Katie Porter - What Is Causing Inflation?

[Derec]

What is causing this inflation is clearly global, and the thing that makes such global inflation happen is an increasing cost of energy.

Few things are monocausal. Inflation is not monocausal. To ignore the role fiscal and monetary policy have played would be foolish.

It is not something Biden could possibly be causing. It is rather something RUSSIA is causing.

Russia, or rather the West's (quite justified) response to Russia's invasion of Ukraine, has been part of the causation only relatively recently. It really started in 2020. Pandemic happened, oil demand disappeared, oil price crashed. Oil futures even went negative briefly because the world was running out of storage for all the oil that was getting pumped but not burned. So oil projects get put on hold, oil workers get laid off, and when the demand picks up, you have too little supply and prices shoot up.

But again, that is not the whole picture.
The monetary policy: interest rates should have been increased much sooner.
The fiscal policy: an enormous amount of federal spending to respond to the Pandemic. Some of it necessary for sure, but much of it ill-conceived and let run way too long. Plus new programs like $400G in student loan cancellation.

 

[Derec]

Fun fact: One of my "pandemic" jobs was working for this fine company (heavy sarcasm) at a Fry's store in Tempe, Arizona. After decades in a cushy, well paying job, it was an eye opening experience. I understand why younger people are finding socialism appealing.

Because they think working in a grocery store in Soviet Russia or East Germany was akin to some kind of worker's paradise?

 

[Derec]

Exacerbating those is the increasing concentration at the wholesale level. There are fewer meat packet and processors, along with fewer producers of processed foods.

Increasing concentration is due to a variety of factors, one of which is less vigilant anti- trust enforcement.

I would definitely not be opposed to more vigorous anti-trust enforcement where appropriate.
However, that does not change the fact that monetary and fiscal policies have been the major drivers of this inflation.
To dismiss that, just because you want federal government to spend even more on expensive federal programs is foolish.

For example, if Dems retain the House and gain two Senate seats, they will no doubt revive the full $3.5T B³ bill. Hell, they may even make it bigger! So of course they want to dismiss the role of wanton spending on inflation.

 

[zorq]

Unless you are accusing the Alternet of altering the text of the transcript to fit, I think your objection here is silly.

I am not accusing anybody. I am pointing to a blatant double standard when it comes to sources here. If Daily Fail is frowned upon, then so should the likes of DailyKos and Alternet.
And also, why link to an extreme left blog if it's just a "exchange of a US House Committee meeting". Should be easy to find a reputable source to link to then.

Here are the links to the last two times Daily Mail was linked by users of this board.
1.Moment transgender singer strips NAKED live on Channel 4 and plays the keyboard with her PENIS
2.Popstar wannabe eco-zealot compares herself to a PRISONER OF WAR after football fans pelted her with drinks when she stormed pitch during Spurs v West Ham clash

Do you notice a little bit of yellow journalism and cherrypicking going on in those links? Because I sure do. Contrast that with the alternet link,

This isn't difficult.

Of course it isn't. Few simplistic analyses are.

No, what isn't difficult is to actually LOOK at the chart Katie Porter is holding. You know the one this thread happens to be about?

That raises the question: why have corporations become so greedy all of a sudden, if inflation has all to do with their greed and nothing with monetary and fiscal policies?

"All of a sudden?" Hey guys, this dude is wondering when corporations became greedy! LOL.

No. THIS inflation has a lot to do with corporate greed, but that doesn't imply that all inflation is only corporate greed. Most of the time corportations can get away with shit like this, but supply chain disruptions from stuff like Brexit, Trump's little trade war with China, and a little thing called COVID 19 gave corporations the cover to raise prices.

Please also note that it is perfectly okay for companies to not INCREASE their profits, and instead have no increases in profits or have mild decreases in profits and still remain profitable.

If you ran a corporation and could increase its profitability, would you not be derelict in your duties if you didn't?

