Our current inflation began with the disruption of global supply chains due to the pandemic. That disruption is continuing with sanctions the U.S. and our allies have imposed on Russia for their invasion of Ukraine. Multinational corporations have seized this opportunity to raise prices on products they sell to unreasonable levels because they have the market power to do so. They blame their price increases on inflation caused by the disruption of supply chains, but they are covering those added costs and increasing prices an additional amount to enable them to make record profits. Corporate profit after taxes soared 37% in 2021, the most since the Fed began tracking profits in 1948. Their greed is creating inflation levels much higher than necessary and inflicting harm on American consumers.
For decades, exploitive globalization, referred to as free trade, allowed multinational corporations to exploit labor and abusive environments in developing countries. This resulted in cheap imports flooding our markets with extensive supply chains leading to a dramatic decline in our manufacturing base. We essentially sent our jobs overseas because our international trade treaties did not require higher wages and benefits for workers and protection of environments in developing countries. Disruption of global supply chains has revealed that exploitive globalization is not stable or sustainable and has severely diminished the economic power of middle-income workers in the United States. In the future we need to negotiate international trade treaties that embody empowerment globalization, creating fair trade that empowers workers and preserves environments.
Now we are in a major transition toward manufacturing more products domestically with our own labor, which has the added benefit of increased wages and benefits for low- and middle-income workers. This major transition includes some inflation as we move from exploitation to empowerment of workers. The purchasing power of wages for low-and middle-income workers has declined for decades, especially when compared to the huge gains the wealthy received. Those wages and benefits need to increase. Reducing the disparity of wealth in our country by empowering our workers with a living wage is necessary for our democracy to function properly and is beneficial for all. A temporary low level of inflation is expected and is a reasonable price to pay to transition toward empowerment of workers and protection of environment, but inflation should not be this high.
Multinational corporations and extremely wealthy individuals that benefited from exploitive globalization are now causing additional harm to American workers by raising inflation to unnecessary levels to satisfy their greed with excessive profits. Multinational corporations must take responsibility for a large share of our current inflation and for practicing exploitive globalized trade practices which caused economic harm to our low-and middle-income workers, creating a disparity of wealth in the U.S. not seen since the 1920s.
To address this situation, we must pass antitrust legislation and dramatically increase antitrust enforcement, which would require large multinational corporations to operate in a more competitive environment. Legislation must be passed to require wealthy corporations and individuals to pay their fair share of taxes. Various proposals such as closing tax loopholes, a minimum tax on wealthy individuals and corporations, repeal of former President Donald Trump’s tax cuts for the rich, a wealth tax, and a windfall profits tax should be considered. We must end large dark money contributions to campaigns and lobbying, eliminating the great disparity of political power that the wealthy achieve with this corrupt system.
The U.S. became the economic marvel of the world when we built a strong middle class. Exploitive globalization (free trade) severely weakened our middle class. It must be rebuilt and strengthened with more domestic manufacturing, higher wages and benefits, a fair taxation system, elimination of dark and disproportionate money in politics, the right to vote and healthcare for all. These are solutions that Democrats are promoting as we transition away from exploitive globalization, run by extremely wealthy corporations and individuals, to a stronger economy where middle-income workers prosper.
Ron de Yong was Director of Agriculture for Montana for over nine years under former Democratic Govs. Brian Schweitzer and Steve Bullock.