The best parts of the Biden administration’s response to the cost-of-living crisis are already being forgotten.
Joe Biden delivering remarks on the Inflation Reduction Act of 2022 at the White House on July 28, 2022, in Washington, DC. (Anna Moneymaker / Getty Images)
The current leadership crisis inside the Democratic Party has left many despairing the future of organized politics. Politically captive to landlords and developer groups locally, to employer associations and their financiers nationally, the Democratic Party entered the Trump administration the same way it ended Joe Biden’s: immobilized.
“We’re not going to swing at every pitch,” explained House leader Hakeem Jeffries on January 29.
In the Biden years, that indecision reflected the power of organized business over the American political system. Opposed to increasing corporate taxes, raising the minimum wage, and expanding public spending on education and health care, their veto leaves the Democratic Party flailing for strategies on bipartisan legislation: restricting immigration, deregulating construction, and stimulating Silicon Valley. But in the second Trump administration, which has seen muted partisan opposition to these centrist policies, business leadership of the liberal coalition has even graver implications.
On key issues of national economic vision, many leading party officials learned the wrong lesson from the inflation and the high cost of living that was a refrain of the 2024 elections: that material reality shows no sign of abating, as the cost of living is today 23 percent above prepandemic levels.
Its annual rate of increase — what’s reported as “inflation” — also remains faster than before the pandemic, particularly for “core” prices (excluding food and energy). In the postindustrial American economy, these prices are predominantly services, where wages continue to adjust to the higher cost of living. The average hourly wage in manufacturing is up 23 percent, from $28.20 in January 2020 to $34.64 — just matching inflation. The average hourly wage in leisure and hospitality is up 33 percent, from $16.84 to $22.48, representing real income gains.
Wage increases over five years must pay for things today 23 percent more expensive. For many workers, this means there has been little to no growth in real hourly wages.
“It’s not so much the inflation now,” Federal Reserve chairman Jerome Powell said in the first Federal Open Market Committee meeting of the second Trump administration. “It’s the price level.”
For nonsupervisory workers as a whole, real average hourly earnings are up 4.7 percent over five years, though a decline in hours-per-worker in many industries has left real weekly earnings up only 3.9 percent over five years.
The Wage Slowdown
Drawing the right conclusions about why prices rose during the Biden years and how they slowed is critical for working people as prices settle to new postpandemic highs. The conventional wisdom about the inflation that informed the Biden administration’s response — and continues to inform the Federal Reserve’s — is that wage growth has been the key variable in driving prices higher.
“Wage increases are not quite back to where they would need to be,” Powell said last year, meaning they were still too high.
The motivating goal for the Biden administration, for both the Democratic Congress of 2021–22 and the Republican Congress of 2023–24, and for the Federal Reserve, has therefore been to slow down hiring and weaken labor’s bargaining power to put a cap on wage increases. That has happened.
The official unemployment rate rose from 3.5 to 4.2 percent over the second half of 2023 and the first half 2024, stabilizing at the new higher level of around seven million workers for the past six months. The hiring rate (new hires as a share of employment) fell below prepandemic levels of 3.9 percent in the second half of 2023 and is today at its lowest rate since the Great Recession: 3.4 percent. That level, according to the economist Kathryn Edwards, “signals the labor market is in a deep recession.”
But the slowdown in the job market has been seen as a good thing from figures like Powell.
“Wage growth has eased over the past year,” Powell said in late January. “The labor market is not a source of significant inflationary pressure . . . what we have now is a good labor market.” President Donald Trump responded approvingly four days later, saying that the central bank’s decision to pause lowering interest rates “was the right thing to do.”
The Profit Explosion
The cost of this approach to stabilizing prices is, of course, the political ambition of improving average Americans’ lives. The spending reductions in the Inflation Reduction Act (IRA) required jettisoning the Biden administration’s expansive plans to reform American capitalism — to increase staffing in health and education; bring hearing, vision, and dental under Medicare; change community colleges to a tuition-free business model; provide four weeks of paid family and medical leave; expand elder care benefits — frozen in the 2021–22 Congress. The White House’s professed commitment to leave prices to the Federal Reserve meant that, as prices rose 14 percent during the debate on Build Back Better, elected leaders disclaimed any responsibility for addressing the evident problem on which public attention focused.
That inability to focus public attention reflected the unwillingness in Congress to address the real source of the new higher price level: corporate profits.
Every price is an income for someone, and the price increases of the past four years have meant an explosion of profits for owners and employers. Corporate profits doubled during the coronavirus pandemic and the accompanying legislative struggle over Bidenomics.
