Unmasking Senator Casey’s fake inflation spin
Last week, in an op-ed for The Guardian, Pennsylvania Senator Bob Casey blamed businesses for inflation and
Casey’s op-ed is full of half-truths, misrepresentations, and outright lies aimed to distract Americans from Casey’s role in making your life more expensive.
But he did get one thing right: inflation is wreaking havoc on the lives of millions of Americans.
The real culprit behind runaway inflation: Washington’s reckless spending.
For the last four years, progressive politicians like Casey have voted for bills, like the Inflation Reduction Act, .
Today, they want to distract Americans from their bad choices by blaming others and giving themselves more power.
Casey’s claims are misdirection 101.
The data is clear: Businesses did not cause inflation.
In his piece, the senator argues greed created inflation by claiming -incorrectly- that business profits rose more than the economy.
“From mid-2020 to mid-2022, corporate profits rose by 75% – five times as fast as inflation. In fact, corporate profits jumped so much that they played a major role in causing inflation.”
There are some problems with his argument.
- First, Casey’s research is shoddy. Corporate profits remain stable once you account for taxes. Our extensive
- Second, markups — the difference between the final price of a product and how much it costs to produce it — is the best number to measure whether prices rose because production became more costly or because of so-called “corporate greed.”
If corporations caused inflation, then markups should have risen as well.
Unfortunately for Senator Casey, the Federal Reserve Bank of San Francisco and Harvard Business School Pricing Lab tested that hypothesis. Both released studies showing overall markups stayed stable between 2021 and 2023, meaning prices rose because production costs and government money creation rose, not because of greed.
Here is a blog we published if you want a deep dive into how greedflation is a mirage.
Who’s really behind inflation?
If Casey wants someone to blame, he should look in the mirror.
The value of money depends on supply and demand. Inflation happens when too many dollars are chasing a few goods, and each dollar bill will buy you less than before— and that’s exactly what happened in America.
While some of the spending approved during the pandemic might have been justified, as the pandemic subsided, there was no justification for even more massive spending. However, Casey, along with many progressive senators, voted for trillions in new government spending and debt before and during the pandemic.
Specifically, the ill-named American Rescue Plan, approved in March 2021, injected a whopping $1.9 trillion into an already saturated market. To make matters worse, most of that money was spent in a few months, pushing the American economy over the edge.
These reckless decisions ensured inflation would become a painful reality for all Americans.
Casey plans to punish businesses for Washington’s mistakes
Governments should not tell businesses how much they should charge for their products or punish private companies for charging “too much.” After all, how much is too much, and why should a Washington bureaucrat make that call?
Giving the government too much power would cause economic mayhem and open the door for politicians to misuse and abuse this power.
Casey’s bill is a political ploy to distract the American people from the Senator’s votes that fueled inflation. He and many of his friends in Congress made inflation worse, and now he wants more power to punish businesses for the crisis the government created.
This cynical plan has nothing to do with inflation and all to do with politics — and it would do nothing to help everyday Americans.
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