The Public Doesn't Think Trump Is Doing Enough To Lower Prices

The chart above reflects the results of the CBS News / YouGov Poll -- done between February 5th and 7th of a nationwide sample of 2,175 adults, with a 2.5 point margin of error. 

Trump Promised To Lower Grocery Prices - He Won't

 The following is part of a post by Dan Rather:

Trump clearly knows how to appeal to the electorate. He understood that high inflation and the promise to bring prices down were the most important issues facing Americans. He exploited the fear of economic uncertainty to win. Of the 70% of voters who said they were “very concerned” about prices, 6 in 10 cast their ballot for Trump.

On December 8, Trump crowed about it on NBC’s “Meet the Press.” “I won on groceries. A very simple word, ‘groceries.’”

Four days later, he backpedaled.

“Look, they got them up. I’d like to bring them down,” he told Time magazine. “It’s hard to bring things down once they’re up. You know, it’s very hard.”

So let’s get this straight. The president-elect is reneging on promises six weeks beforehe takes office.

Trump isn’t wrong about it being “hard.” Curbing inflation, slowing the rate of price increases, is difficult enough. But Trump is talking about deflation, actual price drops.

Those usually happen only during an economic downturn like a recession or a depression. Trust me, we don’t want either.

So it looks like all those people who voted for him, despite all the reasons not to, will be abandoned on aisle 6, in the hoodwink section. Because not only will Trump be unable to bring prices down from the day he “takes the oath of office,” most economists say his proposed policies, like imposing tariffs and deporting undocumented workers, would actually drive prices up — way up.

Trump, an Ivy League-educated, trust-fund billionaire, is an unlikely populist. A member of the 0.1% who has likely never been grocery shopping figured out how to appeal to Americans at the bottom of the economic ladder, with, it turns out, empty promises.

That bottom rung is getting larger. The wealth inequality in our country is astounding and worsening. In 1970, 61% of the U.S. population was considered middle class. It’s now down to 50% and shrinking. Today, the top 1% of Americans hold 31% of the wealth; the bottom half holds just 2.6%. We all might want to pause to fully consider those percentages.

Then there is this: According to the U.S. census the median household income in the United States was just over $80,000 a year in 2023. Half of all Americans earn less than that. No wonder the price of eggs, which has soared 37.5% in part because of an avian flu outbreak, is a big problem. Grocery prices have risen 28% in five years, according to the USDA. That is a stunning increase. Besides bird flu, supply-chain disruption and pent-up demand from the pandemic are among the problems. So is the war in Ukraine. Ukraine is normally a major grain supplier to the U.S.

Another factor is “greedflation.” Corporate profits have increased by 29% since the start of the pandemic; grocery prices have risen by almost the same percentage. According to the Groundwork Collaborative, this increase accounts for a large portion of the higher prices we are all paying. By their assessment, as much as 53 cents of every dollar spent can be attributed to corporate profit-taking.

Corporations are entitled to make profits, of course. Indeed, in our economic system we need them to be profitable. But how much is too much — especially considering the astronomical salaries of many corporate executives? According to the Economic Policy Institute, over the past 45 years, top CEO compensation increased by 1,085% (not a typo) while their typical worker’s salary inched up by just 24%.

Bending the truth and overpromising on the campaign trail are as American as cherry pie.

Basing a campaign on something you know you can’t make happen is a low reserved only for Trump. It will be worth watching what happens during the 2026 midterm elections if prices continue to rise on the most basic of necessities. Control of Congress could again hinge upon the price of eggs.

Biden Was Reducing Inflation - Trump Will Increase It

 

The policies of President Biden was working to reduce inflation. And it was not just gas prices, but inflation reduction for most other items, too.

Unfortunately, the MAGA cult (who refused to accept the truth) and low-information voters (who don't watch the news) combined to re-elect Donald Trump. 

Trump's stated agenda (huge tariffs on imported goods and mass deportations) will cause inflation to again start rising - probably by a huge margin.

