Shuler: Blame corporate greed, not workers, for inflation

By Mark Gruenberg
PAI Staff Writer

Washington (PAI) — With the Federal Reserve Board poised to “fight inflation” by raising prime interest rates again — driving up the interest costs consumers pay on everything from credit cards to kids’ college loans — AFL-CIO President Liz Shuler and a panel of pro-worker economists warned policymakers to blame corporate greed, not workers, for inflation.

“There are some bad ideas floating around out there to bring down inflation, ‘like the idea that working people, who have kept the country running during the coronavirus pandemic, are to blame for inflation,’ currently running at an eight percent annual rate,” Shuler said.

“Nothing could be further from the truth,” she added.

Economic Policy Institute Senior Analyst Elise Gould agreed.

“Today’s inflation really is rooted in some of the same long-standing policy choices and long-standing power imbalances between Labor and capital, with capital on top, that hurt workers in past decades,” declared Gould, the bluntest of the group. “Corporate power is really at the root of many of these price hikes.”

As for earnings calls with Wall Street, whose financiers always seek higher returns, she said, “Corporate executives are not shy about how inflation and other recent factors have been very, very good for business.”

The Federal Reserve Board didn’t listen.

The board decided on Sept. 21 to raise basic rates by three-fourths of a percentage point for the third time in a year. That move, the panel said, could slow job growth at best and produce increasing unemployment, at worst.

BAD POLITICS OVER GOOD POLICY
And, though it was left unsaid in the Sept.15 discussion, right-wing and Trump Republicans are making political hay out of inflation in the runup to this fall’s mid-term election.

The Republican playbook is to divert voters from the party’s own sorry record of 2017-21: A $1.7 trillion tax cut for corporations and the rich, failure to combat the coronavirus pandemic and the double-digit joblessness it produced, and the Jan. 6, 2021 Trump coup d’état attempt, including invasion of the Capitol, plus continual undermining of democracy since then.

The Federal Reserve and right-wing economists contend that the way to cool an overheating economy is to make borrowing more difficult. That would slow investment in machinery and people, too. If tighter credit and higher interest rates result in higher unemployment, well, the Fed says, that’s a price the nation must pay.

WORKERS’ AGENDA
By contrast, there is still unfinished business on the workers’ agenda, Shuler and the others said. It includes restoration of the expanded child tax credit — which cut childhood poverty by 30 percent to 40 percent during the pandemic —
and further measures to create green good union jobs, as well as passing the Protect the Right to Organize Act, Labor’s No. 1 legislative priority.

Those measures, they said, are not inflationary and boost worker power and wallets.

‘WORKERS ARE THE VICTIMS’
Shuler, AFL-CIO chief economist William Spriggs, and both Gould and Josh Bivens of the Economic Policy Institute say the Fed has it all wrong. Workers are the victims, not the perpetrators, of inflation.

One big culprit for the current eight percent inflation, Spriggs and the others said, is corporate greed. That’s where Gould took the lead. As one panelist put it: “Executives have not been shy about using (supply) shortages to justify price increases.”

Inflation “allowed them (corporations) to jack up prices far beyond” their costs for labor and parts, said Gould.

“This continues to be true even as supply chains cave in,” she said. “And in the second quarter of this year, non-financial profits rose to their highest points in 70 years.”

The entire discussion is available at https://www.youtube.com/watch?v=TIneaV2ZbCI.