Greed is NOT good - unless you are a shareholder and a member of the investor class.
Yesterday I heard a report on NPR on inflation which discussed why it doesn’t seem to be cooling down — and it mentioned what Biden had to say earlier this year.
PRESIDENT JOE BIDEN: While families struggle to pay their bills, some corporate executives are on earnings calls with investors on Wall Street cheering their record profits and explain how they're using this period of inflation to cover the rise in prices far beyond what they need to do to cover their costs.
emphasis added
Mary Louise Kelly of NPR and Lindsey Owens of the Groundwork Collaborative look into this.
Biden is right.
KELLY: So I gather your group, the Groundwork Collaborative, joins these calls that we just heard President Biden mention there, calls that companies hold with their investors. What have you been hearing recently as you listen in?
OWENS: Yeah, so we listen in on these calls, and we also read through the transcripts, which are publicly available to anyone who wants to look them up. And what we hear over and over again is CEOs talking about the fact that they're able to raise prices beyond the level that they need to cover their rising input costs.
emphasis added
Funny how we haven't been hearing about this with all the scare stories about high gas prices, high food prices, etc. — and how it’s all the fault of Democrats.
KELLY: Although isn't the market supposed to correct for this? Isn't the market supposed to handle this? If a company prices things too high, their customers will go elsewhere to buy things. And that company's competitors win out.
OWENS: Yes, absolutely. In theory, this type of profiteering wouldn't really be possible, right? A competitor would come in, undercut one of the big players and drive prices down. But what we're seeing in this moment is that the companies with the biggest market share, with the most market power, the most pricing power are the ones who are really engaging in the most egregious profiteering.
KELLY: Lindsay Owens - she's executive director of the Groundwork Collaborative. Thank you.
emphasis added
This is what decades of lapsed anti-trust enforcement has gotten us. We were told by very serious people (See Reich below on Robert Bork and the Chicago School) that as long as consumers didn’t see higher prices, we could ignore industry consolidation and all the other problems that go with it: loss of jobs, communities hit by merged companies closing down redundant facilities, less and less innovation because of decreased need to stay competitive, declining service… But hey, none of that matters if the things we get from a handful of companies are cheap, right?
Except they aren’t even cheap now that companies think they can get away with jacking up prices.
This was not all that noticeable before the pandemic shook up the economy and corporations seized the opportunity to cash in even while people were suffering, and they haven’t stopped.
Robert Reich laid out in 2018 how decades of consolidation had gotten us to the point where a bare handful of companies control huge market segments. His walk through a supermarket after starting at the level of farmers shows how monopolies have skewed the food chain — shelves full of ‘choices’ are an illusion. Reich goes on from there. It's worse than most people know.
(The part where Reich discusses Teddy Roosevelt as a trust-buster shows why Republicans were so determined to capture the Supreme Court.)
Considering how much media consolidation there is these days, it’s not really a surprise that Biden’s explanation of what’s driving inflation can barely get mentioned.
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Had you heard anything in the news about Biden explaining how corporations were driving inflation - because they can?
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Had you heard anything in the news about Biden explaining how corporations were driving inflation - because they can?
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