What is causing inflation can be answered with the 3 C’s. COVID, Climate Change and Corporate Greed. Then toss in the Russian/Ukraine war, The Federal Reserve System raising interest rates and the financial power of the OPEC oil cartel controlling oil/gas prices.
1. COVID had a profound negative effect on every aspect of our society. It changed everything from work patterns to supply disruptions, to a mental health crisis and how we eat, shop and be entertained. The effect of inflation due to COVID was widespread throughout America and around the world. Not enough workers, shortages of essential products and services created an environment for rising prices at record levels. As the shadow of COVID is getting smaller, inflation is diminishing.
2. Climate Change is already a growing element of inflation as property insurance rates are skyrocketing to address the massive property losses due to floods and storms on steroids. Changing weather patterns are affecting food products in America and around the world. There is now more viruses and diseases among poultry and cattle that is affecting the price of chicken, eggs and meat. Without aggressively addressing Climate Change, expect increasing costs to the public for just about every product that we need or want. Climate Change is not just about growing heat and carbon in our atmosphere, it effects the “balance of nature” and the massive power of mother nature to keep in balance. We are becoming mass victims of mother nature!
3. Corporate Greed is establishing a greater share of inflation. Since COVID, the business community has become very bold and aggressive in raising prices beyond justification. With huge record profits, record levels of stock buybacks, high executive pay and raising dividends to stockholders, the consumers are being gouged with extra-large price increases. Also helping raise prices is the growing number of near monopolies in essential industries like Healthcare, Pharmaceutical, technology, energy/oil and banking. Monopolies have the power to raise prices with impunity from consumers. Corporations are also guilty of raising the prices of rental and for-sale housing beyond justification because of the advent of high-tech products and services like Airbnb and software sharing/colluding among corporate landlords.
⇒ Realize that President Biden has little power in effecting higher prices. The Federal Reserve System has unique, independent power to raise interest rates and they have. The oil industry raises prices daily; grocery stores at record profits still are raising prices beyond justification. And the massive effect of COVID on inflation that Biden inherited in his first couple years in office. Biden is as much a victim of high inflation as the public. The only winners appear to be large corporations as they continue to amass massive record level profits. Focus one’s anger and angst at Corporate Greed, COVID and the Climate Change Crisis, NOT President Biden!
The Bottom Line …. Inflation has dropped from 9.1% to 3.2%. The US has the lowest inflation rate than any developed nation in the world AND the strongest economy.