Is Price Gouging Partially for Inflation // A political argument with pushback from economists

If you’ve gone shopping recently, you already know something
about inflation: Prices are up. That is true around the world.
Inflation rates in a number of European countries are also at
record highs, just like the US. But if you examine core interest rates—which exclude gasoline and food, whose prices are volatile and often
dependent on very specific factors, such as the war in
Ukraine—the US has had a higher inflation rate than
almost every other major country and is currently only
tied with the UK. High inflation turns into a political issue anywhere,
and in the US it is happening at a moment when
politics was always going to be even louder than usual,
with the midterm elections coming up. Republicans
have stuck to an easy formula, attacking the party in
power. In large part they have been pointing to actions
taken by the Biden administration, such as the stimulus checks that were sent out last year. Democrats, of necessity, have been taking a different tack. One of the most popular rallying cries in recent weeks
on the left-leaning side has been that companies are “price gouging.” That claim, championed perhaps most prominently by Senator Elizabeth Warren of Massachusetts, has led to ridicule by some business leaders and economists. Identifying the factors responsible for the current inflation is complicated, as is the question of what to
do about it and whether or not we’re about to run into
a recession. But it is also something that is fraught with
politics, because it largely determines which political
party people will trust.

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