Price gouging at supermarkets is a ‘myth,’ business executive says
A business executive and former Libertarian Party treasurer has fact-checked Vice President Kamala Harris’ claims that supermarkets are price-gouging Americans.
Todd Hagopian, also known on social media as the Profit/Minute Guy, said, “Price gouging in food is a myth” because “margins in the food industry are down.”
His claims are supported by a recent study by New York University, which found that the U.S. grocery industry had a net profit margin of just 1.18% in 2023. This hardly suggests that grocers are jacking up prices to line their pockets with profit.
Rather, supermarket prices are rising because labor, energy, and transportation costs have increased significantly in recent years.
“Government inflation is the cause,” he explained. “Don’t elect someone who doesn’t understand this.”
Hagopian was responding to Kamala Harris’ recent proposal to ban “price gouging” by food suppliers and supermarkets, which she tabled as part of a broader agenda to combat inflation. Critics said her plan amounts to price controls, which have failed everywhere they’ve been implemented.
“It’s a heavy-handed socialist policy that I don’t think any economist would support,” Kevin Hassett, a former top economic adviser in the Trump White House, told the Associated Press.
Years after Covid, the debate around consumer prices continues to grip Americans, even though economists say inflation is no longer the nation’s biggest concern.
The government struggles to control the inflation narrative
The annual growth in the Consumer Price Index (CPI) has fallen by nearly 70% from its pandemic peak of 9.1%, but that doesn’t mean inflation has disappeared. As Creditews recently reported, consumer prices have increased by more than 20% since February 2020.
Some inflation categories, such as insurance, housing, and transportation, have risen even faster.
This explosive growth in inflation is hardly surprising, given the massive spike in the money supply since the start of Covid. According to the Mises Institute, roughly one-quarter of the U.S. money supply has been created since the start of 2020.
Perhaps more shocking, “nearly two-thirds of the total existing money supply [has] been created just in the past 13 years,” the Mises Institute explained.
As economist Peter Schiff has said, money printing is the true cause of inflation, with higher prices being a byproduct of a rapidly expanding money supply.
Tesla CEO Elon Musk agrees, calling inflation a government problem, not a private sector problem.
In Musk’s view, monopolistic business practices, including price gouging, are “relatively rare” and “usually only possible if those companies have gained control of their industry regulator.”
Although the Federal Reserve has yet to slay the inflation dragon, policymakers are clearly shifting their priorities from lowering costs to beefing up the economy.
As Creditnews has reported, the Fed is under enormous pressure to start cutting interest rates and will likely do so at its forthcoming meeting in September.