The Washington Post’s editorial board recently criticized Vice President Harris’s economic plan, dismissing it as filled with populist gimmicks.
But in doing so, they boldly claimed that “price gouging is not causing inflation.”
This narrative, echoed by many in the mainstream media, suggests that inflation is merely a byproduct of basic supply and demand.
Yet, this oversimplification glosses over some hard truths.
Let’s get one thing straight: Yes, prices surged during the pandemic, largely due to supply chain disruptions.
But corporate profit margins swelled alongside those price hikes, meaning companies weren’t just covering their losses—they were thriving.
Even as supply chains mended, prices didn’t fall.
This isn’t the kind of “deflation” that scares economists; it’s the natural correction that should have occurred in a competitive market.
The fact that it didn’t suggests something more insidious: a lack of competitive pressure, potentially due to monopolistic control or collusion.
Some argue that inflation’s persistence is linked to factors like stimulus aid. But this narrative misses the mark.
Working-class Americans aren’t flush with cash, and wage growth has consistently lagged behind productivity for decades.
So, it’s not excessive consumer spending that’s driving up prices.
Consider the much-cited example of egg prices. Critics often brush past the reality that even after supply issues were resolved, prices remained high.
This isn’t an isolated case—many grocery staples saw price hikes without any real supply issues.
The evidence is stark: retail sector consolidation and price gouging have played a significant role in driving inflation.
Addressing these monopoly practices isn’t just a populist ploy; it’s a necessary step to restore balance to the market.
Yet, the Federal Reserve has stuck to its traditional playbook, hiking interest rates to curb inflation.
This might work when excessive consumption is the problem, but when price gouging is at play, high rates only exacerbate the issue.
Consumers face higher borrowing costs, while small businesses struggle to invest in expansion.
The result? Monopolists tighten their grip on the market, stifling competition and innovation.
The American public isn’t fooled. They know inflation isn’t about having too much money to spend—it’s about a rigged system where oligarchs rake in record profits unchecked.
The market doesn’t correct itself when bad actors aren’t held accountable.
It’s time to rethink our approach before the consequences become even more dire.
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