"At that time, Edwards said, inflation was generally being blamed on raw material prices because of the Ukraine war, as well as the labor market, with very few people saying there was profit-driven inflation, but he took a different view: "This is unprecedented." He pointed out "when unit costs rise, always, unit margins fall, always, in history." He said that shouldn't have happened, and the reason it did was because of so much stimulus from the government that "companies could get away with doing it, using [inflation as] cover.""
"The consequence of this money printing and fiscal expenditure was a "bonanza for the corporate sector," resulting in corporate profit margins soaring "off to infinity" after the pandemic. Edwards noted specific sectors benefited enormously, recalling a St. Louis Fed study that showed corporate profits as a share of national income surging as a share of national income since the inflation spike, a total outlier compared to the rest of the world."
Albert Edwards, a long-standing Société Générale strategist since 1982, links recent political gains by figures like Zohran Mamdani to backlash against corporate "greedflation." Post-pandemic money printing and fiscal stimulus allowed companies to expand profit margins despite rising unit costs, producing unprecedented corporate profits. Specific sectors benefited markedly, and a St. Louis Fed study showed corporate profits as a share of national income spiking relative to global peers. The surge in profit margins created public resentment and political instability, framing corporate excess as a central grievance driving electoral and grassroots responses.
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