It is exceedingly rare for a major congressional committee to hold hearings on “corporate greed” leading to corporate profiteering and surging prices on consumer goods. On April 5, 2022, Senate Budget Chairman, Senator Bernie Sanders (I-VT) chartered uncensored territory on corporate avarice with a lead witness, former Secretary of Labor, Robert Reich, now a professor at the University of California, Berkeley.
Although the hearing covered bread and butter issues, the mainstream corporate media ignored it. Massive coverage of the war in Ukraine does not offend advertisers, while the corporate war on consumers directly involves corporate advertisers.
Corporate greed takes hundreds of thousands of American lives every year (think the opioid disaster, the tobacco cancer business, the toxins in the air and water), not to mention injuries and illnesses stemming from corporations that put extra profit over concerns about public health and safety.
However, at the Senate hearing, Sanders chose to focus on the economic exploitation of consumers. Here is his introductory remark:
Across every major industry, prices continue to rise – this includes a 38 percent increase in the price of gasoline, a 44 percent increase in the price of heating oil, a 41 percent increase in the price of a used car, a 24 percent in the price of rental cars, and a 17 percent increase in the price of furniture. Further, Tyson Foods recently increased beef prices by 32 percent, the price of chicken by 20 percent and the price of pork by 13 percent. As prices increase, corporate profits hit a record high of nearly $3 trillion in 2021, up 25 percent in a single year.
He might have added that the companies profiting from these price increases paid a record low amount in federal income taxes. Moreover, the net worth of their richest shareholders soared in the midst of the pandemic.
Sanders denounced $900 billion in stock buybacks last year alone (a sign of excessive pricing power). In 2020, he added, the CEOs of major U.S. companies on average “made nearly 350 times more than the median worker.”
Senator Sanders could have noted that Apple’s CEO Tim Cook is making $50,000 an hour or about $850 a minute this year! (No, those are not typos).
Big corporations always have misleading, but plausible excuses. They are currently blaming the war in Ukraine, the Covid-19 pandemic, and the global supply chain pile-up in our ports for high prices. Well, who created the supply chain requiring U.S. consumers to buy all kinds of products from countries thousands of miles away that could have been produced here in the USA? It was Big Business CEOs who pushed corporate-managed “free trade” agreements through from Washington to Beijing. Their avaricious mantra was that their “free trade” pacts would lower prices for consumers. Really? Aside from clothing, look at the sky-high prices for your imported iPhones, your computers, cars, and drugs. The corporate boosters of the global trade pacts pocketed the excess profits from the backs of serf labor abroad.
Professor Robert Reich rebutted the corporate excuses for their higher prices by pointing out the detrimental impact on consumers of concentrated corporate power in such industries as gas and meat. With profits at a 70-year high and the companies flush with cash, why are they raising prices? His answer: “Because they can, and they can because they don’t face meaningful competition.”
Just the reverse is true. These industries dominated by a few corporations “have the power to raise prices because it makes it easy for them to informally coordinate price increases … without risking the possibility of losing customers, who have no other choice,” he testified.
“If markets were competitive,” he continued, “companies would keep their prices down to prevent competitors from grabbing away customers.” The reason they’re raising prices rather than absorbing increased costs is that they have pricing power in their locales,” as does Proctor & Gamble for diapers and toilet paper. In addition to their soaring profits, Reich showed how corporations even make money off of inflation beyond their rising costs. Tyson Foods CFO admitted this power (See the full, well-documented testimony by Professor Reich, which includes reforms.
"The Democratic leadership has to decide what they want most—votes or more corporate campaign money to further enrich their consultants who themselves are often conflicted due to their own business clients."
Senator Lindsey Graham (R-SC), the malicious, duplicitous ranking Republican member of the Budget Committee, had as his witness, professor Michael Faulkender who worked for Trump’s Treasury Department. Faulkender blamed the Federal Reserve’s monetary policy (funded by banks and headed by a Trump nominee) and excessive demand fueled by Washington’s stimulus programs for price increases. This is the usual GOP routine of blaming the government for everything, even a government under the thumb of the corporate lobby. He neglected to mention that given soaring profits, companies in a competitive industry would absorb rising costs to keep their customers. Instead, these companies are passing on these costs, plus adding profit, fueling ever-higher inflation.
Under both Republican and Democratic administrations, the government’s abdication of antitrust enforcement – shaped by corporatist lobbying – allowed countless merger after merger in industry after industry to occur. But Faulkender did not dwell on this dimension of the corporate state or the relentless corporate urge to merge so they can buy their customers instead of earn them.
The Biden White House has proposed stronger antitrust and consumer protection measures. They want to tax billionaires and unproductive stock buybacks – the latter being a long-time desire of President Biden. But there is no energy by his Party in Congress compared to the energy by the GOP to stop these measures. Besides, both parties are dialing for the same corporate campaign cash – a daily begging that dilutes the reformists’ ardor.
The media blackout on Sanders’s hearing is partly the Senator’s fault. He knows how to hold a highly energetic public hearing. You have witnesses who have worked in the trenches against corporate profiteering, victims of these profiteers, and subpoenaing corporate executives like Tim Cook of Apple if they don’t testify voluntarily. There also needs to be proponents of strong corporate crime legislation.
If Democrats can’t organize a determined hearing, that generates massive media coverage, how do they expect to make these popular issues front and center in the coming November elections? How do they expect to rebut the twistificating Republicans from succeeding in blaming the Democrats for these corporate-bred inflationary pressures on voters? The Democrats haven’t even formulated the slogans for such an offensive.
The Democratic leadership has to decide what they want most – votes or more corporate campaign money to further enrich their consultants who themselves are often conflicted due to their own business clients.
Unfortunately for the American people, the knowledgeable civic community is not catching the ears of the Democratic Party candidates. Regular reports show incumbent Democrats feeling despair and defeatism over the prospect of the lying, corrupt, corporatist, and clever GOP taking control of Congress next year.
Wake up to the winning ways of addressing ALL THE PEOPLE with economic and moral policies that connect with where people live, work and raise their families. Learn from FDR!