Wealthy corporations and billionaires are exploiting a political narrative to raise prices on consumers, making record profits in the process. In fact, American billionaires increased their fortunes by an astronomical figure of $2 trillion during the pandemic.
“McDonald’s, now with higher prices, topped $23 billion in revenue in 2021.”
“Exxon Mobil reports an $8.9 billion fourth-quarter profit as oil prices soar”.
“Starbucks raising prices despite soaring profits”.
“UPS just posted record-breaking profits, plans to hike prices in 2022.”
Above are just a few of the headlines Americans are reading as they question why we are seeing an increase in consumer prices. Polls show that a wide sector of the public is concerned about inflation, particularly regarding groceries and gas prices.
Republicans have characteristically seized on this as an opportunity to attack and blame President Joe Biden. Those attacks blatantly ignore that under Biden’s tenure we have had the strongest performance in economic growth, jobs, and income in decades. Disposable income is up three percent in the last 10 months, and GDP increased 7.8% in 2021. Wages have increased more in the last months of last year than they had in the previous two decades.
Some even blame these positive economic developments for the rising inflation, saying that Biden’s policies have driven too much money into people’s pockets and that it’s causing the rise in prices.
That’s all absolute cynical nonsense aided and abetted by an ingloriously lazy mainstream press all too willing to spread the GOP’s misinformation.
The primary driver of rising prices is not inflation.
It is corporate greed.
The data is clear, these wealthy corporations are making record profits during the pandemic and are raising prices out of sheer greed to squeeze more money out of people who are struggling to make ends meet.
In 2021, two out of three of the biggest U.S. publicly traded companies reported bigger profit margins than they did in 2019 and almost 100 of these giant companies have recorded profit margins at least 50% above 2019 levels.
Just look at this chart from the Federal Reserve Bank with information from the U.S. Bureau of Economics which shows the aggregate corporate profits of America over the last decade. In the last year of the failed former president’s term, there was a crash in corporate profits, followed by a steep rise through last July which is the latest data on record. (This is the same chart in our cover image.)
Truly candid business leaders are also not really hiding any of this.
John Catsimatidis, president of Gristedes Supermarkets and D’Agostino Supermarkets, said on Fox Business, “if Wall Street CEOs are off by a penny in earnings, Wall Street is not forgiving, so what are CEO’s doing? They are raising prices… why give away something, when you don’t have to give it away and you make more margin.”
That’s an admission from a leading businessman that greedy business leaders are definitely using the narrative of inflation to raise prices on consumers and make more money for themselves in the process.
According to economist Isabella Weber of the University of Massachusetts, the pandemic and supply chain disruptions associated with it have created an opportunity for companies to pad their bottom line by raising prices.
“It’s a little bit like the guy who sells water at $20 a bottle after a hurricane, which is only possible because everybody wants to buy water but the local supply is fixed,” said Weber.
During World War II, Americans also saw rising incomes and severe shortages of civilian goods, a situation that was tackled by the federal government by imposing strict price controls. But that’s not a viable solution to today’s problems as disgraced former Republican President Richard Nixon taught us.
The Biden administration is not considering price controls, but it has already instructed the Federal Trade Commission to investigate anti-consumer behavior by oil companies, who are raising prices as they see record profits. We need lawmakers to hold these greedy companies accountable by using their investigatory powers to paint a factual picture of what is happening in plain sight in our country when greedy companies squeeze people for cash.
Just last week, House Democrats pushed through a major bill to fight supply chain inflation, the real cause of rising prices, by bringing back U.S. microchip production and beefing up research and development in America.
Passing the Build Back Better Act would significantly ease the financial pressure of working-class people by lowering healthcare costs, prescription drug costs, and more while making corporations pay their fair share, is also a good step that leading economists agree will ease inflationary pressure. Tragically, Senator Joe Manchin (D-WV) torpedoed the package, though some parts may still get passed.
That’s how to fight inflation in 2022.
We as Democrats need to push back on this fake narrative that social spending and money in the pockets of working-class people are driving inflation. It’s a harmful trope aimed at hurting any sort of political project that will address the actual needs of the broader American public.
Democrats need to forcefully deliver this clear message to the American public:
Republicans are lying to you. You are paying more for things because greedy corporations and billionaires are taking advantage of you. And we are going to do something about it.
Thomas Kennedy is a Democratic National Committee member representing Florida. He tweets from @tomaskenn.
is a former reported opinion columnist and roving correspondent. He's an elected member of the Democratic National Committee from Florida and a fomer Director of Sunshine Agenda Inc. a government transparency nonprofit organization.