Another Republican President, Another Recession.

[hanimmal]

https://apnews.com/article/business-lifestyle-kamala-harris-janet-yellen-gene-sperling-3e82e96c545b8bd117c747b0ca3f226a

The Biden administration is kicking off an outreach campaign to get millions of families to file their taxes — so they can receive the second half of payments from the expanded child tax credit.

Vice President Kamala Harris, Treasury Secretary Janet Yellen and White House senior adviser Gene Sperling are hosting a virtual event Tuesday to encourage people to send their tax forms to the IRS, including those whose incomes are so low that they might not have traditionally filed.

Several lawmakers and nonprofits are taking part in the event, and there are plans to hold events in all 50 states and Puerto Rico during the tax filing season, according to a White House official who insisted on anonymity to discuss the forthcoming plans.

As part of the $1.9 trillion coronavirus relief package, President Joe Biden increased the child tax credits to $3,600 annually for each child aged 5 or under and $3,000 for those who are age 6 to 17. The government began to send the payments out on a monthly basis starting last July, meaning that there are six months worth of payments waiting to be claimed by people filing their taxes.

BUSINESS

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The payments would come at a moment when families are coping with rising prices for food, gasoline and other goods relative to a year ago. Administration officials estimate that $193 billion would go to 58 million eligible households that file taxes, meaning that families would receive credits on their taxes or refunds averaging $3,330 from this provision.

Workers without children could also get additional help this tax season if they file. The relief package nearly tripled the earned income tax credit for workers without dependent children, meaning that 17 million people could receive credits worth $1,500.

The expanded child tax credits were seen as slashing child poverty to the lowest levels on record. A recent analysis by researchers at Washington University in St. Louis and Appalachian State University found no evidence that the monthly payments caused parents to stop working, which was one of the criticisms by opponents of the expanded credit.

Biden pushed to continue the expanded child tax for another year as part of his “Build Back Better” agenda. But in an evenly split Senate, West Virginia Democrat Joe Manchin opposed the expanded credit out of concerns that its price tag could increase the deficit and worsen inflation.

 

[hanimmal]

https://www.rawstory.com/trump-china-2656602033/

Just before the novel coronavirus struck, former President Donald Trump was hyping a trade deal he was negotiating with the Chinese government that he said would have obligated China to buy billions worth of American exports.

But Chad P. Brown, an economist at the Peterson Institute for International Economics, has crunched some numbers and has found that Trump's China deal has been a massive bust.

"In the end, China bought only 57 percent of the US exports it had committed to purchase under the agreement, not even enough to reach its import levels from before the trade war," Brown writes. "Put differently, China bought none of the additional $200 billion of exports Trump's deal had promised."

Brown does give Trump credit for coming to some kind of deal with Xi, which he said halted what he described as a "spiraling" trade war between the United States and China.

But that's about where the success of the deal ends.

"President Trump's trade war and phase on agreement did little to change China's economic policymaking," he argues. "Beijing seems intent on becoming more state centered and less market oriented. With the December 31, 2021 deadline for the $200 billion of purchase commitments now past, US policymakers are seeking a different approach."

Read the full analysis here.

 

[Roger A. Shrubber]

https://www.rawstory.com/trump-china-2656602033/View attachment 5082443
View attachment 5082448View attachment 5082449
View attachment 5082450

If trump did ANYTHING good for America, it was either good for trump, too, or it was an accident....

 

[hanimmal]

More economic turmoil due to Republican funded fuckery. Based on reporting by MSNBC just now, it also looks like Americans truckers are being trolled to get them to attack the Superbowl, large American cities, and Biden's State of the Union speech with this shit.

https://apnews.com/article/coronavirus-pandemic-business-health-prince-edward-canada-6f60c879c0c2eff82235e3157ad79bb0

TORONTO (AP) — A blockade of the bridge between Canada and Detroit by protesters demanding an end to Canada’s COVID-19 restrictions forced the shutdown Wednesday of a Ford plant and began to have broader implications for the North American auto industry.

