Record Profits Come From Thinning Wallets Of Americans

Corporate profits are nearing record highs, but inflation isn't decreasing, and prices remain high due to corporations wielding enough monopoly power to maintain prices.

In 2021, PepsiCo, known for various drinks and snacks, cited "higher costs" as a reason for raising prices and still reported $11 billion in profit. I Photo: PepsiCo Facebook

Alternatively, they are reducing product sizes without reducing prices, essentially achieving the same outcome, wrote Robert Reich in Substack.

This is a major reason why the American public isn't attributing a strong economy to Biden. Most people aren't experiencing its benefits. For example, in 2021, PepsiCo, known for various drinks and snacks, cited "higher costs" as a reason for raising prices and still reported $11 billion in profit.

If Pepsi faced tougher competition, consumers could opt for cheaper alternatives.

However, PepsiCo's main soda rival, Coca-Cola, also raised prices around the same time, claiming its popular sodas justified the increases. Yet, what seems to be popular these days is corporate price gouging.

This pattern extends throughout the economy, particularly evident in grocery prices. While the rate of inflation has slowed compared to recent years, consumer prices remain high, allowing corporations to maintain near-record profit margins.

They can overcharge consumers due to monopoly power or by coordinating price increases with few competitors, avoiding price reductions.

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