Other nonfinancial: “Consists of agriculture, forestry, fishing, and hunting; mining; construction; real estate and rental and leasing; professional, scientific, and technical services; administrative and waste management services; educational services; health care and social assistance; arts, entertainment, and recreation; accommodation and food services; and other services, except government.”
In the same period corporate profits doubled, the total value of goods and services those corporations produce grew by less than half. This is inflation. As a share of corporate value added — revenues minus nonlabor costs and taxes — nonfinancial corporation profits are higher today than at any point in the past seventy-five years according to the US Department of Commerce’s data.
The ideological cement of the administration’s “modern supply side economics” was corporate tax increases. The new spending would be “paid for,” pleasing moderates, while top incomes of the powerful would have new limits, pleasing class-struggle politicians. The failure to raise the tax rate on corporations’ domestic income therefore splintered this coalition.
The fact that corporate profits exploded during the inflation, just at the moment when corporate taxes were on the table, makes the story Democrats tell themselves about prices all the more disorienting in political terms. Catherine Rampell of the Washington Post set the tone during the crisis, calling the idea that profits were inflationary a “conspiracy theory . . . infecting the Democratic Party.” As macroeconomic orthodoxy concedes raising taxes as a proper fiscal-policy response to inflation, such efforts to divert attention from corporate profits in the formulation of fiscal policy were a rhetorical disaster for how the Democrats entered the 2022 primaries.
Speculation and Profiteering
The story of oil profits over the past five years shows this point. They were driven, as Michael Greenberger, Servaas Storm, and Carlotta Breman have shown, by speculative price manipulation in the futures markets for agricultural and energy commodities. Storm and Breman found as much as 48 percent of the increase in the price of oil from 2020 to 2022 was driven by financial speculation in futures markets.
During the 2022 oil-price run-up, former Commodity Futures Trading Commission chair Greenberger said that noncommerical users with no intention of delivering or receiving product were trading “something like 13 times the physical amount of oil.” Rising commodity prices pull in tremendous volumes of speculative capital — enough that prices depart from the demands of actual users such as refineries and food processors, as even the Department of Energy recognizes.
“Nobody with power is looking at what they’re doing,” Greenberger told the Guardian about the role of futures speculation in the inflation. “There’s no cop on the beat.”
Volatility in upstream commodity markets, tolerated due to the lobbying of derivatives trades, is not, however, the only source of pressure on prices. Once materials costs go up, downstream users such as processors and manufacturers have a reason to raise their margins. Lumber is a representative commodity: whereas log and timber prices rose less than 10 percent during the inflation, lumber prices rose more than 50 percent. Retailers also get in on the game, as the drama of used car prices during 2020 and 2021 showed.
The power to expand margins, on top of speculatively high commodity prices, has also been augmented by the reorganization of industries during the profit boom. Despite record high prices received in lumber, the North American sawmill industry eliminated 3.1 billion board feet in 2024, or about 4 percent of total production capacity.
The margin between log prices and lumber prices shows that a lack of profits isn’t driving the consolidation. Like most things in corporate finance, rather it is the desire for power and control over the market — in particular over prices — that motivates such closures.
We can see such margin expansion clearly with the difference between the per-gallon price of oil and the price of gasoline (also known as the “crack spread,” for refineries’ cracking towers). While crude oil prices are today 20 percent higher than in 2018, gasoline prices are 29 percent higher than in 2018. Refineries are a key bottleneck in the energy supply chain, and more than half the price of gasoline in the past decade has come from refiners’ margins. Yet between 2020 and 2022, as gasoline prices rose 40 percent, refinery owners cut back total US refining capacity by 5 percent. It remains today below prepandemic levels.
Business Leadership Undermines the Democrats’ Coalition
There is evidence that a struggle for power and influence occurred inside the Biden administration over how to respond to the profit-driven inflation of 2021 and 2022. In December 2021, for example, the White House began liquidating the Special Petroleum Reserve — a federally managed oil inventory created for national defense — to countervail against futures traders betting on rising prices. This direct management of the supply to users was a departure from business orthodoxy.
More directly confrontational with the industry was the June 2022 letter the White House sent to the major oil companies and their CEO’s identifying “historically high profit margins for refining oil” as a problem for the public interest. Refining capacity rose during 2023 and 2024, though not to prepandemic levels.
Many of the elements in the party responsible for this orientation of anti-inflation policy on profiteering left the administration during 2023. Those that stayed adapted to a new political reality. The passage of the IRA sealed the official narrative that government spending and wages had been to blame all along.
