WASHINGTON (NEXSTAR) — A congressional committee is investigating whether large corporations are taking advantage of consumers by raising prices solely to increase profits. This was due to the fact that problems with the supply chain had already caused a natural increase in prices.
Many experts who testified before a congressional committee agreed that large corporations artificially raise prices, forcing consumers to pay record high prices while corporations reap record profits.
Rep. Raja Krishnamoorthy (D-IL) explained that “companies are raising prices far more than necessary to offset higher costs.”
Democrats say big corporations are using supply chain problems linked to the pandemic to raise prices paid by consumers.
“They’re growing because powerful executives are making deliberate choices to maximize their profits,” said Rep. Cathy Porter (D-Calif.).
An economist who tracks corporate profits during the pandemic says corporations have posted their highest quarterly profits in more than seven decades.
“Big companies like Procter & Gamble know they can tap into basic consumer needs because they make essentials like diapers and laundry supplies,” explained Groundwork Collaborative’s Dr. Raikin Maboud.
But observers say that after decades of deregulation, Congress is also to blame.
“If corporate power allows margins and commodity inflation to continue to remain so high, then there is no real path to pre-pandemic levels without a major reduction in demand for services,” said Mike Konchal of the Roosevelt Institute.
Additionally, Republicans like Congressman Michael Cloud (R-TX) say Democrats are using corporations as scapegoats.
“I am concerned that this hearing could be another attempt to shift the blame from the policies of this administration and the reckless spending of this Congress,” Cloud said.
Republicans say President Biden’s pandemic stimulus package has driven up prices. Tyler Goodspeed, an economist at Stanford University’s Hoover Institution, says the costs have caused big problems.
“240% annual growth in demand for goods. That’s a lot. That’s a lot,” Goodspeed said.
To reduce inflation by cooling demand, the Federal Reserve raised interest rates again this week. Interest rate hikes are expected to continue until inflation reaches the 2% target.