Prime Minister Justin Trudeau, meanwhile, stood firm against an easing of Canada’s COVID-19 restrictions in the face of mounting pressure during recent weeks by protests against the restrictions and against Trudeau himself.

The protest by people mostly in pickup trucks entered its third day at the Ambassador Bridge between Detroit and Windsor, Ontario. Traffic was prevented from entering Canada, while U.S.-bound traffic was still moving.

The bridge carries 25% of all trade between the two countries, and Canadian authorities expressed increasing worry about the economic effects.

Ford said late Wednesday that parts shortages forced it to shut down its engine plant in Windsor and to run an assembly plant in Oakville, Ontario, on a reduced schedule.

“This interruption on the Detroit-Windsor bridge hurts customers, auto workers, suppliers, communities and companies on both sides of the border,” Ford said in a statement. “We hope this situation is resolved quickly because it could have widespread impact on all automakers in the U.S. and Canada.”

CORONAVIRUS PANDEMIC

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Shortages due to the blockade also forced General Motors to cancel the second shift of the day at its midsize-SUV factory near Lansing, Michigan. Spokesman Dan Flores said it was expected to restart Thursday and no additional impact was expected for the time being.

Later Wednesday, Toyota spokesman Scott Vazin said the company will not be able to manufacture anything at three Canadian plants for the rest of this week due to parts shortages. A statement attributed the problem to supply chain, weather and pandemic-related challenges, but the shutdowns came just days after the blockade began Monday.

“Our teams are working diligently to minimize the impact on production,” the company said, adding that it doesn’t expect any layoffs at this time.

Stellantis, formerly Fiat Chrysler, reported normal operations, though the company had to cut shifts short the previous day at its Windsor minivan plant.

A growing number of Canadian provinces have moved to lift some of their precautions as the omicron surge levels off, but Trudeau defended the measures the federal government is responsible for, including the one that has angered many truck drivers: a rule that took effect Jan. 15 requiring truckers entering Canada to be fully vaccinated.

“The reality is that vaccine mandates, and the fact that Canadians stepped up to get vaccinated to almost 90%, ensured that this pandemic didn’t hit as hard here in Canada as elsewhere in the world,” Trudeau said in Parliament.

About 90% of truckers in Canada are vaccinated, and trucker associations and many big-rig operators have denounced the protests. The U.S. has the same vaccination rule for truckers entering the country, so it would make little difference if Trudeau lifted the restriction.

Protesters have also been blocking the border crossing at Coutts, Alberta, for a week and a half, with about 50 trucks remaining there Wednesday. And more than 400 trucks have paralyzed downtown Ottawa, Canada’s capital, in a protest that began late last month.

While protesters have been calling for Trudeau’s removal, most of the restrictive measures around the country have been put in place by provincial governments. Those include requirements that people show proof-of-vaccination “passports” to enter restaurants, gyms, movie theaters and sporting events.

Alberta, Saskatchewan, Quebec, Prince Edward Island and Nova Scotia announced plans this week to roll back some or all of their precautions. Alberta, Canada’s most conservative province, dropped its vaccine passport immediately and plans to get rid of mask requirements at the end of the month.

Alberta opposition leader Rachel Notley accused the province’s premier, Jason Kenney, of allowing an “illegal blockade to dictate public health measures.”

Despite Alberta’s plans to scrap its measures, the protest there continued.

“We’ve got guys here — they’ve lost everything due to these mandates, and they’re not giving up, and they’re willing to stand their ground and keep going until this is done,” said protester John Vanreeuwyk, a feedlot operator from Coaldale, Alberta.

“Until Trudeau moves,” he said, “we don’t move.”

As for the Ambassador Bridge blockade, Windsor Mayor Drew Dilkens said police had not removed people for fear of inflaming the situation. But he added: “We’re not going to let this happen for a prolonged period of time.”

