What blows this up is when companies get large enough that they can use their size and market dominance to keep competitors out of the marketplace. As long as there are multiple companies in every market sector, and new businesses can easily enter the marketplace to compete with larger companies that have gotten lazy or greedy, competition regulates prices very efficiently. If one company raises prices above a reasonable level, another company will offer products at a lower price and take away their customers. Prices in America used to be regulated by something called competition. Not only does every politician in America know how this political danger works, but so also does the leader of every major corporation. When the economy sucks, enough voters swing to “the other guy” to change the nation’s political power dynamics, pretty much regardless of who the other guy is.Īs the headline in today’s New York Times reads: “ Democrats Face Deepening Peril as Republicans Seize on Inflation Fears.” Both Jerry Ford and Jimmy Carter were one-term presidents largely because of inflation, and the 20% inflation after World War II nearly got Harry Truman thrown out of the White House. Inflation always hurts the party in power. Lest you think I’ve gone totally paranoid, please read on. That is, inflation that started out as a demand/supply-chain rebound from the end of Covid is continuing to rise in America as part of an intentional effort to damage Democratic prospects in this Fall’s election and heading into 2024. The one variable nobody seems to be positing - but I’m going to go there - is that it’s political, at least in part. How is it possible that the rest of the world is recovering from the Covid/Oil/War inflation bump, but things are getting worse here in the USA? Yet inflation continues, nonetheless, to rise here in the US (9.1% this month) while, Bloomberg reported yesterday, the EU is down to 7.1% inflation and predicting 4% for next year. But the price of oil is now below $95 and our economy is on the verge of recession, both major factors that should be cutting inflation. Is it rebound demand from Covid? Too much “quantitative easing” stimulus from the Fed? Chinese botched-Covid supply chain issues? Saudi Arabia withholding oil from world markets? Russia’s terrorist campaign against Ukraine? There’s lots of speculation about what may be causing today’s terrible inflation to continue to rise.

Adam Smith, The Wealth of Nations, 1776 “he monopoly which our manufacturers have obtained against us … like an overgrown standing army, has become formidable to the government, and upon many occasions intimidate the legislature.”

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