Pub. 18 2021 Issue 4

Issue 4 • 2021 17 operating income, or profit, of $3.785 billion. That represented a 20.9% profit margin compared to total sales. In the fiscal quarter ending Sept. 30, 2021, after some of P&G’s price increases went into effect, the company reported a profit of $5.06 billion. That represented a profit margin of 24.7%. The company then spent $3 billion in the quarter buying its own stock. The price of Pampers or Tide cannot be explained by “rising costs for raw materials” or transportation alone. Rather, the price increases were necessary to maintain — and even increase — large profit margins. For example, Procter & Gamble can get away with selling diapers at a considerable margin because there is almost zero competition in the diaper market. Economic data shows that corporations raising prices are also amassing huge profits and spending billions on stock buybacks. While various factors are at play, insufficiently competitive industries have stripped consumers of bargaining power. This extends to other sectors, like the food and beverage industry. Both PepsiCo and Coca-Cola, both dominant market forces, decided to raise prices by up to 5%, which increased the profit margins for both companies massively. Another example is Whirlpool, which raised its prices between 5% and 12% in 2021, said the increase was to “compensate for increased raw material costs, including for steel and plastics.” However, in the third quarter, Whirlpool announced profits of $608 million and revised its profit margins moving forward from 10% to 12%. So, while the initial excuse for the price increases was to offset the raw material cost, they significantly increased profit margins. There have been articles here and there detailing how much corporate consolidation and lack of market competition are contributing to inflation, but it certainly isn’t the mainstream narrative. Instead, there is an attempt to muddy the water, to mystify the cause. It’s striking how much the early consensus around inflation immediately blamed the stimulus checks sent to Americans during the pandemic. That is the media’s default position in this country; find people without any actual power, make them the scapegoat, and absolve people with enormous There have been articles here and there detailing how much corporate consolidation and lack of market competition are contributing to inflation, but it certainly isn’t the mainstream narrative. Instead, there is an attempt to muddy the water, to mystify the cause. amounts of power of any responsibility. The further you dig into the causes of inflation, it becomes apparent that supply-chain issues and corporate consolidation are far more at their roots than stimulus money or increased wages. However, it is incredibly beneficial to those in power to scapegoat stimulus checks or increased wages as the cause to depress the expectations of the American public in the future. As a result, we have a climate in this country where the media is constantly gaslighting people or telling outright lies, blaming economic travails on sources with no actual power, such as low-wage workers making slightly more and completely ignoring or whitewashing the actual sources of our problems. As a result, you have a population that often seems remarkably confused, reactionary, and angry. Who can blame people when it’s so difficult to determine the truth? Another example of willful misinformation around an issue, in the same vein as inflation, revolves around the mutations of COVID-19 that are currently emerging long after vaccine availability. These mutations are emerging in developing countries that have largely been denied vaccine access. The biggest reason for the lack of vaccine access in these countries is that the pharmaceutical companies with the patents for creating the vaccine (Pfizer, Moderna, Johnson & Johnson) refuse to waive the patents, thus prolonging the pandemic and leading to further mutations. There is a direct correlation between corporate profiteering and failing public health. Outside the board rooms of those pharmaceutical companies, there shouldn’t be a single American siding with this outrageously shortsighted decision making. Yet there is a complete unwillingness in our most prominent media outlets to call out the corporate greed, to really emphasize how little chance we have of solving any of our major problems in this current environment. If you examine most issues currently plaguing this country, corporate consolidation almost always plays a major role. Our current supply-chain issues, for example, have been revealed to be the result of the same type of factors. According to a recent Wall Street Journal article, a hedge-fund-backed consolidated ship container supply, along with freight rail cost-cutting, has been the main culprit for the supply- chain snarl. In every step of the way, in every sector of our economy, there is profiteering going on to different degrees. As a result, it’s difficult to solve any actual problems if the most pressing matter is how you will make a certain amount of money tomorrow or next quarter. It produces a short-term, volatile mindset. It would be tremendously beneficial if more Americans understood who has all the power, who really controls the economy, instead of constantly shifting the blame. As it currently stands, we can usually identify our problems but rarely come up with coherent solutions. n