Episode 210: Seller’s Inflation and the Super Serious Economists Mocking “Greedflation” “Conspiracies”
Citations Needed | October 16, 2024 | Transcript
[Music]
Intro: This is Citations Needed with Nima Shirazi and Adam Johnson.
Nima Shirazi: Welcome to Citations Needed, a podcast on the media, power, PR, and the history of bullshit. I’m Nima Shirazi.
Adam Johnson: I’m Adam Johnson.
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Nima: “An inflation conspiracy theory is infecting the Democratic Party,” frets the Washington Post “‘Greedflation’ is a nonsense idea,” The Economist insists. “Harris’ plan to stop price gouging could create more problems than it solves,” CNN warns.
Adam: Over the last few years, as prices of groceries, cars, and other necessities have risen, often dramatically, leading news outlets and influential pundits have claimed that these rising prices are simply a matter of supply and demand. Corporations aren’t taking advantage of inflation. We’re told they’re simply responding to it. If materials are in short supply or if there’s a surge in demand, retailers have no choice but to raise prices to control production flows and costs. Likewise, if prices of goods are significantly higher, then the people who want those goods enough to pay higher prices can still have them.
Nima: But these pat arguments don’t hold up to scrutiny. Since the most recent round of inflation began, multiple studies have shown that corporations are indeed taking advantage of inflation, using tactics like price gouging to boost profits while creating barriers to quality food, medication, and other essentials. So, what explains the discrepancy?
Adam: On today’s episode, we’ll examine the tendency of media to defend corporate price gouging and other inflationary maneuvers, discuss how high-status pundits and serious economists critique the White House from the right on this issue and condescend to anyone who might even be slightly suspicious that corporations are animated by something other than just the invisible hand, oftentimes painting those who are skeptical of this narrative as wacko conspiracy theorists who simply need to take the vaulted Econ 101.
Nima: Later on the show, we’ll be speaking with Dylan Gyauch-Lewis, Senior Researcher at the Revolving Door Project where she leads their Economic Media Project.
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Dylan Gyauch-Lewis: When you have concentrated markets where firms are able to be price setters rather than just price takers, then when there is uncertainty around pricing because of high inflation, i.e. consumers can’t tell when you raise the price of milk by an extra dollar whether that’s reflective of an actual increase in costs or whether that’s to line your wallet, then you have every incentive to increase the price of milk by the extra dollar.
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Adam: So, this is a spiritual successor to a live interview we did in July of 2022 entitled “How Our Simplistic ‘Inflation’ Discourse Fuels the War on Workers” with Josh Mason who is an associate Professor of Economics at John Jay College. So, check that out if you haven’t.
Nima: Yes, we discussed inflation and inflation narratives in the media a bit with Josh, and this, we’re gonna dig into it deeper, especially because of what we have seen in the ensuing two years. Now, to start, let’s go back 50 to 60 years and talk about the historic inflation of the mid to late 1960s through the 1970s which occurred amid multiple oil crises and the general neoliberalization of the global economy. Now, there were many differences, of course, between the inflation of that time and the inflation that we see now, but the groundwork was being laid in the 1970s to obscure the inflationary role of private industry while placing outsized blame on government spending and, of course, labor power.
Now, a November 1970 edition of Reader’s Digest included an article written by then President Nixon’s Under Secretary of the Treasury, Charles E. Walker. The article opened with this:
Ready for a short multiple choice quiz on the economy. Here goes:
1. The basic cause of the rising cost of living has been
a. Price gouging by business
b. excessive wage increases demanded by labor unions or
c. federal spending.
Nima: After that opening, Walker continued with this: “If your answer to [the question] is c, go to the head of the class. If it’s any of the other choices, back to your textbook in economics!” So, c, of course, being federal spending. That was the only appropriate answer that Walker was going to accept for why there has been inflation and thus a rise in the cost of living.
Adam: There are, of course, multiple contributing factors to inflation, and of course, how we emphasize those factors is deeply political and deeply ideological, and very much about public perception. But at the time, the Nixon administration had been blaming organized labor for rising prices by demanding higher wages, prompting union leaders to draw attention to the inflationary effects of corporate price gouging.
In 1971, I.W. Abel, the president of United Steelworkers made the following statement, saying:
The single most important factor in the current inflation has been price-gouging by the profit-greedy. Between 1960 and 1968, after-tax business profits skyrocketed 91 per cent, while dividend payments to shareholders increased by 84 per cent. During this period, average after-tax, take home pay of American workers increased by only 31 per cent with inflation further reducing the workers’ gains to 11 percent.
Still, the erasure of corporate culpability continued. Some years later, in May of 1978, the Associated Press published an article with the headline: “What Causes Inflation?” In this article, the AP stated the following:
While there is no single cause of inflation, these factors play a part:
— Labor negotiations. As prices rise, workers ask for more money — and that extra cost is passed on in still higher prices.
— Government policy. Inflation is not the only consideration, and some decisions are made in spite of, not because of, their effect on inflation.
— Deficit spending. Higher government spending puts more money into circulation, which increases demand — and prices.
— Devaluation. As the value of US currency drops in comparison with foreign money, imports cost more, whether they are finished goods or raw material of domestic products.
And the list ended there. Note the conspicuous absence of private industry decisions at all on raising prices, right? It’s only labor unions, government, social spending, and broader devaluation of currency. There’s no sense that corporate price gouging is responsible at all.
Nima: That’s right. Never would the private industry be responsible for inflation. It is only labor and the federal government. Now let’s skip ahead to the present day and what we’ve been seeing lately. Since the start of the decade, the dismissal of the corporate cause of or contributions to inflation has been kicked into high gear. By late 2021, following a number of global disruptions, including the onset of the Covid-19 pandemic and the related, so-called supply chain crisis, inflation was on track to reach its highest levels since 1982 which it did in early 2022. The Biden White House had issued an executive order in July of 2021 calling for some mild regulations targeting consolidation and profiteering across industries, including healthcare, agriculture, internet service providers, technology, and transportation, ostensibly designed in part to reduce prices to keep inflation in check.
Months later, in November of 2021, Biden, according to The Washington Post, “[urged] the Federal Trade Commission to escalate its investigation of anti-competitive behavior in the oil and gas industry, which the president alleged was leading to higher prices for drivers at the pump.” So, despite the fact that this was reported fairly straight by the Washington Post, they do say “alleged,” but still, The Washington Post’s own editorial board, in January of 2022, published a piece condemning Biden’s move to cite business consolidation as a major cause of rising prices as what they deem to be “foolishness,” adding that “pinning the current inflation problems on corporate greed is a flimsy argument.” Instead, the Washington Post editorial board argued demand soared, but supply just couldn’t keep up due to “supply chain hiccups and labor shortages, so prices went up.”
The implication here, of course, was that corporations, according to The Washington Post editorial board, had either very little control or no control whatsoever over the economic dynamics of the time. That the cause of inflation really was pandemic-era supply chain hiccups and of course, as we’ve discussed before on Citations Needed, the dreaded labor shortage.