Apartment Owners Using An Algorithm To Illegally Fix Prices

The following post is part of an article in The New York Times by Binyamin Applebaum:

Illegal price fixing used to require a lot of work. . . .

Now there’s an app for things like that.

The Justice Department alleged in a civil antitrust lawsuit filed Aug. 23 that a Texas company called RealPage is orchestrating what amounts to a nationwide apartment cartel by persuading major landlords to use its software to set prices for millions of apartments across the country. RealPage markets its software by boasting that it increases rents by 3 percent to 7 percent.

The case is important because it highlights the growing use of algorithms to set prices — and the potential for companies that are supposed to be competing to instead coordinate at the expense of their customers by using the same price-setting formulas. The suit is part of a broader effort by the nation’s antitrust enforcers to catch up with the methods that modern corporations are using to squeeze their customers — in this case, by increasing the price of housing, the most expensive part of American life.

“We are seeing these kinds of technologies emerge throughout our economy,” Jonathan Kanter, the assistant attorney general for antitrust, said in an interview. Technology, he said, “took something that may have been inherently difficult to do, in terms of putting a cartel together, and actually is making it much easier and more effective.”. . .

What the team found, the government says, is that RealPage calculates target prices for individual apartments by using proprietary data from its clients and then urges clients to use those prices by arguing that if everyone cooperates, everyone wins.

The complaint quotes a RealPage executive explaining, “There is greater good in everybody succeeding versus essentially trying to compete against one another in a way that actually keeps the entire industry down.” This may be true, insofar as one is interested in the greater good of landlords. Society as a whole, however, benefits more when companies are forced to participate in vigorous competition. Their pain is our gain. In the apartment business, that means rents would rise more slowly — or even go down. . . .

RealPage can orchestrate pricing because the ownership of large apartment buildings in major markets is increasingly dominated by the same handful of big national landlords. . . .

RealPage’s success, built on the market dominance of the biggest landlords, should be regarded as evidence that they have accumulated too much power. Ending algorithmic price fixing is a necessary first step to check that power. 

Harris Wants To Stop Corporate Food Price Gouging

From former Labor Secretary Robert Reich:

Food prices remain high because there’s little to no competition across the entire food supply chain, which has allowed big corporations to engage in a price gouging free-for-all.

Four companies control most food industries, allowing them to coordinate prices instead of compete on the basis of lower prices. I offered this graph to illustrate the problem (see above).

I urged that Harris announce that as president she’ll bust up food monopolies.

 

Well, I have it on good authority that on Friday she’ll announce a plan to prevent corporations in the food and grocery industries from unfairly jacking up prices on consumers. 

She’ll call for the first-ever federal ban on corporate price-gouging in these industries.

It Is Corporate Price Gouging That Is Keeping Prices High

 

The following is just a small part of an excellent post by Robert Reich. I highly recommend you read the whole thing. He writes:

The latest economic data shows two big things:

 

(1) Corporate profits reached a record high in the fourth quarter of last year. 

(2) Inflation is still with us. The government reported Friday that the Fed’s preferred inflation gauge rose 0.3 percent month-to-month in February, following a January uptick that was the largest in a year. Prices have risen 2.5 percent over the past 12 months — certainly better than inflation readings compared with a year ago but still stubbornly above the Fed’s 2 percent target. So-called core inflation, which strips out more volatile food and energy prices and is therefore a more reliable indicator of where prices might be headed, is still coming in more strongly than central bank officials would like to see.

The easiest explanation for both phenomena — record corporate profits and prices remaining elevated — is that corporations have enough monopoly power to keep prices high. (Corporations are also shrinking the size of the products you’re buying without lowering their prices — a variant of the same thing.)

This is one of the biggest reasons the American public is not crediting Biden with a great economy. 

Most people still aren’t feeling it.

But the mainstream media doesn’t want to talk about this. . . .

At the end of 2023, Americans were paying at least 30 percent more for beef, pork, and poultry products than they were in 2020. 

Why? Near-monopoly power. Just four companies now control processing of 80 percent of beef, nearly 70 percent of pork, and almost 60 percent of poultry. So of course it’s easy for them to coordinate price increases.