Sure, but that doesn't mean that it isn't one of the flaws of a capitalist economic system. News flash, Capitalism doesn't maximize prosperity. It doesn't even maximize prodcutivity or efficiency when there isn't sufficient competition.

America's status as an economic and intellectual powerhouse comes from the strength of its middle class.

Which is not in dispute here. We can talk about compensation for various jobs and particularly about corporate executives, but this thread is about causes of inflation.
What is in dispute is how some people want to pretend that monetary and fiscal policies have nothing to do with inflation.

Who said that? Who the fuck said that? Show me the person who said monetary and fiscal policies have nothing to do with inflation.

What I'm saying is just because the baseline since 1979 has been 11.4% doesn't mean that it is the only healthy number. 0% could be just as good or better if that means that employees are getting a bigger slice of the pie.

0% what? 0% corporate profits?

Did you even look at the chart? Like at all? Do you even know what we're talking about?

 

[Derec]

Most economists that I've read believe that the extra Biden spending is contributing about 2 to 3% of the inflation hitting us today. No bueno. However, what bothers me is that dems are taking all the blame. There is an incredible amount of stimulus in the economy that republicans started: massive tax cuts, PPP, massive government spending under Trump, and etc.

I do not mind that a lot of money was spend as a response to the Pandemic. Much of that was necessary. Much of it was designed or implemented poorly, but haste makes waste. So far so good. Biden took over in January 2021. He let these Pandemic spending programs - such as expanded unemployment which only ended in September 2021! - ride much longer than necessary. And he wanted to add $3.5T in extra spending that was completely unnecessary.
So I can see why Biden and Dems get most of the blame. Especially when in the years before the Pandemic when AOC started proposing her $60-100T "Green New Deal" the "Modern Monetary Theory" became fashionable stating that government could just print more money to pay for it and for other fauxgressive pet projects.

I for one am willing to give both sides a pass because covid caused massive uncertainties; and at the least, the spending stopped deflation dead in its tracks.

I am willing to give both sides a pass for the initial COVID response. After all that spending was bipartisan.
However, when economy reopened in 2021 there was no need for that level of stimulus and nevertheless it was kept up. That was a mistake. As was proposing and pushing for trillions in new spending.

Monetary policy plays a role too. Interest rates were kept low too long. Why? This article says the desire to reduce unemployment gap between blacks and whites by keeping unemployment very low is partly to blame.
How DEI Made Inflation Worse
Even if you disagree with this analysis as to why, it is a fact that Fed started raising interest rates quite late in the game.

Inflation is far better than deflation. Yea, inflation is causing stress. But at least we all have jobs. In deflationary times, products may be 2% cheaper, but no one has a job.

Some inflation indeed is. That's why Fed target is not 0% but ~2%.

 

[Derec]

One of Katie Porter's friends in Congress:
Rep. AOC Exposes Price Gouging underlying 'Inflation' - YouTube in a Congressional hearing on April 6

Same politician who thinks spending $60-100T on her "green new deal" would be hunky-dory.

Like four meat-processing companies accounting for 53% of all US meat processing. Cargill, JBS, Cargill, Tyson, Smithfield.

Four is still a good deal of competition and together they only control a bit over half of the market.

The four largest retailers have 35% of the market share. WalMart and Amazon are 2/3 of this or 1/4 of the total (WM 14%, Am 10%).

Which still means that there is bunch of competition in retail.

Then about the effect of WalMart Supercenters on employment. One can find that out by comparing where they are approved to where they are not approved. Wages go down by 5.2%, employment by 2.9%, and participation by 1.4%.
Lack of competition is costly to workers, reducing their wages by 15% - 25%.

We have a few WM supercenters around here, but no lack of competition. Where does she get those numbers from I wonder ...
And what is her solution? Government banning certain stores?

Then antitrust and labor unions. It's more difficult to organize labor unions in large companies like Amazon and Starbucks because of their union busting, and penalties are not strong enough. Mergers are an anti-union technique.

