August 16, 2026 9 min read
I commonly perceive 2 different responses erstwhile group talk whether the United States is successful a recession. I perceive “What recession?” and “Everything is costly now!” All while in installments paper indebtedness deed an all-time precocious past twelvemonth ($1.28 trillion, Q4 2025). More “regular” group are surviving paycheck to paycheck, and person to homelessness than ever before. 111 cardinal Americans, ~40% of adults cannot salary their in installments paper equilibrium successful afloat each month. [1] Contributing to the rumor is simply a single, elemental business practice: constrain supply, raise prices acold beyond what the constraint justifies, and past garbage to little them.
The pandemic is wherever companies discovered it worked, pinch the cleanable screen of confusion, panic, and unknowns. It was the impervious of concept. When world proviso chains collapsed down successful 2020, the mean markup complete costs jumped from 56% to 72% successful a azygous twelvemonth — the fastest summation since 1955. [2] Corporate profits person risen 50% since; existent hourly wages, only 3%. [3] As acold arsenic the wide nationalist knew, who was to opportunity whether it was the pandemic creating shortages, aliases higher upstream commodity pricing. Few knew, and it surely wasn’t a priority. Corporate profits drove much than a 3rd of ostentation from the commencement of the pandemic, and 53% of it by mid-2023 (after proviso chains had recovered). In the forty years before, they drove 11%. [4] This format accrued firm confidence, and laid retired a scheme for each CEO and CFO [of ample marketplace companies] successful the country.
In 2026, pinch reducing regulations, rampant collusion, deficiency of competition, and nonstop grounds (the pandemic) that corporations tin gouge consumers without concern, we are successful a dire condition that has caused equipment to summation successful costs 3x (or more) successful 6 years. It’s genuinely unprecedented, and successful my opinion, everyone should beryllium alert of the specifics. Because moreover if you are 1 of the fortunate that are still capable to spend your value of life, location are things you tin do for those that are person to not being capable to.
Rockets and feathers
The process of expanding prices much than constraint demands has been exceedingly celebrated crossed industries lately. Its world sanction is Asymmetric Price Transmission, but it’s commonly known arsenic Rockets and Feathers. Describing prices that emergence for illustration rockets, but autumn for illustration feathers. [5]
S&P 500 nett profit margins deed an all-time precocious successful Q2 2026, reaching 16.9%, up from the 10-12% scope that held for astir of the anterior decade. [6] Workers’ stock of nationalist income fell to 52.9%, the lowest level recorded since the information bid began successful 1947. [7] 401(k) hardship withdrawals person tripled since 2020. [8]
At the CNBC CFO Council Summit successful precocious 2023, Richmond Fed President Tom Barkin polled the executives successful the room astir their pricing plans: a mostly said they would raise prices, a number said they would hold, and not a azygous 1 said they would little them. Companies won’t springiness up pricing powerfulness “until they person to,” Barkin said, noting that earlier COVID, astir companies “really weren’t into raising prices [as they] didn’t deliberation they had the powerfulness to do it.” [9]
- Corporate profits deed $4.42 trillion successful Q1 2026, much than double the 2010 level. [10]
- In Q2 2026, S&P 500 net grew 50.4% while gross grew 15.0%. This represents less sales, but higher prices connected less units. [6]
“Obviously, our extremity if a recession hits, and commodity costs travel down, would beryllium to past get a gap, support a spread going guardant wherever obviously, we’re maintaining much value than the alteration connected the commodity.” [11] - DuPont CEO Edward Breen
Since 2020, the aforesaid shape has played retired crossed astatine slightest eleven awesome user categories. Eggs, cars, rent, groceries, gasoline, car insurance, lumber, shipping, building materials, pharmaceuticals, babe formula. Each pinch its ain proviso shock, each pinch the aforesaid result: prices went up, profits deed records, and erstwhile the constraint eased, the prices stayed.
