Corporate profits

COLUMN: POINT-COUNTERPOINT: Is inflation driven by corporate earnings? | Columns

There is no doubt that inflation is on everyone’s mind.

I overheard a conversation last week between two people at a local store discussing the price increase, and one said to the other, “That’s ridiculous!”

We know that rising costs continue to trickle down and we can’t cut back or stop doing a lot of things. That was about the last time we had an inflationary spurt, but as a country we weren’t as divided as we are today. Then President Ford offered a catchy “Whip Inflation Now!” button that we could wear, and even if we didn’t like it, no one liked it – there was no finger pointing, anger and hatred towards others.

What’s different now? Two things make a big difference: social media and media that have a political agenda and a huge platform. Add to that the “billionaire class” bullhorns profiting from price hikes, and we have a perfect stew of misinformation and upset people.

There are those who are convinced that only one person – Biden! – is the cause of all this distress, that certain policies and actions have caused the perfect storm of rising food and fuel prices. The facts tell a different story. We need to dig deeper into all the factors involved to understand the mess we find ourselves in. The fact is that corporate profits are on the rise. And, frankly, the decision to inject $1.9 trillion into the economy to help families recover from the pandemic, as demand grew as people emerged from pandemic-related isolation, led to an increase in demand – unequal supply and demand.

But while most people are struggling to get by, we see it from the Maine Center for Economic Policy, June 21: “Higher costs are the result of corporate consolidation and companies are using their control over the market to set inflated prices.These companies are raking in record profits while Mainers (and everyone in the world!) pay higher prices for everyday items like meat, milk, bread, fuel and electricity.

Moreover, the CEOs of these companies pose as bandits. And everything is legal. The work done by President Theodore Roosevelt, a Republican, to enforce anti-trust laws in 1902 at the end of the “Golden Age”, when income disparity became so evident, was essentially abandoned in the 1980s under Ronald Reagan, another Republican.

Not only are they making record profits, but they are asking for social benefits. For example, Intel, the chipmaker, made $79 billion in profit last year and its CEO made $179 million. Then, because of the shortage of chips, they asked the government for a handout to “speed up production”. And Congress is ready to hand over $52 billion of your dollars to the industry on top of their profits. And yet, when the government was asked to help with infant formula, our Oklahoma lawmakers all voted no, saying, “You can’t throw money at a problem.

I will withhold judgment until I see how they vote on the corporate welfare bill. I expect another melody. Then there’s gas, so I’ll end with this from PolitiFact: “Gas prices have been rising steadily since before Russia invaded Ukraine. slow economic recovery from deeply disruptive shifts in supply and demand in the pandemic era, but gas prices quickly soared when war broke out between the countries on February 24. Global crude oil prices surged to over $100 a barrel, reaching their highest levels since 2008.”

So Biden no more caused inflation than Trump caused the pandemic. Maybe we can solve this problem together – maybe if we can work together to find solutions instead of pointing fingers. Let’s do this.

Robert Lee is a retired social worker with an interest in history and politics. He lives in Tahlequah.