Corporate greed and takeovers of smaller companies has changed the capitalist ideas of the past which was always promoted as a good thing. We live in a world where the one percent use their money to govern power for themselves. We must get money our of politics. Yes
I was appalled when I read yesterday’s news about the Fed hiking rates.
We can get through this inflation by tightening our belts… curbing our appetites for things we really don’t need, buying USA made products as much as possible.
Gas prices are going to remain high for a while. Each time we fill up we just might want to spend that time thinking of the upended lives of Ukrainians and give thanks that we have the freedom to drive around town.
Professor Reich, I am truly glad that I am reading your blogs and learning from you. My question is this: what can an ordinary citizen, armed with growing knowledge and understanding, do with the information you share? I find myself feeling hopeless to change these forces that are so beyond my control. What can I do to affect Powell’s decision making? Forgive me for sounding so naive, and I hope I don’t get pummelled here for sounding and feeling hopeless.
Excellent facts yet I see questions below asking how can we affect what the Fed proposes or does. Start locally with letters and calls from Assemblymen/women to State Representatives in Congress and, yes, the White House. There are phone numbers, emails, et cetera. Google the information. It is all available to us. Let your viewpoints be heard. It may feel like throwing a pebble into the Grand Canyon, but be persistent in reaching out, encourage others to do the same. If we want things to change, we need to show up in order to be heard. Change will not occur overnight, but we citizens can influence those in power. After all, they need our votes.
I heard President Biden say that the successful big businesses should increase the wages of their workers, as he looked directly at the left side of the audience, where the Republicans were sitting. It was interesting when Biden mentioned policies like child care for working mothers and the camera panned to show 'centrist' Susan Collins making a face and turning her head in a 'no' motion.
I have to believe you are right because you've been studying this subject for a very long time. I just emailed Ro Khanna. I see Biden is trying to address some of these issues. If you think Powell will mess things up....doesn't that mean we need a different Fed Chairman? Who would be a good candidate?
Regarding Putin, I say we use the alliance that Biden has resuscitated to totally freeze out Putin and Russia in every way possible, hard and fast. Kill the Russian banking system entirely, including their currency, and stop every bit of trade.
Time is of the essence because Putin plans to level Ukraine the way he destroyed Grozny, Chechnya. If the Ukrainians won't give up, which is unlikely at this point, he'll just go ahead and destroy Ukraine.
Putin is a thug and a mass-murderer and will stop at nothing to have his way. The Ukrainians will put up a strong defense - stronger if we send them sufficient Stinger missiles to knock every Russian airplane out of the sky, anti-tank missiles to destroy tanks and every offensive vehicle, and somehow get them drones that can destroy their missile batteries. That 40-mile long trail of military vehicles headed south to Kyiv is stuck but can't be destroyed without the weapons Ukrainians need to do so.
Professor, I have been reflecting on this situation. I'm convinced that we need a mass consumer movement to avoid using gasoline, avoid spending money on gasoline. I am reminded of WWII when the United States had a "meatless Friday" policy. Regular Americans jumped on the bandwagon to try to help our troops overseas in their mission. These days anything that anyone could do to reduce their cost of transportation would be good for themselves, for the Nation, and for the Europeans who are so dependent on Russian energy products. We need a "Gasless Friday"!
Corporations who still have people coming in to work could implement four 10 hour days and take Fridays off. People who used to go out on the town on Fridays could entertain at home instead. When you must go, ride share with someone and kill two birds. Last evening I got a ride to dinner from a friend who had to go shopping, then after dinner I used the town shuttle service, which is based on electric vehicles, to get home. I felt really smart for not driving my own car, especially since I had two beers at dinner. There are about 260 million adults in this country - if each of us could save 5 gallons a week of gasoline that is 1.3 billion gallons of fuel! Wow. At today's prices that is saving $25 per week per vehicle, that is 6.5 billion dollars not being spent on inflated energy costs.
Let me point out that we Americans have it pretty good in the long run. In most other countries, people pay $2-3.00 per LITRE for gas. And $2.00 to mail even just a post card. On another note:
Just remember that Star Trek's Ferengi Rule of Acquisition #34 says War is Good for Profits. Those making and selling arms to both sides will profit greatly from the invasion of Ukraine.
