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Pandemic Profiteering: How Corporations Are Capitalizing on the Crisis
When the pandemic sent the economy into a tailspin, corporations saw an opportunity to wring more and more profits from us.
by Peter Hart and Mia DiFelice
From the beginning of the COVID crisis, corporate oligarchs manipulated markets to maximize profits. The giants that control the meat industry stoked bogus fears of a shortage to jack up prices on consumers — with lies so egregious that we filed suit against one of the worst offenders, pork giant Smithfield.
Of course, the problems mounted. Inflation spiked across the economy. Shops swung between long waits and huge shortages. Big companies blamed supply chain shocks and increasing production costs, which were certainly part of it.
But when a handful of corporations control markets, they can essentially name their price — and shovel obscene profits to CEOs and Wall Street speculators.
Oil Companies Are Winning
The squeeze on working families intensified with the Russian invasion of Ukraine. Suddenly, global dependence on fossil fuels reached a breaking point. U.S. gasoline prices soared while gas supplies to Europe plunged into chaos.
In response, politicians and their media enablers demanded a dramatic increase in fracking. But energy giants quietly rebuffed these drilling demands. Not for any new concern for the environment — but rather because they are pulling in billions in record profits. Twisted market logic meant that limiting supply would pay off for their Wall Street investors.
From January to March this year, CEOs of eight fossil fuel corporations saw their share values grow by nearly $100 million. Windfall profits have not resulted in lower prices or better conditions for workers. Instead, these CEOs sold their shares for millions of personal profit.
The horror in Ukraine has created a new global energy crisis. Unfortunately, too many political leaders are clinging to the wrong solution. They want to “fix” a fossil fuel crisis by pushing more fossil fuels. That political support has given frackers a license to spring for long-term gas export terminals. American company EQT even called their mega-polluting gas export scheme “the Largest Green Initiative On the Planet.”
As a result, 25 new LNG projects are currently underway in our country. Fossil fuel companies are not only profiteering from today’s misery — they’re locking us into decades of pollution and emissions. We can’t let this continue. The International Energy Agency warned just last year that fossil fuel production must stop growing immediately if we’re to avoid the worst effects of climate change.
Cornering The Market At The Supermarket
At the start of the pandemic, broadcasts and news feeds were fixated on one recurring image: empty grocery store shelves. Periodic shortages kept some consumers on our toes, while many were simply forced to go without.
As with oil and gas, we face giant corporations that would rather gobble profits than prioritize the needs of families. Over the course of the pandemic, we’ve seen the cost of meat rise while small farmers’ and ranchers’ profits fell. While COVID ran rampant, we saw corporations limit hazard pay for workers, while investing in stock buybacks to line the pockets of executives.
The meat industry is one of the core players in this problem. A mere four corporations process 85% of all beef and 70% of pork in the U.S. This extreme concentration gives these companies the power to control supply chains, prices and wages. Experts suspect they’re using inflation and supply chain problems as a cover to boost profits. In fact, net profit margins for those top four companies are up over 300%.
Plus, lean supply chains in any industry are dangerous for crises. With one disaster, a few broken links send huge ripples throughout a system without the backups and resilience to recover. For example, a COVID outbreak in a single Smithfield hog plant took out 5 percent of the nation’s hog processing capacity.
Corporations Are Selling Us Misery
It’s never been clearer: When the essentials for life itself are controlled by corporate cartels, the future of our communities, our families and our planet are at their mercy. For decades, corporate America has told us that bigger is better, that consolidation would lower prices and eliminate inefficiencies.
We know this is a lie.
The latest heartbreaking example: the wealthiest nation on Earth is running out of baby formula because of problems at a single factory, thanks to a market controlled by four corporations.
At Food & Water Action, we know that these problems have solutions. That’s why we’re fighting to break up the grocery cartels and stop corporate water profiteers. It’s why we’re demanding an end to the polluting factory farms that harm communities and farmers. Why we fight on the ground across the country to stop the fossil fuel projects driving the climate emergency. In an era of compounding crises, we must fight to transform the present and protect the future.
We can’t fight Corporate America without you.