Bernie Sanders is right: 'Corporate greed' and 'price-gouging' are driving inflation

Liberal economist Paul Krugman, in his New York Times column, has been arguing that President Joe Biden needs to do a much better job selling the positive aspects of the U.S. economy — unemployment way down from what it was in 2020, millions of new jobs added — while speaking candidly and frankly about inflation. It’s no secret that prices for a variety of items have been soaring during the COVID-19 pandemic.

A key factor in the pandemic-era inflation problem, many economists have said, is the supply chain. Because of the pandemic, goods have a harder time getting from Point A to Point B. But The Nation’s John Nichols, in an article published on February 21, argues that a major factor with inflation — one that isn’t being discussed enough — is corporate greed and price-gouging.

Liberal Sen. Elizabeth Warren of Massachusetts, according to Nichols, “put the pieces together” when Federal Reserve Chairman Jerome Powell appeared before the Senate Banking Committee in January.

“They’re raising prices because they can, and they’re not being competed down,” Warren told Powell during that hearing. “You know, market concentration has allowed giant corporations to hide behind claims of increased costs to fatten their profit margins. So, the consumer pays more both because the corporation faces higher costs and because, as you put it, because the corporation can increase prices. The reason I raise this is that higher prices have many causes, and we can’t overlook the role that concentrated corporate power has played in creating the conditions for price gouging.”

Warren, according to Nichols, “made the vital connection that all Democrats should be making as debates about the causes of inflation heat up.”

Nichols writes, “Instead of letting Wall Street apologists create the impression that inflation is simply the result of supply chain kinks and pent-up consumer demand after two years of pandemic lockdowns, and instead of letting Republicans suggest that federal and state investments in health care and housing are the problem, Democrats should be speaking like Warren — and like former Ohio State Senator Nina Turner.”

On February 17, Turner tweeted, “It’s not ‘inflation,’ it’s price-gouging. Exxon and other Big Oil corporations are price-gouging us at the gas pump. Grocery chains are making record profits price-gouging us at the register. Corporations are bleeding working people dry. Enough.”

Sen. Bernie Sanders of Vermont has also slammed corporations for “price gouging” and “corporate greed” during the pandemic.

Sanders and Warren have much in common but have their differences as well. While Sanders considers himself a “democratic socialist” along the lines of left-wing politicians in Sweden, Norway and Denmark, Warren has described herself as a “capitalist to my bones” — and the Massachusetts Democrat has emphasized that while free market capitalism needs robust competition to be healthy, many corporations have done everything they can to avoid competition and become monopolies.

“There are still plenty of Democrats who are cautious about calling out corporate greed,” Nichols observes. “A failure to be blunt about profiteering leaves a void that will ill serve their party in 2022.”

Nichols continues, “History makes it clear that midterm elections are tough for the party that controls the White House and Congress. Voters take out their frustrations on those who are in positions of power. And that is doubly true in moments of economic turbulence, as Jimmy Carter and the Democrats learned in 1978, as Ronald Reagan and the Republicans learned in 1986, as Barack Obama and the Democrats learned in 2010.”

Nichols recalls that in the 1934 midterms, President Franklin Delano Roosevelt’s willingness to call out corporations served him well.

“Throughout 1934, FDR never let up when it came to calling out speculators, monopolists, and price gougers,” Nichols explains. “He promised that New Deal Democrats with increased congressional majorities would hold the bad actors to account. Voters approved. In November, they gave Democrats nine more seats in the House and nine more in the Senate, where the party achieved a rare supermajority.”

Nichols wraps up his article by emphasizing that Democrats should pay close attention to what Sanders has been saying about inflation.

The Vermont senator tweeted, “The problem is not that a low-income worker got a 50 cent raise two weeks ago and a $1400 check last year. The problem is that corporations are using ‘inflation’ as an excuse to jack up prices so that they can make record-breaking profits to enrich CEOs and wealthy shareholders.”