I couldn't agree with you more, Robert. Corporate greed and monopolies are crushing us little people. Isn't someone telling the Fed Chair this? What is also sickening is that even when prices for supply chain goods come down, the greedy bastards won't reduce their rates. I went to buy some produce the other day at a local market and the prices were so high, I left the store! This simply HAS to be addressed by the Biden admin. Thank you
A week before midterms, leading economist and NYT opinion columnist Paul Krugman rightly had stated “that while the G.O.P.’s election strategy [had been]… all about blaming the Biden Administration for inflation, the Republican Party [didn’t]…actually have any plan to reduce inflation.” What had troubled me, a week out from the midterm election, was that this celebrated economist had declined to underscore how major corporations were using the cover of inflation to drive up prices. Considering the American people in poll after poll largely had reported the economy and inflation as their two major issues, I had expected a united, laser-focused effort to expose how corporate profits had accounted for over half of the increased prices people were paying.
While some might have defended a reluctance, due to corporate donors’ undue influence on our politics, to call out record corporate profits (a 54% increase) as the biggest driver of inflation, I believe the benefits of pinning corporate gouging on the increased prices people were paying would have outweighed the consequences. I further contend, with 60% of the people in this country living paycheck to paycheck and millions working for starvation wages, not only should our standout spokespersons highlight this biggest driver of inflation; they should make it clear to working families throughout this country, many of whom had voted Republican, the Party that had been silent on this issue, that their vote had run counter to their interests and concerns. In a word, we need more leading economists not to allow deceptions and distortions related to the state of the economy to go unanswered.
When inflation erupts, the best option is to ensure full employment so that maximum production of goods and services can keep prices down. In contrast, while a recessed economy may also reduce price pressure, it exacerbates inequality since families who lose their primary wage earners suffer even as the wealth of the rich is protected.
Higher interest rates that suppress demand do not resolve supply chain issues, prevent the spread of Covid, stop the war in Ukraine, or eliminate price-gouging, all of which drive inflation. A survey by The Economist shows that the economies of eight countries that sharply hiked their rates over the last year had weakened relative to the global average.
Relying on monetary policy is counter-productive. Instead we need better targeted tools such as strategic price controls, taxes on excessive profits, food and energy subsidies for the very poor, and a government Job Guarantee for all those who wish to contribute to society and earn their keep.
The Fed says my wages are too high. Last year inflation waa 5% and that year I had a 3% raise. So I had a 2% pay cut. This year inflation is 9% and I had another 3% raise for another 6% pay cut. Or 8% pay cut over two years. The price on all consumables shot up and any loans I have are variable or have been directly affected by the Fed rate. This has tipped me into taking loans to pay debt which means more interest which means more debt. Paying off inflation with what little personal wealth I have and giving it ro corporations is absolutely insane. I hear the Fed and the Treasurer saying words and its all fantasy land The treasurer on 60min said she didnt want the little people to be forgotten. I'd prefer a little more fight on our behalf than lip service from someone who doesnt see that minimum wage raise my wife got this and last year became a wash with inflation. We make too much money. Change the word we for Corporations and yeah those are the folks that need to suffer.
But, thanks to Citizens United, the John Roberts’ Court assured Corporations they can get the best government money can buy. Good luck getting Congress to intervene...too much money coming their way.
You hit the nail on the head once again, Professor Reich. The Fed has been grossly unfair to most of the American people. My small household alone is going without things we just cannot afford anymore. The organic chicken I like is $15.00 per pound… lettuce, $6.00 per pound.
It is as though all retailers got together in a huddle and said “On the count of three - We shrink the size of our merchandise, change the ingredients to cut corners and save on costs, RAISE PRICES ACROSS THE BOARD and deliver them an inferior unsatisfactory product because there’s nothing they can do about it… ”
I am so glad you wrote about this gross injustice; thank you.
Great to see someone clearly stating the real world causes of the current inflation. The "experts" focusing myopically on US monetary policy destroy their credibility every time they ignore the obvious: global forces and corporate greed. No small measure of blame must go to the bankers involved.....who must find higher interests rate irresistible after a decade of low rates....so the banker drumbeat for higher rates rolls onward around the world. Most of the media is as complicit or clueless as ever.
This is why boycotting is important. The public has to be aware of the names of the corporations s, their products and tell store owners WHY they are boycotting which products.
"This is wrong. It’s bad economics. It’s insane politics. And it’s profoundly unfair." One could even say it is immoral, but does anyone care about that?
Retailers and food companies are planning price increases on basic necessities to compensate for lower volumes. The cost of living for consumers is affecting the quality of life in this Country.
My parents lived through the Great Depression and World War II. There was a sense of everyone being in the same boat mentality at that time. It feels now that there is a permanent underclass that can never achieve economic stability irregardless of their hardwork.
Losing the hope of upward mobility means changing how we define success.
Biden took the easy way out and reappointed Powell to another term. Powell is so out of touch with those of us who are just normal human beings. Elizabeth Warren voted against confirming Powell to another term. I agreed with her, as I do on many other issues. This is such a challenging time for so many families and retirees. My parents Social Security benefit went up, their Medicare premium went down. However both their Prescription Drug Plan and their Plan G went up 40%! At least we are not in the UK, where libraries have set up “warm banks” providing warm drinks, toast, food to take home, clothing racks, and companionship. (Guardian article by Amelia Gentleman, December 13 2022). Her article is really worth reading.
The counter weight to greedy corporations is unions. We need more, and stronger ones.
