The Biden administration has identified its counter-narrative to Republican attacks laying the blame for rising inflation at its feet as we head into a midterm election year. The good news is that Biden’s explanation for rising prices — coordinated corporate price-gouging — is not only accurate, but also points to a course of action that is popular with the public. The bad news is that the administration has yet to deploy the treatment regimen — i.e., a corporate crackdown — that diagnosis demands.
Tune into most major news channels and you will hear one story about the factors driving the rise in prices. Figures like George W. Bush economist Glenn Hubbard argue ludicrously that government spending has caused inflationary spikes, and the Build Back Better Act should be slashed even further as a result. Larry Summers, of course, has been fear-mongering about a return to stagflation since the moment it was clear he wouldn’t get a job in the Biden White House. These economists’ message is that ending inflation will require more deeply immiserating the poorest Americans through Fed rate hikes and withdrawn social services.
The White House, however, has consistently advanced a different narrative, one that is actually backed by the evidence. In a Dec. 10 post on the White House blog, National Economic Council Director Brian Deese and deputies Samira Fazili and Bharat Ramamurti showed that meat prices are “the single largest contributor to the rising cost of food people consume at home,” and identified that just four conglomerates — Tyson, JBS, Marfrig, and Seaboard — control up to 85 percent of U.S. meat processing. What’s more, they show that these companies’ net profit margins have tripled since the COVID-19 pandemic began. And none of the companies’ excuses for hiking their prices stand up to scrutiny.
The blog post follows up on an earlier post from September which observed that farmers, not just consumers, are being squeezed even as the corporate meatpacking middlemen reap record profits. In other words, most of the hike in meat prices is not due to COVID-19-related disruptions. (Meatpacking firms infamously placed bets on which of their employees would get COVID-19 in the middle of the second wave. We wish the higher prices were due to slower production for safety reasons.) The price hikes also aren’t due to too much easy money in the economy, despite how Fed Chair Jerome Powell has pivoted the moment his reappointment was secure.
They are due to price gouging, plain and simple. As More Perfect Union’s Faiz Shakir pointed out, it doesn’t take detailed analysis to figure this out — just look at what CEOs are telling their boards during earnings calls.
Unlike the mainstream story about inflation, the White House’s diagnosis that corporate concentration and unchecked profit-seeking are direct causes of the pain in Americans’ pocketbooks points to a course of action that is overwhelmingly popular. Targeting corporate malfeasance is good politics. Our polling with Data For Progress shows strong majorities of Democrats, independents, and Republicans all want to see a crackdown on lawbreaking and injustices committed by corporate actors, and elsewhere, polling from Navigator finds the majority of Americans primarily blame corporate greed for inflation.
Yet, elite economists like Hubbard and Summers, not Deese or his deputies, are the ones controlling the narrative about inflation. Being correct, it turns out, isn’t enough. A dry blog post full of economic statistics and analysis simply isn’t how best to message the President’s position to the public.
Instead, Biden needs to take the fight to his villains. The media thrives on conflict — it’s the root of all storytelling, after all — and here is a ready-made conflict against unpopular price-gouging corporations. Why isn’t the administration leaning into it?
Rather than just jockeying with naysayers through interviews and TV appearances, the White House can and should be using the power at its disposal to drive coverage by pursuing these price-gouging firms. They can open investigations, call on Congressional allies to demand Hill testimony, and issue enforcement actions where appropriate. All of this also generates follow-up stories: corporate elites under the microscope issue their own aggrieved press releases, and their attempts to deflect once they’ve been called out usually aren’t persuasive. This gives the White House yet more opportunities to put forward its analysis and position itself as fighting for the little guy against the price-gougers.
All of this will require more staff at the various agencies leading the charge, and where necessary, political appointees to direct them. Both items should be on the White House’s to-do list anyway. There’s no way to hold the guilty accountable without sufficient investigators to find facts, experts to contextualize them, and prosecutors to bring the charges.As for the price-gougers, it’s not just agriculture — profits are at record highs in the shipping industry even as supply chain issues entangle the shipping of actual goods. Scratch a little beneath the surface of our current inflation spike, and you see greed everywhere.
It isn’t novel to point out that Democrats, and the Biden White House especially, have a serious messaging problem on their hands. The American people simply don’t know what the Biden Administration’s agenda is, much less that it’s fighting for them — and if they don’t know that, Democrats up and down the ticket will have serious trouble in the midterms.
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