Democrats shift blame for inflation to retailers and their 'dynamic pricing' schemes

After years of stubborn inflation, lawmakers are increasing pressure on supermarkets and restaurants to lower prices.

Last week, Democratic Senators Elizabeth Warren and Bob Casey wrote a letter to Kroger CEO Rodney McMullen questioning the supermarket chain’s new electronic shelf labels.

The senators said the new labels make it easier for grocers to raise prices of certain high-demand goods. “The increased use of dynamic pricing will drive company profits higher—leaving consumers with the bill,” they wrote.

Earlier this year, Democratic Senator Sherrod Brown penned a similar letter to Walmart, blaming the mega-retailer for gouging customers with its new dynamic pricing technology.

According to CNBC, Warren and Casey are trying to capitalize on Americans’ growing frustration with inflation ahead of the November presidential election.

Although inflation growth has subsided lately, it remains the biggest financial worry for many Americans—and it's no wonder why.

According to the Bureau of Labor Statistics, consumer prices have increased by an average of 20.8% since the beginning of Covid. This total increase, not the annual growth cited by pundits, is what is straining Americans.

While Americans are right to be furious about inflation, not everyone is convinced that corporations are to blame.

Government spending is the real culprit?

Several economists believe that Warren and Casey's letter is the Democrats's desperate attempt to find a scapegoat for high inflation. They say the real problem is money printing, not corporate greed.

By Mises Institute estimates, roughly one-quarter of all dollars have been issued since the beginning of Covid. That is the true definition of inflation, according to economist Peter Schiff.

In his view, higher prices are just a byproduct of inflation as more dollars chase fewer goods.

“What is being inflated is the money supply. Rising prices are a result, a consequence of inflation. They are not inflation, and they do not cause inflation. They are a byproduct of inflation,” Schiff explained.

Schiff also said the Federal Reserve has enabled the government to increase its deficit spending, which has also contributed to inflation. Uncle Sam's lavishness is evident in federal debt, which recently surpassed $35 trillion for the first time ever.

It’s not just consumers who are paying higher prices. Producers and wholesalers have been in the same boat since the pandemic.

According to the Bureau of Labor Statistics, the Producer Price Index (PPI) peaked at 11.2% in March 2022—the highest since record-keeping began in 2010. Unfortunately, economists say that producers are passing the lion's share of these costs on to consumers.

An “upward trend in producer prices [...] can only be passed through to consumers and result in upward pressure on consumer price inflation,” explained Kurt Rankin, a senior economist for PNC Financial Services Group.