Corporate Price Gouging Accounts For Over Half The Inflation Rate

Update to President Biden Assails Big Oil For Price Gouging Profits.

Sarah Jones reports, Factcheckers Agree With Katie Porter And Her Whiteboard That Corporate Profits Drive Inflation Price Increases:

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%.”

WOW.

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.”

You can see my very specific descriptions of NIPA tables going viral here. https://t.co/jnSpUgTSXa pic.twitter.com/Ie2xVV45hl

— Mike Konczal (@mtkonczal) October 19, 2022

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 “Chucklehead” 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.

Hey Dems, blame the corporate profiteers and the price gougers for inflation! It has the advantage of being a vote-winner and the advantage of being true.

In my @MSNBC commentary tonight, I laid out how Democrats should fight back on inflation – watch:pic.twitter.com/pH3gvG9iBu

— Mehdi Hasan (@mehdirhasan) October 24, 2022

Jason Easley reports, Biden Just Blew A Hole In The Entire Republican Midterm Argument:

President Biden said that Democrats are the real party of fiscal responsibility while Republicans want blow up the deficit with tax cuts for the rich.

Biden said while speaking at DNC headquarters:

We, the Democrats, are the ones that are fiscally responsible. Let’s get that straight now, okay. We’re investing in all of America. Reducing everyday costs while lowering the deficit at the same time. Republicans are fiscally reckless, pushing “tax cuts” for the wealthy [i.e., tax expenditures paid for by deficit borrowing] and exploiting a deficit that is making inflation worse.

Note: Federal deficit was cut in half last year, Treasury Department says: “New numbers from the Treasury on Friday give the Biden administration something to brag about, for now: The federal budget shortfall was chopped in half in the last fiscal year (which ended last month), falling to $1.38 trillion. Meanwhile, government revenues rose by $850 billion to $4.9 trillion. That rise is due, in part, to higher individual income taxes on the back of a strong labor market and strong wage gains for workers. In a statement, Treasury Secretary Janet Yellen said the figures demonstrate President Biden’s ‘commitment to strengthening our nation’s fiscal health.'”

Look, folks, Democrats are going to protect Social Security and Medicare. Republicans have been very clear, they have stated boldly they want to cut Social Security and Medicare.

And to the point that they’ll shut down the government, they say, and send the nation into default, which raises the price for everyone if we do not cut Social Security and Medicare. I ain’t going to do it.

We’re going to protect,  Democrats are going to protect the fundamental rights and freedoms like the right to choose, the right to privacy, the right to vote. Our very democracy. Republicans have introduced legislation that will ban abortion. At the same time, Republicans are threatening to take away to marry the person you love. You don’t need to imagine anything this time around. Look at what they’re saying. They are saying it out loud for everyone to hear.

Democrats are making their closing argument that is trying to rip away the GOP facade that claims to care about inflation. Republicans aren’t interested in doing anything about inflation because they know that they can’t do anything about inflation.

President Biden has it right. Democrats should be arguing to voters that they will do for them what Republicans won’t. It is not just about protecting Social Security and Medicare or codifying Roe. It is about lower costs and the deficit.

Making life easier for working and middle-class people instead of the wealthy and corporations.

Democrats need to focus on kitchen table issues and show thatRepublican fiscal irresponsibility will is a recipe for disaster for the working people of the nation.

Last week, President Biden Remarked on the Historic Deficit Reduction (excerpt):

Today, my administration announced that this year the deficit fell by $1.4 trillion — the largest one-year drop in American history — $1.4 trillion decline in the deficit.

Let me repeat that: the largest-ever decline in the federal deficit.

Let me be clear: This record deficit reduction includes the cost of my student loan plan and everything else we’re paying for. The deficit is down $1.4 trillion this year, even after accounting for 30 years of debt relief paid in advance.

You know, this — this follows last year’s drop of $350 billion in the deficit.

And because we’re making sure the largest corporations pay their fair share; cracking down on billionaire tax cheats; and giving Medicare the power to negotiate lower drug prices in the future beginning — just getting underway, which lowers one of the biggest costs that government and families have to pay, we’ll reduce, because of that, the deficit another $250 billion over the next 10 years.

