Katie Porter’s whiteboard got factchecked, and guess what. She is correct that corporate profits are behind inflation.
“Claim: On average, 11.4% of inflationary price increases became corporate profits from 1979 to 2019. Since the 2020 pandemic, that number has jumped up to 53.9%.”
Yes, that is correct: “Unless new data is presented to dispute The Economic Policy Institute and the Roosevelt Institute, there are reliable indications that a large portion of price increases are going to profits for large corporations in services like groceries, furniture and cars,” 12 News Verify concluded. They point out that while we might assume this is the result of corporate greed, it’s difficult to identify a cause. What we do know is the money is pouring into corporate profits. (Since corporations exist to make a profit and have in recent years been open about that being their biggest objective, the objection to the word greed seems a matter of polite linguistics rather than a genuine conundrum.)
The fact-check is based on Rep. Katie Porter’s whiteboard making another appearance this week, this time to explain that bigger corporate profits account for over half of the higher prices people are paying.
Bigger corporate profits account for *over half* of the higher prices people are paying. pic.twitter.com/RZr5O0X4oJ
— Rep. Katie Porter (@RepKatiePorter) October 18, 2022
“According to this chart, what is the biggest driver of inflation during this pandemic… during this recent period?”
Mike Konczal, director of a progressive economic think tank Macroeconomic Analysis at the Roosevelt Institute: “It would be corporate profits.”
Porter: “And what is that percentage?”
Konczal: “It is 54% and that number does stay that high if you update that to more recent numbers as well.”
Thus, Porter concludes correctly that over half of the higher prices are going to corporate profits.
CORPORATE PROFITS. Gee, whose economic policies help corporations avoid contributing to basic American life via taxes? Oh, that’s right. That would be Republicans. Who voted no to stop price gouging by oil companies? Republicans.
The Consumer Fuel Price Gouging Prevention Act, introduced by Reps. Kim Schrier, D-Wash., and Katie Porter, D-Calif., would give the president the authority to issue an energy emergency proclamation that would make it unlawful for companies to increase fuel prices to “unconscionably excessive” levels.
Well, what else contributes to inflation?
The Verify segment asked Dennis Hoffman, Director of the L. William Seidman Research Institute at the W.P. Carey School of Business at Arizona State University, and his response cites a number of factors including the pandemic supply chain disruptions, stimulus checks (Democrats definitely pushed for higher stimulus checks and they were needed), failed immigration policy that doesn’t allow more immigrants to work legally (we can put this in Republican column because their policies seek this outcome and Trump had so many qualified immigrants deported, but immigration policy failure belongs to our Congress and has for over a decade), response of the fed to fight inflation, easy credit- oh, that so belongs in the R column it’s not funny (refresher needed? See Bush crash of 2008, easy credit has been a Republican economy booster for over a decade) and more:
Inflation occurs when there is too much money chasing too few goods, Hoffman said.
Hoffman points to major factors like easy credit, stimulus checks, changes in consumer behavior, supply chain disruption, and a failed immigration policy that does not allow more immigrants to work legally.
Hoffman adds the federal reserve needs to decrease demand dramatically to continue fighting inflation, and they are doing just that. The housing market is cooling, which is the goal. But it’s a slow process.
But Republicans aren’t offering solutions to these problems. They certainly haven’t had the backbone to raise interest rates significantly when they’re in charge recently. Or perhaps that’s a function of a longstanding Fed tradition of caring about inflation “much more during Democratic administrations.” In 2012, The Atlantic cited with qualifications, “yes — the conservative folks who tend to run central banks seem to prefer conservative politicians.”
Why doesn’t the media tell the public that if they are worried about higher prices, the party that tried to pass legislation to help them is being stopped by Republicans? Time and time again, the media forces a Democrat or Independent to explain reality to their viewers.
Sen. Bernie Sanders (I-VT) explained to Chuck Todd last week why Republicans blaming Biden for inflation is bogus:
Inflation I’m sure you know, Chuck, is an international problem. In Germany, it is 10%, U.K. It is 10%, Canada it is 7% inflation globally is caused by the pandemic and the break in supply chains. It is caused by in my view the war in Ukraine, obviously.
And it is also caused by incredible corporate greed, and I hope everybody understands that when you go to the gas station you fill up your car today, the oil companies are making huge profits. The food companies are making huge profits, prescription drugs are high, the pharmaceutical industry is making huge profits. We’ve got to deal with that issue and Republicans won’t.
As those who read these pages already know, higher prices we are all paying are due to corporate greed (and in some cases, Saudis and Russians working to help Republicans win elections – seems like this should merit more coverage- shouldn’t voters be told, shouldn’t the media explain that the Saudis have an even bigger influence over Republicans than is widely known?).
There can never be too much correction of the false narrative Republicans and the media are putting out about inflation, because it has taken root in Americans’ minds, according to polls. And it is wrong.
If they’re going to complain about high prices, Republicans should have solutions. Instead, they vote against solutions while campaigning on being basic trolls, wagging their fingers at Democrats while they laugh with their corporate donors at how easy it is to blame Democrats for Republicans’ actions.
Sarah has been credentialed to cover President Barack Obama, then VP Joe Biden, 2016 Democratic presidential candidate Hillary Clinton, and exclusively interviewed Speaker Nancy Pelosi multiple times and exclusively covered her first home appearance after the first impeachment of then President Donald Trump.
Sarah is two-time Telly award winning video producer and a member of the Society of Professional Journalists.