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Inflation

The Food Crisis Didn’t Begin With The War In Ukraine

Even before the war in Ukraine, farmers across the U.S. were getting ready for higher prices on seed, fertilizer and crop chemicals. All winter, major farm media was warning farmers to book supplies early as prices would be high and supplies would be short. The war has only amped up the concern among farmers and input suppliers. Like the oil companies that cited the sanctions on Russian oil to justify steep price increases (even though Russian oil continues to flow almost without interruption), corporate agribusiness has used the war as a justification to ramp up fertilizer, seed and chemical prices even further, leading Secretary of Agriculture Tom Vilsack to ask the Justice Department to investigate whether “every penny of these increases” is warranted.

Price Controls Could Tame Inflation

Though corporate America would like us to believe otherwise, the retail prices of essential goods like food and energy are not set by simple supply and demand. In large part, they’re determined by the corporate cartels that have vanquished their competitors — and Wall Street speculators who place bets on the future availability of commodities. With price hikes for energy, gas, and food remaining stubbornly high, it’s time to do something about it. That’s why some experts now support a fix that was long considered taboo: limiting what corporations can charge for certain goods. In other words, price controls. Price controls tend to outrage many economists and business-friendly politicians. But curbing excess profits and making essentials more affordable would be politically smart — and effective.

A Monetary Reset Where The Rich Don’t Own Everything

In ancient Mesopotamia, it was called a Jubilee. When debts at interest grew too high to be repaid, the slate was wiped clean. Debts were forgiven, the debtors’ prisons were opened, and the serfs returned to work their plots of land. This could be done because the king was the representative of the gods who were said to own the land, and thus was the creditor to whom the debts were owed. The same policy was advocated in the Book of Leviticus, though it is unclear to what extent this biblical Jubilee was implemented. That sort of across-the-board debt forgiveness can’t be done today because most of the creditors are private lenders. Banks, landlords and pension fund investors would go bankrupt if their contractual rights to repayment were simply wiped out.

I Cannot Live On Tomorrow’s Bread

On April 19, the International Monetary Fund (IMF) released its annual World Economic Outlook, which forecasted a severe slowdown in global growth along with soaring prices. ‘For 2022, inflation is projected at 5.7 percent in advanced economies and 8.7 percent in emerging market and developing economies – 1.8 and 2.8 percentage points higher than projected in … January’, the report noted. IMF Managing Director Kristalina Georgieva offered a sobering reflection on the data: ‘Inflation is reaching the highest levels seen in decades. Sharply higher prices for food and fertilizers put pressure on households worldwide – especially for the poorest. And we know that food crises can unleash social unrest’.

One Simple Trick To Protect Workers From Inflation

Inflation is an economic phenomenon whose nuances remain a mystery even to economists. That hasn’t stopped politicians from wielding it as a weapon to villainize anyone they wish, from environmentalists (blamed for rising gas prices) to annoying outsiders (condemned for driving up housing costs). In reality, we know one group will always pay the price for inflation and bear the burden of increasing costs: working people. Yet the most important practical tool for protecting workers from the ravages of inflation — unionization— is almost totally absent from today’s panicked political dialogue. In the same way that seemingly every foreign war is compared with World War II, every bout of high inflation in America triggers immediate comparison to the late 1970s.

Corporate Profits Have Contributed Disproportionately To Inflation

The inflation spike of 2021 and 2022 has presented real policy challenges. In order to better understand this policy debate, it is imperative to look at prices and how they are being affected. The price of just about everything in the U.S. economy can be broken down into the three main components of cost. These include labor costs, non-labor inputs, and the “mark-up” of profits over the first two components. Good data on these separate cost components exist for the non-financial corporate (NFC) sector—those companies that produce goods and services—of the economy, which makes up roughly 75% of the entire private sector. Since the trough of the COVID-19 recession in the second quarter of 2020, overall prices in the NFC sector have risen at an annualized rate of 6.1%—a pronounced acceleration over the 1.8% price growth that characterized the pre-pandemic business cycle of 2007–2019.

Child Care And Elder Care Investments Are A Tool For Reducing Inflation

Policymakers should look for any tool that can help restrain inflationary pressures without causing significant collateral damage. One such tool could be investments in child care and elder care. By subsidizing families’ use of child care and elder care and providing direct investments to providers, such investments could boost future labor supply by allowing working-age parents and children who want to look for paid employment to do so while remaining confident their family members are receiving care. Further, these investments can help dampen inflationary pressures—that rising wages could in theory contribute to—even well before they fully take effect.

Global Food Shortages: How Does Your Garden (Or Pantry) Grow?