The demonstration involved 50 to 74 vehicles and about 100 protesters, police said. Some of the protesters say they are willing to die for their cause, according to the mayor.

“I’ll be brutally honest: You are trying to have a rational conversation, and not everyone on the ground is a rational actor,” Dilkens said. “Police are doing what is right by taking a moderate approach, trying to sensibly work through this situation where everyone can walk away, nobody gets hurt, and the bridge can open.”

To avoid the blockade and get into Canada, truckers in the Detroit area had to drive 70 miles north to Port Huron, Michigan, and cross the Blue Water Bridge, where there was a 4½-hour delay leaving the U.S.

At a news conference in Ottawa that excluded mainstream news organizations, Benjamin Dichter, one of the protest organizers, said: “I think the government and the media are drastically underestimating the resolve and patience of truckers.”

“Drop the mandates. Drop the passports,” he said.

The “freedom truck convoy” has been promoted by Fox News personalities and attracted support from many U.S. Republicans, including former President Donald Trump, who called Trudeau a “far left lunatic” who has “destroyed Canada with insane Covid mandates.”

Pandemic restrictions have been far stricter in Canada than in the U.S., but Canadians have largely supported them. Canada’s COVID-19 death rate is one-third that of the U.S.

Interim Conservative leader Candice Bergen said in Parliament that countries around the world are removing restrictions and noted that Canadian provinces are, too. She accused Trudeau of wanting to live in a “permanent pandemic.”

“Many of the reasons that were previously to keep Canadians under restrictions are vanishing before our eyes,” she said. “The prime minister needs to put his ego aside. He needs to do what’s right for the country. He needs to end the mandates. He needs to end the restrictions.”

Ontario, Canada’s largest province with almost 40% of the country’s population, is sticking to what it calls a “very cautious” stance toward the pandemic, and the deputy premier said it has no plans to drop vaccine passports or mask requirements.

 

[Nsparky1]

If you actually took two seconds to reread what you wrote you would see it doesn't make any sense at all.

The Democrats were busy trying to fix the economy, figuring out what to spend on is not magic or some 'gut' logic. And also plugging holes in the laws that lead to the financial market crash, and bailing out the auto makers.

The Republicans during the entire time Obama was fixing their mess trolled them with their 'Tea Party' astroturf movement funded by the mega wealthy Koch Bros. So that the next election two years later the Republicans won the House and were able to shut everything down until McConnell really got to end Obama's ability to govern at all.

The Democrats have not been in power long enough to do all the things that need to get done, it is not that they have complaining about not having the money to do it, it is that money never got appropriated to do them.

This exactly this

 

[hanimmal]

https://apnews.com/article/coronavirus-pandemic-business-health-prices-inflation-bd71ae9e491907a51956c1d4eb07fb90

WASHINGTON (AP) — Last year, it was a nasty surprise. And it wasn’t supposed to last. But now, inflation has become an ongoing financial strain for millions of Americans filling up at the gas station, lined up at a grocery checkout lane, shopping for clothes, bargaining for a car or paying monthly rent.

For the 12 months ending in January, inflation amounted to 7.5% — the fastest year-over-year pace since 1982 — the Labor Department said Thursday. Even if you toss out volatile food and energy prices, so-called core inflation jumped 6% over the past year. That was also the sharpest such jump in four decades.

Consumers felt the price squeeze in everyday routines. Over the past year, prices rose 41% for used cars and trucks, 40% for gasoline, 18% for bacon, 14% for bedroom furniture, 11% for women’s dresses.

The Federal Reserve didn’t anticipate an inflation wave this severe or this persistent. In December 2020, the Fed’s policymakers had forecast that consumer inflation would stay below their 2% annual target and end 2021 at around 1.8%.