The problem goes well beyond the grocery store. In 75 percent of U.S. industries, fewer companies now control more of their markets than they did 20 years ago. . . .

The record profits of large corporations are coming out of the paychecks of average Americans, who are still struggling to get by.

Biden and the Democrats must say this loudly and clearly, and tell the public what they are doing — and will do — to stop corporate monopolies and price gouging.

It's Not Inflation Driving Up Prices - It's Greedflation!

The idiots in Washington don't seem to understand the real cause of today's rising prices. Robert Reich, in this post, tries to explain it for them in simple language:

Okay, the House has passed the debt-ceiling deal, and the Senate will follow suit. So the economic crisis is over. Right? 

Not quite, because another and more serious economic crisis is brewing: While the Fed continues to raise interest rates to counter inflation by slowing the economy, big corporations continue to raise prices. Greedflation is stalking the economy. 

The latest data shows that the average company in the S&P 500 stock index increased its net profit margin from the end of last year. Wall Street analysts forecast that profit margins will keep expanding in the second half of this year. 

The Fed has raised borrowing costs at 10 consecutive meetings, increasing its benchmark rate to over 5 percent. Yet inflation has barely slowed. Why? Because the Fed’s rate hikes barely affect big corporations that continue to raise prices to fatten their profits.

I want to emphasize that it’s their profit margins that continue to increase. Corporations aren’t raising prices to cover increased costs. The Producer Price Index dropped 2.3 percent for the 12 months through April. The prices of oil, transportation, food ingredients, and raw materials continue to drop as the shocks stemming from the pandemic and the war in Ukraine fade. Wage gains still lag behind price increases. Wages and salaries in the Employment Cost Index, a broader measure of worker compensation, have been trending downward for a year.

No, big corporations are raising prices because they can — because they have enough monopoly power to do so. With just a handful of companies dominating each market, it’s easy to implicitly agree they’ll all raise their prices.

They’re not plowing those profits back into investments that would make the economy more productive. They continue to sink them into stock buybacks, which reward executives and big investors but do nothing for the economy. 

(By the way, corporate economists argue that businesses couldn’t be padding their profits; if they could, they would have done it before the inflation of the last two years. But businesses have been using the cover of inflation to justify price increases, so consumers accept them. According to Paul Donovan, chief economist at UBS Global Wealth Management, businesses “are confident that they can convince consumers that it isn’t their fault, and it won’t damage their brand.”)

Inflation is not being propelled by an overheated economy. It’s being propelled by overheated profits. So it makes no sense to fight inflation by trying to slow the economy with high interest rates. In fact, this strategy is dangerous — especially now that Congress and the administration are on the verge of reducing anticipated federal spending by about $55 billion next year and another $81 billion in 2025. This one-two punch will take the wind out of the job market but not out of corporate monopolies.

The good news is that even the establishment media is finally catching on. In just the past few weeks, both The Wall Street Journal and The New York Times have featured lead stories highlighting inflation driven in large part by corporations raising their prices to fatten their profits.

 

This opens space for shifting the burden of fighting inflation from workers and consumers to corporations.

As I’ve suggested before, instead of relying on the Fed to “tame” inflation via fewer jobs and lower wages, Democratic lawmakers and the Biden administration should seek legislation that puts more of the onus of fighting inflation on big corporations. Such legislation would:

 

— Allow the Justice Department to bust up monopolies (and prevent further consolidation through mergers and acquisitions) when three or fewer corporations have more than half the sales of a particular market.

— Direct the Federal Trade Commission to find that any such corporation has engaged in unlawful price gouging whenever it has raised prices higher than the rate of inflation, and impose a fine that would claw back those unlawful gains.

— Permit the Treasury Department to impose a windfall profits tax on large corporations, above a specific reasonable rate of return or profit margin.

If Republicans won’t go along, Biden and the Democrats should make this a major campaign issue for 2024. 

They should ask the public: Do you want more jobs and higher wages, or do you want large corporations making fatter profits by raising prices?