I saw Larry Summers on television today. That says all you need to know about the corporate media’s state of discourse on the economy. The Democratic leadership in Congress is like a deer in the headlights – they are just effing doing nothing. Didn’t they have at least two shots at reconciliation? Has it occurred to any of them that they should pass something under the Byrd rule, seeing as they plan on leaving the filibuster intact?
I suspect the answer to these questions is a resounding no, and I suspect the reason for that answer may be, well, Larry Summers. The austerians appear to be winning the day in the Biden Administration and the Democratic-led Congress. They are afraid of spending money on anything apart from the military, which is the beneficiary of lavish amounts of public funds in excess of $800 billion per annum.
The notion that social spending is responsible for recent price rises is simply laughable. There are other, more likely causes.
Pumping profits straight from the ground
Gas prices are an obvious driver of inflation. The price at the pump is somewhere around $5, the highest they’ve been perhaps ever. The thing is, crude oil prices are not at a record high, not by any means. Oil peaked in 2008 above $140 a barrel, and yet gasoline in the U.S. was selling at about $4 a gallon. Right now oil’s around $108 a barrel. So …. what gives?
One big factor is refining. During the pandemic, oil refining capacity in the United States fell about 5%, from over 19 million barrels in 2019 to less than 18 million. This was because there was less domestic travel due to COVID, which meant less demand for oil. Now that demand has shot up like a rocket again, the oil refining capacity in the United States is simply not sufficient to meet the need.
Why not reopen some of that refining capacity? Well …. that would mean more supply, lower price, less profit. Get the grift … I mean, drift?
From every misfortune a fortune is made
Why are prices rising? Over the course of 2021, corporate profits were up by more than 25%. There’s some serious profit-taking going on here, obviously. While everyone else was struggling to get through the pandemic, these fuckers have been cleaning up. Jim Hightower talks about Proctor and Gamble’s diaper business, an industry they and maybe one other mega corporation have a corner on:
Procter & Gamble Co. announced a year ago that COVID-19-driven production costs were forcing it to raise the price for its Pampers brand. At the time, it had just posted a quarterly profit of $3.8 billion, so P&G could easily have absorbed a temporary rise in its costs. But instead of holding the price to ease their customers’ economic pain, the conglomerate used a global health crisis to justify upping diaper prices. Six months later, P&G’s quarterly profit topped $5 billion. And—in that same quarter—P&G spent $3 billion to buy back shares of its own stock.
Just one of many examples. Bottom line is, as working families are stripped of the modest benefits they received from the Child Tax Credit, they must now contend with rising prices driven by the greed of monopolistic companies that contribute heavily to our leaders’ campaign coffers.
Asleep at the wheel
Why isn’t the mainstream press reporting on this? Too busy reporting on the many challenges of air travel – Turmoil at the Terminal! As I’ve mentioned previously, corporate journalists are disproportionately focused on the airline industry. That’s because they make up the seven percent of Americans who fly regularly (once a month or more). Maybe Jim Hightower should hang out in airports and talk to the correspondents as they wait impatiently for their flights.
luv u,
jp
