Reviews | As prices soar we need action – not spin
If millions of people say they are suffering financially, the administration should take that as secular gospel — and focus on fixing what’s wrong rather than what’s right.
To pay for this, Sen. Sheldon Whitehouse (DR.I.) and Rep. Ro Khanna (D-Calif.) recently introduced legislation that targets record oil company profits in a context of rising gas prices. Their bill would impose a 50% tax on oil companies whose profits exceed their average from 2015 to 2019 – before the pandemic. The revenue would then be used to provide direct payments to working families, which would be another way to directly counter gas costs.
As for fighting inflation, Biden said it was the work of the federal reserve – and so, one is left to assume, not his. It’s a claim that economist James K. Galbraith recently called “radically false and politically suicidal” in a piece for the Nation (of which I am the editor). Galbraith notes that the government has other tools at its disposal to control prices beyond raising interest rates: imposing rent controls on stable housing costs or adopting Medicare-for-all, which would allow the government to control health care prices. Galbraith calls Medicare-for-all “potentially the most powerful anti-inflationary tool available to government.”
Of course, these goals are ambitious and will require a lot of time and political will. In the meantime, another approach already has political momentum: prevent companies from profiting from inflation. The narrative that companies are raising prices just to keep pace with rising costs becomes suspect when you consider that many of them are posting record profits.
Galbraith suggests a price administration office, as created during World War II, to monitor potential profits. And the legislation proposed by Sen. Bernie Sanders (I-Vt.), co-sponsored by Sen. Edward J. Markey (D-Mass.) and Rep. Jamaal Bowman (DN.Y.), would levy a tax on “excess profits” large companies. Companies grossing over $500 million per year would see a 95% tax on profits above their pre-pandemic annual average. It is a direct effort to prevent companies from taking advantage of the current economic climate and raising their prices without restraint. And for any skeptics who fear the long-term effects of a corporate tax hike, it’s only supposed to last until 2024.
At a time of such economic uncertainty, political accusations will only reach Democrats so far. It is increasingly essential that they adopt policies that visibly support workers. Quick action, not spin, is what’s needed as November’s midterm approaches.