The following message is an abridged version of a recent article that Civic Action team member Paul Constant wrote in Business Insider. The article has picked up traction – and it was even shared by Sen. Elizabeth Warren. Please, give Paul’s article a read and answer this poll to tell us what you think.

Do you believe inflation is partially caused by corporate greed?

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According to the Consumer Price Index (CPI), inflation rose by 7% in December. But what the CPI can't explain – at least, not fully – is how and why inflation is rising. 

When we begin to look at the causes of inflation, the first thing to note is that virtually every nation in the world is struggling with skyrocketing inflation rates, though the rate is increasing higher in the U.S. than in most nations. 

The reason for this universal price hike is relatively simple: The pandemic shut down the global supply chain, which then caused a worldwide traffic jam for goods ranging from auto parts to semiconductors at the exact same time that demand for goods like electronics and home-improvement items increased for hundreds of millions of locked-down consumers around the world.

One thing to keep in mind is that inflation, like everything else to do with the economy, isn’t established by some objective, all-seeing, all-knowing "free market" that assesses every aspect of the economy and sets prices accordingly. Prices are set by people – and that’s where corporate greed creeps in.

In fact, a good number of the rising prices we're paying weren't strictly necessary at all. During the last quarter of 2021, for example, Starbucks reported an eye-popping 31% increase in profits, and revenue increased for the quarter by almost 20% to more than $8 billion. On the same call that Starbucks announced those terrific numbers, the corporation also announced that it would raise its prices over the next year – probably more than once.

The company blamed "supply-chain disruptions" and higher costs for labor for the price hikes, but Jake Johnson at media nonprofit Common Dreams said that they didn't mention one raise in particular: Starbucks CEO Kevin Johnson's pay increased by almost 40% last year to more than $20 million. 

It's not just Starbucks: Many American corporations see inflationary panic as an opportunity to boost their profits. Journalist Matt Stoller estimated that 60% of the price increases that ordinary Americans are paying are going directly to corporate profits, not to compensate for global supply issues or compensate for higher-priced goods.

Of course, none of this context about inflation helps the ordinary American consumer, who's paying more for everyday items. It's going to take a suite of policies – from using government muscle to help smooth out lingering supply-chain snags to combating shameless corporate price gouging and exploitative rent hikes – to push inflation back down to healthy levels.

But in the meantime, it does the American people no good to try to pin inflation solely on lockdowns, stimulus checks, or other policies that were passed to help keep Americans safe and supported through the worst of the pandemic. That's the worst kind of trickle-down fear-mongering – meant to keep workers angry with workers and everyone's eyes off the real profiteers.

As this article gains traction, we want to know what you think about inflation. Please, take our poll now to share your insight:

Do you believe inflation is partially caused by corporate greed?

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Thanks for reading,

Paul Constant
Team Civic Action







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