Federal Reserve Chair Jerome Powell fielded questions for around 40 minutes on Wednesday following the central bank’s decision to impose another large interest rate hike, but not a single reporter asked about the extent to which record-high corporate profits are fueling inflation even as companies openly boast about their pricing power. Progressive economists have estimated that corporate profits are to blame for at least 40% of price increases during the recovery from the pandemic-induced downturn, a disproportionate contribution to the stubbornly high inflation that is eating away at workers’ wages. Some have put the number at over 50%. The notion…
Corporate Profits
Sanders Calls for Windfall Tax to Defend Economy Against Corporate Greed
Sen. Bernie Sanders on Thursday slammed oil companies for raking in huge profits on the backs of U.S. consumers and reiterated his case for a windfall tax, a demand that came as President Joe Biden’s call for a federal gas tax holiday faced growing pushback from progressives and top officials in his own administration. “Corporate greed is destroying this economy. Right now, people all over the country are paying $5, $6 for a gallon of gas,” said Sanders (I-Vt.), the chair of the Senate Budget Committee. “Meanwhile, in the first quarter of this year, oil company profits were $93 billion,…
Corporate Profits Soared to Highest Levels in 7 Decades Last Year
A new paper published Tuesday shows that U.S. corporate price markups and profits surged to their highest levels since the 1950s last year, bolstering arguments for an excess profits tax as a way to rein in sky-high inflation. Authored by Mike Konczal and Niko Lusiani of the Roosevelt Institute, the analysis finds that markups—the difference between the actual cost of a good or service and the selling price—”were both the highest level on record and the largest one-year increase” in 2021. “Markups this high mean there is room for reversing them with little economic harm and likely societal benefit,” Konczal…
Poll Finds Most Voters Think Companies Are Exploiting Pandemic to Raise Prices
As large corporations post record profits, nearly two-thirds of voters agree that corporations are taking advantage of the pandemic in order to raise prices, new polling has found. The poll of over 1,500 likely voters, conducted by Data for Progress in collaboration with Groundwork Collaborative this month, found that 63 percent of all respondents think that corporations are using the pandemic to pad profits. Only 29 percent said that the companies have no choice but to raise prices to cover operational costs. This belief is widely held regardless of political affiliation, according to the survey. Seventy-six percent of Democratic voters…