'Over half of the increased prices people are paying come from increases in corporate profits': Katie Porter grills macroeconomics expert

During a House of Representatives hearing on Wednesday, United States Congresswoman Katie Porter (D-California) showed up with whiteboard ready with charts ready to interrogate Mike Konczal, a director at the progressive Roosevelt Institute.

Porter pointed out that the primary driver of inflation – 54% of it – has been corporate profits. In a video that has now gone viral, Porter gives one of her classic whiteboard presentations to illustrate:

The Congresswoman does not mess around, she gets to the point quickly and effectively. She came with her charts pointing out that corporate profits/greed is responsible for more than half our inflation rate.

The underlying economic problem is profit-price inflation. It’s caused by corporations raising their prices above their increasing costs.

Corporations are using those increasing costs – of materials, components and labor – as excuses to increase their prices even higher, resulting in bigger profits. This is why corporate profits are close to levels not seen in over half a century.

Corporations have the power to raise prices without losing customers because they face so little competition. Since the 1980s, two-thirds of all American industries have become more concentrated.

The Fed is doing a full frontal assault on those who are hurt most by inflation while letting the robber barons who rule Wall Street run wild. This is the government preferring fictitious citizens — otherwise known as corporations — over actual citizens — otherwise known as people.

California Governor Gavin Newsom recently endorsed a report by Consumer Watchdog which calls for an excess profits tax on oil refiners in that state after they reported record profits. Gasoline in California currently cost about $2.50 a gallon more than in the rest of the US. Consumer Watchdog reports that the state’s five major refiners made between three and ten times more in profits per gallon off their West Coast operations from April through June than they did in the same period last year.

Wall Street has consolidated into five giant banks, raking in record profits on the spreads between the interest they pay on deposits and what they charge on loans.

Broadband is dominated by three giant cable companies, all raising their prices.

Automobile dealers are enjoying record profits as they raise the retail prices of automobiles.

Gas prices have started to drop but big oil still has the power to raise prices at the pump far higher than the costs of crude.

This is why Congress and the administration need to take direct action against profit-price inflation, rather than rely solely on the Fed to raise interest rates and put the burden of fighting inflation on average working people who are not responsible for it.