Yes, inflation is real. But the panic around it is, if you will, wildly inflated and horribly misreported by the American corporate media. As Paul Waldman notes at WaPo this afternoon, "Inflation is a genuine problem, but it's hardly spinning out of control. Inflation PANIC, on the other hand, is getting ridiculous." Our guest on today's BradCast made the same argument last week as the media touched off the panic. He joins us to explain and go even further than Waldman. [Audio link to full show is posted below this summary.]
But, first up, the so-called 'QAnon Shaman' Jacob Chansley, the guy with face paint and a horned hat who took control of the dais in the U.S. Senate during the Trump-incited attack on the U.S. Capitol on January 6, was sentenced to 41 months in prison on Wednesday. That's more than three and a half years, for a man with mental issues who was not particularly violent while serving as a henchman for Trump's attempt to steal the 2020 Presidential election that day. Meanwhile, the organizers and planners of the assault --- namely Donald Trump himself and a whole bunch of others --- have faced zero accountability, much less jail time for their crimes lighting the fire in the first place.
In more accountability news, Arizona's far-right Republican Rep. Paul Gosar was censured by the U.S. House in response to an animated video he posted to Twitter, appearing to show him murdering Rep. Alexandria Ocasio-Cortez (D-NY) and threatening the same for President Biden. House Republicans refused to reprimand him, so a rare censure vote was held today and Gosar was removed from his House committee assignments in the bargain. He's the second Republican to be removed from committee seats this year, after Rep. Marjorie Taylor Greene (R-GA) faced a similar punishment for support of violent threats against Democrats prior to being elected and a similar failure by her own caucus to take action in any way. Accountability is always good, but, as with Chansley's punishment, there are some nuances and concerns worth discussing on this point as well today.
And, before we get to our guest, President Biden on Wednesday asked the Federal Trade Commission to investigate potentially "illegal conduct" by Big Oil companies such as ExxonMobil and Chevron who may be inflating gas prices, even as their profits have risen and the cost of refined fuel has fallen. But the recent spike in prices at the pump has helped fuel economy-wide inflation. That, in turn --- thanks, at least in part, to some really bad reporting by the American corporate media --- has also undercut Biden's approval ratings, and is being used (disingenuously) to try and jeopardize passage of Biden's Build Back Better (BBB) social spending and climate change reconciliation bill.
Unlike the recently signed $1.2 trillion bipartisan infrastructure bill, the $1.75 trillion BBB is fully paid for with increases on taxes to corporations and the wealthy. And, unlike stimulus bills passed recently under both this President and the previous one, the BBB's spending is spread over the next decade, instead of as a quick jolt to the economic system. Thus, the consensus of economic experts is that it will not cause inflation and its expansion of the economy may, in fact, help ease inflation in several ways, particularly for the working class.
Still, West Virginia's obstructionist Democratic Senator Joe Manchin is using inflation fears again to try and put the brakes on the BBB package, and the corporate media are certainly helping him. For example, while largely ignoring undeniably positive news about the economy in recent months --- on everything from record job growth to very low unemployment to three months of rising retail sales --- last week, the media offered breathless reports on new inflation numbers from the U.S. Bureau of Labor and Statistics.
You may recall some of the panic when the media informed us that inflation had risen to a record 6.2% in October! If true, a one month 6.2% increase in prices would be a panic. But, in truth, inflation was just 0.9 percent last month. As our guest today points out, "products that cost $10.00 in September now cost a terrifying $10.09." But lost in the panicked coverage was that the 6.2% rise in retail prices was in comparison to what they were a full year ago, in the middle of the worst of the pandemic. They didn't rise "6.2% in October" as many have misleadingly reported.
But all of that also ignores something else that most Americans do not understand about inflation, according to our guest today: It can actually be good for the working class and very very bad for corporations, in particular, for big banks. That may be just one of the reasons why media are so quick to report on inflation numbers as terrible, terrible news for the country.
We're joined today by JON SCHWARZ of The Intercept to explain all of this, as he detailed recently in an article with what he admits is "a little bit of a troll-y headline", "Inflation is Good for You". In fact, as we discuss, he's not entirely "troll-y" on that point. For one, the booming economy has resulted in rising wages (for the first time in years) at almost the same rate as inflation over the past year. He notes at The Intercept: "As prices increased 6.2 percent over the past year, wages for regular people went up 5.8 percent. In other words, inflation barely touched their purchasing power."
The larger point, however, that he explains today is why inflation can be actually be good for workers but not for big corporations like banks: "Household debt in the United States is a gigantic number, difficult to comprehend. It's like $14.5 trillion --- that is mortgages, credit card debt, student debt, it's a whole bunch of things... And when there's inflation of this kind, 6.2%, that is around $850 billion-worth of that debt falling in value. That is a transfer of wealth from creditors, the people who loaned out the money, to borrowers."
Those creditors/lenders "are the richest people in America, and they are losing a lot of money. And they don't like that! People with tons of money do not like losing enormous amounts of it," Schwarz notes. "Inflation is the absolute worst for people who have loaned out a lot of money. It is something that is never discussed, because it is a sort of clear class issue. It makes you realize that, just as a great economy for regular people is not so great for people at the top, it makes you think about what inflation actually does, and who it affects the most."
While he recognizes that "inflation can be real trouble for some people," (and there is some nuance here) the overall effects are often more positive for the working class and not even particularly harmful to those on a fixed income, such as the elderly living on Social Security, which increases each year as its tied to inflation.
There is a lot to discuss on this matter that the corporate media fail to adequately cover (for reasons which we also discuss) while misleading the nation and delighting Republicans and, yes, Joe Manchin, who has fresh (if false) evidence to use in further cutting back on Biden's Build Back Better agenda or even stopping it dead in its tracks.
Finally, as long as we're myth busting today, Congress is preparing to approve the annual National Defense Authorization Act, with nearly as much spending --- for one single year --- as BBB would cost over ten years. Yet, you'll hear almost nothing about how the U.S. can't afford to spend so much money, or that it might lead to inflation, etc. Sen. Bernie Sanders (I-VT) has a thought or two on all of that, with which we close today's program...
(Snail mail support to "Brad Friedman, 7095 Hollywood Blvd., #594 Los Angeles, CA 90028" always welcome too!)