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Dear John,
Price gouging. Of all the shameless responses to the economic upheavals of the pandemic, this has got to be one of the most egregious.
You know what price gouging is. It’s when prices go up, or continue to stay high, not due to market pressures or other economic factors, but solely because the seller, renter, or provider wants to increase their already excessive profits.
Price gouging may start with a temporary shortage, for instance a supply chain disruption during an emergency, or a manipulated restriction in supply, or a period of high inflation; but when the stressor is no longer in effect, prices stay high just because it benefits the price-setters.
Price gouging is endemic to monopolies, duopolies, and oligopolies: If the only place to buy supplies is the “company store,” workers will be kept in perpetual debt.
Some CEOs have even bragged to their shareholders about how much their profit-making pricing strategies exceed their inflationary increases in production costs.
To fight back against what she calls “greedflation,” Senator Elizabeth Warren has reintroduced her Price Gouging Prevention Act and is now seeking co-sponsors in the Senate. Send a message to your senators now to urge them to co-sponsor this bill, or to thank them if they have already done so.
What would the Price Gouging Prevention Act do to prevent “greedflation”? As Senator Warren describes, her bill has several important features:
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It will prohibit price gouging on a nationwide basis.
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It will take aim at companies that have taken advantage of the pandemic to jack up prices unnecessarily, and keep them high.
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It will focus on companies whose executives brag to shareholders about increasing prices faster than inflationary costs.
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It will require public disclosure of companies’ costs and pricing strategies.
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It will increase the Federal Trade Commission’s funding to enforce these conditions.
Corporate costs are coming down and profits are rising, but consumers are still paying higher prices -- 3.4% higher last year, while production costs increased only 1%. Diapers are a good example: The wood pulp used to make them decreased by 25% in 2023, yet the prices continue to increase. Meanwhile, consolidation in all sectors is creating monopolies that squeeze consumers even further.
Send a message to your Senators to encourage them to sign on to the Price Gouging Prevention Act as co-sponsors, or to thank them if they’ve already done so.
Thank you for holding corporations accountable to the public they are supposed to be serving.
Robert Reich
Inequality Media Civic Action
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