HomeUncategorizedGood Guys, Bad Guys? and OT 11/12-13

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jcitybone

orlbucfan

Bernie will retire when his term ends. Who is going to step up to replace him in the cesspool known as the Senate?

Benny

I’ve been getting e-mail donation requests from his campaign, which leads me to believe he’s not retiring in 2024.

wi63

We need to talk about the real reason behind US inflation
Robert Reich

On Wednesday, the US labor department announced that the consumer price index – a basket of products ranging from gasoline and health care to groceries and rents – rose 6.2% from a year ago. That’s the nation’s highest annual inflation rate since November 1990.

Pressure on Fed to raise interest rates as US inflation surges to 30-year high
Republicans are hammering Biden and Democratic lawmakers over inflation – and attacking his economic stimulus plans as wrongheaded. “This will be a winter of high gas prices, shortages and inflation because far left lunatics control our government,” Marco Rubio, the Republican senator from Florida posted on Twitter Thursday.

A major reason for price rises is supply bottlenecks, as Jerome Powell, chair of the Federal Reserve, has pointed out. He believes they’re temporary, and he’s probably right.

But there’s a deeper structural reason for inflation, one that appears to be growing worse: the economic concentration of the American economy in the hands of a relative few corporate giants with the power to raise prices.

If markets were competitive, companies would keep their prices down in order to prevent competitors from grabbing away customers.

But they’re raising prices even as they rake in record profits. How can this be? They have so much market power they can raise prices with impunity.

Viewed this way, the underlying problem isn’t inflation per se. It’s lack of competition. Corporations are using the excuse of inflation to raise prices and make fatter profits.

In April, Procter & Gamble announced it would start charging more for consumer staples ranging from diapers to toilet paper, citing “rising costs for raw materials, such as resin and pulp, and higher expenses to transport goods”.

But P&G is making huge profits. In the quarter ending 30 September, after some of its price increases went into effect, it reported a whopping 24.7% profit margin. It even spent $3bn during the quarter buying its own stock.

It could raise prices and rake in more money because P&G faces almost no competition. The lion’s share of the market for diapers, to take one example, is controlled by just two companies – P&G and Kimberly-Clark – which roughly coordinate their prices and production. It was hardly a coincidence that Kimberly-Clark announced price increases similar to P&Gs at the same time P&G announced its own price increases.

Or consider another consumer product duopoly – PepsiCo (the parent company of Frito-Lay, Gatorade, Quaker, Tropicana, and other brands), and Coca-Cola. In April, PepsiCo announced it was increasing prices, blaming “higher costs for some ingredients, freight and labor”. Rubbish. The company didn’t have to raise prices. It recorded $3bn in operating profits through September.

If PepsiCo faced tough competition, it could never have gotten away with this. But it doesn’t. To the contrary, it appears to have colluded with Coca-Cola – which, oddly, announced price increases at about the same time as PepsiCo, and has increased its profit margins to 28.9%.

You can see a similar pattern in energy prices. If energy markets were competitive, producers would have quickly ramped up production to create more supply, once it became clear that demand was growing. But they didn’t.

Why not? Industry experts say oil and gas companies saw bigger money in letting prices run higher before producing more supply. They can get away with this because big oil and gas producers don’t operate in a competitive market. They can manipulate supply by coordinating among themselves.

Since the 1980s, two-thirds of all American industries have become more concentrated
In sum, inflation isn’t driving most of these price increases. Corporate power is driving them.

Since the 1980s, when the US government all but abandoned antitrust enforcement, two-thirds of all American industries have become more concentrated.

Monsanto now sets the prices for most of the nation’s seed corn.

The government green-lighted Wall Street’s consolidation into five giant banks, of which JP Morgan is the largest.

Airlines have merged from 12 in 1980 to four today, which now control 80% of domestic seating capacity.

Boeing and McDonnell Douglas have merged, leaving the US with just one large producer of civilian aircraft: Boeing.

