Greedflation Politics

Democratic strategists are complaining that Biden is being too honest.

NYT (“Whose Fault Is Inflation? Liberals Want Biden to Blame Big Business.“):

As high prices at grocery stores, gas pumps and pharmacies have soured many voters on his first term, President Biden has developed a populist riposte: Blame big corporations for inflation, not me.

But despite facing a tough re-election battle where economic issues will be central, Mr. Biden has not leaned into that message as frequently or naturally as some other Democrats, including senators running in competitive seats across the southwest and the industrial Midwest. The Biden campaign has not focused its television or online advertisements on messages berating companies for high prices, unlike Senators Bob Casey of Pennsylvania and Sherrod Brown of Ohio, who have made the issue a centerpiece of their campaigns — and who are outrunning Mr. Biden in polls.

Now, some progressives are urging Mr. Biden to follow those senators’ lead and make “greedflation,” as they call it, a driving theme of his re-election bid. They say that taking the fight to big business could bolster the broader Main Street vs. Wall Street argument he is pursuing against former President Donald J. Trump, particularly with the working-class voters of color Mr. Biden needs to motivate. And they believe polls show voters are primed to hear the president condemn big corporations in more forceful terms.

“It’s a winning message for Democrats,” said April Verrett, the president of the Service Employees International Union, which is knocking on doors in battleground states as part of a $200 million voter-turnout operation. “And clearly Bob Casey, who’s doing better in the polls than the president, is proving that it’s the winning message.”

The popular Senators are out-polling an unpopular President more than a decade older than them is hardly surprising. It’s almost certainly not a function of their attacking corporate greed.

Beyond that, aside from the degree to which “greedflation” is a thing (more on that later), few people blame Congress for the economy. While it may not be logical, it’s always the President who gets credit or blame for the state of the economy. So, Biden deflecting the blame on to corporations just looks like buck-passing.

Inflation soared under Mr. Biden in 2021 and 2022, as the economy emerged from pandemic recession. Its causes were complex, including snarled global supply chains, stimulative policies by the Federal Reserve and, to a degree, federal fiscal policies including Covid relief bills signed by Mr. Trump and the $1.9 trillion emergency spending measure Mr. Biden signed soon after taking office to help people and businesses hurt by the downturn.

What Republicans call “Bidenflation” has become one of the president’s biggest political liabilities in his rematch with Mr. Trump. In response, Mr. Biden has sought to simultaneously cheer progress in stabilizing or bringing down prices — growth has slowed sharply from a year ago — while acknowledging the pain voters still feel in their pocketbooks.

Mr. Biden has also attacked corporations for pricing practices in certain sectors such as meatpacking, snack foods, concert tickets and gasoline. His administration has worked to limit prices for prescription drugs like insulin and inhalers, rein in bank overdraft and credit card fees and make airline travel cheaper and more transparent, achievements that he often discusses on the campaign trail.

“We’re taking on corporate greed to bring down the price of gas, food and rent, eliminating junk fees,” Mr. Biden told a crowd of 1,000 cheering supporters in Philadelphia last week.

While it may not be effective messaging—the electorate is even less movable than usual this cycle, given two extremely-well-known and unpopular candidates—this strikes me as a far more effective strategy. He’s hitting genuinely deceptive business practices and trying to undermine oligopoly pricing. That’s a very different thing from claiming that the overall inflation rate was primarily driven by “greed.”

Biden’s defenders, quite rightly, point to the fact that post-pandemic inflation was a global phenomenon and that the United States has actually fared far better than most. See, for example, a Pew report (“In the U.S. and around the world, inflation is high and getting higher“) from almost exactly two years ago. It contains this graphic:

and this one:

Are we seriously going to argue that a global phenomenon was primarily caused by “greed”? And that the level of greed varied widely from country to country?

And, again, Biden and his supporters rightly point out that we’ve recovered faster than most. See this chart from Visual Capitalist:

It’s a bit hard to argue that corporate greed receded so quickly and diffusely.