But aren't unions a monopoly of sorts? But a monopoly imposed on the employers?
And while having higher wages sounds good, higher wages also means higher prices. And if wages are pushed too high by unions that are too aggressive (or what would be called "greedy" if they were corporations) then there is always danger that employment will be reduced - through automation, outsourcing or a combination of both:
Freshii introduces ‘Percy’ virtual cashier, outsourcing jobs to Central America
I imagine more of stuff like this especially where politicians think fast food companies should be forced to pay >$20/h.
Btw, I do not know why they missed the opportunity to spell "Percy" as "Percii" ...

 

[Derec]

She calls increasing interest rates and lowering wages "misguided" and says that what people need is lower costs, not lower wages.

What she does not mention is wanton federal spending. That's what's misguided, not tightening monetary policy.

She suggests ways of increasing supply like more green energy, increasing domestic manufacturing, let Medicare negotiate drug prices, and stop Big-Oil price gouging.

Sigh. Some of these may be good ideas, but will not, in themselves, reduce inflation by much. Also, she does not seem to be in favor of increasing supply of oil and gas.

 

[Derec]

Here are the links to the last two times Daily Mail was linked by users of this board.

Were either of those two stories made up?

Do you notice a little bit of yellow journalism and cherrypicking going on in those links?

Cherrypicking? They are reporting on particular stories presumably of interest to their readers. I am not a Daily Mail reader, but I went to their homepage just now and found this human interest story about an area septuagenarian:
Moment President Biden, 76, drives more than a HUNDRED miles per hour while drag racing against Colin Powell's son on episode of Jay Leno's car-centric TV show
Might want to check out that episode.

No, what isn't difficult is to actually LOOK at the chart Katie Porter is holding. You know the one this thread happens to be about?

Prop comics aren't my thing.
I know she likes to blame "corporate greed" for everything and dismiss the two major drivers of inflation: monetary policy and fiscal policy. She thinks raising interest rates is "misguided" and she of course supports spending additional $3.5T on things like more subsidies for parents and tax cuts for blue state rich.

"All of a sudden?" Hey guys, this dude is wondering when corporations became greedy! LOL.

That's exactly my point! Corporations would not be getting much more greedy all of a sudden. So why is inflation bad now and not 5 years ago, or 10.

No. THIS inflation has a lot to do with corporate greed, but that doesn't imply that all inflation is only corporate greed. Most of the time corportations can get away with shit like this, but supply chain disruptions from stuff like Brexit, Trump's little trade war with China, and a little thing called COVID 19 gave corporations the cover to raise prices.

Not to mention overly expansionary monetary policy and high level of government spending (some needed due to COVID19, some not).
So we agree that higher corporate profits are an effect of all these other things, not a cause of anything? You are starting to get it, perhaps.

Sure, but that doesn't mean that it isn't one of the flaws of a capitalist economic system. News flash, Capitalism doesn't maximize prosperity. It doesn't even maximize prodcutivity or efficiency when there isn't sufficient competition.

Just like democracy, it is the worst economic system except for all the other ones that have been tried.
The fact is that for all its flaws capitalism brought a lot of prosperity to the world. It is the profit motive in capitalism that led various tinkerers to play with steam engines and improve them, stick them on wheels etc. and thus ushered the Industrial Revolution.
And look at what happened in Actually Existing Socialism. No profit motive and a great deal of stasis. Compare two initially very similar societies - West and East Germanies.

Who said that? Who the fuck said that? Show me the person who said monetary and fiscal policies have nothing to do with inflation.

Katie Porter tacitly does that when she claims increasing interest rates is "misguided" and when she continues to support wanton federal spending.

Did you even look at the chart? Like at all? Do you even know what we're talking about?

Again, not a big fan of prop comics. If there is an actually useful chart, link to it or embed it here with IMG tags like a normal person. I don't want to watch a Youtube video of her holding an oversized chart like a prop.

