Elizabeth Warren Wants To Stop Corporate Price-Gouging
This week, Sen. Elizabeth Warren introduced legislation that would address corporate price-gouging during this trying time in which many companies are jacking up their pricing and claiming it's just "inflation."
"The Price Gouging Prevention Act of 2022 " a one page summary of the bill reads, "would prohibit the practice of price gouging during all abnormal market disruptions—including the current pandemic—by authorizing the Federal Trade Commission (FTC) and state attorneys general to enforce a federal ban against unconscionably excessive price increases, regardless of a seller’s position in a supply chain. It also creates an affirmative defense to protect small businesses that must raise prices in good faith to earn a profit while establishing presumptions against dominant companies that brag about exploiting American consumers."
It's all good, but that last one is particularly satisfying. It's frustrating hearing many of these corporations straight up admit that they're raising prices through the roof because they know consumers will just blame it on inflation and knowing that basically nothing can be done about that.
The bill would also "require public companies to clearly disclose costs and pricing strategies," so that consumers can know when they are getting screwed and by whom.
The legislation is co-sponsored in the Senate by Tammy Baldwin, with companion legislation being filed in the house by Rep. Jan Schakowsky.
“Prices are rising, and consumers are paying more, while giant corporations are using inflation as a cover to expand their profits,” said Senator Warren. “This bill would crack down on corporate price gouging by setting tougher rules of the road and enhancing enforcement, and I'm going to fight to get this done.”
"We can lower costs for families across Wisconsin if we take on big corporations who are using a crisis to jack up prices for consumers," said Senator Tammy Baldwin. "During COVID, Big Oil and those at the top of the food chain have used inflation to boost record profits while working families have paid the price. This legislation will shine a light on price hikes and help prevent big corporations from exploiting a period of inflation to gouge consumers with higher costs."
“Price gouging harms consumers and is fueling the inflation hitting Americans’ pocketbooks. Corporate profit margins reached a 70-year high in 2021. Just this year, Big Pharma has increased the prices of 742 drugs. And prices at the pump remain high despite the cost of oil coming down. That’s corporate greed. During World War II, war profiteers were held accountable. The same rule should apply here. Our bill empowers the FTC to hold these price gouging companies accountable when they take advantage of American consumers, especially during times of global uncertainty,” said Rep. Schakowsky.
Agreed, agreed, and agreed.
As a bonus, it would also be pretty hard to not look like an asshole voting against this — though some conservatives are already trying to come up with a reason to oppose it. A particularly laughable response to the legislation in City-Journal explains that corporations are benevolent entities that only ever raise prices because they have to, not because the people behind them want to make more money.
This bill flunks basic economics. Firms raise prices for two reasons: they face higher costs and must pass them on to the consumer, or they are seeing increased demand. Right now, both things are happening, though it’s often hard to separate the two. Costs are higher because of higher energy prices and problems with supply chains. Demand is hot because Americans have savings from the pandemic and the government, with respect to both fiscal and monetary policy, was too expansionary.
We can assume that this even applies when, again, executives of those corporations in question are publicly bragging about how they are jacking up prices. They're probably just trying to trick us all so we don't see how wonderful and selfless they actually are, because they are too modest to take credit for such things.
Still, it seems wise to heed Maya Angelou's advice on this one and believe these corporations when they show us who they are, by very blatantly talking about how they are screwing us. Surely, if they're not actually price-gouging, they will have nothing to worry about.
And now this is your OPEN THREAD!
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Robyn Pennacchia is a brilliant, fabulously talented and visually stunning angel of a human being, who shrugged off what she is pretty sure would have been a Tony Award-winning career in musical theater in order to write about stuff on the internet. Follow her on Twitter at @RobynElyse