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The Dirty Secret of Inflation: Corporations Are Jacking Up Prices and Profits
Link to tweet
Tweet text:
John Nichols
@NicholsUprising
Prices rose 7.5% over the last year.
AND
The US Department of Commerce reports that corporate profit margins had hit the highest level in 70 years.
We’re not experiencing inflation. We’re experiencing pandemic profiteering and corporate price gouging.
thenation.com
The Dirty Secret of Inflation: Corporations Are Jacking Up Prices and Profits
Democrats are failing to speak to the realities of the economic moment—and it could cost them in the midterms.
8:01 AM · Feb 21, 2022
John Nichols
@NicholsUprising
Prices rose 7.5% over the last year.
AND
The US Department of Commerce reports that corporate profit margins had hit the highest level in 70 years.
We’re not experiencing inflation. We’re experiencing pandemic profiteering and corporate price gouging.
thenation.com
The Dirty Secret of Inflation: Corporations Are Jacking Up Prices and Profits
Democrats are failing to speak to the realities of the economic moment—and it could cost them in the midterms.
8:01 AM · Feb 21, 2022
https://www.thenation.com/article/politics/inflation-price-gouging/
resident Biden and his fellow Democrats need to learn to talk about inflation if they hope to maintain congressional majorities in this year’s midterm elections. They can’t deny that costs for consumers are rising at a jarring rate—up 7.5 percent compared to a year ago, according to the latest figures. But they can, and must, make the connection between surging prices and surging corporate profits.
The US Department of Commerce reported at the end of December that corporate profit margins had hit the highest level in 70 years. You’ll hear a lot of complex, and often conflicting, explanations for why this is happening now.
But recent news stories speak for themselves.
From CNBC:
Oil giant BP reports highest profit in 8 years on soaring commodity prices
From Reuters:
Cereal maker Kellogg Co. forecast full-year profit growth above market expectations on Thursday, riding on higher product prices that helped overcome labor strike disruptions and soaring input costs in the fourth quarter.
From The New York Times:
Procter & Gamble’s sales jump as consumers brush off rising prices.
From The Ticker:
McDonald’s to raise prices despite record revenue
From Yahoo Finance:
Amazon stock soars 15% after earnings, will hike Prime membership fee
*snip*
8 replies
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And yet...
https://www.washingtonpost.com/us-policy/2022/02/17/white-house-inflation-corporations/
Non paywall link: https://t.co/ylJg4JPP1L
When the prepared congressional testimony of a senior administration official was circulated inside the White House in recent weeks, it included a passage tying inflation to corporate consolidation and monopoly power.
That language was eventually taken out of the remarks before they were delivered. Members of the White House Council of Economic Advisers had raised objections to the idea that a spike in prices was due to corporate power, according to two people aware of the matter who spoke on the condition of anonymity due to fears of professional reprisals.
The alteration of the testimony highlights the tensions within the administration over whether the White House should blame corporate consolidation and monopoly power for price hikes. Some officials in the White House National Economic Council believe the administration could more aggressively advance that argument, and Democratic pollsters have told the White House that a populist economic message on corporate greed and prices broadly resonates with voters.
But economists inside the administration, particularly at the CEA, are uncomfortable with the push. “It’s been the war of the ‘track changes’ inside the administration over how much the White House can lean in on the extent to which competition and greed are driving inflation,” said one person briefed on the internal dynamics, who spoke on the condition of anonymity due to fear of professional reprisals.
That language was eventually taken out of the remarks before they were delivered. Members of the White House Council of Economic Advisers had raised objections to the idea that a spike in prices was due to corporate power, according to two people aware of the matter who spoke on the condition of anonymity due to fears of professional reprisals.
The alteration of the testimony highlights the tensions within the administration over whether the White House should blame corporate consolidation and monopoly power for price hikes. Some officials in the White House National Economic Council believe the administration could more aggressively advance that argument, and Democratic pollsters have told the White House that a populist economic message on corporate greed and prices broadly resonates with voters.
But economists inside the administration, particularly at the CEA, are uncomfortable with the push. “It’s been the war of the ‘track changes’ inside the administration over how much the White House can lean in on the extent to which competition and greed are driving inflation,” said one person briefed on the internal dynamics, who spoke on the condition of anonymity due to fear of professional reprisals.
From the Nation article in the OP:
There have been only a few instances of a president’s seeing his party’s position in Congress improve in a midterm election. Yet, remarkably, one such moment did occur during the Great Depression. In the midterm election year of 1934, President Franklin Roosevelt put the blame for hard times on self-serving speculators, greedy bankers, and profiteering CEOs. Said FDR, “The fault lies with Wall Street.”
Instead of letting corporate spin form the narrative of the Great Depression and the New Deal response to it, Roosevelt used his 1934 State of the Union address to speak “of those individuals who have evaded the spirit and purpose of our tax laws, of those high officials of banks or corporations who have grown rich at the expense of their stockholders or the public, of those reckless speculators with their own or other people’s money whose operations have injured the values of the farmers’ crops and the savings of the poor.”
Throughout 1934, FDR never let up when it came to calling out speculators, monopolists, and price gougers. He promised that New Deal Democrats with increased congressional majorities would hold the bad actors to account. Voters approved. In November, they gave Democrats nine more seats in the House and nine more in the Senate, where the party achieved a rare supermajority.
Instead of letting corporate spin form the narrative of the Great Depression and the New Deal response to it, Roosevelt used his 1934 State of the Union address to speak “of those individuals who have evaded the spirit and purpose of our tax laws, of those high officials of banks or corporations who have grown rich at the expense of their stockholders or the public, of those reckless speculators with their own or other people’s money whose operations have injured the values of the farmers’ crops and the savings of the poor.”
Throughout 1934, FDR never let up when it came to calling out speculators, monopolists, and price gougers. He promised that New Deal Democrats with increased congressional majorities would hold the bad actors to account. Voters approved. In November, they gave Democrats nine more seats in the House and nine more in the Senate, where the party achieved a rare supermajority.
Somebody at the White House needs to knock some heads together. FDR got it right.
