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In his latest installment in service of The Narrative, Dr. Reich again tortures logic and reason in pursuit of his hatred of successful businesses. He thinks inflation is companies raising their prices. He thinks government is the fix and not the cause.
In his latest installment in service of The Narrative, Dr. Reich again tortures logic and reason in pursuit of his hatred of successful businesses. He thinks inflation is companies raising their prices. He thinks government is the fix and not the cause.
In fact, he never discusses the premise posed by the title. He just dismisses it and move son to accuse businesses of causing inflation.
It’s caused by corporate power. And what would President Harris do about it?
Friends,
You’ve probably been told that the main causes of rising prices are wage gains and excessive government spending. Wrong.
Prices have risen and remained high — especially in critical sectors such as energy, drugs, and food — largely because giant corporations have been raising their prices to increase their profits. (A summary denial followed by a summary assertion. We will simply respond, "Wrong. Only government can cause inflation." Since Dr. Reich sets the bar low for proving one's case, all that is required is to respond with contradictions.)
They can do this because they face such little competition. (Our statement of contradiction: No they can't.)
Worried about sky-high airfares and lousy service? That’s largely because airlines have merged from 12 carriers in 1980 to only four today. (Four carriers means there is competition.
Friends,
You’ve probably been told that the main causes of rising prices are wage gains and excessive government spending. Wrong.
Prices have risen and remained high — especially in critical sectors such as energy, drugs, and food — largely because giant corporations have been raising their prices to increase their profits. (A summary denial followed by a summary assertion. We will simply respond, "Wrong. Only government can cause inflation." Since Dr. Reich sets the bar low for proving one's case, all that is required is to respond with contradictions.)
They can do this because they face such little competition. (Our statement of contradiction: No they can't.)
Worried about sky-high airfares and lousy service? That’s largely because airlines have merged from 12 carriers in 1980 to only four today. (Four carriers means there is competition.
But, if the number of airlines increased to 8, or even back to 12, that does not mean prices would come down. All that is required for competition is two.
And by the way, does Dr. Reich wonder why has the number of airlines has decreased? What factors might there be that make it difficult to be in the airline business? What might be the root causes?)
Concerned about drug prices? Between 1995 and 2015, 60 leading pharmaceutical companies merged to only 10.
Upset about food costs? Four large companies now control 85 percent of beef processing, 70 percent of the pork market, and 54 percent of poultry.
Worried about grocery prices? Just three giants — Albertsons, Kroger, and Walmart — control 70 percent of the grocery sales in 167 cities.
And on and on through almost every sector of the economy, including rental housing, adtech, chemicals, and health care.
Monopolies (None of these examples are monopolies. Dr. Reich dishonestly inserts the term.)
Concerned about drug prices? Between 1995 and 2015, 60 leading pharmaceutical companies merged to only 10.
Upset about food costs? Four large companies now control 85 percent of beef processing, 70 percent of the pork market, and 54 percent of poultry.
Worried about grocery prices? Just three giants — Albertsons, Kroger, and Walmart — control 70 percent of the grocery sales in 167 cities.
And on and on through almost every sector of the economy, including rental housing, adtech, chemicals, and health care.
Monopolies (None of these examples are monopolies. Dr. Reich dishonestly inserts the term.)
can raise prices and keep them high because they don’t face enough competitors charging lower prices and grabbing consumers away. (He repeats his undocumented assertion.)
Right now, the Federal Reserve Board has responsibility for fighting inflation. (Is there a law somewhere that says this? Where did the Fed get this responsibility?
Right now, the Federal Reserve Board has responsibility for fighting inflation. (Is there a law somewhere that says this? Where did the Fed get this responsibility?
They should be fired for their abject failure.)
When prices rise, the Fed raises interest rates to slow the overall economy. (Did COVID slow the economy? Well, yes. It certainly did. Yet coming out of COVID is where we find Biden's inflation. So how exactly does slowing down the economy fight inflation? Explain it, sir, for us country bumpkins...)