Adam: Now, this would become a recurring theme made especially clear by Washington Post columnist Catherine Rampell who in May of 2022, wrote an opinion piece dismissing concerns about corporate contributions to inflation as “a conspiracy theory” that had been “infecting the Democratic Party.” Rampell called the theory “greedflation,” a term used in earnest in the 1970s to refer to the same phenomenon. Rampell, of course, was using it pejoratively, as she dutifully echoed the editorial board’s reasoning. And another piece a few days later, Rampell cited stimulus checks i.e. government social spending as the chief cause of inflation and called the Democratic strategy to blame corporate greed as a form of “demagogic rhetoric.”
And the argument took off with centrist neoliberals and capital S, capital E, Serious Economists and capital, S, capital P, Serious Pundits, namely Matt Yglesias. For example, on his blog Slow Boring in May of 2022, he wrote a post called “Greedflation is fake.” It was published in response to Elizabeth Warren introducing a bill called the Price Gouging Prevention Act of 2022. Yglesias wrote, “only a very stupid person would think companies suddenly became greedy in 2021 after years of being non-greedy.”
Here are similar pieces in the same genre. Matt Iglesias wrote a piece in May of 2023 entitled “Greedflation is still fake.” The Telegraph in June of 2023: “Blaming inflation on corporate greed is dangerous Left-wing nonsense.” And The Economist in July of 2023, “Greedflation is a nonsense idea.” But these pieces were ignoring key points of evidence. Even before Catherine Rampell’s condescending screeds were published in May of 2022, studies had confirmed that corporate price hikes were indeed instrumental to the spike in inflation.
Nima: The Economic Policy Institute or EPI, for example, released a report in April of 2022 noting an enormous rise in profit-driven price increases. Between the second quarter of 2020 and the fourth quarter of 2021, over half of the increase in prices, 53.9%, could be attributed to larger profit margins, and less than 8% could be attributed to labor costs. By contrast, in the 40 years between 1979 and 2019, profits contributed about 11% to price growth, and labor costs contributed over 60% to price growth.
Now, let’s be clear about what so-called greedflation means, and how it relates to an actual economic theory called sellers’ inflation. As our guest Dylan Gyauch-Lewis has written:
sellers’ inflation is the idea that, in significantly concentrated sectors of the economy, coordinated price hikes can be a significant driver of inflation. While the concept’s opponents generally prefer to call it ‘greedflation,’ largely as a way of making it seem less intellectually serious, the experts actually advancing the theory never use that term for a very simple reason: it doesn’t really have anything to do with variance in how greedy corporations are.
So, let’s return to the aforementioned claims of Matt Yglesias that people recognizing the existence of sellers’ inflation think that corporations “suddenly became greedy in 2021.” Now, as Josh Bivens, the author of the EPI study wrote:
It is unlikely that either the extent of corporate greed or even the power of corporations generally has increased during the past two years. Instead, the already-excessive power of corporations has been channeled into raising prices rather than the more traditional form it has taken in recent decades: suppressing wages.
Bivens added:
The historically high profit margins in the economic recovery from the pandemic sit very uneasily with explanations of recent inflation based purely on macroeconomic overheating. Evidence from the past 40 years suggests strongly that profit margins should shrink and the share of corporate sector income going to labor compensation (or the labor share of income) should rise as unemployment falls and the economy heats up. The fact that the exact opposite pattern has happened so far in the recovery should cast much doubt on inflation expectations rooted simply in claims of macroeconomic overheating.
Similarly, economist Isabella Weber of the University of Massachusetts at Amherst also found that corporations had maintained the higher prices they’d set even as the shocks of the pandemic and the supply chain issues subsided and as the rate of wage growth slowed. In 2023, Weber and economist Evan Wasner concluded that “the US COVID-19 inflation is predominantly a sellers’ inflation that derives from microeconomic origins, namely the ability of firms with market power to hike prices.”
And earlier this year, in January of 2024, the think tank Groundwork Collaborative found very similar results to those of EPI, namely that corporate profits were responsible for more than half of inflation during the second and third quarters of 2023. Despite the slowdown in inflation, additional costs were still being passed on by corporations to consumers. Groundwork’s research found that
While prices for consumers have risen by 3.4% over the past year, input costs for producers have risen by just 1%. For many commodities and services, producers’ prices have actually decreased. Corporations have failed to pass these savings to consumers.
Groundwork also found that
Corporate profits as a share of national income have skyrocketed by 29% since the start of the pandemic. While our economy has returned to or surpassed its pre-pandemic levels on many indicators, workers’ share of corporate income has still not recovered.
And as Groundwork’s Executive Director Lindsey Owens explains,
Even as supply-chain snarls have receded and the U.S. economy has stabilized, our research finds that businesses continue to pad their bottom lines at the expense of American families.
Adam: Indeed, as far back as mid-2021, Groundwork researchers began listening in on and reading transcripts of corporate earnings calls across industries experiencing record-setting price increases from oil and gas to housing and healthcare to groceries and retail to transportation industries like railroads and airlines. They found that “CEOs were openly bragging to their shareholders about their ability to raise prices beyond their rising costs to increase profits. To justify these moves, CEOs hid behind the cover of supply chain issues and the economic turmoil caused by the pandemic.”
Yeah, which makes sense, right? There’s a psychological aspect to this. This is why psychologists win Nobel prizes for economics all the time. There’s a huge psychological, huge mass psychological, huge sociological dynamic to many of these questions. And of course, this feeds into issues of how media covers it and how the public perceives it and the political consequences of that perception. That these dynamics don’t exist in a frictionless vacuum. They don’t exist on an Econ 101 textbook page. There are many contributing dynamics to this, and if someone feels like they have the cover of supply chain issues in terms of the psychology of the consumer and the psychology of public regulators, then yeah, they’re gonna try to push it from five to six to 7% to 8%. Why would you not? Why would you not just keep pushing it like the velociraptors in Jurassic Park and kind of see how much you can get away with until you get shocked, right? You would test the fences, both psychologically and from a public regulatory dynamic. That makes sense to me, right? That makes common sense.
Nima: But they’re also not doing it stealthily, which is, I think, what’s really interesting here. Based on the research and based on these publicly available transcripts of corporate earnings calls which are public because they are publicly traded companies. And so therefore, CEOs and those financial officers speaking on these corporate earnings calls are actually bound to at least nominally tell the truth about how they are increasing the profits and the payouts to shareholders. And in these calls, they literally praise themselves for keeping prices high, even though pandemic supply chains have recovered, even though inflation is down. But they’re like, look, the consumer got used to paying higher prices so rather than drop them to kind of react to how the economy is moving, how unemployment is moving, how inflation is moving, we’re just going to keep the prices high because it’s more profit for all of us. And they literally say these things, and you can read it. And still, so much of political speech, so much of media assessment and analysis is based on shitting on this idea of greedflation. Right, Adam? This idea that, if you believe that, you know, all of a sudden —
Adam: All of a sudden.
