Republicans blame Democrats, not Capitalism, when Prices and Profit Margins Rise.

Supply chain disruptions, increased labor costs, and surging demand all play a role. But one factor driving inflation is seldom discussed: mega-corporations with massive market power. As prices have increased in recent months, corporate profits have surged to record highs, according to data from Bloomberg:

Chief executive officers have cut costs and boosted prices for their products. …“To a fundamental analyst, inflation is called ‘pricing power,’” said Nicholas Colas, co-founder of DataTrek Research. 

Corporations are not being forced to raise prices to stay afloat. They are choosing to raise prices to maintain large profit margins because they have enough market power to do so without losing customers. Corporations that are raising prices are also amassing huge profits and spending billions of stock buybacks.

“Companies are extracting from their consumers using the excuse of inflation — all while lining their shareholders’ and CEO’s pockets,” Rakeen Mabud, Chief Economist at the Groundwork Collaborative, told Popular Information. “This has nothing to do with inflation, and everything to do with corporate greed by those who are focused on enriching themselves at the expense of workers and families.”

Kroger CEO Rodney McMullen was quite open about his intention to exploit inflation to increase profits. “A little bit of inflation is always good in our business.”

The GOP’s dismal sentiments could lead to diminished spending. That would starve the economy of much-needed activity. Higher inflation already risks cutting spending, and a sudden pullback would halt the incomplete recovery. Despite news of the omicron coronavirus variant spreading and rising inflation, consumers appear to be not all that shaken. Confidence even improved a bit this month, to 115.8 from 111.9 in November.

To sum it up…