Corporate pricing power is out of control because corporations face so little competition.
Worried about sky-high airline fares and lousy service? That’s largely because airlines have merged from 12 carriers in 1980 to four today.
Concerned about drug prices? A handful of drug companies control the pharmaceutical industry.
Upset about food costs? Four giants now control over 80% of meat processing, 66% of the pork market, and 54% of the poultry market.
Worried about grocery prices? Albertsons bought Safeway and now Kroger is buying Albertsons. Combined, they would control almost 22% of the US grocery market. Add in Walmart, and the three brands would control 70% of the grocery market in 167 cities across the country.
And so on. The evidence of corporate concentration is everywhere.
It’s getting worse. There were over a thousand major corporate mergers or acquisitions last year. Each had a merger value of $100m or more. The total transaction value was $1.4tn.
The government must stop putting the responsibility for fighting inflation on working people whose wages have gone nowhere for four decades.
Put the responsibility where it belongs – on big corporations with power to raise their prices.
One possibility: any large corporation in an industry dominated by five or fewer giant corporations that raises its prices more than the Fed’s target of 2% should be presumed to have monopoly power, and slammed with an antitrust lawsuit.