Katie Porter - What Is Causing Inflation?

[bilby]

I know they have a far left-wing bias. I have not been on their site for years, but I recall their reporting was very hostile to Israel for example when I did.

What the fuck does being hostile to Israel have to do with being left-wing?

Do you even know what "left-wing" means? I can assure you that it has fuck all to do with Israel. A country that few people outside the Middle East and (bizarrely) the USA give much of a crap about.

The only link I can see between the left/right political spectrum and Israel is that antisemitism and the far right have been closely related by association with, and admiration of, the Third Reich.

It very difficult to talk about politics with Americans, because of this bizarre tendency they have to misattribute opinions to one wing or the other, and to use "left-wing" as a synonym for "idea with which I disagree", regardless of its relationship to the political spectrum.

Somebody who loves (or hates) Israel could lie pretty much anywhere on the left-right spectrum. Certainly hating Israel isn't something that suggests to me that I should rule out a person, publication or organisation as being right-wing.

When your evidentiary example of a far left-wing tendency would also indicate that Hermann Göring had "a far left-wing bias", it's clearly neither use nor ornament.

 

[Derec]

Evidence: {}

See the GND discussion we had in 2019.

 

[Derec]

KB responded by saying that US oil production is up and will be at record levels next year. The oil companies have lots of cash, but would rather give it to their shareholders than invest in new drilling.

Those two statements are contradictory. If US production is up, and is indeed predicted to reach record levels, then you cannot say that oil companies are not investing in new drilling. There is also nothing wrong with a company paying out a portion of the profits as dividends to the shareholders, who are the owners of the company.

Note also that it is not wise to increase production too much. You deplete reserves faster and prices would also fall, meaning that the profit margins could disappear since fracking costs are high. Oil prices being too low is also not good for an administration that says that it cares about climate change. Low oil prices means fuel efficient cars, electric cars and alternatives to cars such as transit or biking become less attractive.

KB then mentioned corporate monopolies, though she should have said oligopolies, and she mentioned business leaders bragging about raising their companies' prices in earnings calls.

They brag about being more profitable. The prices are set by supply and demand. As I said before: more government spending --> more money in the economy --> prices tend to rise --> higher profit margins.

 

[Derec]

Ken Klippenstein on Twitter: "can a single one of these harvard economist big brains explain to me how inflation is worse than being unemployed" / Twitter

Does he mean for him personally as an English Lit major or generally for the economy? His word choice of "being unemployed" rather than "unemployment" leads me to believe he means the former.

Rebecca Parson on Twitter: "Corporations are making out like bandits by price-gouging, yet have people convinced that paying one cent more than starvation wages will cause financial apocalypse." / Twitter

Wages have been rising.
Which can set up a vicious cycle called the "wage price spiral". Prices increase so workers demand higher wages which drives prices higher. Rinse repeat.

Krystal Ball on Twitter: "The ruling class depends on poverty as a tool of social control. Hence the freak out over debt relief and demands that the fed spark a recession." / Twitter

Who demands that the Fed spark a recession? Recession would be a bad byproduct of the necessary intervention to slow down inflation. Had the Fed been more proactive and raised the rates in 2021, risk of recession would have been lower because not as high interest rate hikes would have been necessary.

What Will Happen to Black Workers’ Gains if There’s a Recession? - The New York Times - "Black unemployment fell quickly after the initial pandemic downturn. But as the Federal Reserve fights inflation, those gains could be eroded."

So what's the proposed solution? Not to fight inflation?

 

[Derec]

Half a year ago, there was a big shortage of baby formula. I mention that because a common theory about inflation is too much demand chasing too little supply. What has happened since then?

Baby formula shortage was due to overregulation that made for very high barriers to entry. It was also very difficult to import baby formula.

 

[Derec]

Riiight. Things should always cost more. Efficiencies have increased in processes over the years more than offsetting labor costs. Costs in 2022 are lower than they were in 2010. So that should go to the shareholders. Right?

[Citation needed] that refining and transportation costs for example are lower in 2022 than they were in 2010.

 

[Derec]

What the fuck does being hostile to Israel have to do with being left-wing?

In principle nothing, but in practice they have become very much linked.

Do you even know what "left-wing" means? I can assure you that it has fuck all to do with Israel. A country that few people outside the Middle East and (bizarrely) the USA give much of a crap about.