You know, we’re going from a historically strong economic recovery to a steady and stable growth while reducing the deficit, building an economy where everyone does well, where the poor have a ladder up, the middle class does well, and the wealthy do very well. They’re not hurt by it.

And this is the economic vision I’ve had for America and the reason I ran — one of the reasons.

Republicans in Congress have a very different vision.

Now, listen to me closely: Congressional Republicans love to call Democrats “big spenders,” and they always claim to be for less federal spending. But let’s look at the facts.

The federal deficit went up every single year in the Trump administration, every single year he was President. It went up before the pandemic. It went up during the pandemic. It went up every single year on his watch, the Republican watch.

In fact, in three years before COVID hit, the deficit ballooned by another $400 billion.

They’re the facts.

And one big reason for that is Republicans voted for $2 trillion tax cut — a Trump tax cut — which overwhelmingly benefitted the wealthy and the biggest corporations. And that racked up the deficit significantly.

On my watch, things have been different. The deficit has come down both years that I’ve been in office. And I just signed legislation that’s going to reduce it even more in the decades to come.

Now Republicans in Congress are doubling down on their commitment to explode the deficit again.

Just this week — it’s hard to make this stuff up. Just this week, Republican leaders said if they get their way, they’re going to extend the tax — the Trump tax cuts, which are due to expire in a couple years — extend them.

They said they’ll repeal the corporate minimum tax of just 15 percent that I just signed into law — 15 percent.

They’d allow the largest and most prosperous corporations in America to go back to paying zero in federal income tax, which 55 of them did in 2020.

They said they’ll repeal the lower prescription drug costs and it will take effect next year, which that’s — and they don’t — these major reductions in drug costs don’t really kick in until next year.

If the Republicans repeal it, it’s going to raise costs onto millions of seniors, and the cost of federal government — to the federal government will be billions of dollars.

Put it all together and the Republican plan would add about $3 trillion to the deficit — $3 trillion. That’s their plan. That’s what they did under my predecessor, and that’s what they intend to do again. Adding another $3 trillion to the deficit is reckless, it’s irresponsible, and it would make inflation worse.

For Americans, the deficit could not be clearer. [You] don’t have to take my word for it, what they’re for. They’ve laid out a plan that — out — and they laid it out very clearly. Congressional Republicans say — and you all know this — their number-one priority is to repeal the Inflation Reduction Act.

Now, here’s what that means:

If they get their way, the power we just gave Medicare to begin to negotiate lower prescriptions drugs goes away. Gone.

If they get their way, the $2,000 cap on prescription drug costs, which takes effect next year — maximum any senior would have to pay, no matter what their drug costs are, would be $2,000. It goes away. Gone.

The $35-a-month cap on insulin, which takes effect next year for folks on Medicare — gone.

The savings on healthcare premiums of $800 a year for millions of Americans under the Affordable Care Act — gone.

And of — and, of course, they’re still determined to repeal the Affordable Care Act, which means an end to the protections for tens of millions of people who cannot afford health insurance because they have a preexisting condition. Let’s remember that we’re talking about millions of people who will lose their health insurance because they do not have a way to get it because they have a preexisting condition. That’s gone as well.

[One] more thing. If you’re worried about the economy, you need to know this: The Republican leadership in Congress has made it clear they will crash the economy next year by threatening the full faith and credit of the United States for the first time in our history, putting the United States in default unless — unless we yield to their demand to cut Social Security and Medicare. You heard that one, right? You all heard them say that. That’s what they’re saying.

Let me be really clear: I will not yield. I will not cut Social Security. I will not cut Medicare, no matter how hard they work at it.

Folks, we know what the Republicans in Congress will do if they regain power. They’re telling us. They’re being straight up about it. They’re going to repeal lower prescription drug prices I just signed into law and raise drug prices.

They’re going to cut Social Security and Medicare.

They’ll pass massive tax cuts for the wealthy, make them permanent — which they’re not now — the individual tax cuts.

They’ll threaten the very foundations of the American economy if we don’t meet their demands.

And they talk about inflation. Everything they proposed — are proposing will make inflation worse. Everything they’re proposing would make inflation worse.

Don’t be a damn fool, don’t vote for a Republican.