Dispatches

CONGRESS REPORTS CORPORATIONS USE INFLATION TO ‘RAISE PRICES EXCESSIVELY.’ A panel of the US House Committee on Oversight and Reform reported that “certain corporations are using the cover of inflation to raise prices excessively, resulting in record profits and profit margins” at the expense of consumers, Jessica Corbett noted at CommonDreams (11/4).

The analysis—“Power and Profiteering: How Certain Industries Hiked Prices and Drove Inflation”—was produced by the House Subcommittee on Economic and Consumer Policy, which heard testimony from economists in September.

Rep. Raja Krishnamoorthi (D-Ill.), the subcommittee chair, said “today’s analysis reaffirms what an overwhelming 80% majority of Americans already recognize according to a recent poll: Under the guise of inflation, certain corporations excessively hiked prices far beyond what their costs necessitated, further driving inflation.”

“As American corporations report their highest profit margins the United States has seen in over 70 years, executives of leading companies are admitting on earnings calls that they’re taking advantage of inflation,” the congressman continued. “One executive argued that ‘a little bit of inflation is always good in our business’ while another admitted that his company’s prices wouldn’t fall with decreasing costs, stating, ‘We don’t reduce prices on the back end of these increases.’”

“It is unacceptable that certain companies and industries are engaged in extreme price hikes under the cover of inflation,” he declared. “Americans understand this is happening, and they want it to stop. We have an obligation in Congress to shine light on this practice, which is exactly what today’s analysis does.”

The document states that an “analysis of financial information from a sampling of the largest corporations in several industries shows massive increases in profits between 2019 and 2021.”

According to the subcommittee:

• Three of the five largest companies in the shipping industry saw profits rise by 29,965%;

• The two largest public companies in the rental car industry enjoyed a profit increase of 597%

• Four of the largest public companies in the meat processing industry saw profits go up by 134%; and

• Four of the 10 largest public companies by market cap in the oil and gas industry had profits rise by 62%.

“Over the same period, profit margins increased by 201% among the companies analyzed in the shipping industry, by 262% among the companies analyzed in the rental car industry, and by 53% among the companies analyzed in the meat processing industry,” the document notes.

The report also points out that “recent economic studies make clear that record corporate markups, profits, and profit margins contributed to—and continue to contribute to—ongoing Inflation.”

Specifically, the document says that “studies by the Economic Policy Institute and Roosevelt Institute demonstrate that profits contributed more to price growth in the United States from mid-2020 through the end of 2021 than at any other point from 1979 to the present—and continue to contribute markedly today. This is especially true in highly concentrated industries.”

The document concludes with the assertion that “the federal government can and should play an important role in addressing inflation, including by passing legislation to address excessive price hikes,” and highlights the Inflation Reduction Act, which Democrats finally passed this summer after months of party infighting and opposition from the GOP.

Some progressive lawmakers and policy experts continue to advocate for a windfall profits tax bill to target companies like the fossil fuel giants that have recently raked in massive profits, which they’ve used to benefit shareholders.

The new analysis comes just days before the U.S. midterm elections—which will determine whether Democrats retain control of Congress for the second half of President Joe Biden’s first term—and on the heels of the Federal Reserve announcing yet another interest rate hike.

The sixth rate hike of the year came despite warnings from economists, progressive lawmakers and other critics that the approach could have “catastrophic outcomes” for working-class people while not actually impacting inflation, due to corporate profiteering.

HOUSE DEMS PROPOSE END TO WALL STREET RENT-GOUGING. Three California members of Congress touted new legislation to target rent-gouging in the US by private equity firms and investment giants who have gobbled up huge numbers of single-family homes and residential units in the years since the 2008 financial crash, Jon Queally noted at CommonDreams (11/5).

Reps. Ro Khanna, Katie Porter, and Mark Takano are co-authors of the Stop Wall Street Landlords Act, which would “deter future institutional investments” in the Single Family Residential (SFR) market by ending taxpayer subsidies to profit-seekers as a way to help struggling families battling housing costs amid rising inflation.

The proposal would impose “a tax on existing and future acquisitions of SFRs” by large institutional investors, the lawmakers explain. The legislation would also prohibit federal lending institutions Fannie Mae, Freddie Mac, and Gennie Mae from purchasing and securitizing mortgages held by Wall Street firms who leverage their size and ability to purchase large numbers single family homes with debt in order to turn around and rent them out for exorbitant profit—a tactic that by itself pushes rental prices ever higher.