Nima: All of a sudden, corporations got greedy.
Adam: The monocle-wearing capitalist decided to get greedy. They weren’t greedy before, you fucking idiot. Econ 101.
Nima: [Laughs] Which is not what greedflation means. It’s just a way to explain that prices are going up and staying up well above the increase in costs, right? Increase in costs are gonna — this is econ 101 — that makes the overall cost of a good or service more expensive, right? This is profit, well above covering costs, well above that, and they are bragging about it publicly, and still, you get Matt Yglesias being like, yeah, I don’t really think it’s that, there was really no change in the corporate side of things. So, greedflation must just be some conspiracy theory by the Democrats.
And of course, it’s no coincidence that all of this kind of narrative work has occurred after a period of mass industry consolidation. Since the late 1990s, more than 75% of American industries have become more concentrated. In May 2023, The Lever published a piece examining and debunking this media erasure of the role of corporate price gouging. The authors of the article actually asked Matt Yglesias and Catherine Rampell and others for comment to clarify this discrepancy between their claims and the documentation of corporate price gouging.
Those who replied to him, which included Matt Yglesias, simply doubled down on their arguments. When asked about his piece, “Greedflation is fake,” Yglesias responded to The Lever by saying,
In terms of my piece, I believe my thesis — as you yourself quoted it back to me — was that inflation could not possibly be attributed to an increase in the level of corporate greed. I stand by that 100 percent.
And he added,
What I remember from my economics textbooks is that if you have a surge in demand that runs up against relatively inelastic supply, what happens is that prices go up (inflation) and so do profits — that’s broadly speaking what I think is going on here and what I assume the economists whose work you’re summarizing are explaining.
In June of 2024, Yglesias took to Twitter to ask in a snide poll that actually had no choices, this: “Is ‘sellers’ inflation’ just normal demand-push inflation given a new name to be confusing?” And what he was referencing is that study by Isabella Weber.
In response to this snide poll, Isabella Weber, the economist we had referenced earlier who did the study confirming that corporate greed is driving inflation wrote back to him, saying,
Loving it when people with big platforms run such well designed surveys on my work! Congrats! P.s. If you had read our paper, you would know that sellers’ inflation has nothing to do with demand-pull and is not a “new name” but dates to the 1950s.
Yglesias was forced to respond with this,
Okay, I’ve read the paper now, and you’re right. It is much clearer on this point than most of your popularizers. Basic idea is we should understand the macroeconomic outcome in terms of microeconomic rather than macro causes.
So, basically he was shitting on this idea of sellers’ inflation to be smug and snide without ever having read the paper itself. And when called out on it, was basically like, Yeah, I guess you’re right. Never mind.
Adam: Well, I’m glad he got around to reading the paper he was criticizing, but we’ll discuss that more with our esteemed guest and noted Matt Yglesias hater.
So, let’s talk about the media panic around price controls that Kamala Harris proposed. So, there’s a pattern of media apologia that kind of transcends from inflation over to this idea of price controls as a scary, kind of quasi-Marxist solution to high prices. When Kamala Harris took over the now memory-holed Biden campaign, you remember that?
Nima: Who? Who?
Adam: Right, they were so cooked from the beginning. In August of 2024, she quickly proposed a federal ban on price gouging on food and groceries, realizing that obviously, this would be a huge vulnerability for Democrats and also just, I don’t know, probably a good idea. CNN’s economic reporter Elizabeth Buchwald wrote an article, “Harris’ plan to stop price gouging could create more problems than it solves,” which is weirdly editorial for an ostensibly straight report, but the piece cherry-picks conservative economists and studies highlighting those opposed to limits on price gouging and relegating one proponent — the aforementioned Lindsay Owens of the Groundwork Collaborative — to the very bottom of the article. Its main, extremely tortured argument was that limits on price gouging would prevent smaller companies from moving in to offer lower prices. It didn’t seem to take into account that keeping corporate power at this astronomical level would, by traditional capitalist logic, also prevent smaller companies from moving in. But that was not really that important to her. And guess who else had something to say other than CNN’s Elizabeth Buchwald? The Washington Post’s own Catherine Rampell. In August of 2024, she wrote a column headlined, “When your opponent calls you ‘communist,’ maybe don’t propose price controls?” She’s so fucking snarky, isn’t she? Because clearly Republicans are going to stop calling you a communist when you don’t propose price controls because they never called Obama, Hillary Clinton, Bernie Sanders, or Joe Biden a communist. So, clearly there’s evidence that if they don’t propose modest —
Nima: Then the Republicans will just get on board.
Adam: They’ll just stop calling them communists. She warned that “at best,” restrictions on price gouging would lead to shortages, black markets, and hoarding, and would somehow raise prices though it’s not really clear how. Rampell also claimed that price gouging laws
would require public companies to publish detailed internal data about costs, margins, contracts and their future pricing strategies. Posting cost and pricing plans publicly is a fantastic way for companies to collude to keep prices higher — all facilitated by the government.
Adam: Rampell didn’t bother to note that companies mostly already do this and certainly did this in the wake of the pandemic. The nonprofit Good Jobs First analyzed government agency announcements and court records and reported in 2023 that since January 2000, US corporations have paid $96 billion in fines and settlements to resolve more than 2,000 cases involving allegations of price-fixing and similar anti-competitive practices. These cases include household items and necessities, documented cases encompassing goods from shoes to packaged ice to pharmaceuticals.
It’s also central to note that Harris’s proposal was extremely light on details. It’s still very much business-friendly, and this is important. Does it resemble anything close to price controls?
Nima: Yeah, but she’s still a commie.
Adam: Well, yeah. According to The New York Times report, it would likely only target sellers with huge markups during times of emergencies like natural disasters. The plan is also concerned with rewarding smaller businesses, ostensibly a form of “industry competition,” far more than any numerical controls on prices. But this didn’t stop the panic around this because, again, you’re not supposed to imply that there’s any kind of corporate price fixing, either informal or formalized, even though, again, as Good Jobs First noted, there’s been over 2,000 examples of price-fixing in various industries, especially when there’s less and less competition, which increasingly there is, which our guests will talk about.
And I think this really kind of cuts to the core of this media narrative. Matt Yglesias does this a lot. Obviously, we picked on him a lot because he’s been at the forefront of this, but he’s also read every day by former Biden Chief of Staff, Ron Klain. So, he’s very influential. And he does this a lot, obviously, Catherine Rampell did it, which is another capital S, capital E, Serious Economist. They do this idea of conspiracy theory. They kind of love to throw out this pejorative. Now, there’s an old, you know, adage that when workers get together and to better plan their mutual interest and work together, it’s called a union. When people in corporations get together and plan in their better interest, it’s called a conspiracy theory.
