President Joe Biden continues to rack up strong economic gains, with GDP growth continuing to outpace predictions, alongside low unemployment, and falling inflation. The public, however, remains mired in pessimism, with large majorities saying the economy is in bad shape. It’s a disconnect that Democrats have to deal with before next year’s election. That’s why Biden is on his ”Bidenomics” tour—to tout the significant achievements of his administration around the country.
Given the public’s resistance to that message, though, Biden might have to try something else. Feel their pain, and blame it on corporate greed. It has the benefit of both being a valid accusation and a popular one.
Accountable.US just released a study finding “many of the largest general consumer S&P 500 companies have admitted to benefiting from increased prices as their net profits increased year-over-year and they rewarded shareholders with billions in new shareholder handouts.” In other words, price gouging and corporate greed is driving increases to consumer prices. The Federal Reserve’s response is to keep raising interest rates, which continues to hurt consumers.
Take, for example, General Mills, “whose executives admitted to ‘getting smart about how we look at pricing’ while implementing ‘list price increases.’” The company had a net increase in profits of $2.7 billion, up 16.5% from the previous year, in the 2022 fiscal year, and has continued to see profit increases in 2023. The company “spent over $2.12 billion in shareholder handouts and $1.2 billion on the acquisition of Tyson Foods’ pet treats business in its FY 2022 and has nearly matched shareholder handouts in just the first nine months of FY 2023.”
All on the backs of consumers.
Speaking of Tyson, executives there have touted the “significant pricing power of our portfolio with a year-over-year increase of 7.6%.” That translates into a net income increase from $3 billion in FY 2021 to over $3.2 billion in FY 2022, while shareholders reaped “$1.35 billion in handouts––$652 million more than the previous year, including a 948.5% increase in stock buybacks.”
These Fortune 500 companies are patting themselves on the back for these obscene profit schemes, and vowing to keep it up. “Some of the world’s biggest companies have said they do not plan to change course and will continue increasing prices or keep them at elevated levels for the foreseeable future,” according to a recent New York Times report. “That strategy has cushioned corporate profits.” It’s also led to greater inflation, which in turn gives them another excuse to raise prices for consumers.
The case to the public would be an easy one for Biden to make: We’re primed to blame corporations for price gouging. Healthy majorities blamed oil companies for the high gas prices of 2022, and anti-corporate sentiment has grown among voters in both political parties. “Majorities of Americans express negative views of banks and other financial institutions, as well as large corporations,” Pew found in late 2022. “While 56% say banks and other financial institutions have a negative effect on the way things are going in the country, even more (71%) say the same about large corporations.”
And it’s not just your average voter blaming corporate greed for high prices. Bloomberg polled professional and retail investors in June, and they were nearly unanimous.“Some 90% of 288 respondents in a Markets Live Pulse survey said companies on both sides of the Atlantic have been raising prices in excess of their own costs since the pandemic began in 2020.” That excess profit goes right back into stock buybacks and executive compensation.
All of this gives Biden a fantastic opportunity. He can tout the improving economy and the jobs and infrastructure projects he’s created, while at the same time acknowledging that people aren’t feeling better about it because their own wallets are still feeling the squeeze—a squeeze created by greedy corporations that are raising prices, driving inflation to justify raising prices more, and hurting consumers.
There’s nothing like having a common enemy to help bolster your own support.
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