And, frankly, Biden isn’t Bernie Sanders or even Elizabeth Warren. He just can’t pull off the faux populist bit with a straight face.

Still, leaning into that combative message is not always a natural fit for Mr. Biden. He proudly calls himself a “capitalist” and has long had a close, if sometimes contentious, relationship with corporate America. Some economists close to his White House disagree that corporations’ raising prices to juice profits is a major driver of inflation.

And while Mr. Biden delights in telling a folksy anecdote about Snickers bars shrinking in size without doing the same in price, other Democrats have sounded far more aggressive on the issue. The push to blame corporations has united many factions of the Democratic Party, including progressives, swing-state populists, union leaders and environmentalists.

Mr. Brown, who represents a state that Mr. Trump won handily in 2020, has released several web ads proclaiming he is “cracking down on the companies that rip off Ohio.” Mr. Casey cut a campaign ad showing corporate executives in suits sneaking into a grocery store under cover of night and switching out cereal boxes for smaller replacements. Senate Democrats in tight races like Tammy Baldwin of Wisconsin and Jacky Rosen of Nevada are making similar pitches.

Product sizes have been shrinking for as long as I can remember. It’s been a long time since I bought Folgers coffee but I remember my mom complaining about the 1-pound and 3-pound cans suddenly becoming a couple ounces smaller way back in the early 1970s. Sometimes it’s a function of “greed” but mostly it’s a matter of operating costs going up and consumers being less sensitive to shrinking packages than rising prices. Indeed, Folgers now comes in so many different sizes—all in bizarre denominations—that it would be next to impossible to notice. But the big can is now down to 40.3 oz, or 2 pounds, 8.3 ounces.

“President Biden has quite a bit of latitude here to put the blame where it belongs and he should not be shy about voicing it,” said Julián Castro, the former Housing and Urban Development secretary who ran against Mr. Biden for the Democratic nomination in 2020. “The alternative is that they’re going to blame you.”

But some of Mr. Biden’s progressive allies say the president has found effective — and popular — ways to talk about corporate pricing practices, including his focus on “junk fees” levied by airlines, concert promoters and more. They also say he must balance the issue with a broad set of campaign messages, including on abortion and democracy.

“You’re going to be more focused on kitchen-table issues in a Senate race,” said Lindsay Owens, executive director of the progressive Groundwork Collaborative in Washington. Mr. Biden, she added, is “doing the exact right thing. He’s not focusing on the wonky, eggheaded debates on where inflation is coming from, and he’s focusing a lot more on the ways Americans are feeling and experiencing price increases in their daily lives.”

Again, I haven’t the foggiest whether this messaging will be effective. But it’s a more honest way of campaigning and shows voters that he’s actually doing something about the problem rather than just casting blame.

Mr. Biden has carefully targeted his arguments about corporate pricing to evidence provided to him by his economic team, said Bharat Ramamurti, a former deputy director of Mr. Biden’s National Economic Council.

“Maybe that ends up in something that is slightly more reserved,” Mr. Ramamurti said. But when it comes to price gouging, he said, “I think he’s been pretty full-throated in calling it out when he sees it, and when the economic data supports it.”

Which seems quite reasonable to me.

For now, polling shows Mr. Trump with a clear edge: 58 percent of voters across six of the top battleground states say Mr. Trump would do a better job handling the economy, compared with 36 percent who prefer Mr. Biden, a New York Times/Siena College/Philadelphia Inquirer poll found last month.

But Democratic pollsters have found that many voters agree with the contention that corporations are responsible for inflation. Nearly 6 in 10 voters said corporations’ being “greedy” was a major cause of inflation, including a majority of independent voters, according to a poll by the progressive-leaning group Navigator Research.

The Biden campaign’s internal polling analyses have found similar trends.

But, again, the inflation happened under Biden’s watch and voters who are mad about it want someone else in charge. “It was corporate greed, not me” is essentially saying “I’m powerless to stop it.” His messaging about his actual policies to bring prices down therefore seems obviously more powerful.