 

[laughing dog]

Exacerbating those is the increasing concentration at the wholesale level. There are fewer meat packet and processors, along with fewer producers of processed foods.

Increasing concentration is due to a variety of factors, one of which is less vigilant anti- trust enforcement.

I would definitely not be opposed to more vigorous anti-trust enforcement where appropriate.
However, that does not change the fact that monetary and fiscal policies have been the major drivers of this inflation.

It is not a fact that monetary and fiscal policies are the major drivers of this inflation. Inflation is up around the world. IUS monetary and fiscal policy is not the major driver of world inflation. It is a factor in this inflation in the US but it is not the major driver. If it were, this inflation would have started much sooner.

To dismiss that, just because you want federal government to spend even more on expensive federal programs is foolish.

Who is the "you" are refer to? It is certainly not me.

 

[Harry Bosch]

Most economists that I've read believe that the extra Biden spending is contributing about 2 to 3% of the inflation hitting us today. No bueno. However, what bothers me is that dems are taking all the blame. There is an incredible amount of stimulus in the economy that republicans started: massive tax cuts, PPP, massive government spending under Trump, and etc.

I do not mind that a lot of money was spend as a response to the Pandemic. Much of that was necessary. Much of it was designed or implemented poorly, but haste makes waste. So far so good. Biden took over in January 2021. He let these Pandemic spending programs - such as expanded unemployment which only ended in September 2021! - ride much longer than necessary. And he wanted to add $3.5T in extra spending that was completely unnecessary.
So I can see why Biden and Dems get most of the blame. Especially when in the years before the Pandemic when AOC started proposing her $60-100T "Green New Deal" the "Modern Monetary Theory" became fashionable stating that government could just print more money to pay for it and for other fauxgressive pet projects.

I for one am willing to give both sides a pass because covid caused massive uncertainties; and at the least, the spending stopped deflation dead in its tracks.

I am willing to give both sides a pass for the initial COVID response. After all that spending was bipartisan.
However, when economy reopened in 2021 there was no need for that level of stimulus and nevertheless it was kept up. That was a mistake. As was proposing and pushing for trillions in new spending.

Monetary policy plays a role too. Interest rates were kept low too long. Why? This article says the desire to reduce unemployment gap between blacks and whites by keeping unemployment very low is partly to blame.
How DEI Made Inflation Worse
Even if you disagree with this analysis as to why, it is a fact that Fed started raising interest rates quite late in the game.

Inflation is far better than deflation. Yea, inflation is causing stress. But at least we all have jobs. In deflationary times, products may be 2% cheaper, but no one has a job.

Some inflation indeed is. That's why Fed target is not 0% but ~2%.

I couldn't find your source on the National Reivew. And NR is very right wing. Not a source that I would trust. Yea, I already agreed that Biden overshoot a little on the stimulus. Interest rates were too slow to rise. But business people hate rising interest rates. Higher interest rates kills investment. Higher interest rates decrease ROE on projects, stopping them. I look at it every day. Hence the reason why higher interest rates affect inflation. Biden has a plan, and we're seeing some progress that inflation is starting to peak.

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

 

[Ford]

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

You see...if Hunter Biden hadn't been hired by Burisma a few years ago, then Russia's invasion of Ukraine would have gone off without a hitch, and gas prices would be lower right now. Basically, the entire world economy hinges on Hunter Biden and - of course - his laptop. It sounds crazy, but Hunter Biden's laptop caused worldwide 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!"

Given that, let's first call attention to Media-Bias-Chart-Jan2022.jpg, copied at these pages frequently. Along the left-to-right bias axis, The New York Times and CNN (Web) are almost exactly midway between Alternet and Daily Mail. CNN(TV) is closer to Alternet,

Here are the links to the last two times Daily Mail was linked by users of this board.
. . .
Do you notice a little bit of yellow journalism and cherrypicking going on in those links?