Great arguments that you have made before. Especially was I hopeful when hearing the President remark about “price gouging” in SOTU. And, I recall reading about the Csuite bragging. There should be robust (I hope) debate at the Fed board meeting. We must all express our views. Where exactly can we get our views heard such that they matter, is the question? There’s so much work to do. So many loopholes to close on hedge funds, equity funds…we don’t even know where all of the crazy Russian…Putin…money is hidden. Some speculate it’s all crypto or NFT hidden. We aren’t even at first base figuring out that. Maybe FED can get that on its agenda, too, jointly with Treasury.
For now, we need to emphasize how higher interest rates choke off small business creation when that has been a robust engine helping minorities and women START BUSINESSES, especially coming out of the COVID downturn. I would note that many seniors rely on interest earnings, too, even in these times. There’s going to be sacrifice ahead. Keep on with your wise counsel, please, Robert.
Based on what you said, I wonder whether anyone at the Congressional hearing asked Powell whether increasing interest rates would actually slow inflation as intended. If it doesn't, I fear the Fed's interpretation will be that it hasn't increased interest rates enough, and will raise them even more aggressively. Increasing interest rates might not even slow down the rise in housing prices, as a significant amount of housing stock is being vacuumed up by private equity firms that pay cash.
I think Biden missed a huge opportunity to promote renewable energy in his State of the Union message, as a segue from Russia's invasion of Ukraine. We need to reduce and ultimately eliminate our dependence on the whims of adversarial foreign leaders, as Germany has vowed to do. Instead, he emphasized finding ways to increase the supply of oil and gas. I don't favor begging Saudi Arabia to help us consume more oil.
Finally, I'm sure you read this column in the New York Times, headlined "Larry Summers Shares the Blame for Inflation," which summarizes the government facilitation of corporate greed and irresponsibility that you have been discussing here and in your class lectures: https://www.nytimes.com/2022/02/28/opinion/larry-summers-inflation.html?referrer=masthead The column argues that elite economists of both parties adopted Milton Friedman's notion that the sole social responsibility of business is to increase profits and that so-called free markets could solve all problems, while proclaiming government's alleged failures. As a result, desire for greater and greater profits has trumped resiliency and flexibility at all levels of the supply chain. And here we are.
I'm open to using tax as a resolution but we don't control the senate. I have some suggestions.
First the president has the "bully pulpit" and should threaten price gougers.
Second, when we were in Iraq, we had a similar problem and bills targeted "overcharging in order to defraud or profit excessively from war, military action, or reconstruction efforts -- a felony subject to up to 20 years in prison and fines of up to $1 million or twice the illegal profits of the crime. It confers jurisdiction to U.S. federal courts to hear such cases no matter where they might occur." https://www.congress.gov/bill/110th-congress/house-bill/400. An equivalent for the pandemic should be bipartisan. See also the National Emergency Anti-Profiteering Act of 1990
Windfall profits are merely part of the problem. At the core is oil prices. I've mentioned NOPEC previously. The Saudis control OPEC, the "market maker" for the price of oil internationally by fixing output. The Saudis own the largest oil refineries in the US and control a number of US oil producers and are complicit with Russia. We are in a crisis caused by the pandemic and the US should take on profiteers here and abroad. This used to be a bipartisan issue. https://en.wikipedia.org/wiki/No_Oil_Producing_and_Exporting_Cartels_Act
I’m not an economist and was wondering the same thing: Why the hell is Powell raising interest rates. Your article clearly explained the situation, so Thank You!
Raising taxes puts the money in the hands of those that are in the pockets of those you would tax. I don’t believe the labor stalemate is going to resolve itself through any means other than an organized effort. That would include groups who historically have “unions” but have no bargaining support from them. My AICPA membership is only a benefit to me as an inexpensive insurance supplier. Engineers, actuaries, lawyers, accountants while they may be looked at with distrust also face these compensation disparities.
If I remember correctly, the 2017 Trump tax cuts were supposed to invigorate our economy by spurring investments and creating jobs. So if the current inflation is due to an "overheated" economy, shouldn't we raise taxes on investors and large corporations?
Raising interest rates just makes everything more expensive.
Corporate greed and takeovers of smaller companies has changed the capitalist ideas of the past which was always promoted as a good thing. We live in a world where the one percent use their money to govern power for themselves. We must get money our of politics. Yes
Most excellent perspective, Professor.
I was appalled when I read yesterday’s news about the Fed hiking rates.
