Republicans Unable To Determine If Price Gouging Is Good Or Bad, Just Kidding They Think It's Wonderful!
Sherrod Brown wants to stop your damn shrinkflation!
It takes a lot, in this late capitalist world we live in, to hold firm to the idea that the free market will always produce the best and most fair result and the only reason anything could ever possibly go wrong is because someone interfered with its workings through regulations or by helping to alleviate poverty. But that doesn’t mean that Republicans are not going to try their absolute hardest.
On Thursday, the Senate Committee on Banking, Housing and Urban Affairs held a hearing on “Higher Prices: How Shrinkflation and Technology Can Impact Consumers’ Finances,” led by Chairman Sherrod Brown (D-Ohio). It’s an important topic, at least to those of us who care about how we are getting screwed.
At issue is the fact that many companies are selling consumers smaller amounts of things than they used to while still charging the same price (that is, in fact, how they get you) — and the even more disturbing fact that companies are now using our data to charge us more or less depending on how much they think we can pay.
On the side of “inflation is happening because corporations are greedy and are price-gouging Americans because a variety of factors has led them to believe they can, and here is the evidence we have to prove it,” were Sens. Brown, Jon Tester (D-Montana), Tina Smith (D-Minnesota), and our girl Elizabeth Warren (D-Massachusetts).
On the side of “inflation is happening because of stuff the Biden administration has done that we don’t like and no we can’t actually be specific about what or how” were Ranking member Sen. Tim Scott (R-South Carolina) and Sens. Thom Tillis (R-North Carolina), Bill Hagerty (R-Tennessee), and noted community theater star Katie Britt (R-Alabama).
“Prices today are far too high, and families are having a harder time finding a fair price, seeing more of their paycheck vanish into thin air,” Sen. Brown said in his opening statement. “All of this is happening while corporate profits hit record highs. Let’s be clear: The fact that prices and corporate profits are going up at the same time is no coincidence. A study by the Kansas City Fed found that corporate profits drove half of the price increases in 2021. And profits are still high today.”
“When they’re talking to their Wall Street investors, they admit what they’re doing,” he added. “On an investor earnings call, one CEO said, ‘Consumers are tolerating [frequent price increases] well.’ You hear that? Consumers are ‘tolerating’ price increases. I’m here to tell CEOs that working families cannot tolerate unfair price increases.”
Now, you see how he backed that up with a direct quote from McDonald’s CEO Chris Kempczinski? Well, Tim Scott didn’t need anything like that, because he had vibes. He knows that the real culprit here are the policies of the Biden Administration and the regulations they have put on American businesses. Which policies? Policies. Also regulations. Which regulations? Regulations. Generally.
Scott confidently cited a report from the US Federal Reserve suggesting that corporate price margins had not actually gone up all that much and that the thing that caused inflation was government intervention.
“Here’s what the Federal Reserve recently studied that the administration’s — and that’s the Federal Reserve — studied the administration’s claims that corporations are driving up inflation and came to the conclusion, and I’ll just read it, ‘unprecedented large and direct government intervention,’ and ‘accommodative monetary policy.’ Profits were back to their pre-pandemic levels by the end of 2022.”
I suspect he was missing a sentence in there somewhere, but that’s forgivable. What's less forgivable is leaving out the part about what kind of large and direct intervention the report actually cited. Let’s read it, together!
Our analysis shows that much of the increase in aggregate profit margins following the COVID-19 pandemic can be attributed to (i) the unprecedented large and direct government intervention to support U.S. small and medium sized businesses and (ii) a large reduction in net interest expenses due to accommodative monetary policy. Once we adjust for fiscal and monetary interventions, the behavior of aggregate profit margins appears much less notable, and by the end of 2022 they are essentially back at their pre-pandemic levels.
So weird that he’d leave that part out!
The report did come to the conclusion that, despite what the corporations themselves have been saying, their profits are not actually that big. But, as Sen. Brown pointed out at the end of the hearing, the report wasn’t from the Federal Reserve as an entity, but from one economist out of the many, many economists who work there. Other economists have come to different conclusions, and have found that corporate profits have skyrocketed.
