Shortly after the announcement Monday by supermarket giant Loblaws that it would be freezing prices of its No Name brand of products for the next three months, CBC TV’s flagship news show, The National, pounced with a quick analysis: “Amid rising food prices, questions arise about grocery chains’ profits.” The National got support for the profits-driving-prices theory from Jim Stanford, a veteran labour economist, who observed that food chain profit margins are “actually pretty high and the return on equity of companies like Loblaws has been very, very strong.”

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Terence Corcoran: Greedflation! The left gears up for battle Back to video

Also on Monday, an NDP motion before the House of Commons agriculture committee received unanimous support to investigate how corporate greed is driving inflation, especially food price inflation. They call it “greedflation,” an ideological catchphrase that has gained traction over the past year or so in the U.S., Canada and the United Kingdom. The Cambridge Dictionary is currently running a poll as to whether “greedflation” should be added to the dictionary under the definition “the situation when companies use inflation as an excuse to increase their prices more than necessary in order to make as much money as they can.”

In the United States, the AFL-CIO union federation has adopted greedflation as a cornerstone of its political operation, including such claims as “Runaway CEO pay is a symptom of greedflation — when companies increase prices to boost corporate profits and create windfall payouts for corporate CEOs.”

Which takes us back to Jim Stanford, who has just released a new paper through the Canadian Labour Congress that calls for a string of radical policies to deal with the current inflation surge. While Stanford does not use the “G” word, his policy prescriptions reflect the growing greedflation sentiment that using interest rates to curb inflation is the wrong policy. What the economy needs is serious government controls over prices, profits and other aspects of the market economy — and more spending, he says.

There’s no room here to list the vast array of government interventions favoured by Stanford, but here are a few: new taxes on high incomes, fiscal expansion, targeted government spending, price regulations, rent controls, and special new taxes on corporations. “Price regulation could be extended to other products: particularly strategic commodities used as inputs in many other industries (like energy). Excess profit-taking at the wholesale and retail stages of supply chains can also be challenged with regulatory levers. The current Parliamentary investigation into elevated profits in grocery retailing will shed light on the extent to which oligopolistic structures in this industry have contributed to food price inflation.”

Beyond the food industry, calls are going out from the left and other corners of the ideological spectrum for governments to tax the “excess profits” and “windfall profits” of energy corporations — a model adopted recently in Europe and the United Kingdom, where the plan would push corporate tax rates to 65 per cent.

Canadian economist/activist Armine Yalnizyan this week called on Ottawa to follow the European model, where governments expect to collect US$140 billion from the energy sector. “Why not here,” asked Yalnizyan, who echoed Stanford’s claim that governments need to deal with excess profits. She compared the current situation to the First and Second World Wars and the Korean War.  Britain’s new chancellor, Jeremy Hunt, was said to be preparing — before the resignation Thursday of his prime minister — a windfall financial institution tax described by the Financial Times as a “raid on bank profits to help fill £40-billion U.K. fiscal hole.” Ottawa already raided bank profits. The Parliamentary Budget Officer concluded recently that the Trudeau government’s new tax on banks and insurers will raise $5.3 billion for Ottawa in coming years.

Stanford outlines his case for major government interventions with a claim that using monetary policy and interest rates to fight inflation is destructive of jobs and economic growth. He predicts the Bank of Canada’s “unprecedented monetary tightening” via interest rate hikes will cause a major recession.

A recession may well be in the cards, but Stanford’s argument glosses over the cause of the inflation surge the bank is now fighting. He claims massive government spending and monetary expansion during the 2020-21 pandemic were “extraordinarily successful.” But his own graph shows that the pandemic policy crashed the economy (Figure 5, page 15) and that it has never recovered. As much as $400 billion in growth was knocked out of the economy, and the losses will continue. Stanford avoids the obvious conclusion that the inflation mess is a product of the pandemic policy regime he claims was so successful.

Stanford may be influencing Finance Minister Chrystia Freeland. Back in April, in her budget speech, Freeland was claiming that Canada’s economy had not just recovered from the pandemic, it was “booming.” Canada, she said, “has come roaring back.” But now, only seven months later, she has changed her tune. In comments Wednesday, she said that thanks to the Bank of Canada’s inflation-fighting interest rate policy, “business will no longer be booming.”

Having claimed credit for a major pandemic policy success, Freeland is now blaming the Bank of Canada for undoing that achievement. Allegations of corporate greedflation may not be far down the policy agenda in Ottawa and across the provinces.

• Email: tcorcoran@postmedia.com | Twitter: terencecorcoran