No matter what economists are saying about the wonders of our existing economy, and no matter how much Biden can tout the success statistics, stuff just costs more that those wage and salary gains. The basics – food, transportation of all kinds (and fuel), housing, interest, medical care and clothing – have collectively increased since prepandemic times by 19+ percent. Less than the collective wage increases. Yet people are/were spending as if there were no tomorrow, because they anticipated prices would continue to go up even more. Even with interest rates hitting the highest levels in decades, credit card debt was rising fast. Huh?
But if you look at the increasing differential between average workers and CEO of large employers, the multiple was only getting worse. Those with homes enjoyed asset value increases; those who rented or were trying to break into the housing market… well, not so nice. Income inequality spreads got worse. And during all of this, hospitals, airlines, hotels and most of all banks (and all their financial businesses) found new ways to gouge consumers… while still claiming they were moderating inflationary cost increases. Hidden fees that the Biden administration pledged to make more transparent, up-front. Not very popular with chambers of commerce or Republicans.
Take this exchange between Biden’s director of the Consumer Financial Protection Bureau (CFPB), Rohit Chopra, with a GOP member of Congress at a hearing of the House Committee on Financial Services on June 14th. Reported by LA Times OpEd writer (on December 10th), Michael Hiltzik: “‘I talk to a lot of banks,’ Rep. Dan Meuser (R-Pa.) told Rohit Chopra, director of the Consumer Financial Protection Bureau, ‘and they’re really not happy with your agency.’… He urged Chopra to ‘be responsive to the clientele you’re supposed to be helping.’… With admirable restraint, Chopra replied: ‘Just to be clear, the clientele of the CFPB is not the banks. The clientele is the public.’
“The exchange occurred at a hearing of the House Committee on Financial Services on June 14. Leaving aside that Wall Street banks and brokerages have been among Meuser’s leading campaign donors, the congressman was not lying about the bankers’ opinion about Chopra and his agency — in fact, he may have minimized their hostility.
“The U.S. Chamber of Commerce, speaking on behalf of the financial services industry, has called Chopra a ‘radical’ pursuing an ‘ideologically driven agenda.’ Last year, the American Bankers Assn. and two other bankers’ lobby groups published a 21-page broadside against him, calling on Congress and the federal courts to rein him in.”
Just to be even clearer, this notion of regulatory agencies representing the corporate side of the ledger, not the public, was a hallmark of the Trump administration, which, when they weren’t getting direct pro-business decisions (as they did with the Department of Education fighting against students to force repayment of tuition loans for bankrupt and clearly fraudulent “for profits trade schools” or where the Postmaster General cut services, turned off sorting machines and raised rates, and promised to make the US Mail “profitable”), simply defunded the agency they wanted to rein in… like the Environmental Protections Agency and any agency unequivocally dedicated to protecting consumers from unscrupulous business practices. If reelected, Trump promises to go back to his efforts to dissolve or defund any government agency aimed at pro-consumer, pro-public policies at the expense of corporate profits.
Hiltzik continues: “[Republicans’ and their business donors’] ire has intensified in recent months, as the CFPB has stepped up its campaign against ‘junk fees.’ The agency defines these as excessive or unnecessary fees on overdrafts, account information requests, late payments on loans or credit cards, among other charges… The CFPB’s campaign is part of the Biden administration’s broader attack on junk fees across the U.S. economy — fees that appear on a consumer’s bill at the end of a transaction, rather than being disclosed in advance.
“If you’ve rented a car, bought an airline ticket, booked a hotel room or paid a cable bill, you probably know what the White House is talking about: hidden, surprise charges for services you may not even have used, transaction charges for buying online or downloading a concert ticket instead of picking it up at the box office, etc., etc.
“These charges have proliferated as retailers and service providers try to raise revenues by ‘unbundling’ services that used to be provided at no extra charge. The quintessential example comes from the airline industry, where baggage fees have soared, reaching nearly $6.8 billion last year among the top domestic carriers, up from $464 million in 2007. Some ostensibly low-cost airlines charge for checked bags and carry-ons.
“Biden took aim at the nickel-and-diming of American consumers within six months of taking office in 2021, when he instructed agencies including the Department of Transportation, Federal Trade Commission and Federal Communications Commission to devote close scrutiny to regulated industries’ treatment of consumers.
“The administration intensified its campaign on Oct. 11, when Biden, FTC Chair Lina Khan and Chopra jointly announced new initiatives on junk fees… The FTC’s proposed rule would require businesses to disclose ‘all mandatory fees when telling consumers a price, making it easier for consumers to comparison shop for the lowest price,’ according to a commission statement. The FTC would be empowered to obtain refunds for consumers and impose penalties on businesses that don’t comply.” Think it’s kind of weird and hypocritical that these “free market” bastions of capitalism want to charge hidden fees well after the fact? Competition? Hell no!
A lot of what Trump unraveled during his four years has still not come back online fully, and now his reconfigured US Supreme Court is challenging the power of administrative agencies (from the Food and Drug Administration and Department of Justice to the Securities and Exchange Commission) ability to hold hearings, assess penalties and create rules to implement Congressional mandates. They are beginning to rule that only Congress can make those detailed and highly specialized rules, and only courts can enforce them… Congress? LOL. Seriously? Congress should make detailed “laws” vs “rules” permitted to agencies by Congress on stuff like pharmaceutical standards and testing requirements, the minutiae of stock trading and reporting mandates, etc. Like they’re doing so well with ordinary legislation?!
I’m Peter Dekom, and if you really want to know why so many consumer prices are so high, take a serious look at the explosion of corporate profits… and those nasty federal interest rates aimed at taming those even nastier corporate practices that have made the monied class so much richer.
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