A new report from House Oversight Committee lawmakers confirms that corporate “profiteering” has been a major factor fueling inflation in the past two years, as executives have hid under the guise of inflation to fleece the public — all while bragging about it to their shareholders.
The report was released Friday by the Oversight Committee’s Subcommittee on Economic and Consumer Policy. It found that many industries have increased their profits precipitously within the last two years, taking advantage of uncertainty caused by the pandemic and other factors that set the stage for “excessive corporate price hikes,” like Russia’s invasion of Ukraine, the report reads.
Four major meat processors more than doubled their profits between 2019 and 2021, the report found, while two large rental car companies nearly multiplied their profits by six times. In the oil and gas industry, four major companies increased their profits by 62 percent.
Underscoring much of the instability across the global economy was the shipping industry, which saw disruptions due to supply chain issues. Still, these companies were able to profit from the issues nonetheless: the report found that three of the largest five shipping companies increased their profits by a staggering 29,965 percent, an increase of nearly 300 times their pre-pandemic profits.
These findings are staggering, even if they have become relatively normalized under runaway capitalism. They represent, as progressive analysts have said for months now, a failure of political forces to attempt to rein in such price hikes and provide much-needed relief to the public.
“Today’s analysis reaffirms what an overwhelming 80 percent majority of Americans already recognize according to a recent poll: under the guise of inflation, certain corporations excessively hiked prices far beyond what their costs necessitated, further driving inflation,” subcommittee Chairman Rep. Raja Krishnamoorthi (D-Illinois) said in a statement. “It is unacceptable that certain companies and industries are engaged in extreme price hikes under the cover of inflation.”
Corporate executives have been openly touting this strategy to shareholders, the report finds. Executives at companies like Hormel Foods, Tyson Foods, Autozone, and others have explicitly drawn the line between inflationary conditions and raising prices and profits in calls with shareholders, as the report points out.
“[A] little bit of inflation is always good in our business,” one Kroger executive said in June 2021. A Tyson official said in February that “Our pricing actions and strength in the beef segment … more than offset the higher [costs of goods and services].”
“Inflation is going to be a big factor for us next year,” one executive at beverage company Constellation Brands said early this year. “We’ll take as much pricing as we think the consumer can absorb.”
In other words, while the working class has struggled to afford basic needs like rent, food and energy in recent years, corporations have viewed such conditions as an opportunity to even further squeeze the public for their money. Further, they’re not afraid to admit as such, openly discussing these plans in shareholder calls.
The report is drawn from testimony and evidence from left-leaning organizations like the Economic Policy Institute and the Roosevelt Institute, which have indeed found that corporations are in large part responsible for inflation.
However, even economists in traditionally conservative spaces have been citing corporate greed as a driver of high prices. Paul Donovan, the chief economist at UBS Global Wealth Management, strongly urged the Federal Reserve to recognize this fact in an op-ed last week, writing that, because of inflation, “real wage growth is catastrophically negative” and that companies “have also taken advantage of circumstances to expand profit margins.”
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