In his latest campaign blitz touting the benefits of Bidenomics, President Biden said on CNN recently:

“If you take a look at what people have, they have the money to spend. It angers them and angers me that you have to spend more. It’s like 20% less for the same price. That’s corporate greed. That’s corporate greed. And we have got to deal with it. And that’s what I’m working on.”

False. Completely make believe.

Bidenomics is responsible for driving inflation higher, not corporate greed or greedflation.

The Biden administration and liberal policymakers have been looking for someone else to blame for persistent, elevated inflation.

Corporations—the Left’s long-favored punching bag—are now the scapegoat for rising inflation. President Biden, Senator Elizabeth Warren, and others claim that corporations are purposefully marking up prices to fatten their profits.

The Federal Reserve Bank of San Francisco recently destroyed this argument in a new paper. For corporate greed to be the driver of inflation, there must be evidence of widespread markups on goods across all industries, not just markups by a few companies or in a few industries. After analyzing industry-level data on markups, they did not find widespread evidence of companies marking up prices. They concluded:

We find that markups rose substantially in some sectors, such as the motor vehicle industry. However, the aggregate markup across all sectors of the economy, which is more relevant for inflation, has stayed essentially flat during the post-pandemic recovery. This is broadly in line with patterns during previous business cycle recoveries. Overall, our analysis suggests that fluctuations in markups were not a main driver of the post-pandemic surge in inflation nor of the recent disinflation that started in mid-2022.

Some policymakers point to rising corporate profits as evidence of greedflation. The economists at the San Francisco Fed also debunked this idea:

More importantly, corporate profits are an imperfect measure of a firm’s pricing power because several other factors can drive changes in profitability. For instance, much of the recent rise in corporate profits can be attributed to lower business taxes and higher subsidies from pandemic-related government support, as well as lower net interest payments due to monetary policy accommodation (Pallazzo 2023).

So no, corporate greed is not driving the elevated inflation battering households for a third year in a row.

The Left has been searching for any other excuse to divert attention from its massive, reckless spending agenda, which has been a driver of inflation.

First, the Left blamed pandemic disruptions. The pandemic did disrupt the supply chain, driving up costs, but those issues have been abated. Part of what made it difficult for suppliers to produce goods and services was the massive federal cash given to households during the pandemic that discouraged people from working and drove labor costs higher.

Next, the Left blamed Russian President Vladimir Putin. However, that’s false. He invaded Ukraine in early 2022, well after inflation began to accelerate in the spring of 2021. The war in Ukraine may have impacted some agricultural prices, but not childcare or shoes.

Now, they claim that corporations are taking advantage of accelerated costs to artificially inflate prices and expand their bottom line. That, too, is false.

The real problem is the trillions of dollars printed by the federal government and spread throughout the economy, which spurred demand at a time when supply could not meet it. Continuing massive spending is neither sustainable nor fiscally responsible. 

Bottom Line:

President Biden’s claim is false. Bidenomics is the source, not the solution, to high inflation.