‘It’s Not Innovation— It’s Price Gouging’: Sherrod Brown Bemoans Inflation Caused By Corporate Greed

  • 4 months ago
During a Senate Banking Committee hearing on Thursday, Sen. Sherrod Brown (D-OH) decried high consumer prices amid high corporate profits.

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00:00 Every time Ohioans go to the grocery store, they're paying for corporate stock buybacks and executive bonuses.
00:07 Prices today are far too high. Families are having a hard time finding a fair price, seeing more of their paycheck vanish into thin air.
00:15 I hear all the time from Ohioans justifiably angry that when they buy groceries and other basic essentials, they're paying more than they did a few years ago.
00:24 All of this happens while corporate profits hit record highs.
00:29 Let's be clear, the fact that prices in corporate profits are going up at the same time is no coincidence.
00:36 Study for the Kansas City Fed found that corporate profits drove half the price increases in 2021 and profits are still high today.
00:45 Of course, I want businesses to make money. I want American companies to be the most competitive and most profitable in the world.
00:51 What I am against is corporate profiteering that funnels money from working people to executives in the form of massive bonuses and stock buybacks.
01:00 I'm against markets that don't foster competition and low prices. I'm against market manipulation.
01:06 A family walking into a restaurant or a store should not have to guess what they'll be charged.
01:11 Someone shopping online should not be paying more for the exact same product because of their online search history.
01:19 Businesses should create new goods and services that Americans want to buy at prices justified by the cost.
01:26 And workers, critical for the success of businesses, of course, should be paid fairly for helping the businesses succeed.
01:33 Instead, the same Wall Street business model that has kept wages low and executive compensation sky high for decades is now pushing prices up, too.
01:44 Corporations use supply shocks and the pandemic in the war in Ukraine as an excuse to raise prices, and they keep raising them.
01:51 Be clear, they're not charging more because they're paying workers more.
01:56 Wages are not causing price hikes. Corporations are raising prices far beyond their input costs and funneling those profits to executives, not workers, just like they always do.
02:08 They've realized when the market isn't free or fair, they can push prices up higher and higher.
02:15 And they're using tried and true technologies, new technology to refine old ones, to charge those higher and higher prices and get away with it.
02:24 When they're talking to their Wall Street investors, they admit what they're doing.
02:28 On an investor earnings call, one CEO of a major American company said, consumers are tolerating frequent price increases as well.
02:38 You hear that consumers are tolerating price increases.
02:41 I'm here to tell CEOs that working families cannot tolerate unfair price increases.
02:46 Price gouging isn't new, but it's getting easier and easier to conceal.
02:51 By now, we've heard what the media dubbed shrinkflation, where corporations shrink their products, but keep the prices the same or even raise them.
03:00 The rolls of toilet paper have fewer sheets, but they didn't lower the price.
03:03 The package of Oreos has fewer cookies in it, but the price stays the same.
03:08 The trick isn't new, but it's getting worse.
03:11 What's next? Will they shrink the amount of cream in the Oreo cookies?
03:15 Will they will double stuff become half stuffed?
03:19 Companies use advances in technology to find new methods of price gouging.
03:23 They're now using new pricing strategies and data collection to charge more.
03:27 They call these tactics dynamic pricing and personalized pricing algorithms.
03:33 Dynamic pricing, personalized pricing.
03:37 You know, some corporate PR firm is really proud of those terms.
03:41 Customers don't want their pricing personalized.
03:43 They want it to be fair. They want to be transparent.
03:45 They want it to be as low as possible.
03:47 Gone are the days when Americans simply could walk into a store having a clear idea of what they were about to pay.
03:54 It's not just the act of walking into a brick and mortar store that's nostalgic.
03:58 It's the notion of predictable, transparent prices.
04:02 With online retailers, the price can change every day or even within the hour, sometimes dramatically.
04:08 They spread the technique to brick and mortar stores, adding electronic menu boards to restaurants and digital price labels to shelves.
04:16 So the corporation can raise the price at a moment's notice.
04:20 It's frustrating. It makes it impossible for people to compare prices and shop around key ingredients in any fair open market.
04:28 Families with fixed budgets can't afford to walk into the grocery store, into a pharmacy, not knowing how far their paycheck will get them.
04:35 Big tech has exported their data mining business model to retailers, and that has made all of this even easier for companies.
04:43 As more people shop online, retailers learn more about browsing and shopping habits all of us have by collecting every bit of our online data.
04:52 They can charge you more based on your search history.
04:55 You start shopping around to try to find the lowest price of a new washing machine.
04:59 Online retailers realize you're in the market for appliances, start showing you higher and higher prices, spying on people, charging them more for the products they need.
05:08 It's not innovation, it's price gouging. Charging more for food during mealtime isn't free market, it's exploitation.
05:16 The story's all the same, always the same. Whether you use old tricks or new technologies, corporations win, the rest of us typically lose.
05:24 That's not how free markets are supposed to work. It's why standing up to corporate interests matter.
05:33 And why it matters. And people hate Washington. People hate Washington because too many corporate, too many politicians in this town over and over and over do corporations bidding.
05:44 Took us more than a decade of fighting the drug companies and their lobbyists and their allies in Congress to finally lower drug prices and to cap the cost of insulin,
05:53 $35 a month for seniors. Almost nothing we've done elicits the kind of reception that I get when I talk about lowering the price, capping the price of insulin at $35.
06:06 Yet look how hard it was in this country because so many of my colleagues were doing the bidding of corporate interests, doing the bidding of big pharma day after day,
06:17 week after week, month after month, year after year, but consumers had a victory when we capped the price of insulin at $35.
06:24 We need members of Congress to grow spines and stand up to more of these corporate lobbyists.
06:31 Senator Casey and I have a bill to crack down on companies shrinking their products and raising their prices by directing the FTC to label this what it really is, and that is a deceptive practice.
06:42 We need our colleagues to join us in efforts like this to lower prices, to stop these tactics that distort the market and stifle competition and make it harder for Americans to afford the cost of living.

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