Workers are being punished for inflation. The real culprit is corporate greed
The US Federal Reserve is aiming its powerful firehose at the living room but it’s the forest that’s ablaze. As a result, people may drown even as their house catches fire.
This about sums up the sorry state of inflation-fighting in America.
On Wednesday, the Fed – America’s central bank – raised interest rates by three-quarters of a percentage point, and signaled more rate increases to come, perhaps as soon as September.
This followed a quarter-point increase in March, another half a point in May, and three-quarters of a point in June.
On Thursday, the commerce department announced that the US economy had shrunk for the second quarter in a row.
While not technically a recession (economists in and out of the White House have spent much of the last several days deconstructing the word “recession”), there’s no question but that the US economy is slowing.
This, to put it mildly, makes no sense.
Inflation has broken out all over the world – the consequence of pent-up demand from more than two years of pandemic and of limited supplies of everything from computer chips to wheat, due to difficulties getting the world economy up and running.
Add in Putin’s war in Ukraine driving up world energy and food prices, and China’s lockdowns against Covid, and you get a perfect conflagration.
That’s not all. Big corporations are busily raising their prices because consumers have so little choice. Corporations are using inflation as cover.
Prices at the gas pump have drifted down a bit in the last month but are still eye-popping. (Here in California, I’m paying over $6 a gallon.)
At the same time, big oil has hit a gusher. Exxon just reported second-quarter profits of $17.9bn, more than three times what it earned a year ago. Chevron’s profit more
Read more on theguardian.com
