Inflation: the blame game

 “Conventional wisdom” about inflation says its fundamental cause is demand outpacing supply, and in the last two years a combination of financial assistance from government and supply-chain disruptions triggered higher prices.

But there’s more.

 

Generally, business owners chose to raise prices. Some felt they had no choice because they had to meet their own increased costs. However, higher up the financial food chain, many businesses raised prices because they’ll still sell their products and will make more money. It’s worked for them so far. During the pandemic, U.S. corporations made $2.4 trillion in net income (profits), according to the Bureau of Economic Analysis – some $6 billion more than before COVID hit.

 

“Price-gougers can get away with ramping up price tags when consumers are desperate for things they can’t get anywhere else,” commented economist Dylan Gyauch-Lewis, an independent researcher.

 

So: At least one of the factors is business decision-makers deciding to exploit the opportunity; excessive profits can’t be seen as irrelevant.

 

Increasing prices result in a boon for the upper class, which has enriched billionaires.

 

“In the first full year of the COVID pandemic, Elon Musk’s wealth skyrocketed from $25 billion to $150 billion,” said Jane McAlevey, author of A Collective Bargain: Unions, Organizing, and the Fight for Democracy. “Jeff Bezos became the first person on the planet to possess a fortune of more than $200 billion. Flexjet and NetJets – two of the most well-known private-jet charter companies operating in the United States – recently stopped accepting new clients because they simply can’t acquire enough jets to accommodate the explosive growth of the billionaire class.”

 

Reporting in The Nation, she added, “Our new Gilded Age of obscene wealth and arrogance stands in stark contrast to the everyday struggles faced by tens of millions of exhausted workers fighting just to stay healthy and alive, avoid eviction, make the next month’s rent payment, or find the kind of job that will leave enough free time to help their children with homework.”

 

Specifically, shipping corporations are making the largest profits in their histories. Eighty percent of all worldwide shipping is controlled by nine companies working through three cartels, showed the Los Angeles Times, which noted that these businesses obviously have no incentive to solve the supply-chain problem.

Another example is Big Pharma, especially vaccine makers Moderna and Pfizer. Those two corporations’ top investors and executives have reaped $10.3 billion in new wealth just since the Omicron COVID variant emerged, according to a study from Global Justice Now.

 

“Corporate profiteering is the driver of current inflationary trends,” said Gyauch-Lewis. “All it takes to confirm this is taking a look at corporate-earnings calls. Executives are al too delighted to explain to shareholders how they have been able to increase profit margins by charging consumers more.”