Former Clinton administration Secretary of Labor Robert Reich is pummeling Walmart, America’s largest and most famous retail company, for “price gouging.” Reich, who sees the present day version of American capitalism as heavily rigged in favor of an ultra-wealthy ruling class, asserts that the too common practice of transferring cost burdens to those consumers least capable of bearing them endangers the country’s future.
Reich cites Walmart’s 2023 price manipulations and stock market moves as an example of how wealth continues to trickle-up and consolidate, rather than trickling down as envisioned in the economic theory famously embraced by numerous conservative economists.
Walmart hiked prices on its Great Value food brands.
— Robert Reich (@RBReich) February 5, 2024
The result? Its net income spiked 93% to $10.5 billion towards the end of 2023.
Walmart rewarded shareholders with $5.9 billion in buybacks and dividends.
When I say price gouging is driving inflation, this is what I mean.
Reich characterized Walmart’s $5.9 billion in dividends and stock buybacks — hardly the company’s largest annual buybacks — as shareholder rewards delivered on the backs of everyday middle- and lower- economic strata consumers. Reich says: “Walmart hiked prices on its Great Value food brands. The result? Its net income spiked 93% to $10.5 billion towards the end of 2023.”
Reich’s criticism followed a viral video on TikTok (below) that gave a personal context to the Walmart price hikes he references.
@__curtdogg #magurtii #curtdogg #curttii ♬ original sound – CURTISSS
Multiple corporations — notably in the energy sector — have claimed that their hands are tied in the battle against inflation, while simultaneously posting record profits.
The practice has resulted in persistent accusations — like Reich’s — that boardrooms are using inflation as a cover to increase profits while transferring wealth from the middle class to the ownership class. Encapsulating the idea, the CEO of the supermarket giant Kroger allegedly said recently: “A little bit of inflation is always good in our business.”
After oil companies posted record profits — after significantly raising prices — in 2022, California Governor Gavin Newsom decried the trend in Reich-like fashion, levelling the same “price gouging” charge at them and saying:
“While Californians were being ripped off at the pump last year, Big Oil’s bottom line ballooned to levels never seen before in history – making record profits off the backs of hard-working families. Then they flaunt it to their investors while refusing to even answer Californians’ questions about high prices. They’re ripping you off. That’s why, with the Legislature, we’re going to pass a price gouging penalty to hold Big Oil accountable.”