“We don’t trim prices connected the backmost extremity of these increases.” And: “A bully ray recession would beryllium cleanable for america because it would bring earthy worldly costs down moreover more.” [12] [13] - H.B. Fuller CEO Jim Owens
The banal marketplace is rewarding this behavior. PepsiCo posted 9 consecutive quarters of measurement diminution while raising prices 10-17%. Revenue still grew. [14] Across user packaged equipment from 2021 to 2023, dollar income roseate 13% while portion measurement fell 6%. Every dollar of maturation came from pricing, not demand. [15] And erstwhile companies break the pattern, they’re punished. Albertsons trim its full-year guidance successful July 2026 arsenic it invested successful little prices to clasp disconnected Walmart and Aldi, and the banal fell 21% successful a day. [16] BJ’s Wholesale hit its net estimates successful May 2026 and fell 8% anyway, connected a ten-basis-point diminution successful its merchandise margin. [17]
“Why would I beryllium the first to trim my margins erstwhile we conscionable went done a play wherever we had the world’s champion excuse [inflation] to retrieve margins?” [9] - Esade trading professor Marco Bertini
“Imagine I americium the first to opportunity I americium holding connected prices, and make that known to customers? That’s really a value warfare starts and the competitory advantage from being the ‘good guy’ lasts 2 seconds. No 1 wants a title to the bottom. The gains complete the past fewer years evaporate successful a fewer months.” [9] - Esade trading professor Marco Bertini
“We’re each a bunch of cars connected a highway… Who hits the brakes first? Who wants to deed the brakes earlier the personification successful beforehand of them hits the brakes?” [9] - Anonymous CFO connected the CNBC call
Ongoing collusion
Every shape supra tin beryllium explained without conspiracy. Costs rose, firms responded independently, cipher wanted to trim prices first. That mentation is reasonable, it conscionable requires ignoring really often these aforesaid industries person been caught coordinating connected purpose. Price fixing is not a mentation astir really corporations behave. It is simply a class of national crime pinch a agelong prosecution record.
| LCD panels | 60+ concealed “Crystal Meetings” successful Taiwan hotels, 2001–2006. $71.9B successful price-fixed panels | ~$3B successful world fines. 22 executives charged, respective imprisoned. Samsung reported first and paid $0 [18] |
| Auto parts | Bid rigging crossed 30+ constituent categories, 2003–2010. Parts successful 25 cardinal US cars | $2.9B. 46 companies pleaded guilty, 32 executives imprisoned [19] |
| Generic drugs | Teva and 20+ manufacturers coordinating connected 100+ narcotics astatine manufacture dinners | ~$1.3B to date. Doxycycline went from $20 to $1,829 [20] |
| DRAM | Price fixing, 1999–2002 | $730M+. 12+ executives imprisoned [21] |
| Airline substance surcharges | 21 airlines, 2000–2006 | $700M+. British Airways unsocial $540M [22] |
| Lithium-ion batteries | Cylindrical cells for laptops and phones, complete a decade | ~$252M [23] |
| Poultry, beef, pork | Agri Stats intermediary sharing prices, production, and margins crossed competitors | $500M+. Zero individual convictions [24] |
| Eggs | Coordinated bids to manipulate the Urner Barry benchmark, 2022–2025 | $3.3M and 53M donated eggs. 0.08% of Cal-Maine’s yearly gross [25] |
| Rental housing | RealPage algorithm mounting rents from competitors’ confidential data | Settled Nov 2025. $3.8B added to renters’ bills successful 2023 [26] |
Samsung, SK hynix, and Micron clasp astir 90% of the world DRAM market. Samsung and SK hynix pleaded blameworthy to fixing DRAM prices successful 2005; Micron avoided punishment by reporting them. In June 2026, seventeen plaintiffs revenge a people action successful the Northern District of California alleging the 3 utilized a coordinated pivot to AI representation arsenic screen to trim DDR3 and DDR4 output, pinch prices up astir 700% successful 4 years. [27] The allegations are unproven astatine this time. A astir identical lawsuit was dismissed successful 2020 and upheld connected entreaty successful 2022, the Ninth Circuit holding the behaviour “more apt explained by lawful, unchoreographed free-market behavior”, that the rule requires an existent agreement, not the conscious parallelism communal successful a three-supplier market.
Three companies controlling ninety percent of a marketplace tin each trim proviso and raise prices, and the rule calls it competition. The strategy doesn’t punish collusion, truthful it’s a logical business attack to return advantage of the user to use the existent product, stock price.
The title of this article is purposefully the aforesaid arsenic the header of the Rain Intelligence portion connected the DRAM lawsuit, albeit expanding connected the meaning.Tariff refund
The Supreme Court struck down IEEPA tariffs successful February 2026, making astir $166 cardinal successful refunds disposable to companies. [28] [29] Technically Judge Richard Eaton astatine the Court of International Trade ordered the refunds. These are refunds for tariff costs that companies had already passed done to consumers via value increases. $100B of it has already been paid out. [30] The prices didn’t travel backmost down. The refunds went to the companies. This is what they had to opportunity astir the tariffs:
- McCormick CFO Marcos Gabriel: “We are going to usage the mostly of the taxation refund to offset these higher costs.”
- PepsiCo CFO Steve Schmitt: “We will beryllium utilizing the tariff… refunds to thief offset immoderate commodity inflation.”
- Polaris CEO Mike Speetzen: “Positive nett pricing much than offset higher commodity costs.”
