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Karl W. Smith

Elizabeth Warren Is Wrong About Corporate Greed

Democrats like to cite a lack of competition as a reason for rising prices, but that’s not how economics explains it.

Lessons to be learned.

Lessons to be learned.

Photographer: Al Drago/Bloomberg

On Tuesday Senator Elizabeth Warren offered Federal Reserve Chair Jerome Powell an impromptu lesson in what she termed “Econ 101.” Through a series of leading questions, she argued that lack of competition was a major factor behind the rise in prices that Americans have experienced over the last year.

It’s a claim Warren has made before. As an example, she pointed to the fact that grocery-store profits have swelled during the pandemic — something that, she said, shouldn’t happen in competitive markets.