But after having been an economic afterthought for decades, high inflation reasserted itself last year with brutal speed. In February 2021, the government’s consumer price index was running just 1.7% ahead of its level a year earlier. From there, the year-over-year price increases accelerated steadily — 2.7% in March, 4.2% in April, 4.9% in May, 5.3% in June.

CORONAVIRUS PANDEMIC

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By October, the figure was 6.2%, by November 6.8%, by December 7.1%.

For months, Fed Chair Jerome Powell and others characterized higher consumer prices as merely a “transitory” problem — the result, mainly, of shipping delays and temporary shortages of supplies and workers as the economy rebounded from the pandemic recession much faster than anyone had anticipated.

Now, many economists expect consumer inflation to remain elevated well into this year, with demand outstripping supplies in numerous areas of the economy.

“Inflation remains the single largest near-term challenge to the economy,″ said Jim Baird, chief investment officer at Plante Moran Financial Advisors. “Although price pressures are expected to ease as the year progresses, inflation will remain above the Fed’s 2% target for some time to come.″

So the Fed has radically changed course. Last month, the central bank signaled that it will begin a series of rate hikes in March. By doing so, the Fed is moving away from the super-low rates that helped revive the economy from 2020′s devastating pandemic recession but that also helped fuel surging consumer prices.

____

WHAT’S CAUSED THE SPIKE IN INFLATION?

Good news — mostly. When the pandemic paralyzed the economy in the spring of 2020 and lockdowns kicked in, businesses closed or cut hours and consumers stayed home as a health precaution, employers slashed a breathtaking 22 million jobs. Economic output plunged at a record-shattering 31% annual rate in 2020′s April-June quarter.

Everyone braced for more misery. Companies cut investment and postponed restocking. A brutal recession ensued.

But instead of sinking into a prolonged downturn, the economy staged an unexpectedly rousing recovery, fueled by vast infusions of government aid and emergency intervention by the Fed, which slashed interest rates, among other things. By spring of last year, the rollout of vaccines had emboldened consumers to return to restaurants, bars, shops and airports.

Suddenly, businesses had to scramble to meet demand. They couldn’t hire fast enough to fill job openings — a near record 10.9 million in December — or buy enough supplies to meet customer orders. As business roared back, ports and freight yards couldn’t handle the traffic. Global supply chains became seized up.

With demand up and supplies down, costs rose. And companies found that they could pass along those higher costs in the form of higher prices to consumers, many of whom had managed to sock away a ton of savings during the pandemic.

But critics, including former Treasury Secretary Lawrence Summers, blamed in part President Joe Biden’s $1.9 trillion coronavirus relief package, with its $1,400 checks to most households, for overheating an economy that was already sizzling on its own.

The Fed and the federal government had feared an agonizingly slow recovery like the one that followed the Great Recession of 2007-2009.

____

HOW LONG WILL IT LAST?

Elevated consumer price inflation will likely endure as long as companies struggle to keep up with consumers’ demand for goods and services. A recovering job market — employers added a record 6.7 million jobs last year and tacked on 467,000 more in January — means that many Americans can continue to splurge on everything from lawn furniture to electronics.

Many economists foresee inflation staying well above the Fed’s 2% target this year. But relief from higher prices might be coming. Jammed-up supply chains are beginning to show some signs of improvement, at least in some industries. The Fed’s sharp pivot away from easy-money policies toward a more hawkish, anti-inflationary policy could slow the economy and reduce consumer demand. There will be no repeat of last year’s COVID relief checks from Washington.

Inflation itself is eating into household purchasing power and might force some consumers to shave back spending.

Omicron or other COVID’ variants could cloud the outlook, either by causing outbreaks that force factories and ports to close and disrupt supply chains even more or by keeping people home and reducing demand for goods.

“It’s not going to be an easy climb down,″ said Sarah House, senior economist at Wells Fargo. “We’re expecting CPI to still be roughly 4% at the end of this year. That’s still well above what the Fed would like it to be and, of course, well above what consumers are used to seeing.″

___

HOW ARE HIGHER PRICES AFFECTING CONSUMERS?

