On Wednesday, March 9th, Axios chief economic correspondent Neil Irwin and political reporter Alexi McCammond explored the origins and impacts of the rising cost of living and what policies and initiatives could help turn the tide, featuring White House Council of Economic Advisers member Heather Boushey and UC Berkeley public policy professor Robert Reich.
Heather Boushey explained how the federal government is diagnosing the underlying problems behind mounting prices, the impacts of long-building price pressures on American families and what policies could mitigate rising commodity prices amidst the war in Ukraine.
- On long-standing affordability challenges for families: “Even though we have these challenges right now with prices in large part due to the pandemic and how that’s fed its way through the economy, there are also these long-standing issues of affordability. So you mentioned child care and health care and housing, these aren’t issues that just bubbled up during the pandemic. These are long-standing challenges for American families.”
- On the importance of clean energy independence: “So long as we are dependent on fossil fuels, we will be subject to these global volatile prices that you see in fossil fuel prices, just like we are right now…even as we in the short term deal with these price changes, we have to make sure that we get that kind of clean energy independence because that’s going to create real economic security for families in the decades to come.”
Robert Reich discussed the roots of the current affordability crisis, which legislative bodies are best positioned to address this problem and the role that corporations play in inflation.
- On improving wages for Americans: “Underlying all of this is the fact that for the last 40 years, the median wage in the United States has, if you adjust for inflation, gone absolutely nowhere. Half of America has not seen a raise. And so some of the problem and therefore some of the solution has to do with making sure that the bottom half gets simply better wages.”
- On corporations and inflation: “Here’s the big problem that I’ve referred to, that you’ve got many, many big corporations in America who have great pricing power over their markets. So instead of simply absorbing those cost increases that are coming from all over the world in terms of their components and their materials, those corporations are passing the cost increases on to their consumers, their customers.”
In the View from the Top segment, former Comptroller of the Currency and chair of the Ludwig Institute for Shared Economic Prosperity (LISEP) Gene Ludwig conveyed how the consumer price index doesn’t fully reflect data on the economic status of middle-class families.
- “The consumer price index is the big basket, there is a lot of value there, but it includes luxury goods and a lot of goods that middle and low-income Americans don’t even dream of having. And accordingly, it’s not focused on the needs of low and moderate income Americans, and that means we really don’t understand half of our population well enough.”
Thank you Ludwig Institute for Shared Economic Prosperity for sponsoring this event.