An attempt to distract from Biden’s surging inflation – twitchy.com

A clip of Katie Porter waving a chart at a congressional hearing from September 22nd went viral on Twitter this week as ‘proof’ that corporate greed was responsible for inflation.

‘Boom!’, the narrative goes, ‘The high prices your family is paying has nothing to do with Joe Biden or the Democrats. It’s those greedy corporations!’

Democrats are getting the sense that Biden’s poor handling of the economy is about to bite Democrats in the backside at the polls this November. They NEED to shift the blame.

It looks bad, right? The problem is that Porter’s chart doesn’t seem to add up. Some of you disagreed with her characterization.

In the video clip above, there’s a moment where Porter points at the light blue portion of the chart and the witness, Mike Konczal, responds ‘11.5%’. Porter then says ‘and what is it today?’, to which he replies ‘53%’.

That’s what Ms. Porter’s telling people, and that’s what most of them are hearing. That was the goal, but it’s not accurate.

We’re guessing Katie Porter doesn’t exactly understand her chart either.

The light blue portion of Porter’s chart says that the average contribution of profits to unit price from 1979 to 2019 is 11.4%.

The dark blue portion of Porter’s chart say the growth in the contribution of profits for a handful of quarters starting in the 2nd quarter of 2020 is 53.9%.

She’s comparing apples to oranges.

Here’s what Katie Porter’s chart would look like if it compared apples to apples (comparing averages of both periods):

Chart comparing average contributions to unit price

Not nearly as exciting, eh?

It still shows an increase in profit while the other contributors to the unit price are shrinking, but it sure doesn’t give the shock value Katie wanted.

The original chart comes from an article by Josh Bivens with the Economic Policy Institute (EPI), a left-leaning think tank. You can read the article here.

When Mr. Bivens first released the article in May, he followed up on Twitter, explaining why he chose the 2nd quarter of 2020 as the starting point. It’s a good question, right?

He stands by his conclusion, but look at his own data, plotted using the same calculation with different starting points (and the 11.4% average to the left being compared to growth numbers again).

It bounces around quite a bit and shows a decline in growth in profit contribution over the handful of quarters coming out of the initial 6 months of the pandemic.

Bingo.

There was a 10.3% increase in unemployment in April of that period (20+ million jobs) due to lockdowns while the government was also handing out $1,200 stimulus checks. Surely economists can come up with some reasons why there was a growth in profits during a period of such high uncertainty that doesn’t simply amount to ‘companies suddenly became greedy in 2020’?

Yes, too many dollars chasing too few goods. Is it any wonder people spending stimulus money on limited goods resulted in companies earning higher profits for a time and then eventually led to inflation?

It’s not hard to find economists agreeing that greed is not the reason for the inflation we’re seeing now. Even Janet Yellen wasn’t on board with the idea that corporate greed is driving inflation.

What did Joe Biden and Democrats do when they took office: Voted in another $1.9 trillion in ‘COVID relief’.

They made it worse and now they’re looking for cover.

So where does that leave us? Democrats need someone to blame other than Washington D.C. printing money. It’s easy to blame the nameless face of ‘greedy corporations’.

Katie Porter stepped up and provided a misleading chart to help them do just that.

We expect you’ll be seeing more of Katie’s chart going forward.

Do yourselves a favor and watch the comments from Congressman Byron Donalds from the same hearing where Porter presented her chart.

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