In sectors like healthcare, financial services, and agriculture, more than 75% of the market is run by a small number of large corporate organizations that control the business markets of the United States, not leaving space for small businesses to compete.
The monopoly of the large corporations in different sectors is the real reason behind the increasing inflation, as the lack of competition allows them to drive prices for consumers.
With fewer players having control of the markets, families have to pay higher prices for necessities like prescription drugs, food items, and other services.
These monopolies are also creating political turmoil for the Biden Administration, which is being blamed by people for not being able to control inflation. All of this is encouraging the president to take antitrust measures against big giants.
Executive Order for Promoting Competition Will Reduce Inflation
In November, the United States Department of Labor announced that the consumer price index for the basic commodities, including gasoline, healthcare, and groceries, rose 6.2% compared to last year, marking a record-breaking rise in inflation since 1990.
Experts believe that the real factor driving inflation is out of control corporations in the United States that have been driving the market prices without any regulation.
This is just a simple business tactic, as when a business has no competition, it moves to set the prices it desires, which is not possible in the case of a competitive market.
This is a deeper structural factor driving inflation that the governments have been ignoring in the past in their appeasement policy toward big corporations, and now it appears to have grown worse.
Joe Biden has issued an executive order that will promote competition among the businesses, thus breaking the monopoly of a few giant corporations.
It is by far the boldest step to have ever taken by a US president to promote the competitive marketplaces, providing entrepreneurs, consumers, and workers the economic power they need to break the corporate power.
However, critics have shown their concerns over governmental overreach, which, according to them, defy the principles of laissez-faire government and the freedom of practice.
Others hailed the executive order for containing actionable directives and outreach to the agencies that do not directly fall under the President’s supervision, thus ousting the belief that the government is trying to undermine or control the market.
Big Corporations are Worsening Inflation Amid Already Strained Supply Chain Crisis
Making ends meet is the primary motive of most people in many countries, and the high inflation rates were intensifying these worries even in the United States.
The inflation, which was kicked off primarily due to the supply chain crisis, was worsened due to the hegemony of big corporations, as they served the function of adding fuel to the fire.
The pandemic caused supply chain disruptions that are still going on, and many products are unable to reach the markets with new variants of the virus still being discovered.
Republicans and Democratic Senator Joe Manchin are also blaming the $1400 checks for higher costs of the products, as they increased the buying power of the people, further accelerating the shortage of products in the market.
Many critics also argue that Biden Administration could have simply solved the problem by raising interest rates, which would have tamed the inflation.
However, these assumptions have failed to consider that an increase in interest rates would have squeezed employment, and this was the one thing that people could not bear with the economy on an uncertain footing.
President Biden is embracing an assertive posture against giant corporations, including directing the Agriculture Department to investigate the giants in the poultry industry that were tripling their profit margins during the pandemic.
The Federal Trade Commission was also encouraged to investigate the accusations against the giant oil companies which artificially inflated prices of oil and gas and continue to do so even after the fall in prices on a global level.
The inflation provided the government with the opportunity to break up the monopolies and promote economic competition, a step that many presidents dreamed of taking but could not find a way to do so.