Is Corporate Greed Causing Inflation? New Fed Report Disputes Biden's Claims
Summary from the AllSides News Team
President Joe Biden has frequently attributed inflation to corporate greed. Is corporate price gouging the driving force behind inflation?
Details: A new report from the Federal Reserve Bank of San Francisco concluded that the inflation experienced over the past few years is not the result of corporate markups. The report stated, “markups have risen substantially in a few industries such as motor vehicles and petroleum. However, aggregate markups—which are more relevant for overall inflation—have generally remained flat, in line with previous economic recoveries over the past three decades. These patterns suggest that markup fluctuations have not been a main driver of the ups and downs of inflation during the post-pandemic recovery.”
Key Quote: CNN (Lean Left bias) quoted White House spokesperson Jeremy Edwards responding to the report by stating, “These markups should have reversed as we recovered from the pandemic—the fact that they haven’t means prices can come down if corporate profits come back to earth. President Biden has repeatedly called on large corporations to pass their record profits along to their customers by lowering prices. And he is taking on corporate rip-offs like hidden junk fees that costs families billions of dollars a year. The President will continue to call out corporate rip-offs and fight to keep money in Americans’ pockets.”
How the Media Covered It: Outlets across the spectrum concluded that the report undercuts claims made by the Biden Administration regarding corporate greed being the cause of inflation.
Featured Coverage of this Story
From the Left
Think corporate greed is the leading cause of inflation? Think again
Some progressives have frequently blamed corporate greed for fueling the high cost of living that Americans are fed up with.
Yet new research from the Federal Reserve Bank of San Francisco casts doubt on the greedflation theory.
Economists at the SF Fed found that corporate price gouging was not a primary catalyst for the inflation surge of 2021 to 2022.
The Fed researchers did find that some companies exercised pricing power by raising prices above their production costs – a gap known as markups.
For instance, markups spiked for gasoline,...
From the Center
Corporate greed not to blame for price pressures, Fed study shows
Corporate price gouging has not been a primary driver of U.S. inflation, according to research published on Monday by economists at the Federal Reserve Bank of San Francisco.
While markups for motor vehicles and petroleum products did rise sharply during the 2021-2022 inflation surge, markups across the entire spectrum of U.S. goods and services have been relatively flat during the post-pandemic recovery, the bank's latest Economic Letter showed.
"As such, rising markups have not been a main driver of the recent surge and subsequent decline in inflation during the current...
From the Right
Corporate greed is not to blame for high inflation, SF Fed says
President Biden and other Democratic lawmakers have frequently blamed corporate price gouging for chronic inflation that has Americans paying more for everyday necessities.
But new research published by the Federal Reserve Bank of San Francisco suggests that corporate greed is not a primary driver of the inflation spike that began in early 2021.
Although some companies jacked up prices after the COVID-19 pandemic – markups surged for things like gasoline and cars in 2021, for instance – the researchers found the overall markup rate has generally remained flat, consistent with...
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