WASHINGTON (NEXTAR) – A congressional committee is investigating whether big corporations are taking advantage of consumers by raising prices just to boost profits. This comes as supply chain issues have already led to natural price hikes.
Many experts who testified before congressional committees agreed that big corporations were artificially raising prices, forcing consumers to pay record high prices and corporations making record profits.
“Companies are raising prices more than necessary to cover higher costs,” explained Representative Raja Krishnamurthy (D-IL).
Democrats say big corporations are exploiting pandemic-related supply chain problems to drive up prices consumers are paying.
“They’re increasing because powerful executives are making deliberate choices to increase their profits,” said Rep. Katie Porter (D-CA).
Economists tracking corporate profits through the pandemic say that during that time, corporations saw their highest quarterly profit margins in seven decades.
“Big companies like Procter & Gamble know they can take advantage of consumers’ basic needs by making necessities like diapers and laundry supplies,” said Dr. Explained by Rakeen Mabud.
But watchdogs say the Congress is also to blame after decades of demonetisation.
“If corporate power allows margins and commodity inflation to continue at this high, there is no real way to return to pre-pandemic levels without drastically reducing demand for services,” said Mike Konzal 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 may be another attempt to shift blame away from the policies of this administration and the reckless spending of this Congress,” Cloud said.
Republicans say President Biden’s pandemic stimulus package has pushed up prices. Tyler Goodspeed, an economist at Stanford University’s Hoover Institution, says spending poses bigger problems.
“A 240% annual growth rate in demand for goods. That’s a long time. That’s a lot,” Goodspeed said.
In an effort to reduce inflation by dampening demand, the Federal Reserve raised interest rates again this week. Interest rate hikes are expected to continue until inflation reaches the 2% target rate.
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