No, Inflation Is Not a Corporate Conspiracy

The White House has particularly targeted meatpackers over the past several days. Its economists put out an analysis slamming meat processing companies for excessive profiteering, and press secretary Jen Psaki blamed “the greed of meat conglomerates” for rising prices.

The oil-and-gas industry has come in for a similar pounding, and Elizabeth Warren’s theory is that the overall dynamic of rising prices and corporate profits isn’t “simply some inevitable economic force of nature — it’s greed. And, in some cases, it is flatly illegal.”

This is an absurdly reductive depiction of the U.S. economy, as if a broad-based, multi-causal economic phenomenon is being mainly or at least significantly driven by a handful of corporate malefactors wielding nearly unchecked power over the consumer price index.

Did the American economy, after 30 years of notably low inflation, suddenly become more concentrated, such that companies could arbitrarily jack up prices? And why was it that this economic power made itself felt just as supply chain disruptions took hold and the COVID-19 relief bill further stoked demand in an already growing economy?

If greedy corporations are to blame, they are at work across the board. In November, food prices were up 6.1% from the year before, with meat, poultry, fish and eggs up 12.8%, cereals and bakery products up 4.6%, and non-alcoholic beverages up 5.3%. Energy increased 33%. Prices of used trucks and vehicles went up 31.4%.