Now, of course, there are trade groups. There are ways in which corporations, again, both informally and formally, decide not to really compete with each other because it’s in their best interest to do that. That’s the very nature of price fixing. It’s the very nature of trusts. And the idea that that in concert with just broader corporate consolidation, again, as our guest notes in her excellent work at the Revolving Door Project, there are many mechanisms with which corporations are not exactly on the up and up when they determine prices. There isn’t a strict vacuum, a frictionless vacuum, Econ 101 model of supply and demand that determines prices.
Nima: You mean, prices don’t just go up and down like the waxing and waning of the moon, Adam? It’s not just a force of nature unaffected by human decision-making? [Laughs]
Adam: Especially when inflation is such a powerful political tool. And this is something that I think these progressive economists who’ve pushed back on this and talked about sellers’ inflation, I think they’ve avoided this issue because it’s outside of their domain. But having the power of inflation to punish and discipline Democrats, especially during a crisis moment like in 2021, 2022 with respect to Covid and social spending, which radically changed the labor market, radically changed labor power almost overnight in terms of both the stimulus and enhanced unemployment, which we’ve talked a lot about, capital was freaking out. And there needed to be a corrective to what they viewed as being a change in the social system, a change that a lot of doe-eyed progressives thought would maybe translate into a broader social safety net once people saw how much poverty reduced, once people saw how much childhood poverty reduced, and once people saw how much labor power workers could have when you had a higher floor to protect workers from exploitation and from abuse. That, of course, didn’t happen. But I think in this context, there were not just corporations sitting around twiddling their thumbs, simply responding to upstream costs —
Nima: The market.
Adam: The mysterious market and so all this kind of worked together, again, along with the tremendous political power of raising prices, in terms of sending a message to Democrats, sending a message to this sort of prevailing political mood at the time, which at that point was to spend, spend, spend. And again, these things were openly lobbied for by business lobbyists, quite explicitly. So, I’m excited to talk to our guest about this dynamic because I think that this is where this really does become a media story where it intersects with what we do, which is it’s about public perception. It’s about the political perceptions of who owns inflation. Because everyone can see their grocery bill skyrocket. Everyone can see McDonald’s doubling its prices in a matter of four or five years. And so, who owns that, who’s responsible for that, who gets blamed for that is of tremendous importance. And there’s been a huge effort by the business lobby, by pro-business groups, by Republicans, by more conservative Democrats to make sure that at the end of the day, when you see your grocery bill and you see that your bill is 20, 30% higher, that you don’t blame Kroger-Albertsons and other corporate forces but instead blame those greedy workers who asked for too much or those Covid-era layabouts who decided to collect their government cheese instead of working.
Nima: Right because we see so often headlines about skyrocketing inflation and far fewer headlines, albeit some but still far fewer headlines that report things like S&P 500 hits record high amid upbeat third-quarter earnings. Or Tyson Foods shares set record as high meat prices fatten profits. Or US billionaire wealth skyrockets during pandemic, which it did, right? The wealth of the world’s 10 richest men doubled during the pandemic, according to Oxfam. And so, making sure that those kinds of reports fail to make the same waves as reports about inflation and rising prices and rising labor power, rising federal spending, that is the purpose of these very powerful media and political narratives about inflation and how corporations, when they’re even driving up prices, are saying, hey, it has nothing to do with us. It’s all because there was so much federal spending or because of maybe a nominal increase in worker salary and certainly large federal spending, that gets all the blame. To discuss this more, we’re now going to speak with Dylan Gyauch-Lewis is a Senior Researcher at the Revolving Door Project, where she leads their Economic Media Project. Dylan will join us in just a moment. Stay with us.
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Nima: We are joined now by Dylan Gyauch-Lewis. Dylan, thank you so much for joining us today on Citations Needed.
Dylan Gyauch-Lewis: Yeah, thank you so much for having me. I’m looking forward to it.
Adam: So, as you note and as your organization notes, the issue of inflation, prices, price gouging, price controls is very much a media story at its core in the sense that it has tremendous political consequences. The prevailing media narrative around inflation, it’s been eroded a little bit, but I still think it’s fair to say it’s kind of the prevailing or conventional wisdom around inflation, especially from late 2021 into basically early this year, was that Covid-era social spending and disruptions in the supply chain along with increasingly powerful labor markets had radically increased prices across the board, and this led to a kind of inflationary spiral where things kind of got out of hand. And the solution, therefore, the obvious solution to both of those is to decrease labor power and to decrease social spending, which obviously we have ideological problems with on our show, seeing as how we are economically illiterate leftist as we have been called.
Nima: Or you could say pro-labor, I mean, but whatever.
Adam: Well, yeah, for the fedora hat-wearing crowd, we didn’t do 101, we don’t understand supply and demand. Now, obviously we view this popular theory as extremely convenient for the wealthy, right? Discipline labor and cut social spending, right? What are the odds? Talk to us about this kind of dominant media narrative that really took off, I think it’s fair to say, in earnest, in late 2021 with a lot of the panic around uppity, you know, Wendy’s employees was driving up the cost of your burger. How do you respond to that narrative, and what do you think it’s leaving out of the conversation?
Dylan Gyauch-Lewis: So, to start on the economics of it all, really, if we look at the inflation from the past several years, it’s come from a number of different sources, including the ones you mentioned like labor power and government spending. Although, what’s being left out of that list, I think, is even more important, which is supply shocks, which happened for a number of reasons. One was there’s been over the course of the past several decades, much less regulation of transportation industries alongside growing pushes from Wall Street financiers for transportation companies to cut their overhead, which basically means to cut their capital expenditures. Trucking companies have fewer trucks. Train companies have fewer cars, fewer active trains, they upgrade them less frequently, which means that they can save money on those expenses, reduce their overhead, and pass on the savings to shareholders. Obviously, this creates problems when there’s a once-in-a-lifetime or hopefully once-in-a-lifetime pandemic that forces everyone to go home and shift their spending away from services and towards goods. It would have been really useful if those transportation companies had excess capacity in the way that they would have had 40 years ago. Another thing is the invasion of Ukraine by Russia had serious supply shocks in especially oil and grain that rippled through other markets because oil and grain are inputs for a ton of different stuff.
And then after you combine all of this supply-side stuff and demand side stuff, we also saw corporations using inflation as a smoke screen to prop up additional hikes above what they would need to offset their costs in order to pad their profits. But Groundwork Collaborative especially has done a lot of work documenting executives bragging about doing this on their earnings calls. And basically, the mainstream economic discourse response to this has been one of two things. It’s either been nuh-uh, they’re not doing that or it’s been, well, that’s just normal. They’re passing on costs to consumers. On the nuh-uh thing, I have yet to hear a good response to the fact that you are legally obligated to accurately describe your pricing and earning strategies on an earning call. So, for those people who think they’re defending corporate executives by casting doubt on that, they’re also kind of implicitly accusing them of federal crimes.
