Inflation isn’t at record heights because of an increase in production or distribution costs or even pay raises for what were considered menial jobs prior to a global pandemic teaching us who the real essential workers actually are.
Inflation is rising at record paces because the leaders and shareholders of multinational corporations are greedy and price gouging.
Already Americans are paying about $250 more per month, per household, for the same goods than they were before the pandemic according to a study by Moody’s Analytics.
If it were true Inflation the corporations behind it would be, at best, breaking even. Especially, if production and supply chain delays are preventing them from meeting demand.
However, while many local small businesses are failing — some because they didn’t have the resources or capital to adapt to pandemic business needs — the megacorporations are raking in record profits, undertaking massive stock buybacks, and buying up the resources of the failing local businesses.
What the federal reserve is doing in response to it is; therefore, exactly the wrong solution.
Increasing interest rates now will make loans for individuals and new small business startups with new post-pandemic market strategies even harder to obtain.
As a result people will curtail purchases of non-essential goods and services and be even less likely to invest. It will also curtail new home and vehicle purchases.
The real solutions are easy to identify. They would also be easy to implement if we had a majority of members in Congress working for the people instead of lobbyists.
1. Establish a minimum wage that is no less than a true living wage.
2. Tie that minimum wage to true inflation so it remains a living wage.
3. Establish a national single payer health care system that is completely separate from employment.
4. Close the corporate tax loopholes.
5. Create a tiered wealth tax on those whose wealth exceeds $3M.
The combination of these things would free employers from the need to pay the employer portion of health care plans. It would free people from the leading cause of bankruptcy in our nation, medical expenses. And it would eliminate the vast majority of the government’s need for public assistance programs like SNaP, CHiP, and others that are currently actually used to subsidize the shortfall between employer wages and living wage requirements.
People would be free to pursue the careers that would interest them most and which they would he best at doing, without fear of losing their health care.
This would stimulate the economy more than anything else we could do.
It would also stimulate the creation of more new innovative small business and free market competition than anything else we could do.
Ultimately, the problem with the Federal Reserve’s approach is that it will punish average consumers even more instead of those driving prices up with their boundless greed.