In a world where prices soared like Mount Everest's peak, From '21 to '23, a financial technique. Corporations raised the bar, to profits they'd sneak, Trust your gut, the surge in costs wasn't just a streak.
In the game of gains, the rules they'd tweak, Margin expands, profits hit their peak. Executives grin, with rewards they seek, While the rich get richer, the future looks bleak.
But can frustration lead, to the justice we seek? A deeper dive, a united technique. Consumer power, strong, not meek, Challenging the rise, for the justice we seek.
$3.28 trillion, a sum not sleek, Twenty thousand dollars from each worker, a future bleak. If not us, then who, to plug the leak? And claim back our due, in the justice we seek.
Price Gouging and Excessive Profits - in and after the pandemic
Let’s take a walk down memory lane. The Pandemic was officially declared a national emergency in March 2020 and raged through about March 2022 when it started wane due to widespread vaccinations.
It is against the backdrop of Covid-19 deaths that we investigate pandemic price-gouging and excessive profiteering. Because in normal times, in a properly functioning free market with a sufficient number of competitors — the forces of supply and demand generally keep prices and profit margins within a sustainable range, that is until something breaks and a prolonged recession resets the balance. These forces do not permit excessive profiteering on such a grand scale. The pandemic profiteering was under cover and guise of a national emergency, for that we must demand accountability, reconciliation, price rollbacks, and monetary restitution of ill-gotten gains.
Consumer prices spiked to levels not seen in 40 years.
This chart illustrates a cycle of of price increases before each recession, prices in free fall, until they return near to sustainable levels. Prices steadily increase, the recession dramatically lowers prices back to sustainable levels for several years after each crash, wages and employment recover, prices begin an upward path again — until the next recession. Consumers suffer prolonged hardship after each recession, recovering just as the next recession takes its toll. In the case of the pandemic, prices have moderated somewhat but clearly remain elevated above the long term trend line. If this validates your sense that something changed in the pandemic — congratulations, you were right.
The Mount Everest sized pandemic spike in prices from 2021 to 2023, coming out of the pandemic, marks a significant departure from the aftermath of previous recessions in 2001 and 2008 (vertical gray bars). This period has seen corporations raising prices to levels never before achieved, confirming the suspicions many have had about the unusual nature of this economic recovery. Trust the inner voice that informs you: your senses align with the reality of the actual unparalleled price surge.
Meanwhile, the wealthiest individuals consistently emerge more prosperous, suggesting a pattern of imbalance where the general populace bears the brunt of economic downturns while a select few benefit. “Since 2020, Billionaires are now $3.3 trillion or 34% richer than they were at the beginning of this crisis, with their wealth growing three times as fast as the rate of inflation”, interestingly almost the exact same $3.28 trillion number I calculate below. Perhaps indicating, a significant portion of the money flow stops there - the metaphorical beaver dam analogy mentioned in an earlier post. A mysterious crisis ensues for the critters downstream, when industrious furry friends build a paradise upstream — creating a '“trickle-down” ecological disaster.
Absent major economic shocks and given the FED’s attempt to manage inflation near to 2%, let’s use a 3% rate of inflation assumption for the four years 2019 – 2023, and assume (as in previous economic disruptions), prices should eventually return to the normal CPI trend line.
An item costing $100 would cost rough $112.55 four years later. In our minds we can baseline a 13% cost increase as reasonable for the four years ‘before the pandemic to now’, and 10% for the 3.25 year pandemic period (Q3 2020 to Q3 2023). We are setting aside things like the Ukraine war that temporarily spiked gas and grain prices and the avian influenza outbreak affecting egg prices in the same period as they have mostly normalized.
Emerging from the pandemic, price increases should have already reverted back to the 10 - 13% range. If not for pandemic exploitation, greedflation, and a desperate corporate need to grow profits year-over-year — I argue there would be no inflation crisis, no need to impose harsh interest rate hikes on a nation. If interest rate hikes or other interventions are necessary to contain corporate greedflation, policies and regulations should target the corporations reporting unprecedented record windfall profits through and continuing after the pandemic. For in many cases, the record profits are born from greedflation, from price increases that have — and continue to — extract trillions from average hard working Americans who lost loved ones in a national emergency.