Private equity firms and Wall Street rarely if ever strayed into the single-family housing market prior to the 2008 crash, but the market exploded when large firms were given access to trillions in low- or zero-interests dollars over the last decade and as regulators at the Department of Housing and Urban Development (HUD) and the Federal Housing Finance Agency (FHFA) offered subsidies via federal programs such as Fannie and Freddie. In 2015, Sen. Elizabeth Warren (D-Mass.) was among those blowing the whistle by telling HUD that it had no business colluding with Wall Street in such a way.

“These Wall Street investors made money by crashing the economy, got bailed out and now they’re back to feed at the trough again, scooping up these loans at rock-bottom prices so that they profit off them a second time—and it is up to us to stop that!” Warren said to a cheering crowd during a Washington, D.C. rally in 2015.

In remarks posted online (11/5), Khanna said there may have been a time following the 2008 financial crash where it made sense for private entities to step in to buy residential units as a way to stabilize the housing market, but it has become clear that Wall Street investors have exploited government policies and a lack of oversight to fleece millions of renters who find themselves at the mercy of a housing crisis they did nothing to create and have no way to combat.

Khanna said that with 25% of single-family homes in the US being bought up by profit-seeking investors, these firms are “hurting the American dream of home ownership” and the economy overall.

“We need to stop the financialization of housing,” Khanna said. “Americans aren’t serfs. We’re not supposed to pay money to Wall Street to go live in a home. What we need is more American families to own their own homes.”

“When I was on the front lines of the foreclosure crisis, I saw firsthand how corporate special interests take advantage of families to line their pockets,” said Porter in a statement. “The Stop Wall Street Landlords Act promotes affordable homeownership, so that our kids can live in the same communities they grew up in. I am proud to work with Representatives Khanna and Takano to hold Wall Street accountable.”

Takano said, “Wall Street should not be any family’s landlord.”

“As the housing crisis continues to plague the country, America’s middle class is acutely feeling the constraints of our nation’s low housing stock and increasing prices,” added Takano. “Meanwhile, wealthy investors drive these costs up by monopolizing ownership of single-family residences. The Stop Wall Street Landlords Act takes the urgent steps needed to keep corporate investors out of the single-family housing market.”

JOB GROWTH REMAINS STRONG AS WAGE GROWTH SETTLES, BUT FED GOES AHEAD WITH INTEREST HIKE. The economy added 261,000 jobs in October, somewhat faster than most analysts had expected. Despite the rapid job growth, unemployment edged up slightly to 3.7%, the Bureau of Labor Statistics reported (11/4). Perhaps most importantly, it seems wage growth is settling down to a level consistent with the Fed’s 2% inflation target, Dean Baker noted. Over the last three months, it has increased at a 3.9% annual rate. That compares to a 3.4% rate in 2019, when inflation was comfortably below the Fed’s target.

“Given the visible progress in many areas, certainly the Fed can hold off on further rate hikes to see where things currently stand. Everyone recognizes that the full effects of rate hikes are not felt for many months. If the Fed has already raised rates enough to bring inflation down to acceptable levels, further rate hikes will be inflicting needless pain,” Baker observed (11/6).

“The Fed with have another jobs report to look at, as well as two monthly releases of the Consumer Price Index, and much other new data, before making a decision on rates at its December meeting. But the data we got from the October jobs report is certainly consistent with a pause by the Fed,” Baker concluded.

SENATE REPORT DETAILS LATEST PRIVATIZED MEDICARE SCANDAL. Insurance companies and other brokers are making false or misleading claims to dupe senior citizens into purchasing Medicare Advantage plans, according to a report published by the US Senate Finance Committee.

The report, which comes midway through this year’s Medicare enrollment period—described last year by healthcare writer Susan Jaffe as “open season for scammers”—reveals that the number of Medicare beneficiary complaints about dubious private sector marketing tactics more than doubled from 2020 to 2021, Brett Wilkins noted at CommonDreams (11/4).

“Older Americans and those living with a disability count on Medicare to deliver dependable and high-quality healthcare when they need it most. It is unacceptable for this magnitude of fraudsters and scam artists to be running amok in Medicare,” Senate Finance Committee Chair Ron Wyden (D-Ore.) said in a statement.

“Medicare Advantage offers valuable plan options and extra benefits to many seniors but it is critical to stop any tactics or actors that harm seniors or undermine their confidence in the program,” he added.

Medicare Advantage, also known as Medicare Part C, was initially introduced as a private-sector alternative to the government-run program. Designed to provide innovative care alternatives at a lower cost than Medicare, Medicare Advantage plans pay third parties—usually insurance companies—monthly per-person fees to manage patient healthcare. In traditional Medicare, the government pays healthcare providers directly.