- Descartes’ Jackson Wood: “Recapturing those work payments is really going to beryllium astir making their businesses whole. It’s improbable to bring overmuch alleviation to the U.S. user immoderate clip soon.” [29]
Note: Of 22 companies reviewed, half adjusted executive bonuses upward to exclude tariff costs from capacity calculations. [31] Meaning consumers paid the tariff done higher prices, the institution sewage the money back, and the executives were scored arsenic though the tariff had ne'er happened.
Corporations are not acting successful your champion interest, they are doing thing they tin to summation profit.
“We’ll proceed to offset a information of the costs impacts pinch value increases.” [32] - Procter & Gamble CEO Jon Moeller, January 2022
Procter & Gamble predicted $800 cardinal successful windfall profits by retaining savings from falling commodity costs alternatively than passing them to consumers. [4]
Stop buying astatine inflated prices
Consumer sentiment has been sitting astatine recession levels since precocious 2025, and we request to behave for illustration it. [33] 124,000 unsold caller homes [34] and grounds car ages [35] show the truth of American finances successful 2026. The corporations are attempting to person consumers that location is thing wrong, truthful that they tin prolong their profits. They’re banking connected you not noticing.
We should beryllium purposefully delaying purchases. It is the astir logical move pinch inflation, the ongoing warfare successful Iran, and the predatory profits presently recorded. The only action consumers person correct now is refusal, and humanities examples opportunity it works, but only if capable partake.
In January 2025, Croatian consumers organized a unit boycott done a Facebook canvass of 144,000 group who voted connected which circumstantial chains to target. On the first boycott day, invoices dropped 44% and income fell 53%. Over 3 weeks, retailers mislaid €108 million. [36] Kaufland trim prices connected 1,000 products. The authorities expanded value caps from 30 to 70 basal items. [37] The boycott dispersed to 13 countries. North Macedonia saw a 46% gross diminution astatine awesome chains. We request to trigger the value warfare that the CEOs quoted supra are acrophobic of.
Discuss merchandise investigation pinch others. It helps america cognize what things really costs earlier assuming their personalized advertised prices are the norm. See done the trading to the manufacturing. See the problems a merchandise solves, and the worth of your acquisition (to the company).
Be honorable pinch yourself astir your financial position. Even if you tin spend something, do you genuinely request it? Is the markup fair? Does it anger you to cognize that you could lick this problem cheaper? Do you consciousness reward from redeeming money by avoiding cost? Evaluate older alternatives. See the worth successful restoring thing versus buying new. Foresee the equalization of the marketplace done falling prices because you personally refused to partake successful these profit-motivated value hikes. Once you spot the markup, you should beryllium much proactive astir identifying adjacent value. Train yourself to debar luxury brands erstwhile the merchandise is astir the same. Here are a fewer communal examples of merchandise markups, usage these arsenic reminders erstwhile shopping to look for much reasonable prices.
- Mainstream automobiles costs astir $16K-$25K to produce, but waste for $48K-$50K. 2-3x markup earlier the trader adds different 10%. [38]
- Appliances person a 95-100% manufacture-to-retail margin. [39]
- Furniture carries a 42-43% markup connected average, up to 50% astatine the awesome chains. Only the waste prices ever make consciousness to consider. [39]
- Clothing has a 150-250% markup. [39]
- Mattress manufacturers springiness the aforesaid mattress different names astatine different retailers, truthful you can’t comparison shop. Markups routinely tally into the hundreds of percent.
We unrecorded astatine a clip wherever evident oligopolies pinch concentrated marketplace powerfulness are utilizing proviso constraints (real aliases manufactured) arsenic a trigger to summation margin, and ne'er little it. This is simply a systematic and coordinated onslaught connected the consumers of the United States by companies that identified the system and prioritize their banal value. They tin do this because they deliberation you person nary choice. Show them you do.
References
1. Credit paper indebtedness deed $1.28 trillion. Yahoo Finance, 2026. Accessed 2026-08-16.
2. Prices, Profits, and Power: An Analysis of 2021 Firm-Level Markups. Mike Konczal and Niko Lusiani, Roosevelt Institute, 2022-06. Accessed 2026-08-16.
3. The Record Divide Between Corporate Profits and Worker Pay. Edward Conard Macro Roundup, 2026. Accessed 2026-08-16.
4. Inflation Revelation: How Outsized Corporate Profits Drive Rising Costs. Groundwork Collaborative, 2024-01-17. Accessed 2026-08-16.
5. Grocery prices went up for illustration rockets and are coming down for illustration feathers. Fortune, 2026-07-25. Accessed 2026-08-16.
6. Earnings Insight: Q2 2026. John Butters, FactSet Research Systems, 2026-07-31. Accessed 2026-08-16.
7. Productivity and Costs, Second Quarter 2026. U.S. Bureau of Labor Statistics, 2026-08. Accessed 2026-08-16.
8. 401(k) hardship withdrawals deed a record. Axios, 2026-03-04. Accessed 2026-08-16.
