Don’t blame corporate ‘greed’ for inflation | LETTER

President Joe Biden. (AP Photo/Susan Walsh)

In his March 29 letter to the Review-Journal, Dennis Small blamed our 40-year-high inflation rate on “corporate greed.” I almost cringe when I hear this.

First, the late Milton Friedman, Nobel Prize-winner in economics, said that inflation is always a monetary phenomenon — more money chasing the same amount of goods. In fiscal 2020, the U.S. government spent $6.6 trillion. In fiscal 2021, it spent $6.8 trillion. Both figures were 50 percent higher than government spending in 2019. Additionally, our money supply (M2) has grown 36 percent since March 2020. That is a lot of juice.

Second, housing prices in Las Vegas are up more than 26 percent in the past 12 months. Corporate greed? Hardly. These were individuals selling their homes at whatever the market would bear.

Lastly, for those who believe in corporate greed: How would you price your products were you running a business? Just to cover costs because you want to be benevolent? Or at whatever the market will bear, knowing that a price too high will drive consumers to other options, in some cases to the internet? If Herman’s Gas Station raises gasoline to $7 per gallon, customers will flee to other stations in a heartbeat.

The free market we enjoy will manage a lot of “corporate greed.” Excessive government spending and money creation are other issues.