Paul Krugman writing today in the New York Times makes a case that supports Robert Reich's. Here is my take:
Why do major corporations raise prices? Because they can. I noted several dog whistles recently in the financial press from CEOs of major corporations to their shareholders about taking advantage of supply chain disruptions to raise prices. Corporate America is now as consolidated and uncompetitive as it has ever been. More efficient IT makes that possible, and so does a doting regulatory environment. Corporations are using supply disruptions that they themselves caused by their own ill advised offshoring, to excuse price increases and make windfall profits.
And the Fed's proposed cure for this? Punish wage earners whose incomes are not even going up fast enough to keep up with corporate price increases? Yes, a wage-price spiral IS theoretically possible. But we don't have unions anymore except in the public sector. Workers don't have the bargaining power they did back in the 1970s Wage-push inflation isn't the cause of current inflation, and stomping on workers is the wrong cure. Why does the Fed always do this?
Exactly. The old notion that we needed a "reserve army of the unemployed" in order to avoid wage-price inflation is no longer applicable because workers have almost no power on their own to raise their real wages due to (1) the demise of unions (from over a third of private-sector workers in the 1950s to 6.2 percent today, (2) the globalization of the economy (in which American corporations can get all the cheap labor they want at the touch of a computer key), and (3) the financialization of the economy (in which 30 to 40 percent of economic gains flow to people who move money, and have a huge stake in keeping wages as low as possible).
I'm all for unions because they break up the power monopoly that big businesses have. But why not advocate for a 50% discount/rebate policy at retail sale which would double the purchasing power of union members and everyone else. That's better than the mere reform of a 5-10% increase in wages.
Don't forget the industry associations where they can come to be of one mind on political/economic developments. (Technically, that's not conspiracy, if you catch my drift. It's business as usual in DC.) NAM comes >first< to mind!
Bob Palmer ; Because they are not the ones being stomped on! And how did they get on the Fed in a position to make these changes? Who put them in power to do this?
This point seems obvious - we have been watching companies eat up the competition since the 1980's and the agencies that were supposed to prevent monopolies have been underfunded by Congress (go figure!) or have looked the other way. In the meantime, the companies are able to charge whatever the market will bear and who is to tell them they can't? As consumers, we have been a captive audience, especially when the Congress and SCOTUS side with companies and corporations over consumers. Consumers are between a rock and a hard place.
I like one thing I just heard Biden calling back to from yesterday's briefing: "Capitalism without competition is not capitalism. It's exploitation." Just sayin'.
I sure do wish some of the politicians who are making all of these idiot changes would read your daily reports. I know, they are too stupid to get the message. But it would be nice if JUST ONCE, the people who make all of these foolish financial decisions would have to personally suffer themselves from their own decision making that affects the rest of the population.
The point is not to help the average citizen, it's to impoverish people, make them ill, so that they'll take any job, however repugnant, for any paltry sum, just to make ends meet. The worker's revolution is what's spurring this. Big companies see their previously grateful workforce getting some backbone - solution is to raise prices and to blame inflation.
My first thought was it appears that profit hungry corporations have initiated yet another scam on the public, perpetrated through members of Congress, Commerce and the Feds.
Workers and families finally have a little more money to demand higher wages, make career changes, refuse to settle for low wages/benefit and unionize. These choices are something profit driven capitalist detest.
What better way to make people grovel over low paying jobs again than to raise interest rates and increase costs under the guise of “inflation.” I don’t buy it, no one should. There are too many people who’ve run out of UI benefits, can’t afford childcare costs, skyrocketing food/housing costs etc. We must continue to support them by passing the “Build Back Better” legislation now.
And isn’t the fact that homelessness is overtaking our cities a sign that we need more and better jobs too? I realize many homeless people have drug and mental health problems but it’s much more than that. We need to stop sending jobs overseas and help our own people. (Yes, I’m preaching to the choir here. Sorry.)
Our economy ignores people who can not work. Welfare is gone and millions are homeless. children and families are unprotected. We have overloaded the jobs of police and fire to help Americans in emergencies. Mental health and addictions are not being addressed and that leaves trained social workers with no employment; and communities without help.
Minimum wages at a livable rate must rank high in our policy goals. The Fed (like the CDC) refuses to admit that they are in the prison-house of large corporations, so they muddle, confuse, contradict and harm all but the powerful. Inflation--as rare trustworthy economists like Paul Krugman underscore--is largely a false issue (shall we say "false flag" :) ) We certainly can't compare either un/employment, jobs, or inflation over time.