We can get through this inflation by tightening our belts… curbing our appetites for things we really don’t need, buying USA made products as much as possible.
Gas prices are going to remain high for a while. Each time we fill up we just might want to spend that time thinking of the upended lives of Ukrainians and give thanks that we have the freedom to drive around town.
Professor Reich, I am truly glad that I am reading your blogs and learning from you. My question is this: what can an ordinary citizen, armed with growing knowledge and understanding, do with the information you share? I find myself feeling hopeless to change these forces that are so beyond my control. What can I do to affect Powell’s decision making? Forgive me for sounding so naive, and I hope I don’t get pummelled here for sounding and feeling hopeless.
Excellent facts yet I see questions below asking how can we affect what the Fed proposes or does. Start locally with letters and calls from Assemblymen/women to State Representatives in Congress and, yes, the White House. There are phone numbers, emails, et cetera. Google the information. It is all available to us. Let your viewpoints be heard. It may feel like throwing a pebble into the Grand Canyon, but be persistent in reaching out, encourage others to do the same. If we want things to change, we need to show up in order to be heard. Change will not occur overnight, but we citizens can influence those in power. After all, they need our votes.
I heard President Biden say that the successful big businesses should increase the wages of their workers, as he looked directly at the left side of the audience, where the Republicans were sitting. It was interesting when Biden mentioned policies like child care for working mothers and the camera panned to show 'centrist' Susan Collins making a face and turning her head in a 'no' motion.
I have to believe you are right because you've been studying this subject for a very long time. I just emailed Ro Khanna. I see Biden is trying to address some of these issues. If you think Powell will mess things up....doesn't that mean we need a different Fed Chairman? Who would be a good candidate?
Agreed on the Fed.
Regarding Putin, I say we use the alliance that Biden has resuscitated to totally freeze out Putin and Russia in every way possible, hard and fast. Kill the Russian banking system entirely, including their currency, and stop every bit of trade.
Time is of the essence because Putin plans to level Ukraine the way he destroyed Grozny, Chechnya. If the Ukrainians won't give up, which is unlikely at this point, he'll just go ahead and destroy Ukraine.
Putin is a thug and a mass-murderer and will stop at nothing to have his way. The Ukrainians will put up a strong defense - stronger if we send them sufficient Stinger missiles to knock every Russian airplane out of the sky, anti-tank missiles to destroy tanks and every offensive vehicle, and somehow get them drones that can destroy their missile batteries. That 40-mile long trail of military vehicles headed south to Kyiv is stuck but can't be destroyed without the weapons Ukrainians need to do so.
We can't stop. If we do, Ukraine dies.
Professor, I have been reflecting on this situation. I'm convinced that we need a mass consumer movement to avoid using gasoline, avoid spending money on gasoline. I am reminded of WWII when the United States had a "meatless Friday" policy. Regular Americans jumped on the bandwagon to try to help our troops overseas in their mission. These days anything that anyone could do to reduce their cost of transportation would be good for themselves, for the Nation, and for the Europeans who are so dependent on Russian energy products. We need a "Gasless Friday"!
Corporations who still have people coming in to work could implement four 10 hour days and take Fridays off. People who used to go out on the town on Fridays could entertain at home instead. When you must go, ride share with someone and kill two birds. Last evening I got a ride to dinner from a friend who had to go shopping, then after dinner I used the town shuttle service, which is based on electric vehicles, to get home. I felt really smart for not driving my own car, especially since I had two beers at dinner. There are about 260 million adults in this country - if each of us could save 5 gallons a week of gasoline that is 1.3 billion gallons of fuel! Wow. At today's prices that is saving $25 per week per vehicle, that is 6.5 billion dollars not being spent on inflated energy costs.
Let's do this! #gaslessfriday
Let me point out that we Americans have it pretty good in the long run. In most other countries, people pay $2-3.00 per LITRE for gas. And $2.00 to mail even just a post card. On another note:
Just remember that Star Trek's Ferengi Rule of Acquisition #34 says War is Good for Profits. Those making and selling arms to both sides will profit greatly from the invasion of Ukraine.
Great arguments that you have made before. Especially was I hopeful when hearing the President remark about “price gouging” in SOTU. And, I recall reading about the Csuite bragging. There should be robust (I hope) debate at the Fed board meeting. We must all express our views. Where exactly can we get our views heard such that they matter, is the question? There’s so much work to do. So many loopholes to close on hedge funds, equity funds…we don’t even know where all of the crazy Russian…Putin…money is hidden. Some speculate it’s all crypto or NFT hidden. We aren’t even at first base figuring out that. Maybe FED can get that on its agenda, too, jointly with Treasury.