FILED UNDER: 2024 Election, Economics and Business, US Politics, , , , , , , , , , , , , , , , , , , , , ,
James Joyner
About James Joyner
James Joyner is Professor of Security Studies at Marine Corps University's Command and Staff College. He's a former Army officer and Desert Storm veteran. Views expressed here are his own. Follow James on Twitter @DrJJoyner.

Comments

  1. Paul L. says:

    I wish they would bring back the 1/2 gallon – 2 quart ice cream size instead of selling the 1.5 quarts size. Jack up the price 25%-33%.

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  2. MarkedMan says:

    I’m very interested in Milei in Argentina. As regular readers here know, I am (to put it mildly) skeptical of Libertarians and contend that they have been a disaster wherever they have obtained power. But I was curious because the business community seemed to embrace him. On the one hand, it could be because he was willing to take the strong actions necessary to get spending under control. Or it could be that they had no faith in his economic policies but knew that an acknowledged libertarian would let them run roughshod over legalities, the environment, worker safety, etc. I figured the way to judge how they really felt was inflation. If it cooled, then it meant they anticipated his plans would work, if it continued apace, then their love of him was for personal rather than national benefit. Given that inflation appears to continue unchecked and is even accelerating, it seems to be the latter, but admittedly it’s still early days. Maybe the inflation was already baked in.

    I’m curious how the Libertarian community is reacting to having one of their own in charge of a whole country. I know their are some L-curious amongst the commentariat here. How is this being covered in “Reason” and other such places?

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  3. Lounsbury says:

    As political positioning, “greedflation” is likely a fine pitch. It is without proper econometric reality, but in election year so long as one is not decieved by one’s own propaganda in actual monetary policy, iit would be a politically smart move.

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  4. Cheryl Rofer says:

    Ho-hum, James, another screed to help elect Donald Trump.

    Several chain stores just announced that they are cutting prices, but I don’t see that indication of greedflation anywhere in this piece. Nor the inordinate profits that they have been taking in.

    Yes, Joe Biden is old. So is Donald Trump. I understand your petulance that Republicans have fallen under the thrall of an obviously demented would-be dictator, but let’s focus on not electing that person.

    That’s Job One for all of us who prize democracy.

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  5. James Joyner says:

    @Cheryl Rofer: This isn’t a propaganda site but an analytical one. I think I’ve been pretty clear over the years where I stand on Trump. And this piece is an argument that Biden is doing the right thing: focusing on policy actions he can take as President rather than engaging in silly propaganda.

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  6. Cheryl Rofer says:

    @James Joyner: But you failed to cite all the evidence, and you dragged in, several times, the idea that Biden is too old and unpopular. You used what are probably registered-voter polls, which favor Trump, rather than probable-voter polls, which favor Biden. So the analysis left a number of things out.

    Perhaps you are heightening the contradictions to encourage Biden supporters to develop a better message, but there was so much negativity toward Biden that I missed a more positive message.

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  7. Bob@Youngstown says:

    I came to the greed conclusion long before Biden suggested it was an integral aspect of inflation.
    My church has for more than twenty years has had a group of volunteers that make progies for sale to the public. For years this activity produced an annual profit of about 50K per year (all proceeds are turned over to the church)
    At the beginning of the pandemic canned cabbage was in very short supply and we had to pay a premium to purchase that ingredient.
    As consequence, we had to increase the price of the perogy. That year, our profit remained consistent at approximately 50K, and we sold the same volume as prior years.
    Subsequently the price of canned cabbage has mainly returned to pre-pandemic levels, and the volume of our sales has consistent with prior years. But we learned that our customers were willing to pay 20% more (compared with pre-pandemic) with no change in volume.

    So, for the past two years we have “made” approximately 20% more annually to turn over to the church.
    The suggestion that we adjust the price to our customers, more inline with pre-pandemic prices, was rejected by the leaders of the perogy ministry with the statement: “the essence of capitalism is simple, make as much money as possible”

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  8. Scott F. says:

    @Bob@Youngstown:
    I wonder if church surveys indicate whether parishioners blame the pastor for the price increase and whether any intend to leave the church as a result. I’m confident the church newsletter doesn’t credit higher wages amongst the congregants for their willingness to allot more for the pierogi budget.