But slowing the economy with high interest rates causes many people to lose jobs. It keeps wages low. And it raises credit card fees as well as the costs of home loans, car loans, and every other borrowing cost. These burdens fall especially hard on people with lower incomes. (What?? The Fed fights inflation, and it causes people to lose their jobs and increases the cost of loans? Doesn't that mean that the Fed causes inflation when it fights inflation?)
A better way to avoid inflation and lower prices would be to fight pricing power at its source: Break up monopolies (He mentions monopolies again. What monopolies? Where are they? The only monopoly we see is government. Government monopolizes everything it touches. Government, which Dr. Reich loves, is the worst offender. But he never criticizes it. Ever.)
But slowing the economy with high interest rates causes many people to lose jobs. It keeps wages low. And it raises credit card fees as well as the costs of home loans, car loans, and every other borrowing cost. These burdens fall especially hard on people with lower incomes. (What?? The Fed fights inflation, and it causes people to lose their jobs and increases the cost of loans? Doesn't that mean that the Fed causes inflation when it fights inflation?)
A better way to avoid inflation and lower prices would be to fight pricing power at its source: Break up monopolies (He mentions monopolies again. What monopolies? Where are they? The only monopoly we see is government. Government monopolizes everything it touches. Government, which Dr. Reich loves, is the worst offender. But he never criticizes it. Ever.)
with antitrust laws, so that a handful of giant companies can’t artificially raise their prices. ("Artificially," as if government has the ability to discern this.)
Instead of relying solely on the Federal Reserve Board to tame prices, we should rely on monopoly-busters at the Federal Trade Commission and the Antitrust Division of the Justice Department. (Well, certainly, since they have done such a great job with their other duties. Not.
Instead of relying solely on the Federal Reserve Board to tame prices, we should rely on monopoly-busters at the Federal Trade Commission and the Antitrust Division of the Justice Department. (Well, certainly, since they have done such a great job with their other duties. Not.
In actual fact, we should rely solely on market forces. This has not been tried for 80+ years.)
Joe Biden’s appointees at the FTC and the Antitrust Division — Lina Khan and Jonathan Kanter, respectively — have been aggressive monopoly-busters, but much more needs to be done. (Name some monopolies they have busted, please. Two or three would be nice.)
Will a President Kamala Harris keep the heat on?
Matt Stoller, on the Substack competition beat, believes she is likely to. He writes that Biden’s anti-monopolists have made so much progress to date — bringing cases against Amazon, Google, and Ticketmaster; halting the merger of Kroger and Albertsons; and issuing new rules on airlines, shipping, junk fees, credit cards, hearing aids, pharmaceuticals, and data — that the momentum would be hard to slow even if she wanted to. (Um, sir. We want to know what monopolies have been busted, not what large companies have been targeted for supposed infractions.)
Joe Biden’s appointees at the FTC and the Antitrust Division — Lina Khan and Jonathan Kanter, respectively — have been aggressive monopoly-busters, but much more needs to be done. (Name some monopolies they have busted, please. Two or three would be nice.)
Will a President Kamala Harris keep the heat on?
Matt Stoller, on the Substack competition beat, believes she is likely to. He writes that Biden’s anti-monopolists have made so much progress to date — bringing cases against Amazon, Google, and Ticketmaster; halting the merger of Kroger and Albertsons; and issuing new rules on airlines, shipping, junk fees, credit cards, hearing aids, pharmaceuticals, and data — that the momentum would be hard to slow even if she wanted to. (Um, sir. We want to know what monopolies have been busted, not what large companies have been targeted for supposed infractions.)
Moreover, the public has come to expect action against monopolies. ("Good, the propaganda has been working....")
Maybe it’s just the optimism of the moment, but I think Stoller is correct and that Harris as president would be as much an economic populist as Biden, if not more. (??? "Economic populist?" What is that? Dr. Reich drops this undiscussed and undefined phrase right at the end as if it applies somehow to what he has been talking about. )
Maybe it’s just the optimism of the moment, but I think Stoller is correct and that Harris as president would be as much an economic populist as Biden, if not more. (??? "Economic populist?" What is that? Dr. Reich drops this undiscussed and undefined phrase right at the end as if it applies somehow to what he has been talking about. )
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