Deference to the wealthiest industry associations has meant not only ceding control of our diplomacy to oligarchs — whether artificial intelligence companies’ concerns over China, natural gas companies’ interest in the Mediterranean, or auto-parts companies’ concerns over Mexico — but also our basic food, energy, and housing policies. Business control of markets in food, energy, and housing sectors leaves us even less prepared for the next shock.
The Trump administration shows this trend will only continue. Gary Gensler, who fought for securities regulation to promote financial stability, is out at the Securities and Exchange Commission. Paul Atkins, his replacement, is a critic of public oversight of corporate accounting. Lina Khan, who as Federal Trade Commission chair directed enforcement against supply-chain consolidation, is out. Whether war, drought, or other unknown future emergency, the next opportunity for raising prices will be grasped by industries with increased corporate pricing power. And corporate taxes, the disincentive for such profiteering, are about to fall again.
Liberals and Democrats are eager for partisan reasons to criticize the Trump administration’s approach on prices. But those criticisms obscure the conflict within the Democratic Party over just what should be done about the high cost of living. Tolerating a profit explosion and cooling down the labor market won out in the Biden years as the right approach — except it lost liberals in Congress in 2022 and the White House in 2024.
If workers and their allies are to organize an effective challenge to the deepening business control of government, the politicians they elect will have to respond differently to the challenge of rising prices. The biggest risk for workers engaged in organized politics is that they learn the wrong lesson from the profits explosion of the past four years.
“People were concerned that fewer vehicles would mean fewer people visiting the zone, and that seems to not be the case at all,” said Juliette Michaelson, the MTA’s deputy chief of policy and external relations.
Attendance at Broadway shows, for instance, actually spiked during the last three weeks of January, with 751,356 people taking in a show — a more than 17% increase compared to the same time last year, according to data from The Broadway League, a trade association that monitors the industry. Revenue for The Great White Way totaled more than $95 million during those January weeks, a 25% increase compared to the same time last year.
A trickle of preliminary data is painting an early picture of the impact of the toll on Manhattan’s busiest streets. So far, those figures highlight that significantly fewer vehicles are traveling into Manhattan below 60th Street on a given weekday. Drivers are also experiencing faster commutes, mass transit ridership is up and fewer traffic crashes are occurring within the zone, compared to the same January weeks last year.
Beginning on Jan. 5 and throughout the rest of the month, nearly 1.2 million fewer vehicles entered the congestion relief zone during the same time last year, according to Micahelson.
“It tells me that, at the end of the day, this city depends a lot more on transit than on drivers,” said Michaelson.
New intercity passenger rail legislation filed in the Washington State Legislature would set ambitious targets for enhanced Amtrak Cascades service and accountability. Sponsored by Rep. Julia Reed (D-36th, Seattle), House Bill 1837 would establish goals for cutting travel time, increasing daily roundtrips, and boosting on-time performance from Seattle to Portland and Vancouver, British Columbia. Sen. Javier Valdez (D-46th, Seattle) is also sponsoring a companion version (SB 5667) in the Senate. Legislators in both parties are already lining up to back the companion bills, with 17 co-sponsors in the House and Senate.
Under the proposed 2035 goals, Cascades service would be improved to 2.5-hour trip times between Seattle and Portland with at least 14 daily roundtrips and 2.75-hour trip times between Seattle and Vancouver, B.C. with at least five daily roundtrips. Additionally, Amtrak Cascades would need to maintain at least 88% on-time performance. The goals are predicated on the delivery of corresponding corridor improvements over the next decade to reach the targeted service characteristics.
A pro-rail coalition worked with legislators to champion the bills. Banded together as the “Rail Can’t Wait” campaign, the coalition included the Climate Rail Alliance, WA Physicians for Social Responsibility, and Solutionary Rail — a group which also penned an op-ed in The Urbanist last April. On Tuesday, the coalition published a press release arguing now is the time for a new Cascades service and infrastructure enhancement implementation law, nudging the Washington State Department of Transportation (WSDOT) to action.
“This legislation is needed to address concerns that WSDOT’s plans for Amtrak Cascades are not sufficiently robust,” the coalition press release reads. “Commenting on these plans, House Transportation Committee Chair [Jake] Fey and Ranking Member [Andrew] Barkis wrote that the WSDOT plan needs to drive transformative improvements in trip speed, reliability, and frequency that make traveling by rail along this corridor more convenient, accessible, and competitive with other modes of travel.”