    The issue isn’t inflation. The issues are that generally Americans’ understanding of the economy is limited to their direct experience at the grocery store and gas pump (thanks US media), that POTUS gets sole credit/blame for economic conditions regardless of policy, and wage gains are assumed due to us whereas price increases are done to us.

    (Oh, and I distinctly remember that ½ gallon ice cream containers held more than 2 quarts when Trump was President, so it is clearly Biden’s fault that this is no longer the case.)

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  9. DrDaveT says:

    @Bob@Youngstown:

    So, for the past two years we have “made” approximately 20% more annually to turn over to the church.

    So, after adjusting for inflation… no change?

    Subtracting 2019 dollars from 2024 dollars is exactly as valid as subtracting quarts from liters.

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  10. JKB says:

    President “Small Candy” has a problem. The corporate C-suite class are now a Democrat constituency. And if he blames them for the inflation caused by the massive post-COVID cash flood, he’ll have to do something to them.

    And articles such as this are in the records:

    Biden’s Stimulus Is Stoking Inflation, Fed Analysis Suggests
    The American Rescue Plan could be pushing inflation up slightly and temporarily, a Federal Reserve Bank of San Francisco analysis said.

    By Jeanna Smialek
    New York Times, Oct 29, 2021 02:21 PM

    But inflation is a compounding “tax” on consumers. It might go up and then come down as it did, but, those prices didn’t go down because the new prices are 9% higher due to inflation, now compounding at around 3%.

    Transferring student loans to the National Debt is also inflationary. As the payback was suppose to be from the increase productivity of the recipient but instead it is now a drain on the productive taxpayers.

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  11. JKB says:

    Maybe Democrats can blame the voters?

    Stephen Zagor, food and restaurant consultant and adjunct assistant professor of business at the Columbia Business School, told Fortune that bad attitudes toward fast-food companies are an extension of the mentality so many have about the economy. As fast-food prices continue to rise even as inflation cools, consumer sentiment is dipping: In May, it reached its lowest point in six months.

    “We’re in this inflationary mental cycle as much as we are an inflationary reality cycle,” Zagor said.

    Granted, a lot of the fast food horror stories are driven by Gavin Newsom and California’s recent $20/hr minimum wage for the industry that has resulted not only in higher prices, but the loss of 10,000 jobs in the industry.

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  12. Slugger says:

    I was alive, working, and spending during the 1970s. My unschooled impression at that time was that the economy is a lot more complex than anyone thinks, including professors, politicians, philosophers, and regular people. At that time Nixon, Ford, and Carter tried a huge gamut of measures that included raising the Fed rate, wage and price controls, and consciousness raising like the infamous and unintentionally comical WIN (Whip Inflation Now!) buttons. Carter did appoint Paul Volcker who raised the Fed rate with a sterner hand than previous attempts, and inflation declined under Reagan. Did Volcker’s actions do it, or did it simply run its course? I’m insufficiently knowledgeable to answer that question. Thereafter we had low inflation for thirty years with a variety of Presidents, but our economic gurus believed in the Volcker touch. Yes, witch doctors believe in witchcraft. I remain skeptical but acknowledge that the nobody knows what is going on idea is inherently unattractive.
    Is “greedflation” a politically useful slogan to win votes? Depends on the Democrats skill in conveying the message. Personally, I find “greed” one of those simple words that we use to explain complex phenomena. Let’s keep in mind the many wise economists who predicted a big recession for 2023. Maybe, just maybe, nobody knows what is going on.

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  13. Kathy says:

    @Bob@Youngstown:

    Subsequently the price of canned cabbage has mainly returned to pre-pandemic levels, and the volume of our sales has consistent with prior years. But we learned that our customers were willing to pay 20% more (compared with pre-pandemic) with no change in volume.

