Date: 2024-12-21 Page is: DBtxt003.php txt00027304 | |||||||||
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US ECONOMY
UNDERSTANDING INFLATION Robert Reich: Here’s why prices are still high ... We need to keep tackling corporate power. Original article: https://www.nationofchange.org/2024/08/26/heres-why-prices-are-still-high/ Peter Burgess COMMENTARY Peter Burgess | |||||||||
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Politics: Here’s why prices are still high
We need to keep tackling corporate power.
Written by Robert Reich via Nation of Change
August 26, 202458
Americans feel like they’re still being price-gouged, even as inflation has come down. In many ways they’re right.
If we take a closer look at a few of the biggest drivers of inflation, we’ll see that some corporations are still using their power and shady techniques to keep prices high while they rake in record profits.
Let’s start with rent. In another video, I’ve told you how Wall Street investors are infiltrating the housing market by buying up hundreds of thousands of homes and rental properties.These corporate landlords then jack up rents on their units by hundreds of dollars every year.
In the first quarter of 2024, the six largest corporate landlords in America saw their collective profits climb by nearly $300 million thanks to rent increases. They’re raking it in while spending nearly a third of those profits on stock buybacks to enrich wealthy shareholders.
Each of these corporations is using a software company called RealPage, which allegedly allows them to collude with each other to fix rental prices. RealPage’s technology is used to price 16 million apartments nationwide.
What about gas prices?
In 2022, the top five Big Oil companies collectively made nearly $200 billion in profits, double the prior year. Then they spent $100 billion on stock buybacks and dividends. 2023 was another banner year for Big Oil. While you continued to pay through the nose at the pump, corporations like Chevron “returned more cash to shareholders and produced more oil and natural gas than any year in the company’s history,” according to its CEO.
According to recent findings from the Federal Trade Commission, a major Big Oil executive allegedly colluded with OPEC in recent years to artificially cut supply and drive up prices across the industry. By one estimate, that price-fixing scheme resulted in a windfall of $205 billion in excess profits — which cost each American consumer an average of more than $2,000 a year.
That’s more than $2,000 Americans could have spent on groceries. But of course groceries are another burden on our pocket books.
Americans have been paying an arm and a leg in particular for beef, pork, and poultry. Meat producers don’t need to worry about competitors with lower prices because four companies control the bulk of all meat processing in America. This has helped each of those companies siphon more money from you while raking in record profits over the past few years.
And the biggest meat producers use a high-tech pricing tool from a data company called Agri Stats that allegedly allowed them to share information and coordinate price hikes.
None of these price increases has anything to do with government spending or pandemic relief checks from four years ago, despite what you might hear. And workers aren’t to blame, either. After decades of stagnant wages, workers have finally seen modest pay bumps. But this pales in comparison to corporate profits, which are at record highs.
The problem is too much corporate power. And the solution is to crack down on corporations profiteering at your expense.
The Department of Justice under President Biden is investigating RealPage’s facilitation of rental price-fixing and launched a massive antitrust lawsuit against Agri Stats. And Biden’s Federal Trade Commission is suing to block the megamerger of Kroger and Albertsons that would send food prices through the roof.
House Democrats are investigating Big Oil for price fixing, based on the FTC’s damning report. Senate Democrats have introduced legislation to crack down on price-gouging.
Of course much more needs to be done.
Americans are struggling to get by while corporations are raking it in.
We need to keep tackling corporate power.
TAGS economy
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