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Talk of inflation is on everyone’s tongue, and nearly ubiquitous online.
And as the pandemic has spurred inflation, due partially to labor shortages and supply chain bottlenecks, there’s been no shortage of opinions on who should carry most of the blame.
In some news outlets, and perhaps even your personal lives, people are quick to place blame on the Biden administration, and the Biden administration does bear some responsibility, I suppose. Biden-backed policies Americans overwhelmingly support —such as the American Rescue Plan and the bipartisan infrastructure bill — have pumped money into the economy through direct payments, child tax credits and government contracts. This year's rarely-discussed National Defense Authorization Act pumped billions of dollars into the economy through defense contracts, also.
More money in the economy leads to more demand for products, which contributes to cost increases, according to conventional wisdom. But as we consider how price increases have led to such historically low confidence in the economy (despite high wages and job growth), it’s remarkable how little blame corporations receive for their role in raising prices — especially when they’ve been so blatant and boastful about it.
On Thursday's episode of "The ReidOut," Joy put it perfectly during her segment on rising costs: A lot of corporations are taking advantage of inflation to price gouge.
She spoke about corporate price gouging with Lindsay Owens, who leads the progressive economic policy group the Groundwork Collaborative:
As Owens mentioned last night, CEOs have been open — giddy, even — about their plans to raise prices on products, despite the fact many of them have seen profits rise during the pandemic.
“We’ve been very comfortable with our ability to pass on the increases that we’ve seen at this point,” Kroger Chief Financial Officer Gary Millerchip said in October. “And we would expect that to continue to be the case.”
He wasn’t the only one.
“What we are very good at is pricing,” Colgate-Palmolive CEO Noel Wallace said in November. “Whether it’s foreign exchange inflation or raw and packing material inflation, we have found ways over time to recover that in our margin line. And that is certainly the focus right now in the business.”
Kellogg CEO Steve Cahillane recently touted a “very, very strong performance” at the end of last year that was “mostly driven by price.”
All of this reveals an irritating reality. Helped along by many in the media, Americans have trained much of their anger for price increases on politicians. The result? Cash-hungry CEOs and their shareholders have got off scot-free, and laughed all the way to the bank.