The Fed is about to shaft American workers

[Uncle Joe]

(snip)

There’s no “wage-price spiral,” either (even though Fed chief Jerome Powell has expressed concern about wage hikes pushing up prices). To the contrary, workers’ real wages have dropped because of inflation. Even though overall wages have climbed, they’ve failed to keep up with price increases – making most workers worse off in terms of the purchasing power of their dollars.

(snip)

Slowing the economy won’t remedy either of the two real causes of today’s inflation – continuing worldwide bottlenecks in the supply of goods, and the ease with which big corporations (with record profits) are passing these costs to customers in higher prices.

Supply bottlenecks are all around us. (Just take a look at all the ships with billions of dollars of cargo idling outside the Ports of Los Angeles and Long Beach, through which 40 percent of all U.S. seaborne imports flow.) Big corporations have no incentive to absorb the rising costs of such supplies — even with profit margins at their highest level in 70 years. They have enough market power to pass these costs on to consumers, sometimes using inflation to justify even bigger price hikes. “A little bit of inflation is always good in our business,” the CEO of Kroger said last June. “What we are very good at is pricing,” the CEO of Colgate-Palmolive added in October.

In fact, the Fed’s plan to slow the economy is the opposite of what’s needed now or in the foreseeable future. COVID is still with us. Even in its wake, we’ll be dealing with its damaging consequences for years — everything from long-term COVID, to school children months or years behind.

(snip)

https://robertreich.substack.com/p/fed-shafting-american-workers

[SWBTATTReg]

1. Easy way to fix this company built-in price creep...simply don't buy anything or cut back

on purchases. Enough of us do it will make the powers that be notice this and sit up, start dangling incentives in front of us to juice up our spending. Would do us some good anyways, to build up our savings and slow down these company mandated price increases. I understand that a company can price its goods at what the markets will bear, and thus, the reverse is true too. Don't buy crap that keeps going up and up in price for seemingly no reason at all.

It's just like that guy who owned the rights to a medication and raised prices 5,000% because he could? He went to jail (and still is in jail) for defrauding shareowners.

[Uncle Joe]

2. I believe the business philosophy of "what the market will bear" inevitably

leads to the "straw that breaks the camel's back," and for the most holistic, long term, national, local, corporate and personal benefit, business and we the people need to have a higher ethos as well.

We need to move beyond dog eat dog and every person for them self, otherwise I believe we're headed toward national and probable global ruin.

I liked this quote from Robert which I found in another article.

"“We don’t work for the economy, the economy is supposed to work for us.”

Robert Reich

[SWBTATTReg]

3. That's a good quote, I love it. If it wasn't for us, there wouldn't be an economy. NT

[Magoo48]

4. Any small uptick in wages is unacceptable to corporate America.

So, we find ourselves with inflation. The Fed is a tool of the 1%.

We need a two year freeze on wholesale and retail price increases along with a Herculean enforcement effort all around.

[Metaphorical]

5. Wages, No. Dividends, yes.

I've argued from the beginning that most of the inflation that we're facing right now is due to supply chain issues. Opportunistic price gauging is also factoring in, as well as a dramatic increase in dividends due to the stock market shooting up by 10,000 points from pre-Covid levels, which I think actually accounts for housing price increases. The old chestnut about wage hikes leading to inflation goes back more than seventy years, and had to do primarily with the rise of the Baby Boomers causing demand to shoot far ahead of supply. Walt Disney actually did a cartoon short about that in the mid-1950s at the behest of the Eisenhower administration, illustrating why wage inflation led to commodity inflation, though that has NEVER been satisfactorily proven.