WHO IS REALLY TO BLAME FOR INFLATION?

 

         …This president also had to deal with inflation in 1974, he failed big time

 

Blaming President Biden for today’s inflation ignores the real problem

 

PART I:

After writing about the increase in gas prices, I decided to look deeper into the inflation issue.  What I found is stated over the next two days:

You may be too young to remember back to 1974, when President Gerald Ford and the GOP came out with the WIN program. (WIN stood for “Whip Inflation Now,” and The Republicans even came up with a “WIN” button to wear.)

The idea was that the president should go on TV, which he did, and he pledged to, when possible, “Buy only  those products and services, priced at, or below, present price levels.”   He told the following to all Americans: “The problem of inflation was Big Oil, Big Pharma, and Big Food.   He was trying to tell Americans to refuse to pay the inflated prices for gasoline, medicines, groceries and such.  Of course, it didn’t work.

To show just how stupid that idea was, Ford’s own economic advisor, Mr. Alan Greenspan, who in a White House meeting just had to say to himself: “It was surreal…this is unbelievable stupidity.  What am I doing here?”

That was 48 years ago and today we are caught in another issue of inflation.  What we are getting now from the GOP s is right wing political talking points.  Points, that are boiled down to “It’s Joe Biden’s fault!” 

But this time we Americans don’t have an inflation button to wear!

They even put in writing: “You poor consumers are being made to pay more for the basics like groceries and gasoline because of “Socialist Joe’s” investments in grassroots Americans.”

In this statement they are blaming those programs that Joe Biden pushed for those that lost their jobs due to the pandemic. 

In addition, with the trucking industry losing truck drivers in record numbers and the inflated cost of diesel fuel, we have a serious global supply problem. 

This, plus the fact that in every American sea port, (that has also lost a lot of workers), they have hundreds of ships waiting off shore, just to be unloaded.

The reality is that: “what bemoans as American’s inflation problem is actually a corporate greed problem.”

The reason being that for over 40 years, corporate-directed government policies have done the following:

• Intentionally promoted and subsidized mega mergers

• Green lighted anti-competitive business tactics

• Aggressively celebrated the economic lie that “bigger is better”

In short, and with no public awareness, “America has been transformed into a 'Monopoly Nation.' "

A glaring indicator of a non-competitive market is when a supplier, just because they can, raises prices without worrying that the consumers will be able to move to a cheaper supplier.

Brand-name corporations today are not being forced to mark-up prices just to cover rising costs for their raw materials, labor, or transportation.

In a competitive marketplace, they have to eat  much of those cost increases by taking a little less profit.

Today they are raising prices not to simply maintain their exorbitant profits, but so they can squeeze greater profits from the hard hit consumers.

They will then push American’s worrying about inflation, which will create more inflation.

Take an item like disposable diapers, a necessary item for many young American families.. 

Proctor & Gamble (P&G) falsely announced that due to Covid-driven production costs, they were forced to raise the price for their Pampers brand.

At that time, they had just posted a quarterly profit of $3.8 billion.  P&G could have easily absorbed the temporary cost of the price increase.  Instead of holding the price to their customers to ease customer’s economic pain, they used a global health problem to justify increasing the price.

Six months later, P&G ‘s quarterly profit was over $5 billion.  But it didn’t stop there.  They then spent $3 billion to buy back shares of their own company stock.  This artificially increases the wealth of their top execs and other large shareholders.

Why didn’t those customers switch from Pampers to Kimberly-Clark”s (K-C) Huggies brand?  (This is P&G’s main disposable diaper competitor.)

Because K-C’s as a “co-monopolist” increased their Huggies brand at the same time.  (These two companies already control 80% of the global disposable diaper market.)

So, the rich just get richer.

In 2019, big U.S. corporations hauled in roughly a trillion dollars in profit.  Two years later, during the pandemic, they brought in an additional $!.7 trillion profit.

This huge profit jump in large U.S. companies accounts for 60%  of the inflation now hitting all American families.

The CEO of Kroger, the supermarket giant, he boasted last Summer that “a little bit of inflation is always good in our business.  We’ve been very comfortable in passing increases off to consumers.”

Kroger also spent $1.5 billion of its profits on stock buy-backs to reward their executive and large stock holders.

McDonalds told its shareholders that 2021 had been “a banner year.”  They passed their price increases in meat and labor off to consumers and their profits increased by a stunning 59% over 2020.

The Wall Street banking exec Jamie Dimon stated: “We’re going to have the best growth we’ve ever had this year,” at the start of 2022.

Oher examples of America being a Monopoly Nation is that the consumers are at the mercy of the U.S. beef meat market.  The beef industry in the U.S. is controlled 85% by four multi-million dollar monsters.  That includes: Tyson Foods. Cargill Inc., JBS, and National Beef.  They have been raising prices during the pandemic, not for staying afloat, but to profit. Their profit for the end of 2021 was 300% higher than 2020.

This group also has the ability to bankrupt the country’s last competitive market segment.  That being the independent cattle ranchers.

Not only have this Big Four eliminated local and regional cattle-buying competition, they have divided the national ranching territory amongst the Big Four.  They did this so that they don’t have to bid against each other for the cattle.

As an example, is the story that was recently offered in that New York Times.

It involves a Mr. Steve Charter.  He is a third-generation Montana cattle rancher.  With the increasing of beef prices, he decided to take 120 head of cattle to auction.  Now, due to the Big Four’s decision to divide the territory’s into four sections.  This auction now only delivers cattle to the JBS corporation.   At the auction, he was informed, he had to commit to sell only to JBS, and at a price to be dictated later by JBS.

The Montana rancher said: “He wanted to tell him to go to hell.  But what choice did I have?”  There were no other bidders, and a herd of cattle are very expensive to keep.

“Without any consulting or dealing, they just decided that they were going to pay me $1 dollar per pound,” said Mr. Charter.

I am ending this article right here, as it is long enough. 

Tomorrow, I will have the second part of this issue which will talk about how politics and President Joe Biden could get involved.  

Remember, it was Joe Biden that has said in his first, State of the Union speech: “Capitalism without competition isn’t capitalism, its exploitation.”

Copyright G. Ater 2022