Nima: [Laughs] Right, by being honest about what their plans actually are on those earning calls to shareholders, the accusation is that they are not only lying to their shareholders but also, by virtue of lying on those calls, they’re breaking the law even though, obviously, there’s no incentive to do so, especially when they’re admitting to price gouging, right? Increasing costs over and above covering the, you know, increased costs of, say, an import or whatever, that they are actually, like increasing those costs, passing those onto the consumer so that they can just make more profit, and admitting to that on these calls, and so, yeah, no, that’s such a really good point to make. They actually can’t lie on those calls. I mean, you can say, well, anyone can lie anywhere, right? Like, you say that you’re not lying, and then you can lie, but that would actually be a federal crime.
Adam: Yeah, that would be securities fraud. I want to ask a quick question. I want to follow up on this dynamic because I think this is really the key dynamic or it’s one of the main key dynamics, which is this idea that there is a psychology and a kind of human psychology to this. Let’s bring a parallel example to this, right? Before Covid broke out in, obviously, March of 2020, it would be unheard of to ask people to make tips in certain contexts, right? Like most contexts, you were not really prompted to give a tip at, say, a bowling alley or in many kinds of consumer transactions. And then, as labor costs skyrocketed, the psychology dynamic changed where obviously labor costs went up because of tight labor markets. But also, again, either through coordination or just a confluence of incentives, various businesses decided to start trying to pass off their labor cost by guilting you into tipping, which you know, again, from the workers’ perspective, makes sense, but it broke a more. It broke a kind of informal arrangement. And these kinds of informal arrangements around pricing and the psychology of pricing exist everywhere.
And what I think you’re arguing and what a lot of people kind of pooh-poohed is that there is obviously a form of mass psychology involved in how much you can charge for things. And that is what a lot of corporations saw. And again, you can talk about the underlying dynamics that permit them to do this in terms of the power of price, in terms of concentration of and the limited number of corporations in most domains of economic activity, they see the psychological dynamic, and they just get fucking greedy. I mean, in the truest sense of the word, like, let’s just see how far we can go, right? Let’s test the raptors in Jurassic Park. Let’s test the fence until we can’t go any further. Which makes sense because, again, that’s what I would do, right? If you see an opportunity, if you see something that kind of shocks the system, right? It’s Naomi Klein’s Shock Doctrine 101. You sort of see what you can get away with under the cover of this crisis whether it be supply chain disruption, whether it be sort of the broader, sort of psychology of Covid and the lockdowns. So, talk a bit about the psychological dynamic and why this was kind of pooh-poohed so much as one of the things informing the high cost and the inflation.
Dylan Gyauch-Lewis: Yeah, I think you kind of hit the nail on the head there. I do want to gently disagree with you on one point.
Adam: You’re not allowed to do that. That’s banned by the show.
Nima: [Laughs]
Dylan Gyauch-Lewis: Oh.
Adam: Go ahead, sorry.
Dylan Gyauch-Lewis: Well, you can kick me off after I say this.
Adam: You’re out.
Dylan Gyauch-Lewis: Well, let me, since I’m gonna get kicked out anyway, I’ll go ahead and say it.
Adam: Go out with a blaze of glory.
Dylan Gyauch-Lewis: Yeah, I think the characterization that companies got greedy is wrong when you look at outspoken critics of this theory, which is called sellers’ inflation but derided as greedflation. A big part of what they sneer about is they say that the mechanism being proposed is, why would companies have suddenly gotten greedier? I don’t think anyone who has seriously been arguing for sellers’ inflation has ever said that. And the actual narrative is firms are profit-maximizing. If you are like Catherine Rampell who wants to put everything in a Macro 101 context, then that is a basic assumption of every model that you’re going to use. So, that’s presumably something we can agree on.
So then, if you’re profit maximizing and a new opportunity to wield pricing power presents itself, why wouldn’t you use it? No one is saying every corporation is doing this. What people have said is, and what I argue is, when you have concentrated markets where firms are able to be price setters rather than just price takers, then when there is uncertainty around pricing because of high inflation i.e. consumers can’t tell when you raise the price of milk by an extra dollar, whether that’s reflective of an actual increase in costs or whether that’s to line your wallet, then you have every incentive to increase the price of milk by the extra dollar. You don’t go to $1 all at once, necessarily, but on especially inelastic staple goods like milk, like bread, you have an incentive to slowly push the price up past what you would need it to be in order to compensate you for additional costs. And these are also goods whose prices move a lot week to week and month to month anyway — milk, eggs, bread, especially milk and eggs because they have really concentrated oligarchic suppliers for those goods.
But I think a big part of the psychology is, We’re a corporation. We, one, want to make money because we like money, and we like to pay ourselves and our executives well. But two, you actually have legal obligations to shareholders to try and maximize your company’s viability and your company’s basically returns. So, I think that that’s really the mindset going on. And in a stable environment like what we saw throughout the 2000s, throughout the 2010s where inflation is consistently low and not very variable, consumers can tell when they are getting ripped off. People were complaining about shrinkflation for a long time, which is where you reduce the size instead of increasing the price. And they can tell that because they know roughly how costs are moving because they’re in a stable inflationary environment. When you suddenly have a bunch of spiking inflation, it’s so much harder for consumers to be able to intuit when they’re getting ripped off. And there’s such an information asymmetry where businesses know what their changing costs are, they likely know what their competition’s changing costs are as well which means that they can make decisions with information that the public can no longer intuit because you are no longer in a situation where costs are rising at a relatively constant and predictable rate.
Nima: Right, and you know, I want to kind of dig into this a bit more. Dylan, you’ve written that the pejorative dismissal of the term “greedflation,” namely in the past couple years when that term was really being used by those who wanted to, I think, make this idea of price gouging and maximizing profit always the kind of fundamental state of greed, right? That that’s not something that increases or decreases at the top levels of corporate leadership, but that’s kind of the driving motivation. So, in 2022, 2023 when that term was being used to really explain inflation, not just as, hey, that’s just the market, that’s law of nature here. That these are choices being made by executives at companies and giving that media-friendly term “greedflation.” But then that was dismissed by people who didn’t want to push that line, right? Those who maybe were opposed to people calling out corporate pricing power and price gouging. And those calling this out, those kind of dismissing the term greedflation, saying it wasn’t accurate were accusing those who were using it of basically trafficking in conspiracy theories, creating something that wasn’t there. And you mentioned Washington Post opinion columnist Catherine Rampell who has done this, a tedious blogger Matt Yglesias has often made this argument. Can you just explain what that line of discourse really means? This idea of, you know, painting those who are trying to point out so-called greedflation, the very real price gouging motivations of companies that they themselves are not just doing Econ 101, that they are tinfoil hat types, that they are the conspiracy theorists for calling out corporate greed.