I do not put any stock in employment reports: they are mostly based on people very indirectly indicating that they are searching for work--and tied to unemployment benefit claims. Most jobless persons long ago maxed out on their niggardly "benefits." They also compare from state agencies whose data gathering and reporting are very suspect.
As in so much, the US fails its public and suffers ever more dramatically in comparison with so many in other nations.
Harvey, while the word niggardly means stingy or miserly, it’s a very uncomfortable sound which anyone from the South would recognize. So while the use of the word is quite proper and totally unrelated by definition to the sound I refer to, it is still very uncomfortable to hear.
Who cares if your are using it etymologically? You need to stop because it more than stings, it makes me want to vomit all over your oxford shoes, if you get my drift. I'm not trying to hurt you or be rude. Just to jolt you into considering how it makes people like me feel even though we know you meant it etymologically... it's just carries a lot of other bad feelings along with it.
I'll stop here. Right now things are out of control. People are dying daily not just of Covid, but not being able to get meds, not being able to have food. Yes, food. The soup kitchens don't have enough supplies. Kids are going without. People are freezing to death in the streets. This is something that's not talked about.
Yes, I bet you do. I am in Michigan, but I see the streets in FL filled with a lot of homeless people. They're here to, but not as many. Many children are going hungry daily. There's no excuse. If a child attends school they should give them all free food. Rich or poor, or in-between. Like France does. A better quality food, not the worst and cheapest that they give our kids which we have to pay for. It all goes deep. Many people can't afford to get good food. It's amazing. Then, rent is so high these days. People are unable to afford it. Many people.
Exactly correct! And, the only way to change their minds is to pass campaign finance reform and undue Citizens United. Oh, wait! THEY have to pass this -- won't happen. This country is screwed! That is the direct result of greed and corruption. Only a National Work Strike will ever change what is happening.
Ah, c'mon, Congress and the Fed know exactly what they are doing. These policies perpetuate, even with the Democrats in power, shock doctrine schemes. Classic disaster capitalism. Weaken the citizenry, keep them impoverished and, here's the bonus, keep a pandemic going, and you can take over a country NO ONE thought could be taken.
Two things, Janet Yellen definitely could matter here. Secondly, I admit that I am pinning my hopes on the Dr. Rev. William Barber who said a couple of days ago he is planning a series of protests. Americans really have to protest on a very large scale. I hope it can happen. Watching the totally useless Schumer stand behind a lectern and threaten a vote is enough to make my brain explode. The aging Democrats live in an era that is as far away as the planets. Give me a Cory Booker ALWAYS. He was brilliant yesterday, he'd be great leader of the Senate. Every day gets tougher, keep the optimism coming Robert!
You are right on! Prices ARE reducing wages -not the other way around. It is so infuriating that the Fed’s actions blame the very people whom the price increases hurt the most. It’s capitalism’s encouragement of greed that is jacking up prices, not the measly $15 per hour wage gain.
Whether it is just greed or ignorance, (or both), the corporations in tandem with the Fed are delivering a one-two punch to the workers which will kill 'the goose that lays the golden eggs'. How can consumers consume if their pay is inadequate and the safety net is gone?
Also, geez, why didn't Biden replace Jerome Powell? He was encouraged to for good reasons stated by Elizabeth Warren and other Democrats, why? Keeping the donor class happy?
Here's my take. They are not stupid. They are betting against the odds that there are enough people out there making $50,000. or better to keep things afloat. We have enough people in the country to continue on. They just don't care about the others.
Not sure where you live, but here in LaLa Land (SoCal), $50k is barely above poverty wages. A basic home is upwards of $700K, rent on a 1 bedroom apartment is over $3000. Never mind food, utilities, insurance, gas, car payments, child care, etc., etc. Most families need at least double that to just get by.
Yes, I hear you, but that is not the case everywhere else. Except for NYC, richer states. I'm in Michigan. $65,000. is the median income. Since I retired it's much less than that. It's very difficult.
Greetings - I don't know if this email will reach you - I hope so because I'm trying to plan my 2022 political contributions and I'm very confused. I continuously receive emails, Facebook posts, requests in the mail, etc., etc., etc. from all of the organizations and individuals who have anything to do with helping a candidate get elected. Some of the requested are from groups/persons that I don't even know or recognize.