The Amtrak Cascades route spans from Eugene, Oregon to Vancouver, British Columbia. (WSDOT)
The plan would more than double service over today’s levels and shrink travel times by 28% to 39%. Cascades service is currently scheduled to take 3.5 hours between Seattle and Portland with six daily roundtrips and 4 to 4.5 hours between Seattle and Vancouver, B.C. with two daily roundtrips. The plan would also put WSDOT under the microscope for reliability, with the goal of pushing on-time performance back to a reasonable level. Cascades on-time performance (defined as reaching the final destination within 10 minutes of scheduled arrival) has collapsed from 81% in 2013 to 48.2% between January and October of last year.
The proposed legislation doesn’t include funding to turn goals into reality, but WSDOT is still in the midst of a multiphase planning process to identify, design, and develop cost estimates for infrastructure improvements to deliver on alternatives for enhanced Cascades service. The bill would signal legislative intent to follow through on funding once the agency completes the implementation plan — of course there are no guarantees in a tough funding environment.
WSDOT has studied Amtrak and Cascades service expansions and upgrades several times in its history, but the proposed legislation would represent the first time that the state legislature has backed a specific service expansion plan and accountability for conventional intercity passenger rail in statute.
Simultaneously, WSDOT is studying an “ultra-high-speed” rail line connecting Seattle to British Columbia’s Lower Mainland and Portland, and won a $50 million grant to advance planning in the final days of the Biden Administration. The proposed high-speed rail line, which hopes to cut travel times to each city under 90 minutes, is still unfunded and likely decades away from opening. Hence, targeted Cascades upgrades in the interim would be able to expand critical intercity passenger rail service sooner at a fraction of the cost and provide a basis for complementary and supportive service to high-speed rail when it opens.
Reaching the goals outlined in the state legislation would require major track improvements to allow for consistently higher speeds, such as realignment, new sidings, and additional mainline tracks. Top speeds are currently restricted to 79 mph on the fastest sections of the Cascades corridor, but WSDOT has suggested improvements to support 90 mph top speeds. Rail Can’t Wait campaigners are aiming higher with sections for up to 110 mph, as new Cascades equipment will be capable of reaching top speeds of 125 mph. Along with this, signal and systems upgrades, junction and railyard modifications, and more trainsets would be required.
The various Cascades corridor segments with the number and type of daily roundtrips under each of WSDOT’s expansion scenarios. Note that express service is non-stop and that limited stop service is similar to express but includes stops in Tacoma and Vancouver, Washington. (Stephen Fesler)
The proposed legislation does recognize that the goals may be challenging to realize in a decade, but nevertheless directs WSDOT to prioritize them as it proceeds through the Corridor ID process and to engage with host railroads like BNSF and Sound Transit to achieve the goals. Should WSDOT have difficulty in delivering one or more of the goal targets, the department would need to provide details annually to the state legislature in order to collaborate on solutions to deliver on the targets or modify them, as appropriate.
With the proposed legislation just entering the state legislature for consideration, neither chamber has scheduled a public hearing on it yet. But transportation policy bills like this still have about four weeks to be considered and passed out of their house of origin transportation committee in order to live on during this year’s session, and the sheer number of co-sponsors is certainly a positive signal that it could get airtime.
For people who had high blood pressure readings only when sitting (normal readings while lying down), there was no statistically significant difference in risk of coronary heart disease, heart failure, or stroke compared to people with normal blood pressure. The only statistically significant differences were a 41 percent higher risk of fatal coronary heart disease (compared to the 78 percent seen in those with high readings lying down) and an 11 percent higher risk of all-cause mortality.
(In this study, high blood pressure readings were defined for both positions as those with systolic readings (the top number) of 130 mm Hg or greater or diastolic readings (the bottom number) of 80 mm Hg or greater.)
The people with the highest risks across the board were those who had high blood pressure readings while both sitting and lying down.
"These findings suggest that measuring supine [lying down] BP may be useful for identifying elevated BP and latent CVD risk," the researchers conclude.
Strengths and hypotheses
For now, the findings should be considered preliminary. Such an analysis and finding should be repeated with a different group of people to confirm the link. And as to the bigger question of whether using medication to lower supine blood pressure (rather than seated blood pressure) is more effective at reducing risk, it's likely that clinical trials will be necessary.
Still, the analysis had some notable strengths that make the findings attention-worthy. The study's size and design are robust. Researchers tapped into data from the Atherosclerosis Risk in Communities (ARIC) study, a study established in 1987 with middle-aged people living in one of four US communities (Forsyth County, North Carolina; Jackson, Mississippi; suburban Minneapolis, Minnesota; and Washington County, Maryland).
