Amidst all the drama and scandal driven these days by Republican skullduggery, from Kevin McCarthy’s allying with and empowering fascist and white supremacist factions in the House of Representatives to newly-elected Representative George Santos’ shameless deception of American voters (and his and the GOP’s shoulder-shrugging about it), the key political issue of inflation tends to get lost in the mix—maybe intentionally so.
I refer to “inflation” as a political, rather than simply an economic issue, because to call it an economic issue maintains the illusion that somehow the surging prices for key commodities are simply a result of impersonal economic laws, such as supply and demand, rather than a result of unchecked or unregulated power bestowed upon corporations by the political powers that be.
And I put “inflation” in quotation marks because, really, it misnames and thus obscures what’s really going on, which is price-gouging, particularly when it comes to gas and housing prices. And when we use the term “inflation” instead of “price-gouging” or “profiteering,” it galvanizes the beltway wonks to turn to their stale solutions for trying to rein in out-of-control prices, which usually means attacking American workers and making their lives worse, which misapprehends the real causes of skyrocketing living costs for Americans.
Federal Reserve Chairman Jerome Powell has defaulted, for example, to the tired and largely unexamined strategy of raising interest rates to slow the economy. Raising interest rates leads to higher prices, which slows demand, which leads to companies needing less workers to make and transport their products, which raises unemployment and thus puts downward pressure on wages.
The solution to “inflation,” or, more appropriately, price-gouging, is to punish workers. I guess, despite the mantra we hear so often, we’re not all in this together.
As Sylvan Lane concisely explained in The Hill:
Put simply, the Fed knows its past and future rate hikes will lead to higher unemployment and won’t stop fighting inflation because of it.
But higher unemployment isn’t just a side effect of the Fed’s plans: It’s a goal.
Powell and scores of other economists believe the U.S. job market is too strong to allow inflation to fall. The combination of super-low unemployment and record-high job openings have fueled rapid wage growth, they contend, which forces businesses to raise prices to afford higher labor costs.
But we need to unpack the falsehoods informing this hackneyed and misleading, if not outright deceptive, narrative that effectively perpetrates a hoax on the American people.
First, let’s consider the skyrocketing profits oil companies and corporate landlords have been reaping.lately.
And let’s keep in mind that if these corporations were simply passing on their rising costs to consumers, their profits would be remaining level, not surging.
Just take three of the largest oil companies and look at their third quarter profit growth year-over-year for 2022. Exxon’s profits grew from $19.7 billion in the third quarter of 2021 to $24.4 billion in the third quarter of 2022, Chevron’s from $6.1 billion to $11.2 billion, and Shell’s from $4.13 billion to $9.45 billion.
And when it comes to price-gouging in the housing rental industry, Irina Ivanova reported for CBS News:
The largest publicly traded property groups in the U.S. saw their combined earnings surge more than 50% last year to nearly $5 billion, government watchdog group Accountable.US found in a new