With your help, our collective intelligence will lead to deeper investigation into pandemic business practices, prompting a united effort to recover unjustly gained, and unsustainable, profits that are fueling the greedflation crisis and sustaining the excessive interest rate hikes. Egregious examples, shared in the “Embarrassment of Corporate Riches” article, may just be the tip of the proverbial iceberg. When you factor in the excessive profits of private companies that do not publicly report operating results, and excessive price increases within commercial supply chains —we sense the enormity of pandemic profiteering.
I ask the question, at very large scale — can consumers unite to demand the return of ill-gotten profits as restitution for dubious practices during a national emergency? If not for us, who will challenge the pandemic pricing that is anticipated to enrich corporate profits hereafter, and forevermore?
Gauges of pandemic profiteering may include dramatic expanding of profit margins, record windfall profits and share prices, bloated executive compensation awards, unplanned stock buybacks, and dividend increases shortly after the pandemic - profits so excessive these corporations can’t easily reinvest them into a productive use so they gleefully distribute them shareholders and market speculators.
$3.28 Trillion - $20,523 per Employed Person
Without access to specific data from an economist or investigative journalist, it's challenging to pinpoint the exact impact of pandemic-related financial injustices between 2020 and 2023. However, by analyzing trends and discrepancies between expected and actual economic behaviors — illustrated by the area in yellow, between a projected trend line in red, and actual profits in blue), we can approximate the extent of potential exploitation. This approach enables significant insights and revelations about the extent of pandemic profiteering, highlighting the need for further investigation and accountability. (the analysis is based on Statista using NIPA data)
Analyzing large companies' profits from Q3 2020 to Q3 2023 reveals they've potentially amassed $1 trillion yearly in excessive profits due to the pandemic, totaling approximately $3.28 trillion over 39 months (3.25 years). With 162 million people employed in the U.S., this equates to a wealth transfer of $20,253 per employed person in the pandemic period, $6,231 per year and every year hereafter, showcasing significant economic impact and predicting an alarming post pandemic accelerated-wealth transfer of perhaps $1 Trillion per year forevermore.
Over a decade, each individual's share invested in a retirement account, could amount to approximately $80,592, or $161,185 for a dual-income couple. The calculation equates to an investment of $519/month at a 5% return compounded monthly over ten years.
Stock market indices across the board are currently at record highs on assumptions companies will continue to escalate prices, from their new pandemic profit baselines, rather than reverting to pre-pandemic pricing. Markets expect consumers will continue to subsidize these elevated profits, an assumption they will acquiesce to paying $6,000 each, every year hereafter.
Unrelated to the pandemic, two notable economic impacts continue to unnecessarily strain household finances. Continued pandemic pricing, layered onto these two existing financial injustices push too many families toward a financial cliff. The sense that a recession looms, creates a pressing concern amongst families struggling to pay the bills at the end of each month. A stark reality for too many after the pandemic.
From the insights into corporate consolidation described in other posts, it is suggested that households entered into the pandemic — already enduring, an additional $5,000 yearly expense due to elevated prices from corporate consolidation, and a potential $10,000 annual wage diminishment for workers in industries affected by corporate consolidation.
Annually, Americans endure $2,625 in excessive healthcare costs per person (KFF Calculator), with individual coverage costing roughly double what is observed in other countries for similar health outcomes.
Health insurance is a significant financial burden and a crucial component of the broader financial justice thesis. Addressing excessive health care costs, corporate consolidation, along with the trillion-dollar per year pandemic profits debacle, could vastly improve economic conditions for households.
Success in these areas not only addresses actionable financial injustices, but also opens the door to discussing extending healthspan. Where modern geroscience research provides a roadmap to extend peak earning potential through an incremental decade of improved health and wellness — for those able to allocate time, effort and monetary resources towards health enablement.