A strong job market is boosting wages, though not enough to compensate for higher prices. The Labor Department says that hourly earnings for all private-sector employees fell 1.7% last month from a year earlier after accounting for higher consumer prices. But there are exceptions: After-inflation wages were up more than 10% for hotel workers and more than 7% for restaurant and bar employees in December from a year earlier.

Partisan politics also colors the way Americans view the inflation threat. With a Democrat in the White House, Republicans were nearly three times as likely as Democrats (45% versus 16%) to say that inflation is having a negative effect last month on their personal finances, according to a University of Michigan survey.

https://www.rollitup.org/t/another-republican-president-another-recession.1010837/post-16636960

 

[Fogdog]

https://www.washingtonpost.com/business/2021/10/14/inflation-prices-supply-chain/
View attachment 5025937

I think this chart is going to be the one that is most useful in seeing how inflation is going to go.

View attachment 5025938

The decrease in October from last year's Republican led recession is showing up this month in a bigger increase. November should also see a bit larger inflation rate, and then it should start to decline before it starts to drastically decrease in May 2022 and start to move through the larger inflation rates.

supply chain disruptions.

You mean like this?



It seemed to be a pretty stupid protest at the time. Maybe it wasn't a protest but a naked act of economic sabotage?

 

[Roger A. Shrubber]

supply chain disruptions.

You mean like this?

View attachment 5084344

It seemed to be a pretty stupid protest at the time. Maybe it wasn't a protest but a naked act of economic sabotage?

i could totally see this whole thing being thought up, financed, and organized by any member of the freedumb caucus...just the kind if underhanded dirty shit they excel at

 

[Fogdog]

i could totally see this whole thing being thought up, financed, and organized by any member of the freedumb caucus...just the kind if underhanded dirty shit they excel at

There is no doubt in my mind that it was.

I'm often wrong but I do so with conviction.

 

[Roger A. Shrubber]

There is no doubt in my mind that it was.

I'm often wrong but I do so with conviction.

let's start a rumor...mo brooks and paul gosar organized and funded the convoy with gop funds to influence the media, both to draw attention away from the improving economy, and to give the general impression that the government had caved in over vaccine and mask mandates...
which is probably the truest rumor either of us has ever heard...

 

[Pwnstarqt]

Two vile creatures feeding from opposite sides of the same trough. Dems on one side Republicans on the other both doing little more than paying lipservice to anything other than lining their own pockets and protecting the interests of those that keep them paid.
Just a for instance but Trump donated roughly $175,000 more to Dems than Republicans from 1989-2010. This is standard and how the rich keep things moving in their direction.

 

[Roger A. Shrubber]

Two vile creatures feeding from opposite sides of the same trough. Dems on one side Republicans on the other both doing little more than paying lipservice to anything other than lining their own pockets and protecting the interests of those that keep them paid.
Just a for instance but Trump donated roughly $175,000 more to Dems than Republicans from 1989-2010. This is standard and how the rich keep things moving in their direction.

https://www.vox.com/2018/10/19/17990946/twitter-russian-trolls-bots-election-tampering

so, the question is...are you spreading this shit, or are you just one of the fools that believe it?

 

[hanimmal]

Two vile creatures feeding from opposite sides of the same trough. Dems on one side Republicans on the other both doing little more than paying lipservice to anything other than lining their own pockets and protecting the interests of those that keep them paid.
Just a for instance but Trump donated roughly $175,000 more to Dems than Republicans from 1989-2010. This is standard and how the rich keep things moving in their direction.

Maybe 60 years ago man. But since then the Democrats have slowly been changing to represent as close to 100% of our nation as any political power in human history ever has.

