The CEO of the United States Chamber of Commerce has spoken out against Democratic Sen. Elizabeth Warren’s (Mass.) repeated claims that corporations are to blame for higher inflation, saying instead that inflation is primarily due to market factors.
“They’re just plain wrong,” said Chamber of Commerce CEO Suzanne Clark. “We’ve had decades of low inflation. There wasn’t some magic burst of consolidation in the last month or the last quarter. That’s not what’s going on.”
Clark was responding to numerous comments made by Warren, who has repeatedly placed the blame for inflation on corporations, whom she attests are raising prices to increase profit margins at the expense of consumers, thus driving inflation.
Warren notably suggested as much during the re-confirmation hearing of Federal Reserve Chairman Jerome Powell, asking Powell whether companies’ profit margins were likely to remain low in a competitive market, implicitly contrasting this assumption with the high profit margins seen by some corporations since the beginning of the COVID-19 pandemic.
As evidence for her claims, Warren pointed out that two-thirds of American companies reported higher profit margins than prior to the pandemic.
However, the Chamber of Commerce head has a different assessment of the situation, blaming the inflation dilemma instead on shortages across multiple industries.
“We know what’s happening. We know there’s a worker shortage driving wages up. We know there’s an energy shortage. There’s a housing shortage,” Clark continued.
Warren responded by highlighting the decline in market competition, noting that 75 percent of U.S. industries have less competition than 20 years ago.
Of course, inflation is a complex matter and is attributable to a multiplicity of factors.
Among the other explanations that have been proposed for rising prices are years of low interest rates (cut to virtually zero interest during the pandemic), pandemic relief stimulus payments, and higher wages due to a nationwide labor shortage.