I couldn't agree with you more, Robert. Corporate greed and monopolies are crushing us little people. Isn't someone telling the Fed Chair this? What is also sickening is that even when prices for supply chain goods come down, the greedy bastards won't reduce their rates. I went to buy some produce the other day at a local market and the prices were so high, I left the store! This simply HAS to be addressed by the Biden admin. Thank you
A week before midterms, leading economist and NYT opinion columnist Paul Krugman rightly had stated “that while the G.O.P.’s election strategy [had been]… all about blaming the Biden Administration for inflation, the Republican Party [didn’t]…actually have any plan to reduce inflation.” What had troubled me, a week out from the midterm election, was that this celebrated economist had declined to underscore how major corporations were using the cover of inflation to drive up prices. Considering the American people in poll after poll largely had reported the economy and inflation as their two major issues, I had expected a united, laser-focused effort to expose how corporate profits had accounted for over half of the increased prices people were paying.
While some might have defended a reluctance, due to corporate donors’ undue influence on our politics, to call out record corporate profits (a 54% increase) as the biggest driver of inflation, I believe the benefits of pinning corporate gouging on the increased prices people were paying would have outweighed the consequences. I further contend, with 60% of the people in this country living paycheck to paycheck and millions working for starvation wages, not only should our standout spokespersons highlight this biggest driver of inflation; they should make it clear to working families throughout this country, many of whom had voted Republican, the Party that had been silent on this issue, that their vote had run counter to their interests and concerns. In a word, we need more leading economists not to allow deceptions and distortions related to the state of the economy to go unanswered.
This is valid economic logic.
However the Citizens United decision has become Democracy's assassin wearing a cloak of invisibility.
When inflation erupts, the best option is to ensure full employment so that maximum production of goods and services can keep prices down. In contrast, while a recessed economy may also reduce price pressure, it exacerbates inequality since families who lose their primary wage earners suffer even as the wealth of the rich is protected.
Higher interest rates that suppress demand do not resolve supply chain issues, prevent the spread of Covid, stop the war in Ukraine, or eliminate price-gouging, all of which drive inflation. A survey by The Economist shows that the economies of eight countries that sharply hiked their rates over the last year had weakened relative to the global average.
Relying on monetary policy is counter-productive. Instead we need better targeted tools such as strategic price controls, taxes on excessive profits, food and energy subsidies for the very poor, and a government Job Guarantee for all those who wish to contribute to society and earn their keep.
The Fed says my wages are too high. Last year inflation waa 5% and that year I had a 3% raise. So I had a 2% pay cut. This year inflation is 9% and I had another 3% raise for another 6% pay cut. Or 8% pay cut over two years. The price on all consumables shot up and any loans I have are variable or have been directly affected by the Fed rate. This has tipped me into taking loans to pay debt which means more interest which means more debt. Paying off inflation with what little personal wealth I have and giving it ro corporations is absolutely insane. I hear the Fed and the Treasurer saying words and its all fantasy land The treasurer on 60min said she didnt want the little people to be forgotten. I'd prefer a little more fight on our behalf than lip service from someone who doesnt see that minimum wage raise my wife got this and last year became a wash with inflation. We make too much money. Change the word we for Corporations and yeah those are the folks that need to suffer.
But, thanks to Citizens United, the John Roberts’ Court assured Corporations they can get the best government money can buy. Good luck getting Congress to intervene...too much money coming their way.
Where is Teddy Roosevelt when we need him?
You hit the nail on the head once again, Professor Reich. The Fed has been grossly unfair to most of the American people. My small household alone is going without things we just cannot afford anymore. The organic chicken I like is $15.00 per pound… lettuce, $6.00 per pound.
It is as though all retailers got together in a huddle and said “On the count of three - We shrink the size of our merchandise, change the ingredients to cut corners and save on costs, RAISE PRICES ACROSS THE BOARD and deliver them an inferior unsatisfactory product because there’s nothing they can do about it… ”
I am so glad you wrote about this gross injustice; thank you.
Great to see someone clearly stating the real world causes of the current inflation. The "experts" focusing myopically on US monetary policy destroy their credibility every time they ignore the obvious: global forces and corporate greed. No small measure of blame must go to the bankers involved.....who must find higher interests rate irresistible after a decade of low rates....so the banker drumbeat for higher rates rolls onward around the world. Most of the media is as complicit or clueless as ever.
This is why boycotting is important. The public has to be aware of the names of the corporations s, their products and tell store owners WHY they are boycotting which products.
"This is wrong. It’s bad economics. It’s insane politics. And it’s profoundly unfair." One could even say it is immoral, but does anyone care about that?
Thank you, Robert. Tell the Fed! Loud and clear!
American GREED continues to show its ugly head!
Retailers and food companies are planning price increases on basic necessities to compensate for lower volumes. The cost of living for consumers is affecting the quality of life in this Country.
My parents lived through the Great Depression and World War II. There was a sense of everyone being in the same boat mentality at that time. It feels now that there is a permanent underclass that can never achieve economic stability irregardless of their hardwork.
Losing the hope of upward mobility means changing how we define success.
Biden took the easy way out and reappointed Powell to another term. Powell is so out of touch with those of us who are just normal human beings. Elizabeth Warren voted against confirming Powell to another term. I agreed with her, as I do on many other issues. This is such a challenging time for so many families and retirees. My parents Social Security benefit went up, their Medicare premium went down. However both their Prescription Drug Plan and their Plan G went up 40%! At least we are not in the UK, where libraries have set up “warm banks” providing warm drinks, toast, food to take home, clothing racks, and companionship. (Guardian article by Amelia Gentleman, December 13 2022). Her article is really worth reading.