“President Joe Biden and other leaders of the world’s major industrialized democracies pledged action on Thursday [March 24] to address food shortages caused by Russia’s war on Ukraine,” Politico reports. Biden says food shortages “are going to be real,” although he seems to see them as an opportunity to increase US grain production and food exports rather than a real threat to Americans’ own well-being. After a year of continuing his predecessor’s “trade war” policies, Biden seems to be getting some free trade religion, which is nice, but he may be under-estimating the scope of the problem. The Russian invasion of Ukraine — and the US/EU/NATO sanctions response — doesn’t just up-end the global supply of grain crops (Russia and Ukraine are both top exporters of wheat) and other foods.

‘Crush Inflation’?: Workers, Living Standards, And The Politics Of Inflation

Politicians, the media, central bankers and the average worker have all been talking up the recent acceleration in the cost of living. Just a short time ago price rises of just 2% might have been considered ‘inflationary’. In the current phase of the Covid pandemic, inflation in core capitalist states, including Canada, is now running at the 5-7%, far ahead of wage settlements and bumps in income supports for welfare. Inflation always carries important consequences for workers living standards, collective bargaining and meeting basic needs for the poor. Inflation always generates class conflict, most directly and immediately over distribution but indirectly eventually over questions of power over capital and the state.

What’s Really Causing Inflation And How We Should Deal With It

While times have been getting harder for workers, it is clear that capitalists (or “big business”) have been doing very well. It would seem as though everyone is against inflation. But the real problem is not that prices have been increasing but that wages have not kept up with this. It is important to look not only at why inflation has increased but at the very different question of why wages have not kept up with it.

The Real Antidote To Inflation

The Federal Reserve is caught between a rock and a hard place. Inflation grew by 6.8% in November, the fastest in 40 years, a trend the Fed has now acknowledged is not “transitory.” The conventional theory is that inflation is due to too much money chasing too few goods, so the Fed is under heavy pressure to “tighten” or shrink the money supply. Its conventional tools for this purpose are to reduce asset purchases and raise interest rates. But corporate debt has risen by $1.3 trillion just since early 2020; so if the Fed raises rates, a massive wave of defaults is likely to result. According to financial advisor Graham Summers in an article titled “The Fed Is About to Start Playing with Matches Next to a $30 Trillion Debt Bomb,” the stock market could collapse by as much as 50%. 

Fighting The Inflation Profiteers

In a time of high inflation, you hear a lot about companies “passing costs” on to customers. In order for companies to maintain their God-given right to earn a profit, they must raise prices to offset the cost of producing goods and getting them into peoples’ hands. And thanks mostly to the hidden risk, exposed by the pandemic, of neoliberal gospels like just-in-time logistics, deregulation, and offshoring, prices really are going up. But there’s something else mixed in with this latest bout of inflation. Companies aren’t just passing costs onto us. With corporations using inflation as a cover for raising their prices, you and I are passing profits onto companies. “Executives are seizing a once in a generation opportunity to raise prices,” reads a Wall Street Journal story explaining that around two-thirds of the largest publicly traded companies are showing profit margins higher today than they did in 2019, before the pandemic.

US Food Banks Struggle To Feed Hungry Amid Surging Prices

Oakland, CA — U.S. food banks already dealing with increased demand from families sidelined by the pandemic now face a new challenge — surging food prices and supply chain issues walloping the nation. The higher costs and limited availability mean some families may get smaller servings or substitutions for staples such as peanut butter, which costs nearly double what it did a year ago. As holidays approach, some food banks worry they won’t have enough stuffing and cranberry sauce for Thanksgiving and Christmas. “What happens when food prices go up is food insecurity for those who are experiencing it just gets worse,” said Katie Fitzgerald, chief operating officer of Feeding America, a nonprofit organization that coordinates the efforts of more than 200 food banks across the country.

The Inflation Class War

When we hear the word ‘inflation’, it usually brings to mind the prospect of rising prices for basic necessities, things like food, fuel and transport. This kind of inflation comes in two types – cost-push and demand-pull. Cost-push inflation refers to the ‘pushing’ effect of rising input prices somewhere in the supply chain. When oil prices rise substantially, for example, prices across the economy rise as oil is used to produce and transport almost everything. Effectively, rising costs equate to a contraction in the potential amount the economy can produce. Demand-pull inflation, on the other hand, refers to the ‘pulling’ effect of rising demand on prices. Usually, there exists a gap between what could be produced if all the resources in an economy were being put to use as efficiently as possible, and the amount of output we’re currently producing: the output gap.

Global Food Prices Post Biggest Jump In Decade

London - Global food prices have surged by the biggest margin in a decade, as one closely watched index jumped 40 per cent last month, heightening fears that the inflation initially stoked by pandemic disruption was accelerating. The year-on-year rise in the United Nations Food and Agriculture Organisation's (FAO) monthly index was the largest jump since 2011, as commodity prices surged. The higher inflation will hit poorer countries reliant on imports for staple goods. For richer countries, the cost of raw ingredients accounts for only part of the overall price paid for products at supermarkets and restaurants. But the rise in raw material prices has been so steep that big firms like Nestle and Coca-Cola have said they would pass on any increases.
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