If this column ran headlines, a good one might be, 'Well, duh!'

 Still, it’s reassuring to see studies showing that corporate price-gouging has been a big reason for higher prices for food, fuel and insurance, much less cars, homes and other big-ticket items burdened by higher interest rates raised because rising demand tempted greedy executives to take advantage of people’s troubles.

Most Americans thought that was the case – and resented it, and now it’s become more obvious that exploiting a crisis and the consumers the economy depends upon couldn’t last.

And companies raising prices just because they can is bad business, too.

The Federal Reserve for years has blamed workers’ wages for inflation, publicly saying it sought rate hikes to weaken the labor market, leading to lower wages, less spending and less demand. But this year even the business-oriented central bank has conceded that profiteering was part of the inflation problem.

During Fed Chair Jerome Powell’s semi-annual testimony before the U.S. Senate Banking Committee, he was asked by Sen. Senator Chris Van Hollen (D-Md.), “If corporate profits were to decline from the extremely high levels that we saw recently, would it be possible to sustain growth even as we get inflation down to the target of 2%?”

Powell said yes.

But so far corporate titans have resisted cutting prices, or are faking confusion about why consumer demand is falling.

Some consumer-product companies such as Conagra and Kraft Heinz have seen stock prices fall more than 20% due to declining gross revenues (not net incomes). Yet some executives seem to explain the downturn in shopping to suddenly fickle buyers, temporary penny-pinching, or slipping brand loyalty (to generics or store-brands), but not the evident culprit – raised prices.

They blame the victims of profiteering.

The Chicago Tribune’s moderate Republican-leaning editorial page said COVID “gave the businesses cover to fatten their profit margins well beyond what was required to cope with their own inflationary pressures.”

The Trib cited a couple of samples of CEO cluelessness or arrogance.

Kraft Heinz CEO Miguel Patricio this summer dismissed the notion that Kraft Heinz went too far in hiking prices.

“I would do everything again,” he said. “We are leaders in the vast majority of categories where we play. … I mean, we can always go back on price if we think we have to … but we had to lead price increases.”

Conagra CEO Sean Connolly in an October call with analysts said consumers “have [shown] a reduction in wasted food and an increase in the use of leftovers. [Such] short-term behavior shifts act as a sort of cheat code to help these consumers spend within their means.”

The nerve!

The U.S economy depends on consumer spending, as do most modern economies. And in Europe, economists with the mainstream International Monetary Fund this summer flatly blamed corporate profiteering as a key driver of the surge in inflation the last few years.

IMF staffers Niels-Jakob Hansen, Frederik Toscani and Jing Zhou wrote, “Rising corporate profits account for almost half the increase in Europe's inflation over the past two years as companies increased prices by more than spiking costs of imported energy.”

Specifically, corporate profit-pricing has been responsible for almost 45% of inflation’s increase since the onset of the pandemic, as companies raised prices beyond just covering the rising costs from suppliers, energy, shipping woes, and materials.

Corporations’ financial windfalls were stark. For instance, the oil conglomerate Shell manipulated prices so its profits more than doubled last year – to $40 billion, a record.

n the United States, similar boons are apparent, said the Economic Policy Institute (EPI), whose analyst Josh Bivens reported, “In normal times corporate profits contribute about 13% to prices. [But] since the second quarter of 2020, they have instead contributed more than a third of price growth, or more than twice as much as they normally do.”

If inflation is to drop to the targeted 2% target, the IMF economists said, “Companies may have to accept a smaller profit share” as workers demand “pay rises to recoup lost purchasing power.” (Note: Companies could still make healthy profits without sparking inflation, or worse.)

“Corporate greed is a stubborn thing and requires serious action from Congress,” Liz Zelnick, director of economic security and corporate power at the nonpartisan nonprofit Accountable.US told Common Dreams reporter Jake Johnson.

“The Fed has not seen an adequate return on its investment in a policy that has already created fissures in the economy that could lead to recession,” she added. “It's just not worth it.”