People shopping in the egg and dairy case on March 13, 2020 at Whole Foods Merket in Vauxhall, New Jersey. (Photo: Rich Graessle/Icon Sportswire via Getty Images)
Inflation Is Complicated, But the Solution Is Simple
The best thing we can do to offset the pain of inflation is to raise the standard of living for all of us.
Many Americans are noticing the rising price of goods from sour cream to carburetors as politicians sound the alarm on an inflation crisis.
You may be wondering what single force would cause the cost of a dairy product to go up at the same time as the cost of a car part. The truth is that not all inflation is the same. Each sector has its own issues.
A few conservative lawmakers have used inflation as an excuse not to pass these programs. But they have it exactly backwards.
And none of it is solved by less government funding for our safety net, as some politicians have proposed.
Some of it is what we can call pandemic inflation. Because our economy bounced back quicker after the COVID-19 shutdowns than anyone predicted--thanks largely to investments from the American Rescue Plan--people have more spending money and demand has risen faster than our underinvested supply chain could handle.
This rising demand accounts for price flares in auto manufacturing and lumber, for example. At the same time, you'll notice prices that had plummeted during the shutdowns returning to pre-pandemic levels. Think: plane tickets.
Meanwhile, recent price spikes on other goods that families depend on--like diapers, meat, and dairy--can be linked to corporate greed. Decades of corporations monopolizing industries and cutting out competition has given them the power to artificially inflate the prices of these necessities under the guise of "inflation."
Big business is simply milking this opportunity to claim that they need to raise their prices while they use those profits to engage in stock buybacks--which benefit shareholders and CEOs, not small farmers or the grocers who stock the shelves.
This is hard on consumers as well as small and family-owned businesses who depend on bigger conglomerates like Amazon for supplies and market access. With bigger chains hiking up prices, many smaller businesses are going under.
But the price pressures that hurt families the most are not caused by the pandemic--and in fact have been rising for decades.
By far the biggest ticket items on struggling families' budgets are rent and child care. The housing crisis is so bad that no person earning minimum wage full-time can afford rent in any U.S. state. And the cost of child care costs more than college tuition in 30 states.
The Build Back Better Act being debated in Congress right now would help address our housing supply crisis by building new affordable units with a $150 billion investment. The law would also reduce out of pocket child care costs for families, increase labor participation, and raise the wages of care workers.
More local policies like rent control, which advocates won recently in St. Paul, Minnesota, could also help regulate prices.
A few conservative lawmakers have used inflation as an excuse not to pass these programs. But they have it exactly backwards.
The best thing we can do to offset the pain of inflation--whatever its cause--and for the overall health of our economy, is to raise the standard of living for all of us. That means lowering the poverty rate, raising wages, and reaching full employment.
For too long we've supported an economy that depends on low-paid jobs, dangerous work, and big businesses monopolizing power. That makes all of us suffer. Slowing down our economy to boost profits for corporations won't eliminate the need for families to purchase the products they depend on or fix our supply chain issues.
We need to build a system that supports a healthy economy for everyone, and the Build Back Better Act would be a down payment on a future clean bill of health.
FINAL DAY! This is urgent.
Dear Common Dreams reader, It’s been nearly 30 years since I co-founded Common Dreams with my late wife, Lina Newhouser. We had the radical notion that journalism should serve the public good, not corporate profits. It was clear to us from the outset what it would take to build such a project. No paid advertisements. No corporate sponsors. No millionaire publisher telling us what to think or do. Many people said we wouldn't last a year, but we proved those doubters wrong. Together with a tremendous team of journalists and dedicated staff, we built an independent media outlet free from the constraints of profits and corporate control. Our mission from the outset was simple. To inform. To inspire. To ignite change for the common good. Building Common Dreams was not easy. Our survival was never guaranteed. When you take on the most powerful forces—Wall Street greed, fossil fuel industry destruction, Big Tech lobbyists, and uber-rich oligarchs who have spent billions upon billions rigging the economy and democracy in their favor—the only bulwark you have is supporters who believe in your work. But here’s the urgent message from me today. It’s never been this bad out there. And it’s never been this hard to keep us going. At the very moment Common Dreams is most needed and doing some of its best and most important work, the threats we face are intensifying. Right now, with just hours left in our Spring Campaign, we're still falling short of our make-or-break goal. When everyone does the little they can afford, we are strong. But if that support retreats or dries up, so do we. Can you make a gift right now to make sure Common Dreams not only survives but thrives? There is no backup plan or rainy day fund. There is only you. —Craig Brown, Co-founder |
Many Americans are noticing the rising price of goods from sour cream to carburetors as politicians sound the alarm on an inflation crisis.
You may be wondering what single force would cause the cost of a dairy product to go up at the same time as the cost of a car part. The truth is that not all inflation is the same. Each sector has its own issues.
A few conservative lawmakers have used inflation as an excuse not to pass these programs. But they have it exactly backwards.
And none of it is solved by less government funding for our safety net, as some politicians have proposed.