I definitely want my hard-earned money to go to organizations and people who have a good chance of winning and will make a huge difference. BUT WHO!!!??? I live in Idaho so giving to Democrats in Idaho is worthless although I am volunteering for "Reclaim Idaho" for the "Education for All" petition to get enough signatures to get the bill on the ballot in Nov 2022. Plus, I'm a member of "Idaho Women for Biden and Harris" that has a pretty good following for Idaho.
Last year I gave to Emily's List to specific women in key states. Also contribute to National Democrat Party, NOW, Sierra Club, ACLU, Common Cause, NPR, Biden/Harris Campaign, Planned Parenthood. I don't usually give over $50.00 at a time to any one group and spread my contributions out - some are on a monthly basis.
I read and listen to all of your posts and emails. If you could, would you please help me and many of your other followers make wise decisions on who to support and why. I'm already on your paid mailing list and I've been following you for a couple of years now and I trust your opinion. I want to do all that I can, so our democracy remains for many more years. Cheers, Brenda in Boise
Look, not everyone can be a corporate executive. There are millions of people that work hard every day and just barely get by. They are NOT "lazy". I think a sociologist would agree that we tend to mostly live our lives where we started. Sure, there is opportunity, but human nature gears people to gravitate to where they started. That is just a fact of being human. These folks do work. Why can they not at least expect a living wage? There is no reason except greed. Those that have do not want to share. That also is human nature at least for those who started out with much more than most. It is easy to look down on others. Much harder to understand with compassion and love for all. Until we actually care about each other rather than judge, this will never end. Put welfare on the back burner for a second, I am talking about the working poor which are far too many in our country. They choose to be poor? Come on, there has to be more to it than that.
Agree but there’s another problem: digitization and the commodification of technologies. This puts people out of work faster than new jobs can be created. I don’t know what the answer is but I don’t hear a lot of people talking about it.
Paul Krugman writing today in the New York Times makes a case that supports Robert Reich's. Here is my take:
Why do major corporations raise prices? Because they can. I noted several dog whistles recently in the financial press from CEOs of major corporations to their shareholders about taking advantage of supply chain disruptions to raise prices. Corporate America is now as consolidated and uncompetitive as it has ever been. More efficient IT makes that possible, and so does a doting regulatory environment. Corporations are using supply disruptions that they themselves caused by their own ill advised offshoring, to excuse price increases and make windfall profits.
And the Fed's proposed cure for this? Punish wage earners whose incomes are not even going up fast enough to keep up with corporate price increases? Yes, a wage-price spiral IS theoretically possible. But we don't have unions anymore except in the public sector. Workers don't have the bargaining power they did back in the 1970s Wage-push inflation isn't the cause of current inflation, and stomping on workers is the wrong cure. Why does the Fed always do this?
Exactly. The old notion that we needed a "reserve army of the unemployed" in order to avoid wage-price inflation is no longer applicable because workers have almost no power on their own to raise their real wages due to (1) the demise of unions (from over a third of private-sector workers in the 1950s to 6.2 percent today, (2) the globalization of the economy (in which American corporations can get all the cheap labor they want at the touch of a computer key), and (3) the financialization of the economy (in which 30 to 40 percent of economic gains flow to people who move money, and have a huge stake in keeping wages as low as possible).
Time to unionize.
Or how 'bout bustin' industry associations - as they have done with unions?
Hear, Hear!
I'm all for unions because they break up the power monopoly that big businesses have. But why not advocate for a 50% discount/rebate policy at retail sale which would double the purchasing power of union members and everyone else. That's better than the mere reform of a 5-10% increase in wages.
Don't forget the industry associations where they can come to be of one mind on political/economic developments. (Technically, that's not conspiracy, if you catch my drift. It's business as usual in DC.) NAM comes >first< to mind!
Bob Palmer ; Because they are not the ones being stomped on! And how did they get on the Fed in a position to make these changes? Who put them in power to do this?
This point seems obvious - we have been watching companies eat up the competition since the 1980's and the agencies that were supposed to prevent monopolies have been underfunded by Congress (go figure!) or have looked the other way. In the meantime, the companies are able to charge whatever the market will bear and who is to tell them they can't? As consumers, we have been a captive audience, especially when the Congress and SCOTUS side with companies and corporations over consumers. Consumers are between a rock and a hard place.
And yet somehow he won a Nobel prize in economics.
