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Can blaming corporate greed save Democrats on inflation?

Some progressive groups are urging Biden and Democrats to more aggressively cast corporations and billionaires as enemies in the fight against inflation.

President Biden standing at a lectern speaking to a crowd at the Port of Los Angeles.
US President Joe Biden speaks at the Port of Los Angeles in Los Angeles, California, on June 10, 2022. 
Kyle Grillot/Bloomberg via Getty Images
Christian Paz is a senior politics reporter at Vox, where he covers the Democratic Party. He joined Vox in 2022 after reporting on national and international politics for the Atlantic’s politics, global, and ideas teams, including the role of Latino voters in the 2020 election.

Americans don’t need the Labor Department to tell them that prices remain high. Still, Friday’s consumer price index report for May revealed that inflation reached a 40-year high, an 8.6 percent increase last month compared to a year ago. Energy and food supply shocks from the Russia-Ukraine war, pandemic-related employment and production shortages, and strong consumer demand, especially in airline travel, all contributed to higher prices.

The Biden White House knows that the economy will be the primary matter on the ballot in midterm elections this year; that’s partly why President Joe Biden has dedicated the month of June to voicing the ways the White House is trying to soften the blow of rising prices, while giving the Federal Reserve cover to raise interest rates.

But Democrats also know that they have a major messaging problem. CNN and NBC News both reported in the last month that Biden is frustrated he can’t break through the bad economic vibes to convince the American people that, objectively, the economy is doing pretty well. Faced with competing priorities by different audiences in his party, in Congress, and among the public, the White House is struggling to find an enemy to pin that fault on without admitting that, just maybe, the president’s crowning economic accomplishment was partially responsible for worsening inflation.

Still, Democrats in Congress and the White House may not be going after two perfect villains hard enough: large corporations and billionaires, which progressive think tanks, economists, and activist groups say bear some of the responsibility for rising costs of living.

Starting with local demonstrations and continuing to organize throughout this year, an array of progressive groups are trying to shift the national conversation on inflation toward corporate giants — and some think that national Democrats should do more to cast “corporate greed” and price gouging by big businesses and Republican politicians as bigger culprits for still sky-high prices. They also argue that beyond turning the tide on Biden’s approval rating, focusing on a populist economic message can win back working-class voters in competitive House districts.

What progressive groups are doing — and what they want from Biden

Price gouging is a pretty self-explanatory concept: when a seller (a large corporation or business) takes advantage of a crisis, emergency, or disaster (in this case, high inflation) as cover to raise the price of a product to an unreasonable level. Left-leaning economists and think tanks argue that this practice is happening now, with corporations taking advantage of bottlenecks in the supply chain (like not enough truckers or overwhelmed ports), the Russia-Ukraine war (which raised the price of oil and natural gas), and high demand, in order to raise prices — not just to cover higher production costs but to make bigger profits — and pin it all on inflation.

“Firms are passing along their rising costs, but then they’re going for more. And that’s leading to really historic high profit margins,” Lindsay Owens, the executive director of the Groundwork Collaborative, a progressive economic nonprofit, and a former senior economic policy adviser to Sen. Elizabeth Warren (D-MA), told Vox. Owens listened in on earnings calls last year to understand how CEOs were thinking about supply chain disruptions and projected earnings, only to find positive outlooks for profits.

“The story of inflation in 2021 was really big markups, and markups that were coming in part because firms were using the cover of inflation to take big price increases to change the price level. As we moved into the first quarter of 2022, that trend has continued,” she said. Owens said the May CPI report makes more sense in the context of “corporate greed” because some oil and gas executives have scored higher profits while not increasing production to keep pace with demand — worsening the supply shortage.

By calling these practices “corporate greed,” activists hope to convince people that the current economic system may not be working for consumers who are stressed by inflation, but is delivering handsome returns to shareholders and business owners who may be making more money under the cover of inflation.

Some progressive groups are now ramping up efforts to amplify this message. Unrig Our Economy, a progressive campaign formed by local organizers in various states and started by the merger of two other progressive groups, Health Care Voter and Tax the Rich, began a summer campaign Friday to call attention to large corporations and their profit margins with a series of rallies in Arizona, California, Indiana, Iowa, Nebraska, New York, Ohio, and Texas.

The “day of action” Unrig Our Economy and its local partners organized zeroed in on specific energy, food, and pharmaceutical companies that have presences in the cities they selected for protests, like Tyson Foods in Waterloo, Iowa, Eli Lilly in Indianapolis, Indiana, and Kellogg’s in Omaha, Nebraska. Speakers trained their ire on corporations they argue have taken advantage of the pandemic and inflation to raise prices — and politicians they accuse of having stymied efforts to regulate price gouging and profiteering.

Progressives in the Unrig coalition want to prove that “economic populism is a winning strategy … and this fight over inflation is like ground zero in many ways for achieving that,” Sarah Baron, the group’s campaign director, told Vox. With the nation’s attention being pulled among inflation, gun violence, the January 6 committee’s public hearings, and a Supreme Court decision on Roe v. Wade expected this summer, that strategy isn’t guaranteed to work.

