How are you doing?
Work in Progress
By Ivan Morgan
Here’s a new word for us all: greedflation. It refers to the belief many have that some large companies are taking advantage of rampant inflation to jack up their prices for more profit.
Is inflation driven by greed? Are corporations charging more than they need to cover their rising costs?
Corporations are in the business of making money. The most money they can. That’s the only business they are in. How they make that money is secondary. You and I rely on competition between them to keep prices down. Is this working?
Is greedflation a thing? Like everything else about the economy, it depends who you ask.
There’s little point in asking an economist.
I learned something about economists in my travels. You can find one to justify anything. I once attended a lecture at Memorial where a well-respected economist from an Ivy League university in those United States spent an hour confidently striding up and down the stage, using many confusing graphs to show how there was no way the price of oil would fall. Several years later it was $30 a barrel.
A decade ago, I attended another lecture at Memorial where the province’s most respected economist patiently explained to us why Muskrat Falls was a good project. Nuff said.
Economics is not called the dismal science for nothing.
Not much point asking a politician either. All political parties and ideological groups have their own economists who tell them what they want to hear. Don’t take my word for it. Google greedflation. Lefty economists say it’s ruining our lives. Right wing economists say its left-wing nonsense, corporations are having as tough a time as you and I are.
“Our studies prove …!” Etc., etc.
Ask a businessperson? It’s big corporations who are accused of this. They aren’t talking. You won’t find local businesses so quick to gouge you. They too are facing skyrocketing prices and most of them have to look you in the eye. Most are caught in the squeeze between their customers and their suppliers.
I worked in politics long enough to know political people see what they want to see, and blame their opponents when things go bad – like inflation. Watch the news – that’s what they do. I am more interested in what regular folks see.
Is greedflation a fact or a mindset? Are people seeing corporate greed encroaching on their lives?
A while back I was standing in long line at a supermarket, buying a mop and a bucket. People in the line were complaining that there weren’t enough tellers. An employee offered them the chance to go use the self-checkout (I call them robots).
That was not received well. Some folks in the line didn’t want to be forced onto self-checkouts. One fellow started in on how they are taking away jobs and fattening the company’s bottom line. It was interesting to listen. There were some who shrugged and went over to check out their stuff on the self-checkouts. A few of us didn’t. There was muttering about everything being sacrificed for profit. Suddenly an elderly woman turned to me, pointed at my brand-new mop and bucket and said, “You watch, they’ll be having you mop the floors on your way out yet!”
There was, as they say, laughter.
Big corporations are focussed only on profit, delivering cash to their shareholders. Executives who don’t understand that aren’t executives for very long. Is the temptation to jack up prices to pad the bottom line too great? Who knows? There are lots of reasons given for the inflation we are currently experiencing: supply chain issues, labour shortages, supply and demand pressures, a war in Europe. Is greed also to be factored in?
What I do know is the oil companies aren’t hurting. Big food corporations aren’t hurting. The power company is not hurting.
Here’s my question: how are you doing?