Around half of all Medicare beneficiaries are now enrolled in Medicare Advantage plans. The new Senate report exposes tactics used by unscrupulous insurance companies, brokers, and other third parties to pressure seniors to purchase plans, “including deceptive mail advertisements, misleading claims about increasing Social Security benefits, aggressive in-person marketing tactics, and enrolling beneficiaries... without their consent.”

In August, the Senate Finance Committee collected Medicare Advantage marketing complaints from 14 states and found evidence that “beneficiaries are being inundated with aggressive marketing tactics as well as false and misleading information,” with examples including:

• Seniors shopping at their local grocery store are approached by insurance agents and asked to switch their Medicare coverage or Medicare Advantage plan.

• Insurance agents selling new Medicare Advantage plans tell seniors that their doctors are covered by the new plans. Seniors who switch plans find out months later that their doctor is actually out-of-network, and they have to pay out-of-pocket to visit their doctor.

• Seniors receive mailers that look like official business from a federal agency, yet the mailer is a marketing prompt from a Medicare Advantage plan or its agent or broker.

• An insurance agent calls seniors 20 times a day, attempting to convince them to switch their Medicare coverage.

• Widespread television advertisements with celebrities claim that seniors are missing out on benefits, including higher Social Security payments, in order to prompt seniors to call Medicare Advantage plan agent or broker hotlines.

Dr. Jessica Schorr Saxe, a retired family physician, noted in a recent Charlotte Observer opinion piece that “earlier this year, the federal government reported that 13% of denials in Medicare Advantage would not have been refused under traditional Medicare,” while “Medicare Advantage plans are also increasingly ending nursing home and rehabilitation care before providers consider patients ready to go home.”

Schorr Saxe continued:

‘So instead of innovating care, Medicare Advantage seems to mainly withhold it. It has also proven to be costly. Because such plans get higher government payouts for sicker patients, insurers have an incentive to exaggerate the sickness of enrollees.

“According to federal audits, 8 of 10 of the largest companies have submitted inflated bills, and 4 of 5 of the very largest have faced federal lawsuits accusing them of fraud. In 2020 alone, these exaggerated risk scores generated $12 billion in excess payments. Because of this and other factors, the government actually spends 4% more for Medicare Advantage enrollees than those in traditional Medicare.

“Surely this program should be called Medicare Disadvantage,” Schorr Saxe asserted. “When a middleman makes profits from ‘managing’ your healthcare, they inevitably do so by limiting the care you get.”

“Medicare recipients, beware,” she added. “And as citizens and taxpayers, we should all demand that Congress take Medicare out of the hands of corporations, freeing billions of dollars in savings to deliver actual healthcare.”

SO MUCH FOR INFLATION AND GAS PRICES. HOUSE GOP AGENDA IS REVENGE. Voters who think Republicans will take care of inflation and high gas prices will be surprised by what GOP leaders told CNN will be top priorities if they take the House: Hunter Biden, COVID-19 conspiracy theory hearings, removing the metal detectors at the House chamber doors, Joan McCarter noted at DailyKos (11/4). That’s along with forcing Social Security and Medicare cuts or destroying the US and global economies. That’s their argument for their election. Yes, “vengeance and destruction” is a pretty great message for Republican voters. It should be a really motivating message for every other voter in the country, because yikes!

Rep. James Comer (R-KY), set to chair the House Oversight Committee, won’t even wait until January when the new Congress is sworn in to start on the absolutely critical Hunter Biden story. He told CNN he is going to demand the Treasury Department send “suspicious bank activity reports” linked to Hunter Biden on Nov. 9, the day after the election. In the week after the election, he and Rep. Jim Jordan (R-OH), who could head the Judiciary Committee, will hold a Hunter Biden press conference.

They will also probably hype that big report from Jordan, which consisted of 1,050 pages of crank letters the Republicans have sent to the administration, 470 of which were a five-page letter included 94 times. CNN says that this is “committee’s investigative roadmap alleging political interference by the FBI and Justice Department based in part on whistleblower allegations, while rehashing some previous claims and requests that Republicans have made.”

“Rehashing” is putting it generously for the Republicans. “We’re going to lay out what we have thus far on Hunter Biden, and the crimes we believe he has committed,” Comer told CNN. “And then we’re going to be very clear and say what we are investigating, and who we’re gonna ask to meet with us for transcribed interviews. And we’re going to show different areas that we’re looking into.”