To be fair, Scott did cite one thing that he believes will cause future inflation: student loan forgiveness.
“We should be talking about the inflation spike we are likely to see after billions and billions of dollars in student loans are illegally forgiven by this administration. We should be talking about a federal debt that is growing by trillions of dollars every single year. The American people are smart. They see through this blatant attempt by the administration to blame others for the inevitable results of their policies.”
Yes, what kind of fools would they have to be to blame the people who are literally in charge of raising the prices?
That aside! What Scott is suggesting here is that people being in crippling debt is good for the economy.
The witness representing the Republican view of things was not much better.
In her introduction, Dr. Allison Schrager of the conservative think tank the Manhattan Institute told an absolutely insane story about why an umbrella salesman would need to raise prices, for the good of all, when it rained.
“Take the example of an umbrella salesman in the rain,” she said. “It does feel really unfair that he increases his prices when it rains, but if he didn’t increase prices when it starts to sprinkle, there would be no umbrellas left when there is a downpour. Or, if he can’t make more money in the rain, why would he bother sitting in the rain himself and sell umbrellas?”
This feels like one of those riddles where your answer determines if you are a sociopath. You know, like “A woman met the man of her dreams at her aunt’s funeral. The next day, she killed her uncle. Why?”
So, first of all … that’s literally price gouging in a crisis and therefore illegal to some degree or another in 37 states, Guam, Puerto Rico, the Virgin Islands, and Washington DC. Second, is the theory here that if the umbrellas were priced fairly, someone would come and buy up all of the umbrellas leaving none for anyone else? Because, theoretically, that is possible regardless of the price of the umbrellas. Even if we are talking about that $1,290 adidas x Gucci umbrella, there is someone out there who could buy 50 adidas x Gucci umbrellas if the mood took them.
This is also a very easy problem to solve for, without any price gouging at all. You put a sign up that says “limit one per customer” and you call it a day. Is the argument that people with less money would also be able to buy umbrellas, leading to our umbrella salesman running out of umbrellas to sell to the wealthy when there is a downpour? Don’t poor folks need umbrellas just as much as the rich?
As for the “Or, if he can’t make more money in the rain, why would he bother sitting in the rain himself and sell umbrellas?” of it all, it seems fairly obvious that he would sell more umbrellas in the rain, thereby increasing his profits in a normal, non-evil way.
Her big theory here is that the prices are up because demand is up — because people have more money in their pockets and are able to have more of the things they need — and if they didn’t, it would be bad because “this price adjustment is how the market rations goods.” Otherwise people would just go out and buy 40,000 umbrellas all of the time!
In the interest of time, allow me to give a summation of what I understand the Republican theory on all of this to be — “People are broke due to inflation and that is bad. The reason the inflation is happening is because the Biden administration is enacting policies that put more money in people’s pockets and the corporations are naught but innocent babes in the woods, simply responding to consumer demand and raising prices in order to ensure that people aren’t taking more than their share, but also because of unspecified regulations that are driving up their costs. The only way this economy can work is if the people at the bottom are sufficiently broke, but also it is the fault of the Biden administration that they are broke because of inflation.” Sure, that makes sense! Why not?
Dr. Alí R. Bustamante, professor of practice at the University of New Orleans Department of Economics and finance director of the Worker Power and Economic Security Program at the Roosevelt Institute, testified in favor of the idea that corporate profits are what is driving inflation.
He did not do this with a weird umbrella parable. He did it by explaining that markups used to be 48 percent higher than cost and now they are, on average, 69 percent higher.
Research conducted by my colleagues and I at the Roosevelt Institute has found that a recent sharp rise in markups by large corporations is contributing to inflation. Markups are the difference between the prices consumers pay for goods or services and how much it costs to make or provide them. Markups are low in competitive markets but as corporations have accumulated significant market power over the years, they have been able to increase prices without sacrificing profit. Our research finds average markups grew from 48 percent above cost in 2014 to 69 percent above cost in 2023 and that this growth is being driven by a few large corporations.
