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Corporate greed deserves bigger blame for inflation than Biden's policies

The Gainesville Sun logo The Gainesville Sun 2/24/2022 Nathan Crabbe, The Gainesville Sun

Corporations are getting a pass for their greed in jacking up prices.

Inflation rose in January to its highest level in the U.S. in 40 years, with prices 7.5% higher than a year before, according to the U.S. Bureau of Labor Statistics. Americans are feeling the pinch in their pocketbooks from increased costs for everything from cereal to coffee to beef to beer.

Inflation is a big reason for President Joe Biden’s flagging popularity and the likelihood that Democrats are going to get shellacked in the midterm elections. Republicans have been effective in crafting a narrative that government spending and energy policies are responsible for inflation.

The reality is that global supply chain problems and rising corporate profit are playing major roles in rising prices. As former U.S. labor secretary Robert Reich wrote in a column for The Guardian, “With corporate profits at near record levels, they could easily absorb the cost increases. They’re raising prices because they can — and they can because they don’t face meaningful competition.”

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The best example is soaring meat prices. Four giant meat processing corporations dominate the industry and are “using their market power to extract bigger and bigger profit margins for themselves,” according to a recent report from the White House National Economic Council

Reich argued that big corporations such as Amazon, McDonald’s and Starbucks are using inflation as a cover to hike prices while they rake in record profits. He cited a recent survey that found nearly 60% of large retailers say inflation has allowed them to raise prices beyond what is needed to offset higher costs.

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The U.S. Department of Commerce reported in December that corporate profit margins hit their highest level in 70 years. But there is far less news coverage of the role of corporate greed in inflation that there is criticism of Americans getting too many government checks over the course of the pandemic. 

The podcast Unf---ing the Republic (goofy name but good content) recently went through the annual reports of some of the world’s largest consumer goods companies. The reports revealed that these companies have basically told investors that they used this period of time as an opportunity to raise prices beyond what would make up for any increases in expenses.

The show took particular aim at Nestlé and Procter & Gamble, which make thousands of products found on store shelves around the world. Their statements to investors show that these corporations increased prices in the U.S. far higher than in other countries, further padding their profits in the process.

The Procter & Gamble Co. headquarters building in Cincinnati. The Procter & Gamble Co. headquarters building in Cincinnati.

The Institute on Taxation and Economic Policy estimated the average U.S. household received $3,400 in stimulus payments in 2021, but inflation is costing the average households nearly that same amount over a year. As the podcast’s host said, corporations "saw that you had an additional $3,400 in your pocket so they all put their grubby hands in your pocket and picked it.” 

So, the next time you want to blame Biden for higher prices at the grocery store or anywhere else, don’t be so simpleminded. Responsibility goes well beyond his policies to a system set up to let huge corporations make massive profits while you’re scraping together a few extra bucks to buy cereal.

Nathan Crabbe is The Sun's opinion and engagement editor. Follow him at twitter.com/nathancrabbe and facebook.com/nathancrabbe.

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This article originally appeared on The Gainesville Sun: Corporate greed deserves bigger blame for inflation than Biden's policies

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