Major economic pundits are finally admitting that profiteering has been the principal cause of today’s inflation—as many of us working-class types suspected months ago . It’s not a wage-price spiral, as Federal Reserve chair Jerome Powell keeps insisting, but a price spiral largely set by producers, shippers, and sellers in the goods and service industries. A friend calls it “fake-flation.”
The Federal Reserve decision-makers knew these culprits were to blame, but wanted labor costs to drop so profits could rise as the excuse for raising the interest rates notch by notch ever since. Inflation, Powell warned us, could bring on another Recession leading to the Great Depression of the 1930s if employees were not so greedy.
The Fed and privateers have counted on Americans believing that lie in spite of all the recent strikes against years of stagnant wages, low unemployment rates, and year-end reports of record profits for those businesses and industries in 2022.
After all, from antiquity to today, greed would have to be extinguished in the hearts and calculating minds of the economically insecure preying on the gullible and desperate. They see nothing amoral or criminal about charging us “marks” whatever the traffic will bear. To “make hay while the sun shines ,” is the companion business philosophy that a “sucker is born every minute .”
Worse, they figured we consumers rarely fight back. That we can’t afford the Wall Street Journal nor understand the retail marketplace except when prices suddenly take a skyscraping jump. Up until now, they’ve been right. They do seem to have convinced most of us that we are powerless against whatever they decide to do. Most have been taught to fear social ostracism (“whiner!”) for daring to speak up or take direct and peaceful actions.
For example, how many dare complain to supermarket managers about eggs vaulting from $2.50 a dozen to $7.50? Or gather friends to boycott eggs? Who’s angry and gutsy enough to gather a crowd near a gas-station’s price sign to protest the overnight shift from $3.89 per gallon of regular to $5.67 because the Mideast oil oligarchs just colluded to cut production, beginning May 1? Do we picket pharmacies hiking prices on insulin or the obedient ban on selling abortion medications? Are we likely to call our Congressional representatives or email the President to demand they ignore lobbyists and election donors by fast-tracking passage of bills such as Sen. Elizabeth Warren’s Price Gouging Prevention Act ?
Thankfully at least fewer of us still believe profiteers’ alibis for ruinous price rigging: supply-chain shipping, the Ukraine war, labor shortages, the COVID pandemic, middleman-price gouging—and (as always) bad weather.
If the Fed is rushing us into a recession or depression with those never-ending interest-rate boosts, the time seems ripe for us to fight timidity and finally take direct, yet peaceful, action against these extortionate banditti, by using a totally unexpected tactic. We would stop being silent about today’s robber barons perhaps if we realized we were first victims, but then volunteers afraid to take any action against price abuse.
That tactic came to me when I dropped into Safeway the other day to buy a family size can of oatmeal and a container of yogurt.
The oatmeal for us Safeway Club members had a 17 percent ($1) discount on the $5.99 price and 21 percent (80¢) off the $3.79 yogurt. Instead of paying the non-member markup price of $9.78, my small order came to $7.98. But I had spent gas, time, and energy for store loyalty and discount savings. Those two factors at big-box, members-only stores like Costco and Wal-Mart’s Sam’s Clubs explain their overwhelming popularity for low-income consumers and high-income bargain hunters—particularly in today’s so-called inflationary times.
The blinding flash on how to fight these profiteers arrived in Safeway’s parking lot as I put my 2000 Prizm in gear to leave.
What if a single, substantial discount price—say a sensational 30 percent—were applied to every item or service at a members-only “People’s Emporium”? What if members didn’t have to buy in bulk, requiring delivery service or need a pickup truck or van to haul away purchases? And clerks wouldn’t be spending half a shift on their knees or up a ladder applying daily price-change tags.
A 30 percent discount would have saved me $1.78 on the oatmeal and $1.14 for yogurt—for a total of $6.86. The savings would not be that minuscule, of course, for an overflowing grocery cart or big-ticket items like refrigerators as shown in the list below.
Retail 30% Emporium
Item Price Discount Price
Groceries $150 $105
Prescriptions 100 70
Bus Pass 30 21
Gas 5 pg 3.50
Auto Services 200 140
Hardware 200 140
Refrigerator 2,000 1,400
Furnishings 150 105
4-pc. patio set 2,250 1,750
Clothing 100 70
Never doubt that most of us could run a big-box discount store. We’ve had a lifetime of experience in shopping at the best and the worst to achieve success, including the size of parking-lot spots and prevention of cart theft. Collectively, a handful of us could indeed start and run a members-only “People’s Emporium.”
Starting one would follow the origins of Costco and Sam’s Club in the 1970s and 1980s. Their founders rounded up enough capital from families and friends, as well as prospective members and lenders to stock, hire, and rent (with option-to-buy) a large building—and sufficient land for deliveries and parking—on the outskirts of town.
It needn’t mean raising millions. Bernie Sanders’ presidential campaigns taught us that small contributions from thousands of ordinary supporters made him a top fundraiser ($211,125,958 in 2020 ). I’ve noticed how many email campaigns are now asking for $5 , up from Bernie’s usual $3.50. But asking prospective Emporium members for an annual $65 fee means they’ll reap the benefits of that 30 percent discount, plus sharing the profits.
In this regard, Emporium’s founders would need to remind prospective lenders, suppliers, and members that Costco’s 119 million members paying $50 “dues” earned nearly $5.9 billion alone in 2022. Sam’s Club dues are $60 with totals yet to be revealed to the public. Emporium’s dues could be $65 annually, $60 to cover overhead and $5 to defray costs of returns. The first 1,000 members would provide $65,000 from dues alone. If Emporiums began to spread around this country, 100,000 members would yield an annual $6,500,000 from those dues.
Major earnings would come from sales, of course, but scarcely match those
of profiteers’ inflated prices, particularly as a profit-sharing business for members and staff. Employees and managers would have great incentives to make the store thrive. Executives wouldn’t receive excessive salaries, bonuses, or other perks so common to businesses lest they shrink members’ profits.
Add to all this, the multiplier effect in the community.
Its workforce would spend most of their pay locally, meaning small and large businesses and banks would prosper. So would suppliers and shippers if they became Emporium members. Consider, too, the subsequent increased tax revenues for federal, state, and local governments in that community.
If that single Emporium became a chain as did Costco and Sam’s Clubs, it might even help boost our gross national product (GNP) ranking. It might even stop the Fed from its refrain that labor causes inflation because of demands to raise the $7.25 federal minimum wage set in 2009.
Best of all, a People’s Emporium would offer affordable merchandise and shared profits to members living on the bottom of the economy. It also would expose to the public the greed behind profiteers’ markups as the real cause of inflation.
But all this requires that cheated customers finally decide to beat the profiteers at their extortionate and cruel game on behalf of our fellow Americans. To start small and grow big initially takes rolling up our collective sleeves and day by day working at such a beneficial cause in the retail world. We have nothing to lose and so much to gain.
As sociologist Margaret Mead famously said: “Never doubt that a small group of thoughtful, committed citizens can change the world. Indeed, it’s the only thing that ever has.”
So let’s think about opening a People’s Emporium.