What you need to know
Why isn't it also BAD NEWS for the do-nothing Republicans who have blocked every piece of legislation that would help working American families??? Also, inflation is affecting the entire world, NOT just the USA, so how exactly are the Democrats or Biden to blame? Any member of the GOP who blames Democrats for inflation should be slapped across the face so hard their teeth rattle - am sick to death of the blame game and NOBODY IS DOING ANYTHING TO SOLVE THE PROBLEM!!
I can't shake the sense that entities are negatively manipulating the economy not only for profit, but to make the uninformed believe that the Democrats are incompetent and so we are suffering. They are adding to manipulation of the vote, so what gerrymandering doesn't accomplish, subtle propaganda will.
I want to focus on housing costs.
I want to focus on housing costs for those who do not own there own homes.
I want to focus on housing costs for those who do not have there rent and other housing costs capped at 30% of income.
For many of us, the costs have gone up over 25%
I can eat less, or cheaper. I can travel less. I can buy fewer consumer goods.
Unless, as too many of my friends have, I chose to live under a bridge, I cannot avoid spending money on housing. I am scared.
Read the profit reports. Corporations are beholden to stockholders. FOOD and gas. (ever heard of Grimmway Farms...largest carrot producer in the world, based in California) Windfall tax is what corporations were anticipating to put a stop to their pillaging of American finances. Let's DO IT!!!! Raising interest rates sends us closer to a financial cliff. With soaring rents, less incentive to build because of rates...the picture is dire.
Do the Republican candidates running for election in November offer any solutions? No, they don't. They are counting on the anger vote, and little else.
The reasons behind the increased prices on some items is understandable, considering the war in Ukraine, COVID restraints, etc., however on most items, such as oil and food, it's simply based on greed. Perhaps if we taxed those entities and used the funds to help supplement struggling families, these profit hungry corporations might reverse course. The feds aren't helping by raising interest rates, 15% of homebuyers have backed out of their purchase due to higher mortgage interest rates. If the feds do it again, they are welcoming a recession. As Robert Reich has previously said, "watch your wallet."
Why is this bad news for Dems? They need to push like mad for a windfall profits tax instead of yammering about it for years; if it doesn't pass because of republican recalcitrance, say so. They need to shout about the effect of higher interest rates on housing. Educate the general public. This should be bad news for general welfare bashing republicans....to paraphrase Nancy, they're not able to govern.
unless you change campaign finance rules, we will be stuck in this never ending oligopoly of corporations owning the votes and influence where it matters.
PS... I might be wrong but unsure....
Great piece Mr. Reich. It's a waiting game for the most impatient people on the planet. The key issue, as I see it is: how do we communicate to the "Average American" that the POTUS has no power over so many of the factors that contribute to these economic woes? And if the Democrats try to minimize the pain to the Average American, the "small government Republicans" will start screaming? It seems wise to me for the Democrats to REMIND voters that the GOP is the party of "Small Government" and the callous "invisible hand" cares not for any human collateral damage. Pointed questions need to be DEMANDED of the Republican leadership to hear what they would do to reign in inflation. Hey, I've stopped buying many products and activities right now because of their high costs - inflation hurts. But keeping and increasing the majorities in the House and Senate are MUCH MORE IMPORTANT. The fate of our nation depends on it, actually. Thanks for reading.
As always, thanks for your perspective. I want to add another idea about rising rents: the market concentration of rental properties in the hands of large investors who scooped up real estate during the recession. Many, many units were held off the market in places like Oakland which enabled these corporate landlords to push up rents, and keep raising them beyond rates needed to cover costs.
Big Oil must pay a windfall profits tax. Big Pharma must negotiate drug prices for Medicare. Republicans must be fined for lying constantly to their constituents. It's all Alice in Wonderland in this country.
Wasnt a budget deficit also a mjor inflationary pressure? Why do we allow the GOP to get away with acting as if they are so concerened with inflation yet they pass major tax cuts that only add to inflation and do not help anybody but the top economic class? Wouldnt universal healthcare, Universal Pre K, and help offset the 9.1 % inflation we are experiencing?
"What to do? We need a windfall profits tax on Big Oil and food monopolies. Just like Big Oil, food monopolies such as Tysons are taking advantage of their market power and using the cover of inflation to raise their prices. "
Isn't it amazing how easily Republicans discredited Elizebeth Warren? Yes, it will take a wealth tax to balance this listing boat.
Democrats need to do a better job of marketing their ideas. In a world controlled by corporate propaganda, a "windfall profits tax" might be a hard sell. But there's a chance you'd have success if you launch an "affordable housing campaign" All you need to do is get rid of the filibuster, and you can finance it with a tax on the wealthy.
This is why Biden needs to change the management of the Fed. We need an economist whose heart and soul is with the COUNTRY not with Corporate America, We need to write a new tax law, one that enforces full tax payments at a rate not to exceed 40% of gross earnings on everyone in the country earning more than $500,000. We need to ramp up the IRS investigators (the increased tax returns is well worth the extra salaries) BUT the added investigators must go after the wealthy tax dodgers, not just the low hanging fruit of those working for their living. We also need to close tax loop holes that allow the likes of Bezos, Musk, Koch, Hunt, etc to pay ZIP. Capital gains must be treated the same as earned income. In other words we need someone of Robert Reich's knowledge and stature, but not Robert (he deserves his semi retirement).
I find it really frustrating that the Fed thinks raising interest rates is the right way to deal with inflation. The average American is not buying more homes, cars, food, or gas than we need. These are not discretionary purchases. Raising rates simply makes these necessities MORE unaffordable for most people. Yes, raising rates will reduce demand, but inflation will do that on its own and there are less harmful ways to reduce inflation in a more targeted fashion. We could require that single family homes be on the market for 60 days before taking cash offers. We could require mortgage rates for investment property to be a minimum of 3% higher than primary residence rates. We could set a maximum rent rate per square foot based on a multiple of the median income for an area. We could institute emergency rules that kick in when inflation is above a certain percentage. For example, we could set a maximum profit margin on companies deemed integral to the supply chain. Or, we could make the tax rate really high on incomes over a formula amount that is deemed reasonable. Or, we could charge a price gouging penalty that goes into a fund that the government can tap into when corporations need bail outs in future financial crisis. These are all better solutions than causing a food and housing crisis for the poorest Americans.