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Sorry if I’m overloading you this week, but you need to know what’s behind today’s inflation report. Inflation is now running at a rate of 9.1 percent, led by food, rent and gasoline. It’s the highest rate of inflation in 40 years — further squeezing Americans’ budgets.

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What’s going on?

Biggest cause: The global economy, still trying to emerge from the pandemic, has limited supplies of everything—while pent-up demand remains strong. High demand and limited supplies mean higher prices everywhere around the world.

Russia’s invasion of Ukraine has disrupted oil and gas supplies, as well as worldwide supplies of wheat. China’s COVID lockdowns are further squeezing global supplies.

Not a hell of a lot we can do about any of this.

Second biggest cause: Rents, which make up a big chunk of household budgets, are climbing the fastest since 1986. Why? Because mortgage rates are skyrocketing, and would-be homebuyers (read millennials and younger) can’t possibly afford the added cost. So everyone is in an intensely-overcrowded rental market. Limited supply coupled with growing demand means higher rents. (And why are mortgage rates soaring? Because the Fed is raising interest rates. See below.)

Third biggest cause: Big corporations continue to jack up prices, using inflation as a cover. Big Oil is the worst culprit. Gas prices are up about 60 percent from the year before. They contributed almost half the rise in inflation in June, although pump prices have dropped a bit since then. Big Oil is scoring record profits and using them to reward investors by buying back shares of stock. Shell is expecting profits to nearly triple, adding $1 billion to bottom line. BP reports its largest quarterly profit in a decade. Chevron and ExxonMobil are enjoying gusher.

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What to do? We need a windfall profits tax on Big Oil and food monopolies. Just like Big Oil, food monopolies such as Tysons are taking advantage of their market power and using the cover of inflation to raise their prices.

We may also need price controls on oil and food.

Other useful steps would be to increase taxes on big businesses and wealthy individuals – Congress is considering $1 trillion of such tax increases. This would help reduce overall demand.

Congress is also considering a measure to reduce prescription drug costs. This would help consumers now hit by higher prices elsewhere.

What not to do? Note that wages aren’t pushing prices upward at all. In fact, wages are rising far more slowly than prices – which means that the Fed’s efforts to slow wage gains by slowing the economy are like pushing on a wet noodle.The biggest danger is the Federal Reserve will keep raising interest rates (I fear the Fed will raise rates by another full point when it meets July 25-26). This will cause rents to rise even faster (see above), and slow the economy to the point where a recession becomes likely.

Bottom line: Average working American households are taking it on the chin. The biggest price increases are in necessities – gas, rent, groceries. Lower-income Americans could suffer even more if the Fed keep raising interest rates to slow the economy, because the poor are the first to lose their jobs.

Politics: Republicans will try to blame Biden and the Democrats, but it’s Republicans on Capitol Hill who refuse to consider a windfall tax, refuse to raise taxes on corporations and the wealthy, and won’t give Medicare the power to negotiate (and thereby reduce) the prices of prescription drugs. Meanwhile, Biden has little or no control over most of the factors behind today’s inflation. Nonetheless, today’s report is bad news for Democrats in the upcoming midterm elections, since a president always gets blamed (or credited) for an economy.