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Price gouging for profit is a fundamental underlying cause of the growing consumer price inflation we are experiencing today ("Buy now, save later," March 24). Many of the markets in our economy, from food processing to housing and energy, are noncompetitive, monopolistic or oligopolistic markets where one or a few sellers exercise a disproportionate influence over setting the price of goods. This situation has come about over the last four decades due to relaxation in antitrust enforcement, financial deregulation and increased corporate influence on economic policy.
For many firms, their profits are the bottom line, and the COVID-19 pandemic disrupted their profitability by shocking the economy. Now, these firms want to recuperate profits by raising prices. Many large companies are passing on increased costs to consumers, charging even more for their products, and are in turn celebrating record profit margins – all while blaming the ensuing inflation on government spending, supply shocks, rising wages, the war in Europe and downplaying the issues of monopoly competition and price gouging. Further, increases in corporate profits over the past year are greater than both inflation and compensation increases together.
For consumers living under a general price inflation, an inflationary mindset can take over, where they come to rationalize paying any price, no matter how high, and buying in bulk to hedge against future price increases. This mindset risks adding gasoline to the inflationary fire, causing prices to increase further. The federal government needs to discipline monopolies to bring competition back to the economy and protect consumers from unscrupulous profiteers, while labor must exercise its power to provide a bulwark against corporate greed.
BUY WHAT YOU NEED
If everyone does this, or a major amount of people do, these companies see their demand going up. To make more product, they rush more materials that they need and ramp up production, which in turn drives up costs. So we, in fact, help drive up costs with taking this approach. I say buy what you need, and that's it.
Attending a recent Sangamon County Board meeting, I watched a tedious, large-screen presentation given by a well-paid consultant; it gave us all a fancy, high-tech virtual tour of both the new multimodal transportation center and the upcoming remodeling of the county building. Among other wowing features of the soon-to-be built transportation center and county building redo were two murals at a cost of around $200,000 and an exhibit covering the history of the county building. These were clearly ego projects meant to embody civic pride.
Meanwhile, across town our Sangamon County Animal Control facility staff and volunteers were struggling to keep up with the mountain of feces and urine-soaked laundry using a residential-grade washer and dryer, their larger commercial-grade set having broken down. Apparently, there was no money appropriated for a replacement at that time. But back at the transportation center, six figures paid for two murals featuring hackneyed themes was absolutely affordable.
In other news, the findings of a number of recent investigations into the operation of the animal control facility came back as "adequate," and any operational liabilities as "not criminal." Being merely "not criminal" seems to me to be a pretty low bar to set as a standard. These studies and investigations came at a steep cost as well.
There is a county board election approaching, with several new candidates and current members seeking reelection. I am sincerely hoping that amongst these candidates and board members there are those that will see our county animal control operation and facility as an "ego project," the sort of operation that is striving to be humane, state-of-the-art, and of which we are civically proud – the sort of facility that other communities look at and consult to emulate, rather than merely being "adequate" and "not criminal." That is an election platform plank that I could support, and vote for.