$3.28 Trillion of excessive pandemic exploitation per employed person = $519 per month, $6,231 per year, $20,523 over the past 3.25 years, $80,592 if invested in your retirement account over 10 years
Intuitively does this seem about right to you, share your thoughts in the survey below.
It's no surprise folks are upset; and rightfully so. My layperson analysis paints a vivid picture of the magnitude of financial injustice, potentially clocking in at over $10K per working adult annually. Upcoming blogs will explore the issues from more angles, ultimately zeroing in on corporations gleefully reporting an "embarrassment of riches" to their shareholders — a potential sign of pandemic mischief. Brace yourselves as we harness our collective might to reclaim what is ours.
Your Level of Pandemic Wealth Transfer
In order to zero in on the actual financial impact of pandemic profiteering and the interest rate hikes on your household, I have created a lookup table. Looking across the table you’ll see calculations for what your personal estimate of the monthly impact — amounts to annually, over the 3.25 year pandemic period, and nationwide if all households were similar to yours.
Let's compare your ‘household’ expenses during the pandemic to the calculated $3.28 trillion in excess corporate profits discussed earlier to see if perhaps this is where your money is running off to. Using an estimate of 131 million U.S. households, an excessive monthly outflow of $640, tied to pandemic price hikes, profiteering, and interest hikes, matches up to $3.28 trillion.
“According to the U.S. Census Bureau, a household is considered to be all persons living within one housing unit. For example, two roommates who share a living space but are not related would be considered a household.” In the scenario above the $640 per month will most often include multiple wage earners where the earlier analysis was $519 per single employed worker per month. Under both scenarios, we easily arrive at $3.28 Trillion, similar to the OXFAM study reporting $3.3 trillion dollars of incremental wealth transferred to billionaires through the pandemic.
Does it seem plausible that your ‘household’ contributes at least $640/month to these record windfall profits?
For our Substack community, I expect monthly outflows attributed to pandemic pricing and interest rate hikes — will typically fall into $400 to $750/month category. For households that faced significant life changes such as buying a house, leasing an apartment, or acquiring vehicles during the height of pandemic pricing, experiencing a monthly impact of $750 to $1,500 is common.
Excessive interest rate hikes affect on variable mortgages, auto loans and credit cards are largue incremental monthly costs, often measured in hundreds of dollars per month instead of tens of dollars per month. If we can gather enough anecdotal data we may find it substantially elevates the overall average beyond $519 per employed person and perhaps to a multiple of 2 times the $640 per household estimate that arrived at $3.28 Trillion. On a national scale it could equate to significantly more than $1 trillion dollars per year of excessive post-pandemic profits, elevating the $3.28 Trillion ‘heist’ estimate significantly. We don’t have to guess if we can gather data from the readership.
I'd love for you to take a brief survey to help pinpoint which sectors need our joint effort. Your insights will guide our next steps, such as spotlighting auto dealers who exploited pandemic pricing, or addressing the impact of policy-driven rate hikes on adjustable home, auto and revolving credit loans. Your input will help to shape our strategic focus and tactical approaches toward reclaiming what was taken in the pandemic and continues to drain our wallets now..
When robbers grab the loot, the law takes chase, They must return the spoils, face their disgrace.
Yet, when corporations, sly and grand, Sneak off with trillions, across the land, Do we just nod, accept this fate, Or rise, and demand justice, to set things straight?
No gentle tip of hats, no conceding grin, We stand united, let the scrimmage begin. One company at a time, our campaign’s cast, For fairness, restitution, financial justice at last.
Do the concepts and topics resonate deeply with you as true? Each blog post serves as a virtual focus group. Your feedback is essential. After reading each article, leave feedback that will help shape the discussion, strategy, and tactics going forward.
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This GoFundMe is for everyone impacted by pandemic price-gouging, the inflation crisis; and excessive interest rate hikes targeting consumers without addressing the share of inflation attributed to corporate greedflation.
At very large scale - we are a formidable force for change
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$3.28 Trillion Pandemic Wealth Transfer