This would be a temporary tax on price increases exceeding the producer price index’s costs of producing consumer goods. Even the credible threat of antitrust enforcement can deter corporations from raising prices higher than their costs.Ī windfall profits tax could also be helpful. This is why Congress and the administration need to take direct action against profit-price inflation, rather than rely solely on the Fed to raise interest rates and put the burden of fighting inflation on average working people who are not responsible for it.īold antitrust enforcement is essential. Gas prices have started to drop but big oil still has the power to raise prices at the pump far higher than the costs of crude. Wall Street has consolidated into five giant banks, raking in record profits on the spreads between the interest they pay on deposits and what they charge on loans.īroadband is dominated by three giant cable companies, all raising their prices.Īutomobile dealers are enjoying record profits as they raise the retail prices of automobiles. The airline industry has gone from 12 carriers in 1980 to just four today, all rapidly raising ticket prices. And two giant firms dominate consumer staples.Īll are raising prices and increasing profits because they can.īig pharma, comprising five giants, is causing drug prices to soar. Just one corporation sets the price for most of the nation’s seed corn. Why are grocery prices through the roof? Because just four companies control 85% of meat and poultry processing. Since the 1980s, two-thirds of all American industries have become more concentrated. This is why corporate profits are close to levels not seen in over half a century.Ĭorporations have the power to raise prices without losing customers because they face so little competition. It’s caused by corporations raising their prices above their increasing costs.Ĭorporations are using those increasing costs – of materials, components and labor – as excuses to increase their prices even higher, resulting in bigger profits. The underlying economic problem is profit-price inflation. Rather than causing inflation, wages are actually reducing inflationary pressures. Most workers’ paychecks are shrinking in terms of real purchasing power. Wage increases have not even kept up with inflation.
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