9. As ostentation falls, firm America won’t unreserved to salary the price. Eric Rosenbaum, CNBC, 2023-12-15. Accessed 2026-08-16.
10. Corporate profits were already astatine historical highs. They changeable moreover higher successful Q1. Yahoo Finance, reporting Bureau of Economic Analysis data, 2026-05-28. Accessed 2026-08-16.
11. It’s Not ‘Inflation’ — We’re Just Getting Ripped Off. Here’s Proof.. Inequality.org, 2024. Accessed 2026-08-16.
12. Some economists opportunity firm greed is the existent culprit moreover arsenic companies blasted ostentation for higher costs. NBC 6 South Florida, 2022. Accessed 2026-08-16.
13. Big corporations are choosing to support prices precocious for consumers. Lindsay Owens, Groundwork Collaborative / Boston Globe, 2022. Accessed 2026-08-16.
14. How Corporate ‘Greedflation’ Contributes To Higher Consumer Costs And Job Losses. Jack Kelly, Forbes, 2023-08-10. Accessed 2026-08-16.
15. What’s driving the measurement income diminution successful the US?. NielsenIQ, 2023. Accessed 2026-08-16.
16. Albertsons Stock Is Plunging After the Grocery Giant Slashed Its Outlook. Yahoo Finance, 2026-07. Accessed 2026-08-16.
17. What’s Hurting BJ Stock? Wall Street Points To Gas Costs, Margin Squeeze, Weak Consumer. Yahoo Finance, 2026-05. Accessed 2026-08-16.
18. LCD Price-Fixing Conspiracy. Federal Bureau of Investigation. Accessed 2026-08-16.
19. Sticker Shock: Guilty Pleas Show High Cost of Price Fixing successful Auto Industry. Federal Bureau of Investigation. Accessed 2026-08-16.
20. Lawsuit by 44 States Accuses Pharma Giants of Multi-Year Conspiracy to Hike Drug Prices. Common Dreams, 2019-05-12. Accessed 2026-08-16.
21. Samsung Agrees to Plead Guilty and to Pay $300 Million Criminal Fine for Role successful Price Fixing Conspiracy. U.S. Department of Justice, 2005-10-13. Accessed 2026-08-16.
22. 21 Airlines Fined successful Price-Fixing Scheme. NBC News. Accessed 2026-08-16.
23. Lithium-Ion Batteries Antitrust Litigation. Hagens Berman Sobol Shapiro LLP. Accessed 2026-08-16.
24. The Secret Plot to Raise Meat Prices. Jacobin, 2025-12. Accessed 2026-08-16.
25. Egg producers settee value ostentation probe for $3.3 million. CNBC, 2026-06-30. Accessed 2026-08-16.
26. DOJ Backs Tenants successful Price-Fixing Case Against Big Landlords and Real Estate Tech. ProPublica. Accessed 2026-08-16.
27. Samsung, SK hynix, and Micron sued complete alleged DRAM value fixing amid grounds representation costs. Luke James, Tom’s Hardware, 2026-06. Accessed 2026-08-16.
28. Supreme Court strikes down tariffs. SCOTUSblog, 2026-02-20. Learning Resources, Inc. v. Trump. Accessed 2026-08-16.
29. Refunds for Thee, Not for Me: CEOs Reveal How Businesses Are Cashing Refund Checks for Tariffs Paid by Consumers. Groundwork Collaborative, 2026. Accessed 2026-08-16.
30. Trump admin refunds $100 cardinal successful ‘liberation day’ tariffs. CNBC, 2026-08-05. Accessed 2026-08-16.
31. Some CEOs are receiving millions successful bonuses aft tariff costs were ‘neutralized’ — consumers get nothing. Yahoo Finance, 2026. Accessed 2026-08-16.
32. P&G net apical estimates arsenic value hikes offset rising costs, institution raises 2022 income forecast. CNBC, 2022-01-19. Accessed 2026-08-16.
33. The Consumer Sentiment Disconnect From Economic Reality. Real Investment Advice, 2026. Accessed 2026-08-16.
34. Builders slash prices to move homes; June income separator higher. Briefs, 2026. Accessed 2026-08-16.
35. The Average Age Of Vehicles In The US Is Higher Than You Might Think. Carscoops, 2025-05. Accessed 2026-08-16.
36. Croatian Boycott Costs Retail Chains €80 Million arsenic Protests Spread Across the Balkans. Novinite, 2025. Accessed 2026-08-16.
37. People Power: Croatian shop boycott leads to chains announcing value cuts. Croatia Week, 2025. Accessed 2026-08-16.
38. How Much Does a Car Cost to Manufacture?. Sohoify. Accessed 2026-08-16.
39. Cheat Sheet: Retail Markup connected Common Items. Wise Bread. Accessed 2026-08-16.
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