Catherine Rampell on inflation, corporate greed and Senator Warren

See The greediest Thanksgiving ever. Excerpts: 

"For “corporate greed” to be the culprit behind the recent spike in prices, well, you’d have to believe either that businesses suddenly got much greedier — that this is the greediest Thanksgiving ever! — or that businesses somehow suddenly got much more effective at acting upon that greed.

Here’s the thing. Corporations are always out to make a buck. That’s their job. That was true a century ago, a decade ago and last year, too. In spring 2020, readers may recall, inflation plummeted (with oil prices even briefly turning negative) and corporate profits crashed. That didn’t happen because every executive and shareholder out there suddenly became more altruistic. Companies were greedy then, too, and they were trying to make money.

What happened was the pandemic caused demand to plummet, forcing a drop in both the prices that companies charged and the profits that they earned.

What is happening now, inversely, is that demand is up again. Way up. Especially for physical goods, such as furniture and cars and sports equipment, since cooped-up consumers have cash they’re eager to spend and they’re still not totally comfortable purchasing higher-risk services such as travel or live entertainment.

As I said, companies are always out to make a buck; it turns out to be much easier to make a buck when demand is high.

The pandemic also fouled up — really, continues to foul up — the supply chain. Those bottlenecks make it more challenging for companies to produce and sell quite as much stuff as the public wants.

So they are selling out what they have, turning a tidy profit on those sales, and paying top dollar to acquire even more inventory, the last unit of which is often the most expensive to procure. Similar forces are affecting the energy market as factories ramp up production and gobble up more fuel in the process.

These forces are leading to both record profits and higher inflation. Progressives say you should be suspicious that both things could be happening at once, but the truth is that both are a symptom of constrained supply doing its best to meet gangbusters demand."

"it beggars belief that inflation is up because either greed or market power has somehow gotten so much worse in the past 20 or so months — as opposed to these more obvious dynamics (demand outstripping supply) driving up prices."