In the age of COVID with all the shortages, rising prices are pretty much a given. We are generally given to understand that the whole economy is rife with inflation, and that is part of the reason why prices are so high.
Well, maybe not. It seems that even with all the inflation around, corporate profits are soaring. And the “fact check” people at one of the world’s largest social media platforms are labeling stories about said profits as “inflation.”
One post that earned a “fact check” tag on Instagram pointed out that Exxon Mobil, Chevron, Shell, and BP have all recently reported their highest profits since the mid-2010s while Americans are left with higher prices at the pump.
“Guess that’s just inflation,” the post mused.
On Facebook, meanwhile, a post accusing Chipotle, Starbucks, and McDonald’s of raising prices despite surging profits and blaming the squeeze on “100% corporate greed” was also adorned with a “fact check” message.
Are all the profits and rising prices about inflation?
Yet some executives, such as the CEO of luxury goods maker Coach, have outright admitted that inflation isn’t what’s causing their companies to raise prices.
“For Coach, the rise in [prices] isn’t really about inflation,” said CEO Todd Kahn, according to the Wall Street Journal. “It’s about reducing discounting.”
The CEO of Ametek, which makes instruments for medical and aerospace companies, meanwhile said that the company is raising prices more than is needed to make up for inflation.
“In the third quarter, our pricing [increases] continued to more than offset inflation,” CEO David Zapico said in a November earnings call, according to the Journal.
While most executives may be less frank about why they’re jacking up prices, a Journal analysis showed that nearly two out of three of the largest US publicly traded companies had reported fatter profit margins by late 2021 than they had during the same period in 2019 — showing that price increases helped more than makeup for inflation-related issues for many companies.
If that is the case, is inflation just a convenient excuse to jack up prices and gouge consumers?
We the bilked would like to know.
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