Some of it is what we can call pandemic inflation. Because our economy bounced back quicker after the COVID-19 shutdowns than anyone predicted--thanks largely to investments from the American Rescue Plan--people have more spending money and demand has risen faster than our underinvested supply chain could handle.
This rising demand accounts for price flares in auto manufacturing and lumber, for example. At the same time, you'll notice prices that had plummeted during the shutdowns returning to pre-pandemic levels. Think: plane tickets.
Meanwhile, recent price spikes on other goods that families depend on--like diapers, meat, and dairy--can be linked to corporate greed. Decades of corporations monopolizing industries and cutting out competition has given them the power to artificially inflate the prices of these necessities under the guise of "inflation."
Big business is simply milking this opportunity to claim that they need to raise their prices while they use those profits to engage in stock buybacks--which benefit shareholders and CEOs, not small farmers or the grocers who stock the shelves.
This is hard on consumers as well as small and family-owned businesses who depend on bigger conglomerates like Amazon for supplies and market access. With bigger chains hiking up prices, many smaller businesses are going under.
But the price pressures that hurt families the most are not caused by the pandemic--and in fact have been rising for decades.
By far the biggest ticket items on struggling families' budgets are rent and child care. The housing crisis is so bad that no person earning minimum wage full-time can afford rent in any U.S. state. And the cost of child care costs more than college tuition in 30 states.
The Build Back Better Act being debated in Congress right now would help address our housing supply crisis by building new affordable units with a $150 billion investment. The law would also reduce out of pocket child care costs for families, increase labor participation, and raise the wages of care workers.
More local policies like rent control, which advocates won recently in St. Paul, Minnesota, could also help regulate prices.
A few conservative lawmakers have used inflation as an excuse not to pass these programs. But they have it exactly backwards.
The best thing we can do to offset the pain of inflation--whatever its cause--and for the overall health of our economy, is to raise the standard of living for all of us. That means lowering the poverty rate, raising wages, and reaching full employment.
For too long we've supported an economy that depends on low-paid jobs, dangerous work, and big businesses monopolizing power. That makes all of us suffer. Slowing down our economy to boost profits for corporations won't eliminate the need for families to purchase the products they depend on or fix our supply chain issues.
We need to build a system that supports a healthy economy for everyone, and the Build Back Better Act would be a down payment on a future clean bill of health.
Many Americans are noticing the rising price of goods from sour cream to carburetors as politicians sound the alarm on an inflation crisis.
You may be wondering what single force would cause the cost of a dairy product to go up at the same time as the cost of a car part. The truth is that not all inflation is the same. Each sector has its own issues.
A few conservative lawmakers have used inflation as an excuse not to pass these programs. But they have it exactly backwards.
And none of it is solved by less government funding for our safety net, as some politicians have proposed.
Some of it is what we can call pandemic inflation. Because our economy bounced back quicker after the COVID-19 shutdowns than anyone predicted--thanks largely to investments from the American Rescue Plan--people have more spending money and demand has risen faster than our underinvested supply chain could handle.
This rising demand accounts for price flares in auto manufacturing and lumber, for example. At the same time, you'll notice prices that had plummeted during the shutdowns returning to pre-pandemic levels. Think: plane tickets.
Meanwhile, recent price spikes on other goods that families depend on--like diapers, meat, and dairy--can be linked to corporate greed. Decades of corporations monopolizing industries and cutting out competition has given them the power to artificially inflate the prices of these necessities under the guise of "inflation."
Big business is simply milking this opportunity to claim that they need to raise their prices while they use those profits to engage in stock buybacks--which benefit shareholders and CEOs, not small farmers or the grocers who stock the shelves.
This is hard on consumers as well as small and family-owned businesses who depend on bigger conglomerates like Amazon for supplies and market access. With bigger chains hiking up prices, many smaller businesses are going under.
But the price pressures that hurt families the most are not caused by the pandemic--and in fact have been rising for decades.
By far the biggest ticket items on struggling families' budgets are rent and child care. The housing crisis is so bad that no person earning minimum wage full-time can afford rent in any U.S. state. And the cost of child care costs more than college tuition in 30 states.
The Build Back Better Act being debated in Congress right now would help address our housing supply crisis by building new affordable units with a $150 billion investment. The law would also reduce out of pocket child care costs for families, increase labor participation, and raise the wages of care workers.
More local policies like rent control, which advocates won recently in St. Paul, Minnesota, could also help regulate prices.
A few conservative lawmakers have used inflation as an excuse not to pass these programs. But they have it exactly backwards.
The best thing we can do to offset the pain of inflation--whatever its cause--and for the overall health of our economy, is to raise the standard of living for all of us. That means lowering the poverty rate, raising wages, and reaching full employment.
For too long we've supported an economy that depends on low-paid jobs, dangerous work, and big businesses monopolizing power. That makes all of us suffer. Slowing down our economy to boost profits for corporations won't eliminate the need for families to purchase the products they depend on or fix our supply chain issues.
We need to build a system that supports a healthy economy for everyone, and the Build Back Better Act would be a down payment on a future clean bill of health.