Cherrypicking? They are reporting on particular stories presumably of interest to their readers. I am not a Daily Mail reader, but I [read] their homepage just now

You misspelled "mainlyfail.com" and the Back button didn't work? The same right-winger who hijacks your account to post screeds against AOC or Warren handcuffed you and toothpicked your eyelids to force you to read it? How many guesses do we get?

Hey. Nobody blames you for reading foreign news sources. U.S. news sites aren't very good. But your citing Daily Mail is rather ironic when you rant against Alternet.

You are unable to name even a single story where Alternet misstated facts. Alternet stories usually contain clear links to source stories from more moderate sites. You didn't know that either. Frankly, U.S. news sites are so bad, it's tempting to go to a site like Alternet to get a look at politics, rather than wading through trash at a site like CNN, ABC or Daily Mail. Since you know nothing about Alternet, why not STFU?

So, Alternet publishes leftish stories? Give yourself a Big Brownie Point for knowing that.

They are extremely biased. Not any better source than Daily Fail and a much worse source than Fox News. And both of those get routinely maligned when somebody links to them. So why should Alternet be given a pass?

More important is: Are their stories — or rather this story in particular — factually correct? If you think not, post some examples of their falsities.

I do not have time to do that, of course. I barely have time to keep up with discussions here. But it is a very biased source nevertheless.

Do not confuse the right with the left

Pox on both their houses! But thanks for admitting that you are fine with left-wing sources but not with right-wing ones. That's the kind of double standard I am talking about.

FTR I avoid Alternet simply because its programming (Javascript loops?) slows down my (misconfigured?) laptop. I get many or most of my news leads right here at IIDB!

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.

Find a factual flaw in the story, or retract your nasty non sequitur, please.

I shall not! Even if this particular story is true, it could have been sourced from a reliable source, not an extreme blog.

I guess you couldn't bring yourself to actually read the cites provided. It was because of the various repricings already underway due to Covid disruptions that big corporations had the opportunity for repricings, pretending them due to rising costs but in fact acting on their "fiduciary responsibility" to maximize shareholder value.

So you are still sticking with the fairy tale that inflation had nothing whatsoever to do with monetary and fiscal policies?

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

Elsewhere in the thread, you seem to deny the enormous monopoly or oligopoly power that many of today's corporations have. That's too HUGE an ignorance to fight in this thread. Start a new thread for that.

I am not denying there is little competition in some industries, but I do not see that as a big driver of present inflation.

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?

 

[ZiprHead]

Katie Porter on Lawrence O'Donnel's show on inflation.



54% of inflation is corporate profits.

 

[ZiprHead]

The EU has implemented a windfall profits tax and Great Britain is considering it too.

 

[ZiprHead]

 

[ZiprHead]

 

[ZiprHead]

 

[TV and credit cards]

The EU has implemented a windfall profits tax and Great Britain is considering it too.

I believe the US threatened something similar. May have even wagged a finger so… they better watch it!

 

[Loren Pechtel]

What I'm saying is just because the baseline since 1979 has been 11.4% doesn't mean that it is the only healthy number. 0% could be just as good or better if that means that employees are getting a bigger slice of the pie.

Let's consider what happens in a world where it's 0%:

Companies have no reason to expand because that brings no value. Companies have no reason to be created because there's no value in doing so.

Thus there is nothing to grow the economy. It's stuck at 1979 levels. Note, furthermore, that as companies fail there would be no replacements because there's no incentive to do so. Look around--anything founded after 1979 would not exist.

It's amazing how delicious seed corn is.

 

[Loren Pechtel]

We have supply issues. Supply issues can be resolved by raising prices, by rationing and by fixing the price and causing a lack of sufficient supply. Which do you think is the least harmful in this case?

And note that if you choose either of the latter two you make the problem permanent because there's no incentive to get the refineries back online.