Biden Credits Falling Profits for Lower Inflation. Is Corporate Greed Over?
Progressives like Sens. Elizabeth Warren and Bernie Sanders typically blame corporate greed for higher prices. When prices go down, does this mean they should credit corporate benevolence?
It's an article of faith on the political left that any number of problems can be explained by corporate greed, and inflation is no exception. In 2021 and 2022, Sen. Elizabeth Warren (D–Mass.) complained that high grocery prices were the result of "a handful of giant chains" choosing to "force high food prices onto Americans while raking in record profits." When the price of eggs more than doubled during 2022, Sen. Bernie Sanders (I–Vt.) and former Clinton administration Labor Secretary Robert Reich each named "corporate greed" as the singular cause.
Today, grocery price inflation is cooling, but egg prices have fallen dramatically, from a peak of $4.82 per dozen in January 2023 to $2.09 in July.
If corporate greed was to blame for rising prices, then is the opposite—corporate benevolence—to credit when prices fall?
Last week, President Joe Biden came very close to making this point.
On August 9, Biden visited Albuquerque to tout his administration's economic agenda. In remarks from a wind energy production facility, Biden noted falling inflation numbers. "One reason we've seen inflation fall by two-thirds without losing jobs," Biden said, "is we're seeing corporate profits come back down to earth."
The evidence is slim that inflation is the result of corporate greed—as opposed to printing $4.6 trillion during the pandemic, or the avian flu outbreak that devastated the egg-laying hen population in 2022, pushing prices higher as egg inventories declined 29 percent that year. And despite Warren's claims that grocery conglomerates were seeing "record profits," grocers notoriously have some of the lowest profit margins of any industrial sector, typically less than 2 percent.
But it does stand to reason that if one is going to blame greedy corporations for rising prices and profits, then the inverse should hold true as well, and those same fat cats should get credit when prices and profits fall.
Otherwise, it would mean that pinning the blame for rising prices on corporate greed, even as inflation nationwide pushed up prices throughout the economy, was just a smokescreen to criticize the people or industries you already don't like.
