From LA Progressive: Why Policymakers Overlook Profits as the Source of Inflation
Every month we hear about inflation resulting from wages pushing up prices, but we don’t hear about record-high profits pushing up prices.
By ROBERT REICH
One of my goals in this newsletter is to help you uncover the ways wealth and power shape public policy. Today, I’m going to focus on a topic that may seem wonky to you — but that’s exactly the point. Its very wonkiness disguises the power dynamic lying behind it.
The issue is how we measure the economy.
Start with the rate of inflation — how fast prices are rising. That number is now driving the Federal Reserve, our central bank, to raise interest rates — which in turn is causing mortgage and bank loans to soar, the dollar to reach new heights against foreign currencies, and the stock market to plunge. It is also likely to drive us into a recession.