Dylan Gyauch-Lewis: Yeah, I think there’s a certain portion of the economics profession that views neoclassical economic models as when there were historians saying, I think it was Fukuyama saying, we’re at the end of history. I think a lot of people feel like neoclassical economics is the end of economics, that it gets it right. And these models are so good that you can apply them anywhere and everywhere, and they should work all the time. And they just like to apply these basic models that they think explain everything, and if there’s other things outside of the models that cast doubt on them or that need further engagement from different angles, then you’re just not being scientific anymore about it.
One of the arguments that I’ve made for years now is that you can really trace the intellectual legacy of sellers’ inflation back all the way to David Ricardo who was a contemporary of Adam Smith, one of the first real economists in the modern sense of the word who had a theory of rent-seeking. Basically, when you have the ability to price higher than you need to in order to make a profit, you have every incentive to increase your profit by adding additional rents. He talked largely about landowners because there was a situation in the UK that he observed where, you know, farmers who are working the land would be paying exorbitantly higher rents than you would think would be justified mostly because if you’re a farmer, it’s really hard to pick up your farm and move to a different plot of land. So, the aristocracy that owns the land would charge more than what you would expect from a pure supply and demand focus, even though they didn’t quite have that conception established back then.
Nima: But they knew that there was this kind of captured market.
Dylan Gyauch-Lewis: Right, exactly. And this is something that is really present in economic thought for quite a long time. And it’s really pretty new that economists, especially to a certain degree, a certain cast of neoliberal neoclassical economists think that they have sort of figured out human behavior, and markets are infallible. This really kind of got jump-started with the Chicago bunch, the idea that markets are just infallible. So, if you just get out of the way and let them do their stuff, they’re going to wind up at the most efficient outcome most of the time, which obviously doesn’t work when you have non-competitive markets because the fundamental assumption of why a market will settle at an efficient outcome is because you’ll have entry and exit of firms in response to changing demand for the goods that they are selling in a particular industry. That doesn’t happen in things like grocery stores because there is a very high burden of entry. It’s hard to compete with Kroger. I can open a grocery store anytime I want. But am I going to be able to get a whole lot of customers when I have to charge, you know, twice the price for a loaf of bread that Kroger does just because of economies of scale? Probably not, and that opens up a lot of latitude. For Kroger to raise their own prices because they know that I’m not going to come in and undercut their prices, even if I do, they can lower them back down, there’s all kinds of ways that they can block entry into the supermarket space.
Adam: I’m going to ask about that because I think the grocery story really is, I think, where the rubber hits the road in terms of media narratives and consequences for, frankly, elections. So recently, the FTC, various attorneys general in various states, Elizabeth Warren has been on this for a while are investigating the existence of price fixing. And I want to touch on this idea of conspiracy theory, right? Matt Yglesias and Catherine Rampell, I think, even called Elizabeth Warren a conspiracy theorist — Rampell did. This idea that corporations either have formal or informal price fixing, especially when there’s two of them. Like, in my neighborhood, it’s either Albertsons or Kroger. There’s no other option. You have “Whole Paycheck,” but that’s kind of its own thing, right? And then, you know, the average person goes to the store and says, God damn, my $140 grocery bill is now $230. Something seems a little bit off here, right? And I know that grocery prices have exceeded inflation by quite a bit.
And then there’s this question of, is there price fixing? Clearly, there’s enough evidence that both the FTC and various attorneys general and other members of the US Senate think it’s at least worth looking into. And of course, they have trade groups, right? They’re not even really conspiracies. I remember during 2021 and 2022 when every single business group was handing out memos saying, complain about labor costs. Complain about labor costs so they can cut Covid social programming, and people will get back to work. And Republicans are like, we’re going to cut social programming so people get back to work. And then you’d be like, wow, this seems a little coordinated. Conspiracy theory much? And it’s like, no, it’s the thing they’re doing it in the open. So, there are trade groups, right, that are captured by these organizations. Talk, if you could, about this kind of conversation-stopping conspiracy smear. Because I’m sure you get that a lot. I know other economists in your space have gotten that a lot. This idea that any gesture towards coordination at all among people in power is somehow basically lizard people stuff.
Dylan Gyauch-Lewis: Yeah, so a somewhat tertiary point that I want to lead with is the people that you’re talking about, Catherine Rampell, Matt Yglesias, they do not read the things that they are critiquing.
Adam: Ah.
Dylan Gyauch-Lewis: Matt Iglesias admitted openly on Twitter that he hadn’t read Isabella Weber’s seminal paper on sellers; inflation while pooh-poohing sellers’ inflation for two years. So, that’s the most blatant example I can come up with. And then Catherine Rampell in one of her columns said that Warren and Bob Casey’s legislation, I think they introduced two separate bills, would give the FTC the ability to set prices for various goods. It doesn’t. Neither bill has any language that does that. So, either she has poor reading comprehension, didn’t read it, or has such an agenda that she —
Nima: Possibly has some ideological priors that are informing what she’s writing.
Dylan Gyauch-Lewis: Right. So, it’s some combination of those factors. And I think that that’s important for understanding this. Ideally, the narrative that happened wouldn’t have been these people are gating econ. Look, there’s this theory that they won’t talk about. And you know, now we need to be iconoclastic about it. I think that most people would have preferred to go through normal academic channels Like, you write some op-eds, you share some ideas, you write a research paper, you do some data analysis. Gets peer-reviewed. It gets published. We can have an open discourse about it — which at the beginning, was the excuse that a lot of people gave for why we couldn’t accept sellers’ inflation. It hadn’t gone through that process, but then, when it was going through that process, it was continually dismissed out of hand by Larry Summers, by Matt Yglesias, even at first by people who I think are quite mainstream and slightly left of center like Paul Krugman, really attacked Isabella Weber about it. And I think part of the reason why is that it is really contrary to how, if you really like markets, how you have to conceptualize markets, which is, they compete. That’s the entire point.
But I think there’s a couple of nuances that are also worth talking about here that by glossing over these neoliberal pundits are able to make their case look a little better than it actually is. One is, they don’t make the distinction between everything. And specific goods that are coming from concentrated markets. Especially staple goods — your milk, your eggs, your meat. There are cartels that control the supply of all things, which is a big part of why the prices of those things got so crazy. And then, part of why those prices were able to fall as soon as you started hearing rhetoric from Biden and Harris and DOJ antitrust and FTC saying, why this is unacceptable. We’re about to smack you over this.
Adam: Quite mysterious. Quite mysterious. I think it was unrelated. I think it was a coincidence.
Dylan Gyauch-Lewis: Yeah, it must be. Must have just been a lag in adjusting their costs.
Adam: Indeed.
Dylan Gyauch-Lewis: But the other thing a lot of the discourse allides is the difference between various costs and fixed costs. So, Matt Yglesias a couple of different times has said, I’m not changing my newsletter pricing despite the fact that I absolutely could increase the price. And the problem with that comparison is a newsletter is mostly fixed costs. You have to be an editor. If you have an intern, you have to pay the intern. You have to pay various expenses. Editing software maybe, what have you. But there aren’t a lot of variable costs. A supermarket or something like that has the opposite where their costs depend a lot on the inputs they’re getting i.e. the stuff they’re putting on shelves. So, if a milk producer jacks up those costs, they absolutely should be adjusting their milk price accordingly. The problem though is that in this lawsuit about Kroger and Albertsons, what Kroger executives admit to doing is moving their prices up to adjust for those things but not correspondingly moving their prices down.