Unfortunately since then though the Democrats have only had about 7 years to actually get much done and every single time they win the presidency the Republicans dump a recession on them so that they are forced to clean up the economy for the first couple years while getting trolled with astro-turf movements like the Tea Party, so that the Republicans can win back just enough power to shut down anything that it not what you say.

As for Trump's donations, the idiot was living in NY the entire time, makes sense he would be trying to buy as much good will with the people being elected there as possible.

 

[Pwnstarqt]

https://www.vox.com/2018/10/19/17990946/twitter-russian-trolls-bots-election-tampering

so, the question is...are you spreading this shit, or are you just one of the fools that believe it?

Neither I'm just not fool enough to believe that either party has my best interest at their core

 

[Pwnstarqt]

Maybe 60 years ago man. But since then the Democrats have slowly been changing to represent as close to 100% of our nation as any political power in human history ever has.

Unfortunately since then though the Democrats have only had about 7 years to actually get much done and every single time they win the presidency the Republicans dump a recession on them so that they are forced to clean up the economy for the first couple years while getting trolled with astro-turf movements like the Tea Party, so that the Republicans can win back just enough power to shut down anything that it not what you say.

As for Trump's donations, the idiot was living in NY the entire time, makes sense he would be trying to buy as much good will with the people being elected there as possible.

The donation portion you mention speaks exactly to my point. Being able to "buy good will" is the problem. The fact that a man like Trump can purchase political, "favor" if you will, is criminal. "You guys be sure and vote this way and the money keeps rolling in. The fact that that is how the parties function is at the root of the problem.

 

[Fogdog]

Neither I'm just not fool enough to believe that either party has my best interest at their core

naive

 

[cawolves]

This aged bad lol. Welcome to the highest inflation since 40 years ago under a Democrat

 

[hanimmal]

The donation portion you mention speaks exactly to my point. Being able to "buy good will" is the problem. The fact that a man like Trump can purchase political, "favor" if you will, is criminal. "You guys be sure and vote this way and the money keeps rolling in. The fact that that is how the parties function is at the root of the problem.

I would love to see some good finance reform, shame that the Republicans and the right wing SCOTUS shot it down to the point that foreign dictators flooding money into it is going unpunished.

This aged bad lol. Welcome to the highest inflation since 40 years ago under a Democrat

Funny that is the one thing that you have to hang your hat on and think you are on to something. You are not.

Do you know how inflation is calculated? It is the change in prices from a year ago. And those prices were at an artificial low due to the shit handling of the pandemic that led to a economic disaster that Biden and the Democrats had to once again fix after Trump dumped trillions into the pockets of the rich (ignoring the struggles of the cities and states who were hammered from the lack of help from the Republicans).

Which the Democrats did by picking up the fumbled ball Trump left behind, since he was kicking like a spoiled brat after he lost the election, since Trump had no plan to distribute the vaccine to our society that scientists delivered, nor saving the economy. And demand fell as all those plants, stores, restaurants, and vacation spots that were shut down started opening up, and all that pent up demand could start being used.

This is why you see the super low inflation right after Trump's economy took the shit it was threatening to since 2018 (yeah Obama's last 3 years were economically better than Trump's first 3 too, Trump was on the way to causing a recession pre-pandemic with his idiotic shutting down the government, trade wars, and xenophobic handling of immigrants that our work places depend on).

And now here we are one full year out, and the inevitable far right propagandist are crying about inflation (ignoring that the national income has increased by a larger amount and that under Biden's presidency the massive job losses that were led by Trump's shit handling of the pandemic has been cleaned up). Because they are parroting the narrative that the wealthy want out there to scaremonger people into not demanding higher prices for their labor.

And just as we start to move out of the inflationary lows of 2021 (around May-June), cue the Republican's savior of Putin to threaten to start a war that will cause the gas prices to soar even higher than the artificially held lows in Trump's final year in office.