“make yourselves impossible to ignore. 10,000 signatures on twitter is a lot but 10 unique personal emails is enough to derail an entire council session.”
I was in a city council meeting last week about defunding the police and one of the council members mentioned multiple times that she’d been inundated with calls and emails all that day saying to defund the police.
[ID: Two screenshots of a twitter thread by alex flanigan, anti-fascist @Coff33Detective from June 12, 2020 beginning at 11:25 AM that reads: hi! i work in local government and community management, and i’m here to tell you a secret: it is like, really, really easy to overwhelm the people who work in your local government. especially right now. especially on things they can actionably do or impact.
you may not know this, but i bet your city or town or municipality has a website. i bet that website has some contact forms or email addresses on it. i bet you can use them to put together a message in about 5 minutes! i bet it’s almost as easy as signing a national petition.
which is to say: i’m noticing, like most other people, that the national level discussion on really important and long overdue issues is flagging. but the internet and news cycle is not the only battleground, and you will be pleasantly surprised by how easy it is to—
—fight those battles at home, on your own turf, with much more immediate impact, and they are so, so important.
I am begging you: make my job, and the jobs of people like me, difficult right now. flood us with demands. make yourselves impossible to ignore. 10,000 signatures on twitter is a lot but 10 unique personal emails is enough to derail an entire council session. End ID]
I’ve been a city council observer with the League of Women Voters for nearly a year, and I have witnessed the following:
A few guys voicing their anxiety about speeding on a street where their children play and suggesting a radar speed sign. Despite catching all of two meetings where this was mentioned, I walked back home one day and–yep–there was a radar speed sign up.
A persistent force of 3-5ish loud residents coming to zoning and council meetings because they did not want a drive through style restaurant moving into a particular area where there were already major issues with traffic congestion and safety. This eventually resulted in a Chik-fil-a having its planning proposal shot down by council such that the lot is now likely to house an Aldi. I am getting low cost groceries instead of bigotry chicken in my neighborhood because of a D&D party’s worth of regular speakers.
A turnout of residents shouting down an attempt to reduce the amount of funding for the community Juneteenth celebration until Council backed down. One meeting. Roughly a dozen people + their kids speaking about the significance of the holiday. The celebration ended up having its full funding restored.
In my experience, it is incredibly easy to bully local politicians and get some sort of results, especially in small municipalities. If you have something that you want to see happen at the local level, seriously try to contact your local officials and see what you can make happen.
I single-handedly got them to double the number of chickens you are allowed to keep in my former town.
You genuinely don’t even always have to go to a meeting btw. If you have a Facebook, those council members are in your local Facebook groups.Do you know how easy it is to tag your mayor and go “hey what are you gonna do about this?” over everything? Do you know how often that WORKS?
Pay attention to this.
Government From Above looks easy. Command your followers to do shit and they do it, right?
Except when they don’t. Because all of a sudden their neighbors get in their faces.
Then the whole thing comes apart.
It’s easy for people to think Their Boy and their way of thinking has won, beating the Evil Other Side. They think they can then go back to arguing with their HOA and worrying about the price of eggs.
Teach them otherwise!
Turn up at local political meetings and have those people understand that you’re not just going to roll over and let them have their way. Yell at them. (In words bigger than they were equipped to understand, if you feel that’s the way to go.) Give them to understand that they are not right,and you will be back again to get up their ill-prepared noses about this. And again. And again. (Because they’ll never really be ready for opposition. No one’s taught them that. They’re just cannon fodder, poor things. They were never meant to go into battle.)
People hate looking stupid repeatedly in front of other people. You can tire them out. You can make them give up. You can make them feel there’s no point in it.
Don’t talk yourself out of this. The Goddess of Justice must descend from great heights to effect herself into the works of human beings. Don’t talk yourself out of “your turn in the barrel.” (As some humans have been known to call it.) It won’t last that long. Almost none of your opponents have any staying power. (Remember Punched-in-The-Face-Nazi guy? He had a huge online presence. It took one punch to make him vanish.)
Let the folks you’re opposing understand that you’re going to keep on doing this every time they show up. Let them get the sense that you’re willing to be unreasonable about this. They’ve been thinking they’re the “sane” ones in this discourse. Teach them that they may possibly be incorrect.
Be persistent. Some of them will never have seen persistence in their lives. (As opposed to repeating somebody else’s talking points over and over again, which isn’t the same thing at all.) True persistence requires creativity! Every day, make a new way to come at them. They will never be able to keep up with you.
If enough of us do this… we can take whole legislative structures back: from the bottom up.
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