Pangram verdict · v3.3
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August 16, 2026 9 min read I commonly hear two different responses when people discuss whether the United States is in a recession. I hear “What recession?” and “Everything is expensive now!” All while credit card debt hit an all-time high last year ($1.28 trillion, Q4 2025). More “regular” people are living paycheck to paycheck, and closer to homelessness than ever before. 111 million Americans, ~40% of adults cannot pay their credit card balance in full each month. [1] Contributing to the issue is a single, simple business practice: constrain supply, raise prices far beyond what the constraint justifies, and then refuse to lower them. The pandemic is where companies discovered it worked, with the perfect cover of confusion, panic, and unknowns. It was the proof of concept. When global supply chains broke down in 2020, the average markup over cost jumped from 56% to 72% in a single year — the fastest increase since 1955. [2] Corporate profits have risen 50% since; real hourly wages, only 3%. [3] As far as the general public knew, who was to say whether it was the pandemic creating shortages, or higher upstream commodity pricing. Few knew, and it certainly wasn’t a priority. Corporate profits drove more than a third of inflation from the start of the pandemic, and 53% of it by mid-2023 (after supply chains had recovered). In the forty years before, they drove 11%. [4] This format increased corporate confidence, and laid out a plan for every CEO and CFO [of large market companies] in the country. In 2026, with reducing regulations, rampant collusion, lack of competition, and direct evidence (the pandemic) that corporations can gouge consumers without concern, we are in a dire circumstance that has caused goods to increase in cost 3x (or more) in 6 years. It’s truly unprecedented, and in my opinion, everyone should be aware of the specifics. Because even if you are one of the fortunate that are still able to afford your quality of life, there are things you can do for those that are closer to not being able to. Rockets and feathers The process of increasing prices more than constraint demands has been exceedingly popular across industries lately. Its academic name is Asymmetric Price Transmission, but it’s commonly known as Rockets and Feathers. Describing prices that rise like rockets, but fall like feathers. [5] S&P 500 net profit margins hit an all-time high in Q2 2026, reaching 16.9%, up from the 10-12% range that held for most of the prior decade. [6] Workers’ share of national income fell to 52.9%, the lowest level recorded since the data series began in 1947. [7] 401(k) hardship withdrawals have tripled since 2020. [8] At the CNBC CFO Council Summit in late 2023, Richmond Fed President Tom Barkin polled the executives in the room about their pricing plans: a majority said they would raise prices, a minority said they would hold, and not a single one said they would lower them. Companies won’t give up pricing power “until they have to,” Barkin said, noting that before COVID, most companies “really weren’t into raising prices [as they] didn’t think they had the power to do it.” [9] Corporate profits hit $4.42 trillion in Q1 2026, more than double the 2010 level. [10] In Q2 2026, S&P 500 earnings grew 50.4% while revenue grew 15.0%. This represents fewer sales, but higher prices on fewer units. [6] “Obviously, our goal if a recession hits, and commodity costs come down, would be to then get a gap, maintain a gap going forward where obviously, we’re maintaining more price than the decrease on the commodity.” [11] - DuPont CEO Edward Breen Since 2020, the same pattern has played out across at least eleven major consumer categories.
Eggs, cars, rent, groceries, gasoline, auto insurance, lumber, shipping, building materials, pharmaceuticals, baby formula. Each with its own supply shock, each with the same result: prices went up, profits hit records, and when the constraint eased, the prices stayed.
“We don’t reduce prices on the back end of these increases.” And: “A nice light recession would be perfect for us because it would bring raw material costs down even more.” [12] [13] - H.B. Fuller CEO Jim Owens The stock market is rewarding this behavior.
PepsiCo posted nine consecutive quarters of volume decline while raising prices 10-17%. Revenue still grew. [14] Across consumer packaged goods from 2021 to 2023, dollar sales rose 13% while unit volume fell 6%. Every dollar of growth came from pricing, not demand. [15] And when companies break the pattern, they’re punished. Albertsons cut its full-year guidance in July 2026 as it invested in lower prices to hold off Walmart and Aldi, and the stock fell 21% in a day.
[16] BJ’s Wholesale beat its earnings estimates in May 2026 and fell 8% anyway, on a ten-basis-point decline in its merchandise margin. [17] “Why would I be the first to cut my margins when we just went through a period where we had the world’s best excuse [inflation] to recover margins?” [9] - Esade marketing professor Marco Bertini “Imagine I am the first to say I am holding on prices, and make that known to customers? That’s how a price war starts and the competitive advantage from being the ‘good guy’ lasts two seconds. No one wants a race to the bottom. The gains over the past few years evaporate in a few months.” [9] - Esade marketing professor Marco Bertini “We’re all a bunch of cars on a highway… Who hits the brakes first? Who wants to hit the brakes before the person in front of them hits the brakes?” [9] - Anonymous CFO on the CNBC call Ongoing collusion Every pattern above can be explained without conspiracy.
Costs rose, firms responded independently, nobody wanted to cut prices first. That interpretation is reasonable, it just requires ignoring how often these same industries have been caught coordinating on purpose. Price fixing is not a theory about how corporations behave. It is a category of federal crime with a long prosecution record. IndustryConductOutcomeLCD panels60+ secret “Crystal Meetings” in Taiwan hotels, 2001–2006. $71.9B in price-fixed panels~$3B in global fines. 22 executives charged, several imprisoned. Samsung reported first and paid $0 [18]Auto partsBid rigging across 30+ component categories, 2003–2010. Parts in 25 million US cars$2.9B. 46 companies pleaded guilty, 32 executives imprisoned [19]Generic drugsTeva and 20+ manufacturers coordinating on 100+ drugs at industry dinners~$1.3B to date. Doxycycline went from $20 to $1,829 [20]DRAMPrice fixing, 1999–2002$730M+. 12+ executives imprisoned [21]Airline fuel surcharges21 airlines, 2000–2006$700M+. British Airways alone $540M [22]Lithium-ion batteriesCylindrical cells for laptops and phones, over a decade~$252M [23]Poultry, beef, porkAgri Stats intermediary sharing prices, production, and margins across competitors$500M+. Zero individual convictions [24]EggsCoordinated bids to manipulate the Urner Barry benchmark, 2022–2025$3.3M and 53M donated eggs.
0.08% of Cal-Maine’s annual revenue [25]Rental housingRealPage algorithm setting rents from competitors’ confidential dataSettled Nov 2025. $3.8B added to renters’ bills in 2023 [26] The first six are criminal convictions or guilty pleas.
The egg and RealPage matters were settled without admission of wrongdoing. Samsung, SK hynix, and Micron hold about 90% of the global DRAM market. Samsung and SK hynix pleaded guilty to fixing DRAM prices in 2005; Micron avoided penalty by reporting them. In June 2026, seventeen plaintiffs filed a class action in the Northern District of California alleging the three used a coordinated pivot to AI memory as cover to cut DDR3 and DDR4 output, with prices up roughly 700% in four years. [27] The allegations are unproven at this time.