So while you might pretend like this thread is not 'aged well', you are wrong. This Tea Party 2.0 inflationary snow flaking to try to sink the Democratic agenda which has once again saved the American workers from a Republican recession is exactly why I made it almost 2 years ago. Because the right wing hate mongers paying the militarized trolls (foreign and domestic) are very predictable, and right now are trying like hell to rewrite history once again to help the Republicans win back enough power in DC to make sure that the mega rich can get away with not paying taxes for another generation.

 

[hanimmal]

https://apnews.com/article/joe-biden-business-prices-inflation-brian-deese-0da8721f67eb720e0d37daaf62128469

WASHINGTON (AP) — President Joe Biden came into office with a plan to fix inflation — just not the particular inflationary problem that the country now faces.

His belief is that a cluster of companies control too many industries, which reduces competition for both customers and workers. That leads to higher prices and lower wages in what the White House says is an average cost of $5,000 annually for U.S. families. Biden is now trying to remedy the situation with 72 distinct initiatives — everything from new rules for cell phone repairs to regulations on meatpacking to more merger reviews.

“The dynamics of the modern American economy — the increased consolidation and lack of competition — has distorted market incentives in important ways,” said Brian Deese, director of the White House National Economic Council. “The president gave us the direction that he wanted us to come back and say what could we do to address this issue of consolidation across industries in a way that would be durable.”

But even administration officials acknowledge that the initiatives outlined by the president’s seven-month-old competition council aren’t designed to quickly stop the 7.5% inflation that’s frustrating Americans and damaging Biden’s popularity. Furthermore, business groups dispute the fundamental premise that competition has faded within the U.S. economy and they are prepared to challenge the administration’s new initiatives in court.

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“It will strangle economic growth,” said Neil Bradley, executive vice president and chief policy officer of the U.S. Chamber of Commerce. “Ironically, what this will do is actually lead to more inflation.”

Part of Biden’s dilemma is that reorienting a bureaucracy to promote competition takes time, and voters want to see inflation — running at a 40-year peak— start dropping now. Voters feel the bite of inflation with every trip they make to the grocery store or the gas station, yet the president is traveling the country to discuss solutions such as competition and new infrastructure that predate the current predicament and would have a much more gradual impact.

America’s current inflation woes stem from the pandemic. Supply chains for computer chips, clothes, furniture and other goods are under stress. At the same time, consumer demand has surged after a historical amount of government aid flowed into the economy. Despite efforts to get the kinks out of the supply chain, price increases have stayed high in recent months instead of fading as many initial forecasts suggested. That has the Federal Reserve ready to increase interest rates to lower inflation.

In a January survey by the University of Chicago, two-thirds of leading economists said that the concentrated power of companies does not explain the current rash of inflation.

New York University economist Thomas Philippon has welcomed the administration’s approach — while allowing it would do little to bring down prices. As the author of the 2019 book, “The Great Reversal: How America Gave Up on Free Markets,” Philippon is the source of the administration’s statement that market concentration places a $5,000 drag on an average family.

What Philippon observed was that other nations had embraced a level of antitrust enforcement and competition that no longer exists in America, resulting in lower costs for cell phone service, internet and airline tickets in Europe relative to the U.S.

“As a way to fight current inflation, it is unlikely to have a big impact in the short term, but it can still be useful,” Philippon said. “I think of it more as a positive side effect of something that should be done in any case.”

The Biden administration contends that even if the lack of competition didn’t directly trigger the recent spike in prices, it has contributed to inflation. The White House Council of Economic Advisers blogged in July about how more sectors of the economy are effectively controlled by a smaller number of companies.

It cited studies that show how mergers led to higher prices for hospital services, health insurance, airline tickets and beer. It also documented a decline in government reviews of mergers and noted that the 2020 federal lawsuits against Google and, separately, Facebook were the first major monopolization cases in 22 years.

