Progressives Rip Corporations for ‘Using Inflation as a Cover Story to Jack Up Prices and Pad Profits’

In the wake of new federal data showing that U.S. inflation rose again in May after decelerating slightly the previous month, progressive lawmakers, economists, and union leaders on Friday tried to hammer home their argument that corporate profiteering is a major driver of the price hikes that are eroding workers’ modest wage gains and heightening economic pain nationwide.

“While families are feeling the sting of soaring energy costs, oil and gas companies are cheering the nearly $100 billion in profits they’ve already made this year off families’ pain at the pump,” said Dr. Rakeen Mabud, chief economist at the Groundwork Collaborative.

“It’s past time for Congress to pass an excess profits tax to stop the outrageous war profiteering by Big Oil,” Mabud added, referring to the benefits the U.S. fossil fuel industry has reaped from Russia’s assault on Ukraine.

The narrative that corporate greed is one of the key culprits behind inflation resonates greatly with the U.S. public, according to recent survey data. A poll conducted last month by Data for Progress showed that 71% of all U.S. voters blame corporate profit-seeking for rising inflation.

But despite the argument’s popularity—and alignment with data showing that record-high corporate profits are a disproportionate contributor to inflation—the Biden administration has been increasingly hesitant to deploy it in recent months even as inflationary pressures persist and businesses’ net incomes grow exponentially in some sectors.

During an event hosted by The New York Times on Thursday, Treasury Secretary Janet Yellen outright rejected the notion that corporate greed is to blame for inflation, saying, “Demand and supply is largely driving inflation.”

Federal Reserve Chair Jerome Powell, meanwhile, has openly suggested that wage increases are part of the problem, telling reporters during a press conference last month that the country needs to “get wages down” in order to tackle inflation.

While progressive economists have acknowledged that a number of factors, from supply chain issues caused by the pandemic to the war in Ukraine, are pushing inflation to levels not seen in decades, they have nevertheless maintained that corporate profiteering is a significant culprit.

“Corporations are using inflation as an excuse to raise their prices, hurting workers and consumers while they enjoy record profits,” Robert Reich, the former secretary of the U.S. Labor Department, wrote last month. “Prices are surging—but let’s be clear: corporations are not raising prices simply because of the increasing costs of supplies and labor. They could easily absorb these higher costs, but instead they are passing them on to consumers and even raising prices higher than those cost increases.”

While the White House has signaled it would be willing to support a windfall profits tax on Big Oil, Democrats’ bill has not received a vote in the House or Senate.

Last month, Sens. Elizabeth Warren (D-Mass.) and Tammy Baldwin (D-Wis.) along with Rep. Jan Schakowsky (D-Ill.) unveiled a measure that would empower federal regulators to crack down on corporate price gouging.

Originally published at Commondreams.org, written by Jake Johnson.