For now, we need to emphasize how higher interest rates choke off small business creation when that has been a robust engine helping minorities and women START BUSINESSES, especially coming out of the COVID downturn. I would note that many seniors rely on interest earnings, too, even in these times. There’s going to be sacrifice ahead. Keep on with your wise counsel, please, Robert.
What's a human life worth? Better inflation and recession than human carnage.
Based on what you said, I wonder whether anyone at the Congressional hearing asked Powell whether increasing interest rates would actually slow inflation as intended. If it doesn't, I fear the Fed's interpretation will be that it hasn't increased interest rates enough, and will raise them even more aggressively. Increasing interest rates might not even slow down the rise in housing prices, as a significant amount of housing stock is being vacuumed up by private equity firms that pay cash.
I think Biden missed a huge opportunity to promote renewable energy in his State of the Union message, as a segue from Russia's invasion of Ukraine. We need to reduce and ultimately eliminate our dependence on the whims of adversarial foreign leaders, as Germany has vowed to do. Instead, he emphasized finding ways to increase the supply of oil and gas. I don't favor begging Saudi Arabia to help us consume more oil.
Finally, I'm sure you read this column in the New York Times, headlined "Larry Summers Shares the Blame for Inflation," which summarizes the government facilitation of corporate greed and irresponsibility that you have been discussing here and in your class lectures: https://www.nytimes.com/2022/02/28/opinion/larry-summers-inflation.html?referrer=masthead The column argues that elite economists of both parties adopted Milton Friedman's notion that the sole social responsibility of business is to increase profits and that so-called free markets could solve all problems, while proclaiming government's alleged failures. As a result, desire for greater and greater profits has trumped resiliency and flexibility at all levels of the supply chain. And here we are.
I'm open to using tax as a resolution but we don't control the senate. I have some suggestions.
First the president has the "bully pulpit" and should threaten price gougers.
Second, when we were in Iraq, we had a similar problem and bills targeted "overcharging in order to defraud or profit excessively from war, military action, or reconstruction efforts -- a felony subject to up to 20 years in prison and fines of up to $1 million or twice the illegal profits of the crime. It confers jurisdiction to U.S. federal courts to hear such cases no matter where they might occur." https://www.congress.gov/bill/110th-congress/house-bill/400. An equivalent for the pandemic should be bipartisan. See also the National Emergency Anti-Profiteering Act of 1990
101st Congress (1989-1990) https://www.congress.gov/bill/101st-congress/house-bill/5582/text?r=7&s=1 https://en.wikipedia.org/wiki/Price_gouging This should be a bipartisan issue.
Windfall profits are merely part of the problem. At the core is oil prices. I've mentioned NOPEC previously. The Saudis control OPEC, the "market maker" for the price of oil internationally by fixing output. The Saudis own the largest oil refineries in the US and control a number of US oil producers and are complicit with Russia. We are in a crisis caused by the pandemic and the US should take on profiteers here and abroad. This used to be a bipartisan issue. https://en.wikipedia.org/wiki/No_Oil_Producing_and_Exporting_Cartels_Act
The DOJ antitrust division, Department of Commerce and the FTC should be bringing cases for profiteering. Here's an example of an enforcement action. Should be headline news. https://www.ftc.gov/news-events/press-releases/2022/02/ftc-enforcement-action-leads-us-dept-education-forgive-717
I’m not an economist and was wondering the same thing: Why the hell is Powell raising interest rates. Your article clearly explained the situation, so Thank You!
Raising taxes puts the money in the hands of those that are in the pockets of those you would tax. I don’t believe the labor stalemate is going to resolve itself through any means other than an organized effort. That would include groups who historically have “unions” but have no bargaining support from them. My AICPA membership is only a benefit to me as an inexpensive insurance supplier. Engineers, actuaries, lawyers, accountants while they may be looked at with distrust also face these compensation disparities.
If I remember correctly, the 2017 Trump tax cuts were supposed to invigorate our economy by spurring investments and creating jobs. So if the current inflation is due to an "overheated" economy, shouldn't we raise taxes on investors and large corporations?
Raising interest rates just makes everything more expensive.