BETHLEHEM, Pennsylvania – Another report challenges Democrats’ narrative about the link between corporate greed and persistent inflation.
The report, titled “The Bidenflation Blame Game: How Big-Spending Politicians Scapegoat the Economy,” by researchers Kurt Couchman and Ilana Blumsack of Americans for Prosperity, says “policy mistakes” at the federal level are the main reason why the U.S. inflation rate rose to its highest level in 41 years in 2022.
“Inflation has remained high since then, with overall prices rising by 20 percent in just over three years,” they note.
“The wasteful spending and debt of politicians in Washington caused inflation,” the report begins in bold orange letters. “Now they are trying to shift the blame onto someone else.”
President Biden himself is convinced of this: “There are still too many companies in America that are ripping people off: through price gouging, junk fees, greed inflation, shrink inflation,” he said in January.
His allies, such as Senator Bob Casey (D-Pennsylvania), often use this strategy.
Casey has spent about $7.55 million on campaign ads mentioning inflation since March – about 70% of his total advertising spending of $10.86 million during that period, according to researchers at Keystone Renewal PAC. Many of those ads, like “Shrinky Dink” and “Fleeced,” blame corporate “price gouging” for higher prices.
The AFP report refutes this, claiming that high prices are caused by debt-financed government spending and government-imposed COVID-19 restrictions, as well as other regulatory laws such as the Inflation Reduction Act, the American Rescue Plan, and the CHIPS and Science Act.
“Biden and his allies say higher corporate profits prove they are taking advantage of consumers,” the report said. “But these claims rely on exaggerated data and quotes taken out of context to construct a flimsy argument against suppliers of goods and services that are also struggling with inflation.”
A study published in May by the Federal Reserve Bank of San Francisco came to a similar conclusion.
The Fed study attributed the high prices to “the combined effect of supply chain disruptions and a decline in labor supply during the post-pandemic recovery, which occurred precisely as consumer demand was rising.”
It also states that while corporate profits have increased, post-Covid profits are not unusually high compared to corporate profits during previous economic crises.
“Data on the current recovery show that the rise in corporate earnings has not been particularly pronounced compared to previous recoveries,” the Fed study said. “Markets have also not played a major role in the slowdown in inflation since the summer of 2022.”