After the second meeting of the government-wide competition council in late January, the White House charted its progress. The Food and Drug Administration has proposed selling hearing aids over-the-counter, “lowering their cost from thousands of dollars to hundreds of dollars,” according to a White House statement. The Federal Trade Commission will increase enforcement against restrictions that companies place on people repairing their own electronic devices. The Transportation Department figures it can cut prices of airline tickets in the New York City area by opening up 16 slots to a low-cost carrier at the airport in Newark, New Jersey.

For proof that more competition can lead to lower prices, administration officials cite the example of eyeglasses. Before 1979, people could only buy eyeglasses from doctors who wrote their prescriptions. The FTC then passed a rule that forced doctors to give out prescriptions, causing the average price of glasses to fall 30.4% to $178 (in 1979 dollars).

The issue does not break cleanly along partisan lines. Republican Sens. Todd Young of Indiana and Kevin Cramer of North Dakota have sponsored a bill to limit companies from using non-compete agreements, which can keep workers from going to another employer for more money.

But many in the business sector dispute Biden’s core premise that the U.S. economy has become less competitive. They argue that mergers allow companies to operate more efficiently and the resulting gains in productivity benefit consumers.

The U.S. Chamber of Commerce says market concentration had waned by 2017 and it intends to challenge some of the administration’s regulatory actions in court.

Airlines for America, a trade association, says that consumers are better off under industry consolidation. In inflation-adjusted terms, it said, the average price of a roundtrip ticket has fallen nearly $100 since 2010 to $306 in 2020.

The Business Roundtable, a group representing CEOs, said that at a time of high inflation “more burdensome government regulations are not what the economy or Americans need.”

Despite the pandemic and inflation, companies have still found ways to achieve historic profits. Corporate profits after tax equaled 11.8% of the total U.S. economy in the second quarter of last year, the highest share on record going back to 1947. The Biden administration is arguing that government policy can ensure that more of that money goes to workers and customers.

The fact that the Biden administration is focused on corporate profits and structure could ultimately limit how much companies can charge and that could deter some inflation, said Barry Lynn, executive director of the Open Markets Institute.

“It sends a message,” Lynn said. “Just having cops walking the beat, having cops out there, saying, ‘Hey, we’re watching. We’re looking. We’re going to be checking your profit levels. We’re going to be targeting those who seem to be really exploiting their monopoly power.’ That’s going to have an effect.”

 

[hanimmal]

https://apnews.com/article/business-economy-national-security-e2332613a26d6ce5b82c0f06e9b5304e

The Defense Department on Tuesday released a report that says mergers and consolidation among its contractors pose risks to the U.S. economy and national security.

Senior Biden administration officials previewed the report ahead of its release. The report lays out steps to block mergers that run contrary to Defense Department interests and reduce barriers to entry for new contractors. It also seeks to ensure that a company’s intellectual property protections are not anti-competitive.

The report calls on five sectors to develop plans for durable supply chains, a key concern as the coronavirus pandemic disrupted global supply chains for semiconductors and other goods in ways that created shortages and inflation. The sectors are: casting and forgings, missiles and munitions, energy storage and batteries, strategic and critical materials and microelectronics.

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The report suggests that mergers have left national security beholden to private companies. There are only five aerospace and defense prime contractors, down from 51 in the 1990s. Just three sources account for 90% of U.S. missiles.

The consolidation can hurt taxpayers because contractors no longer feel competitive pressure to innovate to secure government business.

The report is part of a broader government effort under President Joe Biden to promote competition within the U.S. economy. The ultimate goal of an executive order and a competition council formed by Biden is to raise wages and lower prices.

Antitrust agencies already are taking steps to block mergers deemed harmful to the national interest. The Federal Trade Commission in January sued to stop Lockheed Martin Corp.’s $4.4 billion bid for Aerojet Rocketdyne Holdings, saying the result would be higher prices for missile components and less competition.

On Sunday, Lockheed Martin announced that it was no longer pursuing the acquisition because of the FTC’s actions.