    This is something I’ve seen in many products. Cooking oil in particular. And not just the distributors and retails sellers, but the manufacturers as well. That’s how come prices rarely come down after a bout of scarcity.

    Another thing is the nominal price remains the same, but the amount in the package or bottle or can goes down. Take cooking oil, again. The one company making safflower oil has kept a constant price for the past four years, but reduced the bottle from 946 ml to 825ml.

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  14. Bob@Youngstown says:

    @DrDaveT:

    So, after adjusting for inflation… no change?

    For the past 15 years (since I was a volunteer) the price for a dozen progies was 4.25 to 4.50 per dozen. When canned cabbage was difficult to obtain ( pandemic/supply chain) we had to raise the selling price to 7.50 per dozen, and we made approximately the same profit as prior (15) years.
    A year later when the supply of cabbage returned to normal, but we maintained the 7.50 price, our proceeds increased from approx 52,000 to 70,000. The following years the profits (at the 7.50 price point) were in the 70,000 to 75,000 range, with no significant change in the number of purchasers.

    So, is that inflection point (canned cabbage shortage) the result of inflation? Or have the leaders of the perogy ministry simply decided that while customers may gripe about the 7.50 price there are enough customers willing to pay the new price point.

    IMO, therein lies the problem, despite moaning about increased pricing and the need to blame someone, many customers are supporting the increased pricing by continuing to purchase at the same levels, reaping more profit for the producer. The people who are “harmed” are those who had to sacrifice to purchase at the historic pricing.

    Who walks away fat and happy? In this case it’s my church.

    @Scott F.: No Scott, I’m not aware of any parishioners who have “walked out”, rather those who can’t afford the new pricing have just reduced the size of their family gatherings ( great portion of sales are for holidays and family gatherings).

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  15. TheRyGuy says:

    The underlying problem for Biden is that he, Democrats in Congress, and the media spent two years simply ignoring inflation and hoping it would go away while they passed a bunch of legislation that Democrats had wanted for years but didn’t have much to do with the immediate problems facing the country.

    And for Cheryl Rofer, https://www.realclearpolitics.com/epolls/latest_polls/pres_general/index.htm

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  16. Jen says:

    Nobody “ignored inflation,” and the answer to was it greed is “yes, some.”

    We were still in the middle of the pandemic when inflationary pressures kicked in. No one knew how it was going to play out, especially considering the bottlenecks caused by supply chain disruptions. Supply and demand was completely FUBARed.

    It’s readily apparent that some companies decided to hop on that train and see what they could get away with, and lo and behold, they are realizing that was a stupid move and are rolling back prices accordingly.

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  17. gVOR10 says:

    @Slugger:

    I was alive, working, and spending during the 1970s. My unschooled impression at that time was that the economy is a lot more complex than anyone thinks, including professors, politicians, philosophers, and regular people.

    Me too. I sold a house in Michigan on a land contract because mortgage interest rates exceeded the state usury law. And I’d explicitly add that economists don’t understand inflation. Uncle Milty Friedman got a Nobel for explaining inflation. But when the pending collapse of the Mexican banking system forced Voelker to cut rates, Friedman said it was too soon and we’d immediately reinflate. Wrong. But that doesn’t seem to have hurt his reputation.

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  18. Gustopher says:

    Are we seriously going to argue that a global phenomenon was primarily caused by “greed”? And that the level of greed varied widely from country to country?

    Corporations took advantage of supply chain induced inflation in some areas to raise prices in others. So, it’s a mix.

    And the US is not Argentina. Or even France. We would expect inflation to differ in different countries. Assume a similar baseline and country-by-country differences on top of that.

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  19. Mikey says:

    @TheRyGuy:

    The underlying problem for Biden is that he, Democrats in Congress, and the media spent two years simply ignoring inflation and hoping it would go away

    This is a ridiculous lie. I mean, for fuck’s sake, Biden and the Democrats in Congress’ signature legislative accomplishment is called the Inflation Reduction Act! And it was passed in August of 2022, certainly less than two years after Biden’s inauguration.