I am talking about actually existing leftism, not some platonic ideal.
It is no coincidence that for example the most left-wing leader of the UK Labour Party in a generation is also the most hostile to Israel and friendly toward Hamas and Hezbollah. It is no coincidence that new leftist government of Australia rescinded Australian recognition of Jerusalem as capital of Israel. It is no coincidence that the new leftist president of Chile, Gabriel Boric (Acid) is opposed to Israel and even expelled the Israeli ambassador. It is no coincidence that in 1976, leftist German and Palestinian terrorists worked together to hijack an Israeli airliner. It is also no coincidence that today, big parts of the Left Party in Germany are quite opposed to Israel. So it's not just a US thing.

The only link I can see between the left/right political spectrum and Israel is that antisemitism and the far right have been closely related by association with, and admiration of, the Third Reich.

The Third Reich fell almost 80 years ago. Leftist alignment with anti-Israel is a more recent phenomenon. The Left operates in rigid oppressor-oppressed categories and they have identified Israel with the former and the Arabs with the latter. Furthermore, the Left in recent times has become quite friendly with political Islam.

It very difficult to talk about politics with Americans, because of this bizarre tendency they have to misattribute opinions to one wing or the other, and to use "left-wing" as a synonym for "idea with which I disagree", regardless of its relationship to the political spectrum.

A one axis political spectrum is quite crude, but there are correlations of seemingly unrelated matters. For example, why should support for higher taxes on the wealthy be correlated with one's stance on abortion or gay marriage? No real reason, but at least in US there is a high degree of correlation between them. Other countries might share these correlation or have their own particular ones. Leftism and being anti-Israel go hand in hand not only in the US.

When your evidentiary example of a far left-wing tendency would also indicate that Hermann Göring had "a far left-wing bias", it's clearly neither use nor ornament.

If Göring lived today he'd like what Jeremy Corbyn has to say on that matter I am sure.

 

[bilby]

For example, why should support for higher taxes on the wealthy be correlated with one's stance on abortion or gay marriage?

Because in both cases being intelligent and well informed leads inevitably to a particular stance with regards to those questions. And being stupid and/or ignorant to the opposite.

 

[Harry Bosch]

I couldn't find your source on the National Reivew.

I do not know what you mean.

And NR is very right wing. Not a source that I would trust.

They are right of center, yes, but less right than the likes of Alternet are left. They are also a serious publication.

Yea, I already agreed that Biden overshoot a little on the stimulus. Interest rates were too slow to rise.

Both true. Except I would not say "little". And his bright idea on top of all that stimulus was to spend $3.5T more on B³. Thank FSM for Sinema and Manchin!

But business people hate rising interest rates. Higher interest rates kills investment. Higher interest rates decrease ROE on projects, stopping them.

That's the idea. You cool down an overstimulated economy, as you would avoid a pot from boiling over by turning down the heat.

Biden has a plan, and we're seeing some progress that inflation is starting to peak.

So far, the reduction in inflation (and it has come down) has been due to aggressive interest hikes by the Fed and not by Biden's El Plan.
And the Fed acted late, meaning the rake hikes had to be more aggressive than had Powell acted in mid-2021 instead of rambling about "transitory". Which also means there is a greater chance of overcorrecting into a recession.

What is the republican plan? How in the world will lower taxes, higher deficit, and investigating Hunter stop inflation?

No idea. But then again, I am not a Republican, so don't ask me.

the point is that it's not fair to only blame Biden. The republicans are also to blame for a tremendous amount of the stimulus. They signed off on the QE, their tax cuts, PPP, and etc all contributed towards the inflation of today. And their future agenda if they win congress: tax cuts and investigating Hunter, aren't going to ease inflation.

 

[Swammerdami]

I think opinions and news articles should be judged on their merits, but some Members prefer to play the game "I hate the messenger, so I'll ignore the message! Ha ha ha!"

Here any right of center sources are accused of bias all the time, and yet dodgy left-wing sources are accepted.

In your view FoxNews is "right of center"?? You are dreadfully confused.

Given that, let's first call attention to Media-Bias-Chart-Jan2022.jpg, copied at these pages frequently.

You do know that just pasting the file name of an JPEG is not going to conjure it up here? Could you post it if you want?

Google is your friend. Put "Media-Bias-Chart-Jan2022.jpg" in the search-bar. (I think there is a space between Jan and 2022 but Google will prompt you for that.) The chart is posted frequently and I didn't want to clutter up the thread with a large image. I put the image in its own tab when discussing media bias!