This is what is called “evidence.”
Also testifying on the side of the Democrats was Mr. Bilal Baydoun, director of policy and research at the Groundwork Collaborative. He also brought some actual evidence to the party.
Rideshare apps like Uber reportedly charge users higher prices if their phone battery is lower. Insurance companies fly drones above our property in search of signs of clutter, and car companies install software that reports our driving behavior to insurance companies, who use the data to hike our rates. Amazon reportedly changes prices millions of times per day, running secret pricing experiments like “Project Nessie” that reaped $1 billion in revenue. Frustratingly, food delivery apps like UberEats show us one menu price up front, only to tack on a series of mysterious junk fees right as we’re about to pay, and these last-second markups can be as high as 95 percent. Even a family outing to the bowling alley means encountering “surge pricing,” in which we’re charged more for the sin of seeking out family fun on a Saturday night, the only available time for such outings for many families.
All of this is seriously messed up, and yes, it is absolutely driven by greed and the ability of corporations to use new technology to squeeze every dime they can out of us. There is not a thing on that list that anyone can point to and say “See? This specific thing was caused by this specific policy of the Biden administration!” because it’s literally just greed.
During questioning, Sen. Elizabeth Warren asked Dr. Bustamante if the higher prices we’re seeing in grocery stores were the result of inflation — reflecting prices being higher throughout the supply chain — or if perhaps something else was at play.
Video courtesy of Accountable.US:
Bustamante explained that not only was it not due to inflation across the board, but also that the actual marginal costs for grocery stores had gone down. And that, historically, when those costs go down, stores do not pass the savings onto the consumer, but rather keep the profits for themselves.
It’s clear that we need far more data privacy protection than we’ve been getting. It’s also clear that something does need to be done about shrinkflation. Luckily, earlier this year Sen. Brown and Sen. Bob Casey (D-Pennsylvania) introduced the Shrinkflation Prevention Act, meant to “crack down on corporations reducing product size without a reduction in price.”
There isn’t a reason on earth why we all must just lie back and think of England while corporations screw us. Or while Republican senators spit in our face, tell us it’s raining, explain that the rain was caused by unspecified policies and regulations and then charge us an exorbitant amount for an umbrella on the grounds that it’s really just what’s best for everyone.
Here’s the whole thing.
PREVIOUSLY:
Scott, that lying hack, knows better. This is just about injecting more anti-Biden FUD into the rightwing media human centipede.
And people, look at what these assholes argue with their facile arguments about umbrellas. Republicans hate you, want you to die, and want all your money to go to their corporate benefactors. They want to blame student loan forgiveness, relief from that usury, for prices going up (and that really was the ONLY policy they attempted to name?). Because they hate young people especially. Well they hate regular people. They just want to tell themselves everyone with student debt is a trans gender woke studies major because they hate women and vulnerable minorities.
The "umbrella" example is so ridiculous too. Like we'd have to ration food staples even. Every place I've gone where there's limited quantities has a Limit X per customer. Uuugh but they count on people just glossing over or reading headlines only. Like any propagandist worth their salt.
Punish these assholes and quislings this November (and before if there are any other special elections). Check your voter registration, check it twice.
Mount up!
OT: Wait ... what??
Doubts Over Kristi Noem’s Alleged Meeting With Kim Jong Un: Report
"Congressional staffers and North Korea experts are calling into question claims by South Dakota Gov. Kristi Noem in her forthcoming memoir that she met North Korean dictator Kim Jong Un sometime between 2013 and 2015 during her time on the House Armed Services Committee. “I don’t see any conceivable way that a single junior member of Congress without explicit escort from the U.S. State Department and military would be meeting with a leader from North Korea,” George Lopez, University of Notre Dame professor and expert on the rogue nation, told The Dakota Scout Thursday. The outlet was unable to verify Noem’s account using congressional travel documents or outside sources, it claimed, while adding that one unidentified Capitol Hill staffer described her story as “bullshit.”"
https://www.thedailybeast.com/kristi-noems-alleged-meeting-with-kim-jong-un-in-doubt-report-says?ref=home