    Seriously, just fuck off if all you’re going to do is show up here and lie.

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  20. Gustopher says:

    @gVOR10:

    And I’d explicitly add that economists don’t understand inflation.

    That’s ok, neither do consumers.

    Not only do they fail to understand rate-of-change vs change, but they also genetically lump everything about the economy they don’t like that isn’t unemployment into “inflation”.

    I’ve seen the term “vibe-cession” (a recession of vibes) tossed around here and there to try to separate the economic numbers and how people feel about the economy, and despite the stupid term, it’s not a stupid distinction.

    Also, I question whether traditional inflation numbers, which look at the prices of a basket of goods, captures the reality in an economy where we have so many services, fees and service fees.

    There’s been a move away from an economy based on products and services towards a grifter wealth-extraction economy, and that feeling is going to be (improperly) assigned to whatever economic term people hear most often, so “inflation” is worse than the numbers would suggest.

    Also, every time I go to the half-empty pharmacy in Upper Queen Anne (a wealthy neighborhood), with all the allergy medicine locked up, and the weirdly dim, flickering fluorescent lights that were somehow added*, and the much longer lines than a few years ago… Same with the local Target and a lot of other stores. It’s hard not to think that something terrible is happening when you see that.

    *: it really is impressive how they turned a formerly bright, sterile space into sadness incarnate.

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  21. Jay L Gischer says:

    Huh. I think the pandemic – more properly the end of the pandemic – was a factor, along with the stimulus and greedflation.

    I think we are in a better world than we would have been in without the stimulus, inflation included. We would have had a sluggish economy and high indebtedness.

    I think that even a bit of general inflation was good, since it made current debt a smaller fraction of our wealth and income. And now I have long-term fixed-rate mortgages with very low rates that were locked in. And I can put my current cash into higher-yielding investments. I think there’s a lot of people like me who are also complaining that the price of bacon is up to $6 from $5 (or complaining that it’s up to $15/lb because they are idiots or bullshitters).

    Yeah.

    Is that a good political argument? Not for the general masses. Sigh.

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  22. DK says:

    He’s hitting genuinely deceptive business practices and trying to undermine oligopoly pricing. That’s a very different thing from claiming that the overall inflation rate was primarily driven by “greed.”

    How? Sounds like six in one hand half a dozen in the other. What’s motivating these deceptive, oligarchic business practices if not greed? Altruism and generosity? Magic? Please.

    Are we seriously going to argue that a global phenomenon was primarily caused by “greed”?

    Are we seriously going to argue that corporate executives have not many any greed-based decisions in the past five years?

    It’s a bit hard to argue that corporate greed receded so quickly and diffusely.

    Good thing that’s not the argument being made. Just because a bad seed isn’t tantruming right now doesn’t mean they’re not and have never been bratty. Just because a serial killer hasn’t killed someone in years doesn’t mean they’re not and have never been murderous.

    Just because changes in consumer behavior and other myriad factors that influence pricing helped caused greedy corporate sharks to ease up on the price gouging, doesn’t mean they’re not and have never been greedy.

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  23. DK says:

    @Gustopher:

    Corporations took advantage of supply chain induced inflation in some areas to raise prices in others.

    Yes, and to price gouge in same areas, too.

    We have corporate executives admitting on shareholder calls to using supply chain issues as an excuse to raise prices as high as possible — ceding that it was just an excuse — yet folks still want to pretend greed was not a factor. I mean really.

    It’s one thing to be in denial when someone is pissing your leg and telling you it’s raining. It makes no sense to stay in denial when someone is pissing on your leg and telling you point blank, “I’m pissing on your leg.”

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  24. Slugger says:

    @gVOR10: Yes, I find it hard to believe that the people in charge from 1990 to 2020 were smarter than the people from 1970 to 1980. https://fred.stlouisfed.org/series/FPCPITOTLZGUSA
    I find it easy to believe that people who have partisan agendas are willing to mislead us.
    I’m not an expert. I have been wrong before.

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