Adam: Ahhh…
Dylan Gyauch-Lewis: Yglesias’s logic is, well, I shouldn’t just lower the price of my newsletter even though I could afford to make less profit. And like, no, you don’t need to. But when your pricing is based on the variable cost of item on an item-by-item basis, and your business model is to adjust costs frequently like you do with milk or eggs, then if you’re only moving in one direction, that is exploiting consumers’ lack of knowledge about the supply chain and the costs you’re incurring. So, I think those are a couple of nuances that are really important.
And I think to sort of tie this back to the question, a big part of why this gets called a conspiracy theory is just because it really challenges economic orthodoxy. Especially among this group of people you brought up, the economists or most economists or prestigious economists doesn’t mean what you think it would mean. It means a group that I would call the Beltway Bunch. Robert Rubin, Larry Summers, Jason Furman, the people from the Bill Clinton Treasury Department basically who among their many insights, repealed Glass–Steagall and helped to create 2008. And all profited off of it quite handily too. Larry Summers and Robert Rubin both went to big investment banks after they were in the Treasury, made a ton of money, then left to go join the Obama administration and you know, supposedly fix the problem they in large part had created.
Nima: Right. And they’re deemed to be the unassailable gods of economics.
Adam: Yeah, there’s a certain level of priesthood mysticism and taking a long time and making everything seem super obscure and difficult is kind of the point. Because meanwhile, the average person’s milk prices are skyrocketing and they can’t afford diapers and they’re suffering so the political response is meant to be slowed down until Democrats realized they absolutely had to do something because they were getting their asses handed to them politically especially with the 2024 election coming up. When you put lawyers and economists in charge of policy decisions, no offense, they’re supposed to be the guys crunching the numbers after the political decisions have been made. They’re not supposed to lead the popular response to these crises. And I think the delay and well, we need two years of academic rigor and study it first.
But meanwhile, the status quo, of course, does not, and the inertia of the status quo doesn’t suffer from similar hoops it needs to jump through, right? It’s just taken for granted. And I think that was one of the things that was frustrating about this. People were suffering, and the popular discourse was heavily obscure. Or it just really blamed Covid social programs. I mean, that was kind of the go-to line for the longest time. That along with the IRA and government spending in general was the culprit, and that was kind of taken for granted. And that conventional wisdom didn’t need to go through seven different peer-review studies over two years. It was just a thing people asserted. That, and of course, labor being too mouthy.
Nima: Yeah, right, exactly. You know, increase in union membership or better bargaining deals, higher salaries for workers. All that, the conventional wisdom is, well, you know, the price for that gets passed on to the consumer, and so therefore, if people are getting paid more, you’re having to pay more. So, the bad thing is people getting paid more, not the price gouging from corporations.
Adam: It’s similar to when John Chait was like, well, we can’t have Medicare for All because it’s too complicated. No one’s worked out the math. And then meanwhile, you go back and read his column supporting the Iraq War, and he’s like, ah, we’ll just figure it out. There’s always this double standard of process criticism. And I think you saw that a lot with what you were saying, this kind of effort to say, guys, no, this is about regulation to a large extent. I think the concession was, yeah, like a third of it is these factors, like obviously. But a large part of it is a political issue. It is a moral issue. It is not some obscure technical problem. And I think that’s what’s frustrating watching the sort of narrative around greedflation was that the paralysis was the point. The point was we were kind of supposed to sit around and handwring for two years. Meanwhile, people couldn’t afford to keep up with groceries. I mean, it really hit people really hard in the lower income because, like you said, I mean, you know, inflation is, to a large extent, a reduction in wages for poor people.
Dylan Gyauch-Lewis: Yeah, so few different things on this. One, you know, you said, yeah, the fiscal expenditures account for a third of inflation. That’s something I want to kind of harp on. When we actually did the two years of analysis about the orthodox claims that inflation was being driven by fiscal stimulus, it actually came back most of the time, saying, not really. A third seems to be where a lot of analyses have landed. I’ve seen a number that is lower, I’ve seen some that are higher, but a third seems to be — people are like, that’s a good enough guess. But that means two-thirds isn’t coming from fiscal stimulus. And this kind of gets back to one of your questions from really early on, which was, isn’t it convenient that rich people don’t have to sacrifice anything because, you know, the Fed is going to raise rates due to man destruction, immiserate workers by loosening the labor market, trying to force wage growth and potentially even wages down, all while there’s no effect on capital. And the orthodox model is higher, tighter labor markets lead to higher overall inflation. That’s shown in a graph called the Phillips Curve, which has been broken in the United States for years now. It no longer looks really like a curve.
Another thing you see is that wages were a lagging factor in inflation. So, if you look at when wage increases happened, it seems like, for the most part, they happened in a response to inflation that was already there, which then extended how long inflation was being reported as elevated, but it didn’t create that inflation in the first place, it just made it so that workers were benefiting or at least not being hurt by that rising inflation that was already there. And I think there’s kind of a parallel that shows that a part of this really is about immiserating workers. And that’s the Silicon Valley Bank collapse where everyone rushed to bail out Silicon Valley Bank. And if you were really super worried about inflation like Larry Summers, for instance, was, you know, he was on a beach saying we needed 10% unemployment in order to ever get back down to lower inflation rates. Then, you know, a bank run would have been bad. It would have hurt a lot of people, but it would have been quite deflationary. So the idea that, you know, we have to immiserate workers because it’s necessary to do whatever it takes to decrease inflation, but then as soon as it’s time for capital holders to suffer because of increased rates, there’s a massive response that stretches existing legal precedent fairly thin, to be honest, that keeps capital holders from actually suffering the consequences. I think that that’s just a big dichotomy that you see. And I’m not saying that Silicon Valley Bank or Signature shouldn’t have been bailed out necessarily. Bank runs are bad. But if you are talking constantly about how we have to suffer for inflation to go down, then it’s kind of counterintuitive. But this particular suffering doesn’t help.
Nima: Mhm. When you’re looking at how corporate media talks about “the economy,” and this is something we’ve talked about in the show before, this idea of the economy. Why might questions like how is the economy doing or is the economy better now than it was four years ago be the wrong questions to ask?
