Federal Reserve Chair, Jerome Powell is now going through another
confirmation process since Biden has re appointed him as Fed chair.
So the Senate has to confirm that position again.
And during these hearings, he had a fascinating exchange with
Senator Elizabeth Warren on the topic of inflation.
Now, we've heard that all sorts of things have led to inflation,
anything from increased demand to supply chain issues.
But what about the corporations who simply increase their prices because they can.
And there's virtually no one stopping them and there's virtually no competition.
Warren wanted to ask about that.
Let's watch today.
>> Today nearly two out of three of the biggest publicly
traded corporations in the country.
Are reporting fatter profit margins than they reported before the pandemic.
Which doesn't sound like they're just passing along costs.
So, let me ask you, does that increase in profit margins,
combined with greater market concentration in industry after industry.
Suggest to you that some corporations maybe passing along increased costs.
And at the same time charging more on top of that to fatten their profit margins?
>> That that could be right.
It could also just be though that demand is incredibly strong and
that, they're raising prices because they can.
>> Well, that's the point.
They're raising prices because they can and they're not being competed down.
>> That was an important moment.
Because what Warren points out there in regard to the record
profits that these corporations are making.
Makes it abundantly clear that they're adding a lot more to their prices.
Like they're really utilizing the narratives that we've
heard in the corporate media inflation.
Perfect opportunity for
corporations to just increase their prices to whatever they want.
When you think about how various sectors of the economy are monopolized.
I mean, what are they going to do?
Worry about competition and lower their prices as a result of that?
And we're not talking about,
things that luxury items that people might not need, but want to spend money on.
We're talking about, like, actual things that people need in their
households on a regular basis, the cost of food.
Why have we seen such an extreme amount
of inflation in various sectors of the economy?
And that's what she's trying to draw attention to.
I'm not saying that it's only because of that, of course,
there have been some supply chain disruptions.
Which I think makes it pretty clear that maybe we should consider having more
manufacturing in this country.
Instead of exploiting cheap labor around the world, but
that's not the only issue here.
You have corporations taking advantage of the narratives that
are playing out in the corporate media to not only increase their prices.
But to use the corporate media to justify it, even when there's no justification.
>> Yeah. And again, record profits, right,
that are not being passed down to the workers and
that are not being reflected within the pricing, right?
Where it's like, yo they're making a lot of money.
It's not like they have to raise prices so
that they meet some minimum threshold of profit, right?
Like it's like no I gotta charge you this because I need to make x amount like no.
Like they're making all the money and they're keeping it for
themselves like that they're getting it on both ends right?
Like they're not paying it out to the workers and their price gouging consumers.
So like surprise the evil actor in this whole
thing are the corporations like who could have predicted that?
And economists say it all the time inflation talk is sort of
a self fulfilling prophecy.
You pump inflation talk us we say, snap,
I gotta save, I can't spend, I gotta hold onto stuff.
I start hoarding stuff and then that then has a terrible effect on the economy.
But what I will say is that there was a psychic cost to that sticker shock.
Like people don't like seeing gas cost that much even if you say,
the government is like, we're gonna give send you some money.
Put some money in your hand to pay for that higher price of milk or
that higher price of gas.
Like people just feel agita when they see prices are that astronomically high.
And you know that's not good for the powers that be.
>> Yeah, you're absolutely right about that.
There was one other part of their interaction that I wanted to show
you guys.
And then I also want to just briefly discuss how the Fed chair remember
the Federal Reserve's only role is to prevent inflation.
I want to talk about how he has increased inflation and
continue to do so as things that people ordinary americans need.
Like housing became astronomical.
But before we get to that, let's watch the second half of their interaction.
>> Market concentration has allowed giant corporations to
hide behind claims of increased cost to fatten their profit margins.
So the consumer pays more both because the corporation face higher costs and
because, as you put it.
Because the corporation can increase prices,
the reason I raised this is that higher prices have many causes.
And we can't overlook the role that concentrated corporate
power has played in creating the conditions for price gouging.
>> She's absolutely right about that.
Now, Elizabeth Warren comes at things from a reformist lens,
meaning that she wants more regulations in place.
She wants to find ways to kind of control unmitigated crony capitalism.
But I also want to be clear about something,
despite any well meaning regulation, even if those regulations work.
All of that always ends up being temporary.
Because you still have, like,
remember the whole point of like a capitalist system is to do, what was.
What does capitalism compel you to do?
What is the mandatory point in capitalism?
>> This profit generate profit.
[LAUGH] >> That's it, that's it.
You've got a board of investors.
And every time you meet with them, they're like,
what are you doing to increase my return on investment?
That is capitalism.
So companies literally have a fiduciary responsibility to
their shareholders, to their board to maximize profits.
And what do they do in order to ensure that happens?
They engage in the lobbying that we've seen, the money in politics.
It leads to the corruption that we've seen.
And they will claw their way to what they want, which is repealing those
regulations, bit by bit, little by little, that is always the outcome.
So even if we pass regulations, which honestly right now,
with how ineffective government is, I'll take it.
But just understand that those regulations aren't permanent,
they always end up getting chipped away at.
Because the whole point of this system is to maximize profits period.
Now real quick, I wanted to also just discuss Jerome Powell and
how disastrous it is that he is very likely to continue serving as Fed chair.
This is the man who has engaged in, I mean, record quantitative easing.
And this is monetary policy that put money cold,
hard cash in the pockets of big banks, private equity firms.
And what do they do with that money?
They invested it for themselves, particularly in real estate.
They bought up entire neighborhoods of single family homes.
And what did that do?
It caused inflation in the housing market?
I mean, insane inflation in the housing market?
And this is the unelected government agency, the Federal Reserve,
whose only task is to prevent inflation bravo.