And, of course, they’re already talking impeachment. If not of President Biden, then of homeland security secretary, Alejandro Mayorkas. Even one of the non-Freedom Caucus hardliners that will be screaming for impeachment on Day One is on board with the idea, as long as his colleagues approach it right. “Let’s not rush to judgment, let’s build your case,” said Rep. Michael McCaul (R-TX). “You got to build your case first before you do something of that magnitude—otherwise, it’s not credible.”

Right. Credibility is the GOP brand these days.

In addition to all of that, there will be more vengeance on Democrats. They’re vowing to end remote voting, thus giving them a better chance to infect their colleagues with COVID-19. They are also going to take the metal detectors away from the House chamber doors, thus upping the chances that Rep. Lauren Boebert, or Marjorie Taylor Greene, or Paul Gosar—anyone of them really—shoots someone on the floor. Probably accidentally, because if they think they need to have guns in the House chamber—and clearly they do or the detectors wouldn’t have been necessary in the first place—they are not really likely to be responsible, gun safety types. Speaking of Greene and Boebert, the other thing Republicans are promising is kicking Democratic members off of committees. Just as revenge.

Not only will they restore Greene and Gosar to their committees—while removing Democratic Reps. Adam Schiff and Eric Swalwell off the House Intelligence Committee and boot Rep. Ilhan Omar of Minnesota from the House Foreign Affairs Committee—Leader Kevin McCarthy has said that he might give them even “better” assignments. Like putting Greene on the House Oversight Committee. He’s rewarding the arguably worst person out of 435 for being the worst.

So much for fixing inflation and gas prices.

Actually, they do have a legislative agenda. That’s if repealing everything that Democrats have accomplished in the past two years could really be considered an agenda.

TRUMP SUES NEW YORK AG LETICIA JAMES. Donald Trump has had enough of New York Attorney General Letitia James and the $250 million civil lawsuit she filed against him in September with the intention of permanently banning Trump and his ghoulish children, Eric, Ivanka, and Donald Trump Jr., from ever overseeing the business in New York, Rebekah Sager noted at DailyKos (11/3). So he’s countersuing.

Trump’s latest 41-page suit was filed in the Florida State Circuit Court. It alleges that James “repeatedly abused her position” in order “to pursue a relentless, pernicious, public, and unapologetic crusade” against him and the Trump Organization. Blah, blah, blah, per usual.

Trump also alleges that “what began as a cartoonish, thinly-veiled effort to publicly malign” him “has morphed into a plot to obtain control of a global private enterprise ultimately owned by a Florida revocable trust in which President Trump is the settlor.”

In an email statement to Axios, a spokesperson from the AG’s office said, “Multiple judges have dismissed Donald Trump’s baseless attempts to evade justice, and no number of lawsuits will deter us from pursuing this fraud. … We sued Donald Trump because he committed extensive financial fraud. That fact hasn’t changed, and neither will our resolve to ensure that no matter how powerful or political one might be, no one is above the law.”

James has made it her mission to end Trump’s underhanded business practices in the state since she was elected in 2018.

Business Insider reports that James has accused Trump Organization of inflating his net worth by billions in order to obtain loans, all in an effort to “cheat the system.”

Trump was on Truth Social (11/3) griping that, among other things, the only reason James filed the suit against him in September was that he was “now leading in the polls by substantial margins against both Democrats and Republicans.”

“While James does nothing to protect New York against these violent crimes and criminals, she attacks great and upstanding businesses… which have done nothing wrong, like the very successful, job and tax producing Trump Organization that I have painstakingly built over a long period of years … Crooked and highly partisan James now thinks it is the business of the State of New York to go after my revocable trust and pry into my private estate plan, only to look for ways to recklessly injure me, my family, my businesses, and my tens of millions of supporters.”

But Trump can’t sue his way out of his ubiquitous guilt.

Fulton County District Attorney Fani Willis has said her investigation into Trump’s involvement in interfering with the 2020 presidential election in Georgia will quietly continue, CNN reports. She has indicated that nothing will happen until after the midterms, and she is working to keep politics out of her process.

But as Danny Porter, former district attorney for Georgia’s Gwinnett County, tells CNN, “It has moved from just the idea of the phone call to the Secretary of State to a much broader investigation of tampering with the election.” Of course, Porter is referring to the infamous call Trump made to Georgia Secretary of State Brad Raffensperger, asking him to “find” over 11,000 votes.

Porter is among many legal experts who say indictments will come.

“She has the power to bring a case before a grand jury basically anytime she feels like she has enough evidence to show that the crime has been committed, not beyond a reasonable doubt but by probable cause,” said Porter. “If she gathers that information, she doesn’t have to wait for the report.”

From The Progressive Populist, December 1, 2022

Populist.com