After COVID came and mostly went, suddenly, prices began to rise. The cost of nearly everything soared, especially eggs, a dozen of which eventually cost more than a pound of beef.
Corporate CEOs — who in 2022 made $14.8 million a year compared to the average worker’s $58,800 salary — say it’s all because the cost of doing business, from higher interest rates to the cost of fuel, rose. Yeah, no.
“Higher interest rates haven’t stopped S&P companies, especially in the big food industry, from inflating consumer prices despite reporting billions in extra net earnings and over a trillion dollars in giveaways to wealthy investors,” Liz Zelnick, the director of economic security and corporate power at the nonprofit Accountable.US, said in a release.
The watchdog group found “many of the largest general consumer S&P 500 companies have admitted to benefiting from increased prices as their net profits increased year-over-year and they rewarded shareholders with billions in new shareholder handouts.”
For instance, Accountable.US found that Tyson Foods saw its net income increase from $3 billion in FY 2021 to more than $3.2 billion in FY 2022. The mega-company turned around and delivered $1.35 billion in handouts to shareholders — $652 million more than the previous year.
In addition, PepsiCo’s net income soared by 16.9% to almost $9 billion, and the company shelled out more than $7.5 billion in stock buybacks and dividends in 2022, the report said. General Mills, too, saw its income increase by double digits, 16.5%, to $2.7 billion.
And amid the greedflation, there’s no end in sight. “Some of the world’s biggest companies have said they do not plan to change course and will continue increasing prices or keep them at elevated levels for the foreseeable future,” The New York Times reported. “That strategy has cushioned corporate profits. And it could keep inflation robust, contributing to the very pressures used to justify surging prices.”
Greedflation has long been dismissed as a conspiracy theory, but some economists now say it’s real, even as one labels it “profit-led inflation.” Paul Donovan, UBS Global Wealth Management’s chief economist, said there were three waves: the first caused by the COVID pandemic and the second by the Russian invasion of Ukraine, but Donovan called those “excuses” corporations used as “cover” to raise prices. Now comes wave three, caused by … greed.
“The third wave of inflation, the one we’re getting now, is this unusual profit-led inflation story,” Donovan told Fortune. “This occurs where firms towards the end of the supply chain, so that’s consumer facing companies or near consumer facing companies, increase margins and pretend it’s all due to costs and other factors. They sneak in a margin increase.”
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“We’re seeing this expansion of margin under the cover of, ‘Oh, it’s a general inflation problem, we can’t help it.’ But actually they’re expanding margin and basically persuading consumers to accept that,” he said.
And Donovan said it’s time for people to get angry and make their dissatisfaction known.
“I think that social media can help inflame profit-led inflation by creating excuses that companies can use, but it can also work, by threatening brand values, to cause companies to rethink some of their pricing strategies,” he said.
For the record, you can’t say the cost of doing business rose and then make record profits. Americans need to wake up and make their unhappiness known.
The views expressed in this piece are the author’s own and do not necessarily represent those of The Daily Wire.
Joseph Curl has covered politics for 35 years, including 12 years as White House correspondent for a national newspaper. He was also the a.m. editor of the Drudge Report for four years. Send tips to