Three giant cable companies dominate broadband: Comcast, AT&T and Verizon.

A handful of drug companies control the pharmaceutical industry: Pfizer, Eli Lilly, Johnson & Johnson, Bristol-Myers Squibb and Merck.

All this spells corporate power to raise prices.

So what’s the appropriate response to the latest round of inflation?

The Federal Reserve has signaled it won’t raise interest rates for the time being, believing that the inflation is being driven by temporary supply bottlenecks.

Meanwhile, Biden administration officials have been consulting with the oil industry in an effort to stem rising gas prices, trying to make it simpler to issue commercial driver’s licenses (to help reduce the shortage of truck drivers), and seeking to unclog overcrowded container ports.

But none of this responds to the deeper structural issue – of which price inflation is a symptom: the increasing consolidation of the economy in a relative handful of big corporations with enough power to raise prices and increase profits.

Before i came across this article i already said that the pandemic was an excuse for craprate america to profiteer –they didnt disapoint, record craprate profits are on the way for the year and the CEO’s will get massive Bonus’s at the expense of the middle class and lower, but then again thats the way of our vuture capitalistic system.

polarbear4
polarbear4

link by any chance? if not i can google

wi63
polarbear4
polarbear4

gracias 🙏

orlbucfan

“Since the 1980s, when the US government all but abandoned antitrust enforcement, two-thirds of all American industries have become more concentrated.Since the 1980s, two-thirds of all American industries have become more concentrated.
In sum, inflation isn’t driving most of these price increases. Corporate power is driving them.”
—————————————-
What happened in November 1980? Ronald Craporate Fascist Reagan was elected. The fringe Far Righties and their monied backers were unleashed. As conservative as Carter was, he was a godsend compared to this bunch. 🙁

polarbear4
polarbear4

💜

jcitybone

polarbear4
polarbear4

polarbear4
polarbear4

But what is going unsaid is that these bottlenecks are actually excellent news for two sets of players: the highly consolidated container shipping firms, with names like Maersk, MSC, COSCO, Evergreen, and One. There are eight dominant firms, all foreign-owned, and this year they are on pace to hit $100 billion in profit. It is also good for terminal operators, which are the firms that lease space from ports and run the warehouses, cranes, and docks. Terminal operators are often owned by ocean carriers, who then can use their vertical integrated power to exclude competitive shipping lines, or they are owned by private equity giants like Brookfield Asset Management or Oaktree Capital’s Ports America.

Both carriers and terminal operators are bottlenecks in the system, and they profit not just by charging normal prices, but also by imposing a variety of surcharges on anyone who needs their service. This is similar to how airlines will offer a price for a ticket, but then also charge baggage fees, ticket change fees, or administrative fees on top of that. In 2009, for instance, roughly 50% of total freight charged came from surcharges. The ability to extract extra revenue, especially when demand is high, means that we’re not in an all-hands on deck situation, but a situation which is working quite well for some, and terribly for much of the industry and the public.

and

In other words, mega-ships like the Ever Given are a new phenomenon that are tied not to economic logic but to the consolidation of ocean carrier lines and their ability to offload risk onto counter parties. As Jensen observed, without the consolidation, “ships would likely not have grown above 12,000-14,000 TEUs [twenty-foot equivalent units].” So we’ve moved from a grid with lots of different size ships owned by different lines that could dock in lots of ports, to one dominated by 100-200 mega-ships that can only go to certain ports, all controlled by a de facto small cartel. The game in the business is to acquire market power and then use mega-ships to offload costs onto others and block new entrants.

lots more in the artcle. matt stoller is thorough.

polarbear4
polarbear4

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magsview

Mr. mags had MSNBC on for three or four ghastly minutes yesterday and multiple times I found myself checking to see if it was FOX News I was watching.

polarbear4
polarbear4

ikr? When MSNBC liberals rage about Fox, I inwardly roll my eyes.

polarbear4
polarbear4