Several of these demonstrations happened in or near competitive House districts held by Republicans, like Iowa’s First and Nebraska’s Second congressional districts, where activists argue large corporations have exploited communities’ reliance on jobs. The Unrig Our Economy arm that organized a demonstration in Bakersfield, California, for example, rallied outside the field office for Rep. David Valadao, one of this year’s most endangered incumbent Republicans, and linked his past roles on the Land O’ Lakes food company’s regional leadership council and the California Milk Advisory Board to his work in Congress to support the dairy industry, a major employer and industry in the fertile farmlands of California’s Central Valley.

Alice Walton, a spokesperson for Unrig Our Economy’s Central Valley arm, told Vox that though they are not coordinating with Rudy Salas, the Democratic candidate who will face Valadao in November, they see speaking about corporate greed as an easy way to rally working-class voters to support policies that progressives back.

“In a competitive race, there’s a much better opportunity for candidates to talk about what’s on the minds of voters. We’re out there talking about economic policies that we think are important to average Americans, and we are hopeful that it starts a greater conversation within the district,” she said.

Unrig members and a handful of members of Congress plan to bring that call for stricter regulation of prices in these markets to Capitol Hill in the near future, organizers told Vox. In Congress, progressive senators like Warren, Bernie Sanders, and Jeff Merkley have already trained their attention on corporate profits and antitrust regulations as key policy and political goals. As it is, the federal government is limited in what it can do: The Justice Department opened an investigation into “illicit gain” from companies through its antitrust division, and the House passed a bill to give the president the power to limit price hikes by oil companies, but most price gouging is regulated at the state level. Biden has urged the House to take up a vote on a bill to give federal agencies more power to regulate costs from ocean shipping companies, which have raised prices dramatically over the last year. Other kinds of legislation to regulate costs among big food and energy producers, however, don’t appear to have much momentum.

Will “corporate greed” stick?

There’s not a lot of unanimity among economists on just how much of a role price gouging and corporate greed plays in inflation. Progressives say it has a large role, if not necessarily the primary role, while more centrist economists, like Larry Summers and Jason Furman, two of President Barack Obama’s top economic advisers, have referred to blaming price gouging as “dangerous nonsense” and “political ranting.”

Even Biden’s own Treasury secretary is unwilling to pin the blame firmly on corporate profits. Owens argues that it can still be seen as “an accelerant, an amplifier of inflation, not as the root cause of inflation”— a part of the puzzle. But regardless of the wonkish debates over what is causing inflation, corporations are a popular punching bag: polling from Navigator and Data for Progress shows that Americans already assign some blame to big business for rising costs, and anecdotal evidence from grassroots groups backs this up.

With prices rising on everyday goods, average Americans “just see it happening, when you go to the store or fill up your gas tank. People get it, that it’s the companies who are deciding what the prices are. Our strategy here is we just need to help connect those dots a little bit, and remind people about what is actually happening,” Matt Sinovic, the executive director of the activist group Progress Iowa, which protested Tyson Foods, and Republican Rep. Ashley Hinson, in Waterloo on Friday, told Vox.

Biden and his White House team have already leaned into the message a bit. During last year’s holiday season, he pinned some of the blame on industries where a handful of corporations have consolidated the market, like meatpacking. But he’s renewed the effort this month with speeches and on social media. On Instagram, Biden is explaining the consolidation of ocean shipping. He’s calling out oil companies for not increasing production on Jimmy Kimmel’s late-night show. And he’s picked fights with CEOs. Just Friday, Biden made headlines at the Port of Los Angeles by attacking Exxon Mobil, saying: “Exxon made more money than God this year … Why aren’t they drilling? Because they make more money not producing more oil.” Bharat Ramamurti, the deputy director of the National Economic Council, similarly made that argument to CNN this week.

An ExxonMobil spokesperson countered the president’s claims in a statement to Vox, saying they “have been in regular contact with the administration, informing them of our planned investments to increase production and expand refining capacity in the United States,” and specifying increased oil production in the southwest United States, additional investments in their infrastructure, and pandemic losses in 2020.

Progressives want more of this kind of offense — and Biden might have no other choice. A recent FiveThirtyEight/Ipsos tracking poll showed that more than half of Americans are worried first and foremost about inflation, and right now, Biden seems to be bearing the brunt of the blame in polling for rising costs, even if most of that rise is out of his control. His current economic plan is rooted in letting the Fed do its work, pushing Congress to pass new taxes on big businesses, and reducing the deficit. What he doesn’t have is a clear enemy to attack.

Even if Biden and Democrats can persuade voters to blame corporate greed for rising prices, the success might be limited if legislative and regulatory action doesn’t happen, and voters return to blaming Biden. Democrats have an immense challenge ahead to show Americans that the party in charge not only knows who is worsening the problems, but is doing something to fight it.