Dylan Gyauch-Lewis: So, I think among progressive groups and thinkers, there has been this line that has sort of taken hold, which is, we are the economy. And that, I think, is really reflective of the issues of when we talk about the economy. We look at GDP, some people look at the stock market, even though that’s not really a great indicator of how anything is actually going on the ground. You look at unemployment rates and all kinds of stuff. You look at business start rates. But largely when we talk about the economy, what people talk about is growth, and especially among this cast of the punditocracy with your Matt Yglesiases, your to lesser extent Ezra Kleins, what you see is really they are all about growth. And the thing about growth is that it allides where that extra income is actually going. So, would GDP growing by a trillion dollars but 90% of it going to the top 10% actually be preferable to the GDP growing by $300 billion and 90% of it going to the bottom 90%? On the one hand, a trillion dollars in GDP growth sounds like it’s better, but if it’s going to people who already have plenty of money, whether that’s actually a net improvement for society compared to less GDP growth but shared more evenly, I think matters. And these distributional questions get lost when we talk about the economy as sort of a natural state that we are separated from where really you need to evaluate policies based not just on how the overall growth rate is affected, but you also need to make sure that people maybe aren’t getting gouged for a cheeseburger at Wendy’s when they are on their lunch break because they have limited options. They have limited knowledge. They have limited ability to actually shift their demand around, to respond to, you know, changing real-time prices.
So, there are all of these considerations about like, should policy purely increase growth? And I would say, no, it should look at a whole suite of factors, even ones that aren’t classically captured in metrics. For instance, domestic work, is the famous example that is just not really included in GDP. Domestic work done by people for their own households. And, you know, there’s a lot that can’t be captured in these metrics. So, I think the economy is an abstraction that should be brought back down to reality and back down to people’s lives. And what really matters is how people’s lives get better, and sometimes that will be facilitated through maximizing GDP growth. A lot of times it won’t. I think I’ll leave the substantive question there unless I’ve opened a new can of worms here.
Nima: [Laughs] No, no, I think that’s great. I think the idea that the economy is used as this blanket term when it means so many different things, depending on the proclivity of the speaker or writer, depending on what narrative is being promoted, what possible agenda for better or worse may be pushed. And I just think that that term is so weaselly. You know, we often talk about certain terms being a skeleton key for whatever ideology you want to push. And I think you know when you hear about the economy, when you hear at a presidential debate, like, you know, how is the economy doing? Is it better now? There are a million ways to answer that. So, it sounds like a smart question, but actually it’s just teeing up however you want to approach that. And usually, the economy is deemed to be, you know, what most benefits capital rather than what most benefits everyone else. So no, thank you for answering that. And would love to hear about the work you’re doing at the Economic Media Project, where people can find that work.
Dylan Gyauch-Lewis: Yeah, absolutely. On what you just said, one unexpected source of wisdom that I’ve run across was Colin Cowherd of all people, the football commentator. Trump was talking about how the economy got worse than Biden. And he was just like, I don’t see it. I see people coming to football games. I see them with money in their pocket. I see them buying concessions. I see them relatively happy. And I think, you know, we can point to inflation, we can point to GDP, but we should also be looking at those things. Are people happy? Are they able to afford luxuries? Are they able to go and do things that they want to do? And I think that from a football commentator of all places, that’s actually an important insight into what can often be missed in economic discourse.
But as far as how to follow what we’re working on, you can go to therevolvingdoorproject.org. We have a blog there. There’s also our Economic Media Project-specific website, which is hackwatch.us. We run a weekly substack newsletter called Hackwatch where we write about neoliberal pundits, including a specific list of people we have biographies for on Hackwatch as well as other folks who are generally involved in arguing for pro-corporate policies using flawed economic analysis. We’ve talked about Matt Yglesias a lot. That’s another website to check out. Subscribe to our Substack if you’re interested. You can find us on Twitter @revolvingdoorDC. We’re also on Bluesky. I think that mostly covers all the different places we’re at.
Nima: [Laughs] Every single platform, you can find all that. I love the research that you’re doing. I love that rogues’ gallery where people can really look up the thinkers and writers that oftentimes dominate the discourse and see where they’re coming from, see the research behind that from you all. So, Dylan, this has been so great. We’ve been speaking with Dylan Gyauch-Lewis, Senior Researcher at the Revolving Door Project where she leads their Economic Media Project. Dylan, thank you so much again for joining us today on Citations Needed.
Dylan Gyauch-Lewis: Absolutely. Thank you for having me.
[Music]
Adam: Yeah, I think economics is obviously very intimidating to most people. That’s very complicated. Got lots of graphs, very confusing. You got your gazintas. You got your four goes into five, seven goes into eight. And I think that intimidates people, right? It sort of seems like, again, it is a kind of Latin Mass. It’s very unapproachable.
Nima: Yeah, it’s an inaccessible part of how we understand the world, and yet, it affects every part of our lives. [Laughs]
Adam: And by design, as many economists will tell you, you know, as they critique their own industry, and so, when you see the Washington Post editorial boards kind of sagely tell you, ha ha ha, that’s just demagogic poppycock, people kind of accept it. And I do think that this is why it’s important you have economists who are more interested in these nuances and dynamics of human psychology and political pressure. And it’s important to counterbalance that. And I think in some ways, they’ve done a pretty good job. Actually, I think that the media narrative has shifted around this. Certainly, there’s a political reason to do so because the Democrats are getting hammered on it. But again, the idea that the economy is some kind of law of nature, that it’s an earthquake or a volcano for which we can’t really do anything about is exactly what, I think, is a fundamental premise of neoliberal ideology. That it’s this thing that exists, and there’s not really much we can do about it. We can kind of just harness the elephant and ride it. But beyond that, it’s out of our control. And I think that it’s important to understand that there’s other dynamics here, and there’s obviously a tremendous political reason to blame labor and blame poor people for why your grocery bill is so high.
Nima: Right, and to blame, of course let’s not forget, federal spending, right? You know, the historic influx of stimulus money, right, blamed for fatter wallets all around? And therefore, more purchasing power in the hands of consumers, and therefore, The Economy — capital T, capital E — just had to respond. Corporations had no choice but to respond. Of course, this is also the time when corporate media was blaming, you know, things like labor shortages and higher transportation costs and supply chain disruptions for higher prices, blaming everything, talking around the always mysteriously missing central piece of what creates prices, which are the corporations themselves.
But that will do it for this episode of Citations Needed. Thank you all for listening. Of course, you can follow the show on Twitter@citationspod, Facebook at Citations Needed and become a supporter of the show through patreon.com/citationsneededpodcast. All your support through Patreon. It’s so incredibly appreciated, as we are 100% listener-funded. Anything you can do to help us out there will keep the show sustainable and keep our regularly scheduled full-length episodes always free for everyone. So, please do help us out there if you are able to. And as always, a very special shout-out goes to our critic-level supporters on Patreon.
Adam: I’m Adam Johnson.
Nima: Citations Needed’s senior producer is Florence Barrau-Adams. Producer is Julianne Tveten. Production assistant is Trendel Lightburn. Newsletter by Marco Cartolano. Transcriptions are by Mahnoor Imran. The music is by Grandaddy. Thanks again, everyone. We’ll catch you next time.
[Music]
This Citations Needed episode was released on Wednesday, October 16, 2024.
Transcription by Mahnoor Imran.
