Why Retail “Greedflation” Is A Myth, And Wage-Growth Didn’t Cause Inflation

Now that last year’s epic spike in food and consumer goods prices appears to be behind us, there is renewed debate over who or what to blame for today’s lingering inflation. Two principal theories have floated in and out of the headlines during the past two years. One is a myth masquerading as a conspiracy. The other was a prevailing economic “given”— until recently, when some of the nation’s leading economists had to admit it was flat wrong.

The conspiracy is “greedflation,” loosely defined as price-gouging or monopolistic profiteering. Prices are so high; the theory goes, because retailers found they could jack them up with little consumer pushback by pointing to the headlines. Don’t blame us, they said. Blame gas prices, clogged ports, lousy weather, the war in Ukraine, rising wages, and the pandemic — and then watch the windfall profits pile up.