The skyrocketing prices of the most essential goods have become the number one concern of many citizens of the United States. Inflation broke a new record in November reaching 6.8% year on year, unheard of for forty years. Among ordinary employees, who see their purchasing power largely eroded, anger is roaring. Everything is increasing: gasoline, housing, food, the car. “It’s incredible, I see myself getting poorer over the weeks, everything costs me more! “ exclaims Peter Johnson in the columns of a Newark (New Jersey) newspaper. A construction technician, he works for a New York firm and finds himself forced, like millions of his fellow citizens, to use his car to get to work in the Big Apple. Peter Johnson has seen the cost of filling up with diesel increase by almost 40% over one year. With the explosion of real estate prices, its rent has also been placed on a very upward slope. And price tags are on the rise in supermarkets.
Inflation has become the major problem of the working classes and also of the middle classes. According to the Bloomberg agency “One in 4 consumers reported a reduction in their standard of living in November ». A problem for a Joe Biden in net loss of popularity. Elected in November 2020 thanks to the mobilization of a popular electorate eager for change, the president sees him turn away from the polls again, disillusioned and exasperated by the difficulties. The failure of the ratification of the social and environmental bill (read our edition of December 22) can only accentuate these disillusions.
Strictly speculative operations
The most agreed-upon analyzes of the origin of inflation are undermined. Admittedly, the recovery that began after the containments linked to the 2020 coronavirus has contributed to the rise in prices. The demand for products has exploded without there being enough supply to satisfy it. Many economists, fixed on this explanation alone, have concluded “Transitory character » of the phenomenon. But this explanation is proving less and less convincing. The rise of inflation also obeys other forces and « could therefore be much more persistent ”, now admit a series of observers.
The tremendous financial inflation, which has given so much to the headlines in recent months, has greatly contributed to this. Shareholders saw their earnings increase in a stratospheric fashion. A report, released in November by US asset manager Janus Henderson, estimates that the value of their dividend earnings increased 19.5% in the third quarter of 2021 (or + $ 385 billion) compared to the third quarter 2020, year-on-year. The mountains of free credit distributed by the Federal Reserve, the central bank of the United States, have fueled this phenomenon. They were most often used for strictly speculative operations, such as these massive redemptions of securities by managers of large groups or large fortunes, intended solely to propel stock market prices to new historical records.
Only the thousands of billions thus sterilized, because oriented towards the immediately profitable financier, also lacked the essential long-term investments intended for the production of raw materials or other semi-finished products. The emergence of bottlenecks in supply chains is a consequence of this, with financial inflation spreading to the real economy.
Many American employees who do not intend to let themselves be fooled by inflation have started to react. This is evidenced by the emergence, unprecedented in its scale, of conflicts in recent months for wage increases. Sometimes with resounding successes, as, a month ago, at the manufacturer of agricultural machinery John Deere (+ 20% over six years). All in all, however, inequalities continued to widen over the period as never before, with a majority of employees remaining “unorganized” in companies outside the trade union circuits. Thus, the share of the US economy cannibalized by profits reached 11% in the third quarter. Either, points out the progressive journal The American Prospect, “A level never reached before ».
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