Domenica Ghanem Economy

Don’t Believe Everything You’re Hearing About Inflation

The best thing we can do to offset the pain of inflation is to raise the standard of living for all of us.
[Pictures of Money / CC BY 2.0]

By Domenica Ghanem | OtherWords

Many Americans are noticing the rising price of goods from sour cream to carburetors as politicians sound the alarm on an inflation crisis.

You may be wondering what single force would cause the cost of a dairy product to go up at the same time as the cost of a car part. The truth is that not all inflation is the same. Each sector has its own issues.

And none of it is solved by less government funding for our safety net, as some politicians have proposed.

Some of it is what we can call pandemic inflation. Because our economy bounced back quicker after the COVID-19 shutdowns than anyone predicted — thanks largely to investments from the American Rescue Plan — people have more spending money and demand has risen faster than our underinvested supply chain could handle.

This rising demand accounts for price flares in auto manufacturing and lumber, for example. At the same time, you’ll notice prices that had plummeted during the shutdowns returning to pre-pandemic levels. Think: plane tickets.

Meanwhile, recent price spikes on other goods that families depend on — like diapers, meat, and dairy — can be linked to corporate greed. Decades of corporations monopolizing industries and cutting out competition has given them the power to artificially inflate the prices of these necessities under the guise of “inflation.”

Big business is simply milking this opportunity to claim that they need to raise their prices while they use those profits to engage in stock buybacks — which benefit shareholders and CEOs, not small farmers or the grocers who stock the shelves.

This is hard on consumers as well as small and family-owned businesses who depend on bigger conglomerates like Amazon for supplies and market access. With bigger chains hiking up prices, many smaller businesses are going under.

But the price pressures that hurt families the most are not caused by the pandemic — and in fact have been rising for decades.

By far the biggest ticket items on struggling families’ budgets are rent and child care. The housing crisis is so bad that no person earning minimum wage full-time can afford rent in any U.S. state. And the cost of child care costs more than college tuition in 30 states.

The Build Back Better Act being debated in Congress right now would help address our housing supply crisis by building new affordable units with a $150 billion investment. The law would also reduce out of pocket child care costs for families, increase labor participation, and raise the wages of care workers.

More local policies like rent control, which advocates won recently in St. Paul, Minnesota, could also help regulate prices.

A few conservative lawmakers have used inflation as an excuse not to pass these programs. But they have it exactly backwards.

The best thing we can do to offset the pain of inflation — whatever its cause — and for the overall health of our economy, is to raise the standard of living for all of us. That means lowering the poverty rate, raising wages, and reaching full employment.

For too long we’ve supported an economy that depends on low-paid jobs, dangerous work, and big businesses monopolizing power. That makes all of us suffer. Slowing down our economy to boost profits for corporations won’t eliminate the need for families to purchase the products they depend on or fix our supply chain issues.

We need to build a system that supports a healthy economy for everyone, and the Build Back Better Act would be a down payment on a future clean bill of health.

Domenica Ghanem edits Changewire.org for Community Change. This op-ed was adapted from Changewire.org and distributed by OtherWords.org.

4 comments

  1. The best we can do with “inflation” is to hold the profiteers accountable: stop the rip-off of society tied to profits by billionaires and their Eichmann millionaires. Triple and quadruple lumber costs? Food going up 20 percent. False shortages? Tens of billions going to drug Mafioso Companies from US taxpayers? Housing/rents out the roof. Give us a break. Capitalism and transnational financing and the thugs Blackstone and BlackRock and those other extortion outfits. Come on!

    BBB? Get rid of billionaires. Ninety percent taxation for their externalities. Nationalize with robust experts and workers the industries, the grid, telecommunications, medicine, ag, etc.

    This BBB is Build Backward Better!

    https://youtu.be/ZUGh1Su7-ok

    Abby Martin sits down with Peter Phillips, former director of Project Censored and professor of Political Sociology at Sonoma State University. His new book “Giants: The Global Power Elite” details the 17 transnational investment firms which control over $50 trillion in wealth—and how they are kept in power by their activists, facilitators and protectors.

  2. The more expensive things are, the better! Overconsumption is one of the two biggest problems on the planet (the other being overpopulation), and Americans are No. 1 in committing that evil. The only exception is basic necessities like food and housing. For anything else, higher prices mean less consumption, which means less destruction of our planet and less killing of other species. So again, except for food and housing, inflation is not a legitimate issue.

  3. It’s ‘inflation’ for us, but another opportunity to profit from blood in the streets (Rothschild) for robber baron billionaires preying upon the spoils of war waged under cover of a pseudopandemic – from which they’ve already made out like bandits.

    We’re been living in one big company store for some time, where the ‘free market’ forms the thinnest of ideological veils over the cartels controlling the economy. Now the storeowners are laying down new normal rules of access to resources beneath the pseudoscience of public health selling us such schemes as health passes providing platforms for digital IDs, currency, credit scores and more.

    Controlled demolition of the economy via lockdowns, with rescue and relief efforts chiefly enriching corporate overlords over the petty entrepreneurs and common proles they’ve been crushing, to whom some symbolic crumbs are thrown: that’s been the general rule amid all the dismal science of economics disguising data and obscuring oppression. As disaster capitalism continues to apply shock, an embattled public is coerced into consent to yet another new deal with state fronts selling yet another recovery plan to benefit the predator class.

    A WEF ad slogan echoed among ruling elite representatives in other nations, the Build Back Better plan will sell us ‘sustainability’ and the green economy to further implement the biosecurity regime initiated with the covid coup (climate change is dangerous to your health!). The war on/of bioterror accelerates the corporate state’s fascist creep into the WEF’s Fourth Industrial Revolution where the merging of physical, biological, and digital worlds, the replacement of organic existence with synthetic simulacra, will be facilitated by means of building back better the company store’s control over an internet of bodies and things, imposing an inescapable grid of completely commodified and monetized relations and establishing ‘rights of property’ over all life.

    When plutocrats push their plans upon us – for our own good – it’s best to recall the words of Red Cloud: “They made us many promises, more than I can remember, but they never kept but one; they promised to take our land, and they took it.”

  4. In a fiat economic system in which “value” may be created out of thin air, buy creating money, inflation may also be created or eliminated by those who control the pricing mechanism.

    In this United States this means the Federal Reserve Bank.

    The inflation rate under a fiat currently system such that used in the U.S. may be increased or lower as easily as raise or lowing the tax rate.

    In so doing, policy-makers at the highest level are able to control every person who measures their wealth in U.S. Dollars.

    Everyone single person, from the poorest of the down and trodden to the richest of the aristocratic class.

    The author is correct, just as those who are calling for a universal basic income are also correct. Raising the standard of living for every person, would increase the economic conditions everyone.

    A universal basic income would actually benefit the wealthy even more so that the poor. If the minimum wage were to be increased to $50,000 a year or a universal income was guaranteed to every citizen, Jeff Bezos net worth would double.

    If the economic elite were being taxed at rates comparable to the tax rate of the average worker, the tax revenue of the USGOV would increase commensurately.

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