Remarkably, Corporations Have Suddenly Become "Greedy" Since Biden Became President

December 14, 2021 Francis Menton @ Manhattan Contrarian

Back in college, I knew people who called themselves Marxists. They read long volumes of dense and nearly impenetrable prose expounding the theory in great detail, and thought it was all highly sophisticated. My observation was that it boiled down to nothing more complex than blaming all the problems of the world on the evil actions of a cabal of bad guys, who however hadn’t done anything specific that was illegal or even unethical that you could put your finger on. In classic economic Marxism the bad guys were the capitalists, who had somehow hoarded all the money to themselves and were “exploiting” the working class by offering jobs. In the more recent Neo-Marxist derivative of Critical Race Theory, it’s the cis-gender white males, who practice “whiteness” and “systemic racism,” and thus are able to “oppress” people of other races and genders.

But these evil cabals can work in devious ways. Most recently we have had a complete blow-out of new government spending, fiscal deficits, and money creation by the Federal Reserve. Classic monetary theory would tell you to expect a bout of severe inflation to follow with a lag of some months. And sure enough, we are having a sudden spike of inflation, recently hitting 6.8% at an annualized rate in the most recent data. The inflation has been particularly severe in prices of food and energy.

Might this round of inflation have something to do with these government policies, taken to extremes in the near year under President Biden? Or alternatively, is government policy blameless, and the whole mess a consequence of nefarious conduct by the bad guys?

Let’s consult a few Democratic sources:

President Biden. On November 17 the New York Times reported on a visit Biden made to an auto factory in Detroit. Among the remarks he made: 

“Mr. Biden asked the Federal Trade Commission to consider whether large oil and gas companies were artificially pushing up gasoline prices for American consumers, the administration’s latest effort to target concentration in the energy industry in a bid to bring down costs. . . . Mr. Biden’s letter to Lina Khan, the antitrust champion he appointed as the commission’s chair, claims ‘mounting evidence of anti-consumer behavior by oil and gas companies.’”

Elizabeth Warren. Here’s Senator Warren on Facebook just yesterday:  

“Families are rightly upset that the price of meat has gone through the roof. Who’s to blame? Meatpacking monopolies that are using inflation as a cover to raise prices and make record profits.”

Robert Reich. You probably know of Reich as a prominent TV talking head, left-wing economist, and former Labor Secretary under President Clinton. From Reich’s piece in Salon, December 1:  

“What's really driving inflation? Corporate greed. Giant corporations with little to no competition are driving price increases. The biggest culprit for rising prices that's not being talked about is the increasing economic concentration of the American economy in the hands of a relative few giant big corporations with the power to raise prices.”

Jen Psaki. From Psaki’s press briefing just today, as reported in the Daily Mail:  

“White House Press Secretary Jen Psaki denounced the 'greed of meat conglomerates' during her Tuesday press briefing when addressing the economic pain caused to American families by soaring prices at the grocery store. During her daily news conference Psaki was asked whether President Joe Biden agreed with progressive groups that 'corporate greed is a big driver of inflation right now.’ . . . [She responded,] ‘So, for example, the President, the Secretary of Agriculture have both spoken to what we've seen as the greed of meat conglomerates.’”

Here’s what nobody asks any of these people: Weren’t these companies just as greedy back when Trump was President? Indeed, isn’t their whole job to make as much money as possible for the shareholders? And yet oil and gasoline prices were consistently low under Trump, and for that matter even fell while Obama was President. Food inflation also was largely under control under both Obama and Trump.

For that matter, aren’t the makers of digital electronic stuff like smart phones and laptops just as greedy as food and energy companies? And yet their prices have been consistently dropping during my entire lifetime.

It doesn’t seem to me that the “greedy corporations” line has any explanatory power at all as to the current (or any other) round of inflation. Even raising it is treating the voters with disdain and contempt. But it must poll well.