I like one thing I just heard Biden calling back to from yesterday's briefing: "Capitalism without competition is not capitalism. It's exploitation." Just sayin'.
Such as what? Please elaborate.
I sure do wish some of the politicians who are making all of these idiot changes would read your daily reports. I know, they are too stupid to get the message. But it would be nice if JUST ONCE, the people who make all of these foolish financial decisions would have to personally suffer themselves from their own decision making that affects the rest of the population.
Linda. Well stated.
The point is not to help the average citizen, it's to impoverish people, make them ill, so that they'll take any job, however repugnant, for any paltry sum, just to make ends meet. The worker's revolution is what's spurring this. Big companies see their previously grateful workforce getting some backbone - solution is to raise prices and to blame inflation.
My first thought was it appears that profit hungry corporations have initiated yet another scam on the public, perpetrated through members of Congress, Commerce and the Feds.
Workers and families finally have a little more money to demand higher wages, make career changes, refuse to settle for low wages/benefit and unionize. These choices are something profit driven capitalist detest.
What better way to make people grovel over low paying jobs again than to raise interest rates and increase costs under the guise of “inflation.” I don’t buy it, no one should. There are too many people who’ve run out of UI benefits, can’t afford childcare costs, skyrocketing food/housing costs etc. We must continue to support them by passing the “Build Back Better” legislation now.
And isn’t the fact that homelessness is overtaking our cities a sign that we need more and better jobs too? I realize many homeless people have drug and mental health problems but it’s much more than that. We need to stop sending jobs overseas and help our own people. (Yes, I’m preaching to the choir here. Sorry.)
I wish you were still in the Cabinet, Robert, can Janet Y sound your alarm?
Our economy ignores people who can not work. Welfare is gone and millions are homeless. children and families are unprotected. We have overloaded the jobs of police and fire to help Americans in emergencies. Mental health and addictions are not being addressed and that leaves trained social workers with no employment; and communities without help.
Jerry Smith you hit the nail on the head!
Yes! Our homelessness problem is epic and needs to be addressed ASAP. It’s not just a housing shortage. Totally agree.
Minimum wages at a livable rate must rank high in our policy goals. The Fed (like the CDC) refuses to admit that they are in the prison-house of large corporations, so they muddle, confuse, contradict and harm all but the powerful. Inflation--as rare trustworthy economists like Paul Krugman underscore--is largely a false issue (shall we say "false flag" :) ) We certainly can't compare either un/employment, jobs, or inflation over time.
I do not put any stock in employment reports: they are mostly based on people very indirectly indicating that they are searching for work--and tied to unemployment benefit claims. Most jobless persons long ago maxed out on their niggardly "benefits." They also compare from state agencies whose data gathering and reporting are very suspect.
As in so much, the US fails its public and suffers ever more dramatically in comparison with so many in other nations.
Harvey, while the word niggardly means stingy or miserly, it’s a very uncomfortable sound which anyone from the South would recognize. So while the use of the word is quite proper and totally unrelated by definition to the sound I refer to, it is still very uncomfortable to hear.
Robin, I apologize to your Southern ears. I will be careful, but I am using it etymologically correctly :)
How about "miserly" instead?
Who cares if your are using it etymologically? You need to stop because it more than stings, it makes me want to vomit all over your oxford shoes, if you get my drift. I'm not trying to hurt you or be rude. Just to jolt you into considering how it makes people like me feel even though we know you meant it etymologically... it's just carries a lot of other bad feelings along with it.
Robin I really like that you said that. That word should not be used at all these days.
I'll stop here. Right now things are out of control. People are dying daily not just of Covid, but not being able to get meds, not being able to have food. Yes, food. The soup kitchens don't have enough supplies. Kids are going without. People are freezing to death in the streets. This is something that's not talked about.
Lucy, I hear about this daily. There are national appeals for foods and effort at many levels; Of course not at the federal level
Yes, I bet you do. I am in Michigan, but I see the streets in FL filled with a lot of homeless people. They're here to, but not as many. Many children are going hungry daily. There's no excuse. If a child attends school they should give them all free food. Rich or poor, or in-between. Like France does. A better quality food, not the worst and cheapest that they give our kids which we have to pay for. It all goes deep. Many people can't afford to get good food. It's amazing. Then, rent is so high these days. People are unable to afford it. Many people.
Exactly correct! And, the only way to change their minds is to pass campaign finance reform and undue Citizens United. Oh, wait! THEY have to pass this -- won't happen. This country is screwed! That is the direct result of greed and corruption. Only a National Work Strike will ever change what is happening.
