Inflation Is Caused By Government, Not “Greedy Corporations”
The Federal Reserve will likely raise interest rates more than expected in order to combat high inflation, according to Fed Chairman Jerome Powell.
Inflation continues to have a direct impact on everyday Americans for a number of reasons. The main causes of the high inflation we have seen over the last two years are supply chain issues from COVID-19, the Federal Reserve buying a record number of assets, and most importantly, enormous amounts of spending from the federal government.
The first step to finding a solution is acknowledging the problem. But there are many voices in public debate that refuse to acknowledge the main motivators of inflation. Instead, the common argument you hear on the left is that the out-of-control inflation the U.S. is experiencing is caused by corporate greed and profiteering.
This is economically untrue.
Former Secretary of Labor Robert Reich, a person portrayed by leftwing media outlets as an economic expert, routinely states on Twitter that the blame for high inflation should be put on big corporations because they are raising their prices to increase profit margins.
Congresswoman Rashida Tlaib, who sits on the Committee on Financial Services, echoed this same narrative this week. Tlaib questioned Fed Chairman Powell in a Congressional hearing where she stated that “corporate profiteering does impact inflation” and asked Powell if he has any statistics to show how much inflation corporations are causing. She went on to ask if the Fed was monitoring corporate profiteering and monopolies, neither of which are responsibilities of the Fed.
To put it in the simplest terms, inflation occurs when there is too much money and not enough goods. The Federal Reserve is tasked with reaching a target inflation rate of 2%. When inflation becomes too high, the Fed raises interest rates to help bring it down.
It is not economically rational to state that price hikes cause inflation. Prices are increasing BECAUSE of inflation, and inflation is occurring because the government is printing too much money into the economy to pay for the high amounts of spending. Corporations have always been greedy. How is it possible for price increases to cause inflation?
It’s not surprising that government officials are trying to shift the blame on inflation. Time and time again, the government refuses to take accountability for its poor economic policies. Modern monetary policy has made many politicians believe that our government can spend enormous amounts of money with little-to-no consequences. But until we can properly address the root of the problem, it is unlikely that it will be fixed anytime soon.