I was surprised to see that the bias distance from Alternet to ABC, according to that chart, is less than Daily Mail to FoxNews! The simple fact is that TRUTHFUL sources are almost bound to have "leftist bias", at least when "left/right" are used in the context of post-rational America — The GOP is no longer a party of conservative values: it is a party whose focus is telling lies.

Alternet stories usually contain clear links to source stories from more moderate sites.

But they put a leftist spin on it. So why not link to the moderate sources Alternet links to instead of linking to Alternet?
I am not disputing Katie Porter spoke with her oversized prop chart, but the AN spin that it "proves" corporate greed is causing inflation is poppycock.

Since you know nothing about Alternet, why not STFU?

I know they have a far left-wing bias. I have not been on their site for years, but I recall their reporting was very hostile to Israel for example when I did.

But your true colors are showing. As you have tacitly admitted, Alternet presents TRUE facts. FoxNews — which is as far to the right of Daily Mail as Alternet is to the left of ABC on afore-mentioned media bias chart — lies habitually.

Can you point to some outright lies (as opposed to spin)? And please do distinguish between reporting and opinion pieces like you would with an article from a NY Times opinion page.

Are you joking? Remember that FoxNews on multiple occasions put a "(D)" next to the name of an "(R)" Congressman when they were reporting on criminal behavior by the (R).
Et cetera, et cetera. If you REALLY didn't know FoxNews lies habitually you are too out-of-touch to comment on U.S. media.

In your logic, if anyone mentions any partial cause for inflation OTHER than "monetary and fiscal policies" it means they claim "inflation had nothing whatsoever to do with" monetary and fiscal. Start a thread in Remedial Logic and Reasoning if this really makes sense to you.

You should take your own advice re remedial logic and reasoning. I did not say that there could not be other, minor, contributing factors. But the claim by Alternet is that "corporate greed is behind inflation" and that KP somehow proved it. By logic is that "corporate greed" is either sole or at least predominate cause of inflation.

You are misstating Konczal's position. (And calling it "Alternet's" position shows continued contempt for journalism.)

But more importantly, YOU accused ME of claiming "inflation had nothing whatsoever to do with monetary and fiscal policies." Your retraction is accepted, but please refrain from lying about me in future.

Also, try not to leave unbalanced [ I ] tags in future.

Mea culpa. I must say, as far as editing, the old software was better.

At last! Something we agree on.
We can't go back to the old software, despite that it was hugely better, but I'd be happy to see all the "smart" editing features of the new software disabled.

The Director of Macroeconomic Analysis at the Roosevelt Institute votes one way. Derec, who fails Remedial Logic and Reasoning, votes the other way. Err . . . Derec wins?

Classic argument from authority.
I have offered reasoning and support for my position that the claim that there is a lack of competition in eg. grocery industry is grossly overstated. Mike Konczal has been described by NY Times Magazine as having ”a cult following among progressives“ btw. Yeah, they follow him like a cult.

Konczal et al publish detailed technical papers supporting their claim. Can you link to your peer-reviewed refutation?

Dismissing "authority" because it disagrees with your own layman's prejudice is a symptom of Dunning-Kruger effect.

 

[fromderinside]

Riiight. Things should always cost more. Efficiencies have increased in processes over the years more than offsetting labor costs. Costs in 2022 are lower than they were in 2010. So that should go to the shareholders. Right?

[Citation needed] that refining and transportation costs for example are lower in 2022 than they were in 2010.

Transportation costs rise has been most recently caused by US and European embargo of Russian oil and gas in 2021 and 2022. They are still below the prices in 2010. Otherwise prices have been stable between 2016 and 2020.

Transportation price inflation, 1935→2023

This calculator uses the official Consumer Price Index for Transportation from the U.S. Bureau of Labor Statistics. Transportation costing $20 in 1935 would cost $376.49 in 2023.

www.in2013dollars.com

Refining costs varied between $20 and S40 from 2010 to 2021 when they were at $25 below the prices in 2011 of $40. They spiked to nearly $60 in 2022. These costs are directly related to sanctions on Russia.

Oil Refineries Continue Attacks on the RFS While Enjoying Record Profit Margins

By Scott Richman, RFA Chief Economist If you watched the Sunday morning talk shows last weekend, you might have noticed a new advertisement (paid for by oil refiners)that attacks the Renewable Fuel Standard. The ad notes that consumers are paying record-high prices at the pump (something...

ethanolrfa.org

In both instances most of the price increases have gone into producer profits.

 

[ZiprHead]

Katie Porter on Lawrence O'Donnel's show on inflation.
Video link
54% of inflation is corporate profits.

