WASHINGTON (NEXSTAR) — A congressional panel is looking into whether big corporations are taking advantage of consumers by raising prices just to boost profits. This comes as supply chain issues have already caused a natural rise in prices.
Many of the experts who testified before the congressional committee agreed that big corporations are artificially inflating prices, forcing consumers to pay record prices while corporations make record profits.
Representative Raja Krishnaomorthi (D-IL) explained that “companies are raising prices far more than necessary to offset higher costs.”
Democrats say big corporations are exploiting supply chain problems related to the pandemic to raise the prices consumers pay.
“They grow because powerful executives make deliberate choices to maximize their profits,” said Rep. Katie Porter (D-CA).
An economist tracking corporate profits during the pandemic says that during that period, corporations posted their biggest quarterly profit margins in more than seven decades.
“Big companies like Procter & Gamble know they can tap into basic consumer needs because they make necessities like diapers and laundry supplies,” explained Dr. Rakeen Mabud of the Groundwork Collaborative.
But watchdogs say that after decades of deregulation, Congress is also to blame.
“If corporate power allows margins and commodity inflation to continue to be so high, then there is no real path back to pre-pandemic levels without drastically reducing demand for services,” said Mike Konczal of the Roosevelt Institute.
Additionally, Republicans like Congressman Michael Cloud (R-TX) say Democrats are using corporations as scapegoats.
“I am concerned that this hearing could be another effort to deflect blame from the policies of this administration and the reckless spending of this Congress,” Cloud said.
Republicans say President Biden’s pandemic stimulus package drove prices higher. Tyler Goodspeed, an economist at Stanford University’s Hoover Institution, says the spending has caused big problems.
“A 240% annual growth rate in the demand for goods. That’s a lot. It’s a lot,” Goodspeed said.
In an effort to reduce inflation by reducing demand, the Federal Reserve raised interest rates again this week. Interest rate hikes will continue until inflation reaches the target rate of 2%.
Source : www.newsnationnow.com