As prices have increased faster than at any other point in four decades, lawmakers have scrambled for explanations. In recent months, some Democrats have landed on a new culprit: price gouging.
The idea is that big companies have seized on inflation to jack up prices more than necessary. The White House has backed the claim, and congressional Democrats have introduced bills that target price gouging. Proponents of the theory have a catchy term for it: “greedflation.”
For Democrats, it is a convenient explanation as inflation turns voters against President Biden. It lets Democrats deflect blame from their pandemic relief bill, the American Rescue Plan, which experts say helped increase prices. And it lets them recast inflation as the fault of monopolistic corporations — which progressives have long railed against.
Not all progressives are on board. Jason Furman, an economist who served under Barack Obama, told me that greed was not an important factor in the rise of inflation. He described the focus on price gouging as a distraction from the real causes and solutions.
But the White House and other lawmakers are taking the theory seriously. So in today’s newsletter, I want to look at the arguments for and against the idea that greedflation is driving higher prices.
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