Ah, c'mon, Congress and the Fed know exactly what they are doing. These policies perpetuate, even with the Democrats in power, shock doctrine schemes. Classic disaster capitalism. Weaken the citizenry, keep them impoverished and, here's the bonus, keep a pandemic going, and you can take over a country NO ONE thought could be taken.
Two things, Janet Yellen definitely could matter here. Secondly, I admit that I am pinning my hopes on the Dr. Rev. William Barber who said a couple of days ago he is planning a series of protests. Americans really have to protest on a very large scale. I hope it can happen. Watching the totally useless Schumer stand behind a lectern and threaten a vote is enough to make my brain explode. The aging Democrats live in an era that is as far away as the planets. Give me a Cory Booker ALWAYS. He was brilliant yesterday, he'd be great leader of the Senate. Every day gets tougher, keep the optimism coming Robert!
You are right on! Prices ARE reducing wages -not the other way around. It is so infuriating that the Fed’s actions blame the very people whom the price increases hurt the most. It’s capitalism’s encouragement of greed that is jacking up prices, not the measly $15 per hour wage gain.
Whether it is just greed or ignorance, (or both), the corporations in tandem with the Fed are delivering a one-two punch to the workers which will kill 'the goose that lays the golden eggs'. How can consumers consume if their pay is inadequate and the safety net is gone?
Also, geez, why didn't Biden replace Jerome Powell? He was encouraged to for good reasons stated by Elizabeth Warren and other Democrats, why? Keeping the donor class happy?
Here's my take. They are not stupid. They are betting against the odds that there are enough people out there making $50,000. or better to keep things afloat. We have enough people in the country to continue on. They just don't care about the others.
Not sure where you live, but here in LaLa Land (SoCal), $50k is barely above poverty wages. A basic home is upwards of $700K, rent on a 1 bedroom apartment is over $3000. Never mind food, utilities, insurance, gas, car payments, child care, etc., etc. Most families need at least double that to just get by.
Yes, I hear you, but that is not the case everywhere else. Except for NYC, richer states. I'm in Michigan. $65,000. is the median income. Since I retired it's much less than that. It's very difficult.
Greetings - I don't know if this email will reach you - I hope so because I'm trying to plan my 2022 political contributions and I'm very confused. I continuously receive emails, Facebook posts, requests in the mail, etc., etc., etc. from all of the organizations and individuals who have anything to do with helping a candidate get elected. Some of the requested are from groups/persons that I don't even know or recognize.
I definitely want my hard-earned money to go to organizations and people who have a good chance of winning and will make a huge difference. BUT WHO!!!??? I live in Idaho so giving to Democrats in Idaho is worthless although I am volunteering for "Reclaim Idaho" for the "Education for All" petition to get enough signatures to get the bill on the ballot in Nov 2022. Plus, I'm a member of "Idaho Women for Biden and Harris" that has a pretty good following for Idaho.
Last year I gave to Emily's List to specific women in key states. Also contribute to National Democrat Party, NOW, Sierra Club, ACLU, Common Cause, NPR, Biden/Harris Campaign, Planned Parenthood. I don't usually give over $50.00 at a time to any one group and spread my contributions out - some are on a monthly basis.
I read and listen to all of your posts and emails. If you could, would you please help me and many of your other followers make wise decisions on who to support and why. I'm already on your paid mailing list and I've been following you for a couple of years now and I trust your opinion. I want to do all that I can, so our democracy remains for many more years. Cheers, Brenda in Boise
Look, not everyone can be a corporate executive. There are millions of people that work hard every day and just barely get by. They are NOT "lazy". I think a sociologist would agree that we tend to mostly live our lives where we started. Sure, there is opportunity, but human nature gears people to gravitate to where they started. That is just a fact of being human. These folks do work. Why can they not at least expect a living wage? There is no reason except greed. Those that have do not want to share. That also is human nature at least for those who started out with much more than most. It is easy to look down on others. Much harder to understand with compassion and love for all. Until we actually care about each other rather than judge, this will never end. Put welfare on the back burner for a second, I am talking about the working poor which are far too many in our country. They choose to be poor? Come on, there has to be more to it than that.
Agree but there’s another problem: digitization and the commodification of technologies. This puts people out of work faster than new jobs can be created. I don’t know what the answer is but I don’t hear a lot of people talking about it.