The Worker

Inflation: A Knife in the Back of the Working Class

As gas prices, groceries, utilities and rent continue to increase at an alarming rate, the average worker is the one bearing the additional costs and consequences of one of the most nefarious and volatile capitalist-imperialist structures to be conceived. In addition to the failed response to the COVID-19 pandemic, the Biden Administration has graciously allocated 13.6 billion dollars (of the 1.5 trillion spending bill signed March 12, 2022) to “lethal aid” and financial support to the new proxy war frontier in Ukraine, just as the Consumer Price Index (CPI) monthly averages reach their highest points since the housing crisis of 20081. Below are the respective figures. The CPI is a representation of the average change over time of prices and costs of consumer goods and services purchased by households within the US.

Figure 1. Depicts the month-to-month calculated inflation rate utilizing CPI data. 2022 is calculated as the highest ratio since 2008.
Source: US Inflation Calculator2

It seems that monetary policy and prioritization are rarely in the interests of the working class. Take into account the massive covert bailout operations conducted by the Federal Reserve Board as recently as July 2020, where “The Fed data released this morning [March 31st, 2022] shows that the trading units of six global banks re-
ceived $17.66 trillion of the $28.06 trillion in term adjusted cumulative loans, or 63 percent of the total for all 25 trading houses (primary dealers) that borrowed through the Fed’s repo loan program in the first quarter of 2020.”3 How can the “richest country in the history of the world” allocate such vast resources that are needed by not only its struggling citizens and workers, but those who have been subjected to the ramifications of economic sanctions, embargoes and military coups, and instead allocate quite readily to oligarchic, monopolistic financial institutions, some of which are not even based in the United States?

The proletariat (the working class) and the lumpen (those defined as outside the workforce) are the populations that are subjected to the most scrutiny, vulnerability, and exploitation in addition to the cascading effects that inflation derives. This is demonstrated as markets around the world are anticipating an upcoming food shortage, increasing gas prices and services, as well as another potential spike in Coronavirus cases, prompting the United States to further privatize testing and care. With another “recession” looming due to capitalist greed and senility, the capitalist system attempts to sustain and save itself with the value extracted
from the working class, both domestic and international. This is done by laundering it back into the same conglomerates and institutions that perpetuate the exploitation, as represented in the past few years of reverse repurchase agreements conducted by the Federal Reserve Bank of New York. Below is a figure representing the history of all RRP overnight agreements. The Fed usually only utilizes influence in this operation when a liquidity crisis is possible, as well as when counterparties (institutions and conglomerates) become over-leveraged.

Figure 2. Depicts total Overnight-Reverse Repurchase Agreements from the inception of the program to April 1st, 2022 in billions of USD.4

Considering the all-time high of 1,904.58 billion dollars achieved on December 31st, 2021 in Overnight Reverse Repurchase agreements, it is clear where the interests and the objectives of the capitalist class lie, and it is always associated with maintaining systemic posture when it goes through its cyclical declines.5 How can the average working class individual oppose and organize against such governmental procedures and objectives? This can begin to be addressed through rigorous education, labor organization, and political discipline amongst various labor industries and labor unions as well as trade unions. In order to ensure effective efforts and countermeasures to the new contradictions of monopoly finance capital, the need to become involved or affiliated with a mass organization/political party (such as The Movement for People’s Democracy) takes the utmost priority. Experience and education through political organizations is a productive and practical method to begin working against the capitalist superstructure, in addition to gaining the ability to agitate, organize and educate at the community and local level.


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