Giant Corporations Are Causing Inflation?

Giant corporations are using inflation as cover to raise their prices & boost their profits. In industry after industry, we have too little competition & companies have too much power to increase prices. I’ve been calling out this corporate profiteering & price gouging” – Sen. Elizabeth Warren

Another version of this argument as of late is accusing “Big Oil” of price-gouging consumers to make record-profit margins at a time when consumers are struggling. As Andrew Wilford penned:

“High corporate profits are the smoking gun that proves businesses are using ‘inflation’ as a cover for driving up prices simply because they want more money. This vague finger-pointing even took the form of a messaging bill aimed at oil ‘price-gouging’ that would have done nothing to bring down high gas prices.”

Here is the problem with these arguments that ultimately get regurgitated by the mainstream media.

They aren’t true.

Basic economics says that companies can only set prices at a level where the current supply will meet demand. Moreover, looking at prices in a vacuum is also very misleading because it doesn’t account for changes in the firm’s input or operating costs.