Welcome to Message Monday!
Trump blames Biden for the inflation that is top of mind for many people, and they think the GOP is better on the economy because of it.
While Biden had nothing to do with the pandemic-era supply chain issues that caused some inflation, they did happen on his watch. Biden’s misguided Federal Reserve policy of keeping interest rates high has, without question, caused many prices to soar.
But our kind of government could in fact go beyond the Fed and actually bring down inflation – if they were willing to take on the big corporations. We can and must get a lot more aggressive on this. We can bring prices down by taking on big corporations: this would be a winning message as well as a winning policy.
The American Prospect has a great story about this called “Taming the Pricing Beast.”
The Fed can't fix predatory pricing
The Prospect says that the Fed is not the one who should be carrying the spear. They say “the Fed can’t implement price controls, break up big corporations, or sue companies for anti-competitive practices. The Fed cannot control algorithms used by corporate landlords to drive up rent prices, or force the largest credit card issuers to stop collecting predatory junk fees.
Yet all of these are imperative components of a strategy to combat predatory pricing. The Fed has a single blunt tool—interest rates—that scapegoats workers and makes them poorer. And in this era of pricing, it doesn’t really work that well.” The rest of government has to come to the party.
A story from ProPublica details an example of predatory pricing. Private equity firms have bought up tons of single family homes and apartments alike, and use algorithms to constantly raise rents as much as the market can bear. They also evict tenants and fail to maintain the buildings. Since housing is the #1 issue for most people, if we stood up to these private equity landlords, we’d be a lot more popular.
Who can actually curb inflation, and how
The article includes a lot of possible agencies and actors who could do something. I’ll just mention a couple.
Turns out that over time, we’ve cut corporate taxes, and this means they can raise prices, raise profits, AND keep more of that money. So that’s what they do. But the expiration of the 2017 Trump tax law at the end of 2025 “offers an opportunity to fundamentally remake the tax code in a way that curbs bad behavior.”
We could charge a higher tax rate to companies with bigger profits. We should be campaigning on this, because the next Administration and Congress will be making these decisions.
We can help nonprofits and government agencies compete with predatory companies. The new, free government tax filing software, IRS Direct File, which shows the public can provide a service much more cheaply and efficiently than a for-profit company, is a good example.
Things being done on the state level could be expanded to more states, and to the Federal level. The Prospect mentions one: “Several communities with little access to fresh and abundant food have opened public, nonprofit grocery stores, which would be less likely to trick shoppers and monetize their data. Illinois Gov. J.B. Pritzker (D) recently allocated $20 million to stand up public grocery stores in food deserts across the state.”
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