Inflation redistributes income from the 99 percent and delivers said income to the 1 percent. This is a no-brainer, making inflation nothing more than an income redistribution scam that those on the right and those on the left lie about, although maybe they just don’t know, which is unlikely. Case in point is a Paul Krugman op-ed below.
Krugman claims there is little inflation nowadays, while his right wing opponents claim there is ton’s of inflation and its caused by the Federal Reserve. They’re both right and they’re both wrong, kind of, but not really.
Krugman claimed in his op-ed that inflation is close to zero, and that’s true, kind of. In reality, inflation is currently closer to 8 percent if it was measured as it was back in 1980. Since then the government has switched the way it measures inflation twenty times, and all of these changes show less and less inflation. That is why inflation as measured today is less than 3 percent when it’s probably slightly above 8 percent. The purpose of doing this was to keep people from protesting and getting mad about their loss of real spending power, such as happened back in the 1970s.
Conservatives rightfully claim the inflation numbers are understated, which is remarkably true. However, Republicans claim this is caused by the Federal Reserve and its massive printing of money, which is perhaps a tad true, but mostly false.
Inflation mostly comes from corporate planning. Publicly traded limited liability corporations must always have rising share prices, which is largely a product of increasing profits and dividends. The best way to ensure these constantly increasing returns on investment is for corporate competitors to gather together and plan price increases. Thousands of corporations plan their prices rises in tandem, for the most part, and that’s why we have inflation.
When corporations raise their prices in tandem, it’s called a conspiracy in restraint of trade, a violation of the law, but the government almost always looks the other way, which is a function of corruption. This is not to suggest that to some degree competition doesn’t exist in the corporate world, because it does, but it’s a minor nuisance to our captains of industry which is quickly eliminated when the competition gets too hot, and saner minds quickly impose a truce on any hostilities since the primary enemy of the corporations are their unwitting customers.
Guess who pays the cost of this non-competition? You do. When the price of tuna, or lettuce, or gasoline, or cars, or airline tickets rise due to corporate planning, the difference between the old prices and the new higher prices goes from your pockets into those of rich shareholders.
That’s what the politicos and corporate fat cats don’t want you to know, so they keep the argument within unrealistic and narrow lines of debate.
See Krugman’s op-ed below.
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