Prices go up, people complain, and suddenly the joke “in this economy?” is less funny. This week on Surly Voices, the hosts were joined by Benjamin Wilson and Scott Ferguson to discuss why everything is so expensive, where we’re going and what it all means.
Listen to the whole episode here:
https://sound.wmnf.org/sound/wmnf_220407_100600_surly1_460.MP3
Scott Ferguson, associate professor in the Department of Humanities and Cultural Studies at USF, said a false narrative is being propagated: too much fiscal stimulus is causing prices to rise. However, both guests reject this narrative. Rather, they would put the narrative in a new lens to create a better understanding.
Benjamin Wilson, Associate Professor of Econ at SUNY Cortland, explained one of the main issues with using the lens currently in use. This problem is that most people use singular numbers or data points as references. They use CPI and unemployment rates and they really don’t capture the variability of things and how they actually affect people in their daily lives.
One of the biggest factors driving prices up is used car sales, according to Ben. But, he says, he would argue that prices aren’t going up in general, only the prices of certain goods and services. There is no one trend that fits all.
Looking at the consumer price index, the price of a “shopping basket” is increasing on average. However, used car prices are increasing exponentially, and that is causing the average CPI to increase overall. But, they say, that doesn’t mean things are looking up.
Wilson and Ferguson noted that the price of a barrel of oil has recently fallen back to “pre-shock” levels. However, the price of gas has not fallen. So releasing more oil and buying more oil won’t necessarily lower the price of gas. It’s when the companies decide to lower the price.
The dominant market structure in the US is not so much the open and free market, but rather the structure of oligopolies, where a few cores run the industry and have pricing power over all others. Ben named Amazon and Walmart as two monopoly powers that buy up others to stifle competition, and their power to do so also gives them the power to control market prices for many of the goods they sell.
“It’s time to reinvest in the 21st century and what the future of this country should be,” says Ben. And while we’ve started down this path, Scott says, there’s still a lot of work we need to do as a country.
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