident in the political class, but also within the very wealthy class as well. Think about the individual rights and freedoms that are being ripped away and the ones still in force but being legislated out of viability. Think about this, with the Republican Governor states, where the rights of an individual are sitting right now. Hell even here in the Old Dominion (Virginia), our new corporate liar Governor Youngkin is pushing ever so steadily in removing every single benefit that has been implemented in this state over the past several decades. He is another corporate executive type what some voters think will bring good governance, well, bull shit. Every corporate executive I have ever seen rise to the higher level in politics has been nothing but destructive. While there are a few corporate types who actually give a damn about the citizens, the super majority of then would prefer that we simply vote for them and then shut the hell up until the next election cycle. Morals be damn, especially in the political world of the new Fascist Republican Party. Just look at those states where the Republican has control.
AAnd when political and corporate leaders ignor moraks their actions are adopted by the population at large. There are wealthy who do donate in all kinds of ways to level the playing field but there are many more who simply count their money to no end.
Amen, amen,amen!
And you have the corporate owned Larry Summers out there saying we have to go to 6%. He's on Bloomberg frequently saying the fed has to do more.
He’s one of the reasons I was angry with the Obama Administration. All the Wall Street types he siphoned out of the Clinton crowd.
You are absolutely correct on this analysis. Not raising rates will be a positive move.
You write: "But it’s time to stop, because higher (interest) rates will slow the economy — and a slower economy will hurt lower-wage workers." What you did NOT say is: "The inflation rates have already hurt the lower-wage workers AND those on a fixed income." Everyone who is talking about the "wonderful economy" is acting as if the prices for daily necessities (ie, food, lodging, utilities, etc) have magically reset to pre-pandemic prices. This has not, and will not happen. So please take off your rose colored glasses. This is why Biden's approval rating is so low, people are STILL hurting. The truth is that the higher interest rates cut into large corporations' & billionaires' disgustingly inflated profit margins (greed-flation). Billionaires & mega-corporations want cheap money when borrowing, & little to no taxes being imposed on their profits, and to hell with the plight of the poor & middle class.
The corporations also want Cheap Labor.
When an average CEO makes over $24 million a year (24,000,000) and the average employee for that same company makes $35,000 a year- That’s a problem.
That same CEO most frequently then serves on the Board of Directors of several other corporations... and gets paid & gets those companies stock options...
You can tell Exactly how much they Really care about being in those exclusive CEO “clubs” - and how very very Little they care about their workers.
I hope the Fed reads your blog and listens to you - or if not, that a fellow citizen of theirs tells them about this.