Correlation does not imply causation. I guess not even elementary statistics is required for a law degree (which is why we need more educational and occupational diversity in politics, but that's another issue).
Even if her numbers are correct that there is a 54% level of correlation between inflation and corporate profits, that does not mean that 54% of inflation is caused by corporate profits or as you put it that "54% of inflation is corporate profits".
The causation could be the other way, or both could be caused by another variable.
Imagine an inflationary economy. Say Dems retain the House and gain two net Senate seats so they can pass their $3.5T Spendapalooza without being blocked by Sinema and Manchin.
A lot of money is pumped into the economy. Beneficiaries of that largess have more money to spend, so they bid up the prices - more money chasing same amount of goods and services means prices rise. They must, or else there would be shortages.
But in the short term that increase in price means not only greater profits, but also greater profitability because the cost take time to adjust.
Btw, supply can also adjust but that means more sales and again, more
Too much economic stimulus causes both inflation and higher corporate profits.

During the pandemic you had the double-whammy of more money from stimuli, enhanced unemployment, enhanced child tax credit etc. chasing less goods (supply chain problems) and services (many in-person services were not available early in the pandemic), but the result was similar.

Wut, that money going to corporate profits doesn't exist, ot it just came from money trees? Where did that money come from?

 

[TV and credit cards]

Katie Porter on Lawrence O'Donnel's show on inflation.
Video link
54% of inflation is corporate profits.

Correlation does not imply causation. I guess not even elementary statistics is required for a law degree (which is why we need more educational and occupational diversity in politics, but that's another issue).
Even if her numbers are correct that there is a 54% level of correlation between inflation and corporate profits, that does not mean that 54% of inflation is caused by corporate profits or as you put it that "54% of inflation is corporate profits".
The causation could be the other way, or both could be caused by another variable.
Imagine an inflationary economy. Say Dems retain the House and gain two net Senate seats so they can pass their $3.5T Spendapalooza without being blocked by Sinema and Manchin.
A lot of money is pumped into the economy. Beneficiaries of that largess have more money to spend, so they bid up the prices - more money chasing same amount of goods and services means prices rise. They must, or else there would be shortages.
But in the short term that increase in price means not only greater profits, but also greater profitability because the cost take time to adjust.
Btw, supply can also adjust but that means more sales and again, more
Too much economic stimulus causes both inflation and higher corporate profits.

During the pandemic you had the double-whammy of more money from stimuli, enhanced unemployment, enhanced child tax credit etc. chasing less goods (supply chain problems) and services (many in-person services were not available early in the pandemic), but the result was similar.

Wut, that money going to corporate profits doesn't exist, ot it just came from money trees? Where did that money come from?

It's the "Manna From Heaven" economic model.

 

[Oleg]

Correlation does not imply causation.

What’s bizarre about the “inflation is caused by corporate profits” mantra is how new it is. Cannot recall a time prior when anyone thought that. Inflation had been under control for decades, times during which oil companies and others had huge profits. I guess when the ruling party can’t defend its terrible governance it’s gotta conjure new bullshit.

 

[Cheerful Charlie]

You have a short memory. When OPEC was formed, oil prices shot up from $8 a barrel to $20 a barrel and set off the rampant inflation Jimmy Carter got blamed for.

 

[Oleg]

You have a short memory. When OPEC was formed, oil prices shot up from $8 a barrel to $20 a barrel and set off the rampant inflation Jimmy Carter got blamed for.

What does that have to do with corporate profits?

 

[Cheerful Charlie]

The corporate profits of OPEC members. Also gasoline refiners et al recieved massive windfall profits. If costs of raw materials go up by X 2 but profit margins remain at 10% profit margins double.

 

[Oleg]

The corporate profits of OPEC members. Also gasoline refiners et al recieved massive windfall profits. If costs of raw materials go up by X 2 but profit margins remain at 10% profit margins double.

It was the decision of OPEC countries to flex and cut production. That is entirely separate from saying “corporate profits cause inflation”.

 

[Cheerful Charlie]

Mexico - Pemex. Saudi Arabia - Aramco. Etc. State owned companies. Venezuela nationalized their oil industry in 1976. Iraq in 1972. Iran in 1951.

 

[Oleg]

Mexico - Pemex. Saudi Arabia - Aramco. Etc. State owned companies. Venezuela nationalized their oil industry in 1976. Iraq in 1972. Iran in 1951.

What does that have to do with corporate profits causing inflation?