It Is Corporate Price Gouging That Is Keeping Prices High

 

The following is just a small part of an excellent post by Robert Reich. I highly recommend you read the whole thing. He writes:

The latest economic data shows two big things:

 

(1) Corporate profits reached a record high in the fourth quarter of last year. 

(2) Inflation is still with us. The government reported Friday that the Fed’s preferred inflation gauge rose 0.3 percent month-to-month in February, following a January uptick that was the largest in a year. Prices have risen 2.5 percent over the past 12 months — certainly better than inflation readings compared with a year ago but still stubbornly above the Fed’s 2 percent target. So-called core inflation, which strips out more volatile food and energy prices and is therefore a more reliable indicator of where prices might be headed, is still coming in more strongly than central bank officials would like to see.

The easiest explanation for both phenomena — record corporate profits and prices remaining elevated — is that corporations have enough monopoly power to keep prices high. (Corporations are also shrinking the size of the products you’re buying without lowering their prices — a variant of the same thing.)

This is one of the biggest reasons the American public is not crediting Biden with a great economy. 

Most people still aren’t feeling it.

But the mainstream media doesn’t want to talk about this. . . .

At the end of 2023, Americans were paying at least 30 percent more for beef, pork, and poultry products than they were in 2020. 

Why? Near-monopoly power. Just four companies now control processing of 80 percent of beef, nearly 70 percent of pork, and almost 60 percent of poultry. So of course it’s easy for them to coordinate price increases.

The problem goes well beyond the grocery store. In 75 percent of U.S. industries, fewer companies now control more of their markets than they did 20 years ago. . . .

The record profits of large corporations are coming out of the paychecks of average Americans, who are still struggling to get by.

Biden and the Democrats must say this loudly and clearly, and tell the public what they are doing — and will do — to stop corporate monopolies and price gouging.