Inflation and Reconciliation – Reject the BS

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Call Script

My name is __________. I am a constituent, and my zip code is _______. I am a member of Indivisible SF.

President Biden:

President Biden, I applaud your statement, "If the Senate will not move to tackle the climate crisis and strengthen our domestic clean energy industry, I will take strong executive action to meet this moment." I urge you to make good on that commitment by issuing the following executive orders:

Declare a national emergency on the climate crisis and direct resources to build out clean, renewable, and distributed renewable energy.
Invoke the Defense Production Act to mobilize domestic industry to manufacture and install renewable solar and wind energy technologies with good-paying union jobs.
Call an immediate halt to new fossil fuel leasing, drilling, and infrastructure operations on federal land and offshore.
Direct the DoJ to investigate and prosecute fossil fuel price-gougers, polluters for damages they have caused, and power utilities for antitrust violations.
Reaffirm Executive Order 12898 of Feb. 16, 1994, regarding environmental justice for nonwhite and low-income populations, and revise and expand its mandates.
Commit to veto legislation that would undermine climate action or environmental justice, including bills that grant legal immunity, new subsidies, or regulatory loopholes for polluting corporations that continue to harm our communities and environment.

Senate:

Should a reconciliation bill to lower drug prices and extend ACA subsidies come before the Senate, I urge you to support it. I also urge you to offer—and force Republicans and Senator Manchin to vote on—amendments to restore provisions that were recently yanked from the most recently proposed bill such as:

Medicare solvency tax on high-income earners
Climate emergency defense provisions
Reinstatement of the State and Local Tax (SALT) deduction back to $80,000 from Trump's $10,000.
Funds to further mitigate the effects of the ongoing Covid pandemic (new vaccine development, testing, antiviral medication)

Furthermore, I also urge you to immediately take all necessary steps to remove Manchin as chair of the Senate Energy and Natural Resources Committee.

Background

Corporate media and politicians endlessly repeat their simplistic mantras that inflation is caused by "too much money chasing too few goods" and that therefore, "government spending results in inflation" (except for corporate subsidies and the Pentagon, of course). But in real life there are multiple types and causes of inflation. For example:

Demand-pull inflation: People trying to buy things that are in short supply such as housing and consumer goods. This is the Demand-Pull kind of inflation that corporate media & politicians focus on, particularly government spending that flows to people rather than businesses.
Cost-push inflation: Prices going up because costs are rising. For example, poorly paid service workers are justly demanding higher wages, which force restaurants to charge more. Energy-dependent transportation costs go up, so do prices.
Greed-driven inflation: Monopolies and cartels using their economic and political power to artificially increase their profits. For example, the OPEC+ oil cartel has been deliberately restricting production to rocket their profits into the stratosphere (Shell oil profits in the first quarter of this year were 180 percent of what they were for the same period in 2021, while Exxon is expecting to double its profits). Or consider speculators bidding up property values and then holding them off the market to send home prices and rents soaring.
Monetary inflation: When the value of the dollar falls in comparison to other currencies, the price we pay for imported goods such as clothing and appliances goes up. At the moment, though, the dollar is rising rapidly, which is reducing the inflation we are experiencing while increasing inflation in Europe and elsewhere around the world.

Check out this New York Times graphs from July 14, 2022:

As you can see, the 1st, 2nd, 3rd, and 6th top causes of our current inflation are energy costs, all of which have been deliberately and artificially jacked up by OPEC+ and Big Oil for their own profit. The increases in air travel and food costs (4th, 5th, 7th, 8th, 9th) are also almost entirely due to the effects of higher energy costs. Contrary to Manchin and McConnell, none of the top 10 current inflation causes are in any way affected by government spending.

The Federal Reserve Bank seems to focus almost entirely on this Demand-Pull inflation. Their main remedy is raising interest rates to "cool off an overheated economy." That's a euphemism. What it actually means is reducing the number of new jobs created and forcing businesses to lay off workers from existing jobs so that people no longer have disposable income to buy stuff. But jacking up interest rates does absolutely nothing to reduce price-gouging, speculation, and corruption, all of which are driving the inflation we are experiencing. Nor do increased interest rates address supply-chain disruption, chip shortages, or the grain shortfall caused by the Ukraine War, which is about to cause a global spike in food costs.

Government spending is indeed one (of many) factors influencing inflation. A government pumping too much money into the economy can result in Demand-Pull inflation. But on the other hand, government spending can reduce inflation. A healthier, better-educated labor force with adequate child-care options is more productive and inventive, increasing the availability of goods and services and thereby reducing Demand-Pull inflation. Improved roads, bridges, and other transportation infrastructure reduce transportation costs and thereby lower Cost-Push inflation. Surging rent and home prices are in large part caused by a long-term housing shortage that has been growing worse for decades. Government spending to significantly increase the housing supply would slow residential inflation. So would cracking down on speculators.

Of course, the 60 percent of the federal budget devoted to weapons and defense does inevitably pump goo-gobs of moola into the economy. And since citizens are not permitted to purchase the resulting nuclear weapons and battle tanks, that money injected into the economy chases consumer goods, resulting in some degree of Demand-Pull inflation. (If Republicans manage to take control of Congress in the upcoming midterms, Manchin, McConnell and all the other "public servants" in thrall to the NRA may make personal possession of atomic weapons mandatory, which would allow us all to share in the fruits of the military-industrial complex.)