Fact checkers concur with Katie Porter’s assertion in her whiteboard that corporate profits are what drive inflation and price increases. “Claim: From 1979 to 2019, 11.4% of inflationary price rises on average resulted in business profits. That percentage has increased to 53.9% after the 2020 pandemic.
Yes, that is accurate: “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, unless new data is presented to dispute The Economic Policy Institute and the Roosevelt Institute,” 12 News Verify concluded. They make the point that, despite our tendency to think that corporate greed is to blame, there may be other factors at play. What is certain is that corporate profits are booming. (Since businesses exist to earn a profit and have publicly said in recent years that this is their main goal, the objection to the word “greed” seems to be more of a question of polite semantics than a true problem.)
The fact-check is based on a whiteboard appearance this week by Rep. Katie Porter, who used it to show that increased corporate profits account for more than half of consumer price increases.
What is the primary cause of inflation during this epidemic… during this recent era, according to this chart?
Mike Konczal, director of the Roosevelt Institute’s Macroeconomic Analysis, a progressive economic research tank: It would be business gains,
And what is that percentage, Porter?
It is 54%, and that figure remains high even when updated to more recent data, according to Konczal.
Porter therefore comes to the accurate conclusion that corporate profits account for more than half of the rising pricing.
BUSINESS PROFITS. Gee, whose economic policies enable businesses to evade paying taxes to support American society as a whole? Oh, you’re correct. Republican would be that. Who abstained to prevent oil firms from raising prices? Republicans.
Reps. Kim Schrier, D-Wash., and Katie Porter, D-Calif., proposed the Consumer Fuel Price Gouging Prevention Act, which would grant the president the power to declare an energy emergency and forbid businesses from raising fuel prices to “unconscionably high” levels.
What else, therefore, causes inflation?
Dennis Hoffman, Director of the L. William Seidman Research Institute at the W.P. Carey School of Business at Arizona State University, was questioned for the Verify segment. In his response, he lists a number of factors, such as the pandemic supply chain disruptions, stimulus checks (Democrats undoubtedly pushed for higher stimulus checks and they were necessary), the failed immigration policy that prevents more immigrants from working legally (we can put this in the Republican column because they are in charge of it), and the Easy credit has been a Republican economy booster for more than ten years (see Bush crisis of 2008) and more:
According to Hoffman, inflation happens when too much money is spent on too few commodities.
Hoffman cites significant contributing causes include easy financing, stimulus cheques, shifts in consumer behavior, disruptions in the supply chain, and a flawed immigration policy that prevents more immigrants from obtaining legal employment.
Hoffman notes that in order to keep battling inflation, the federal reserve must significantly reduce demand, and they are already doing so. The aim is being achieved as the housing market cools. But it moves slowly.
Republicans, meanwhile, are not proposing remedies to these issues. When they have been in power recently, they have most definitely lacked the guts to considerably hike interest rates. The Fed has a history of caring about inflation “far more during Democratic administrations,” so perhaps it’s a result of that. “Yes — the conservative persons who tend to manage central banks tended to choose conservative politicians,” The Atlantic stated in 2012 with qualifiers.
Why don’t the media inform the people that Republicans are blocking the party that wanted to enact legislation to aid those who are concerned about rising prices? The media repeatedly makes a Democrat or an Independent explain reality to their audience.
Last week, Sen. Bernie Sanders (I-VT) argued to Chuck Todd that the Republican claim that Biden is to blame for inflation is false.
Inflation Chuck, I’m sure you’re aware that this is a global issue. The epidemic and the supply chain breakdown are to blame for the worldwide inflation rate, which is 10% in Germany, 10% in the U.K., and 7% in Canada. Obviously, in my opinion, the conflict in Ukraine is to blame.
And I believe everyone realizes that when you go to the gas station and fill up your car today, the oil giants are generating enormous profits, which is another factor contributing to it. The pharmaceutical business is generating enormous profits, prescription medicine prices are high, and food firms are earning enormous profits. Republicans won’t deal with the problem, so we must.
The higher prices we are all paying are the result of corporate greed, as those who read these pages already know (and in some cases, Saudis and Russians working to help Republicans win elections – it 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?).
According to polls, Americans believe the false narrative Republicans and the media are spreading about inflation, thus there can never be enough done to reverse it. And it’s incorrect.
Republicans should have answers if they’re going to gripe about expensive goods. Instead, they vote against reforms while running on a platform of being simple trolls, waving their fingers at Democrats and laughing with their corporate funders at how simple it is to attribute the behavior of Republicans on Democrats.