Well, first of all we have to recognize that the consolidation of big corporations into even bigger megacorporations, and then BIGGER mega corporations has created a virtual monopoly on many goods.
Perfect example is gasoline. The oil companies thought they'd get away with massively increasing prices and blaming it on the "inflationary" influence of Biden's economic programs. Turned out, tho, they really should have raised those prices much more gradually, because consumers said: "No way in hell will I drive my car for any reason other than necessity."
In this case, of course the lowered demand convinced Big Oil that they underestimated the willingness of consumers to put up with that sh*t.
They raised gas prices thinking they had a great excuse for it -- the Ukraine war. Ummm. No. If you look at the real availability of oil worldwide, there was no reason that ACTUAL "supply" caused a shortage big enough to justify Big Oil raising prices that high and that fast.
The problem with relying solely on ye olde "supply vs demand" explanations of inflation is that we have an economy where way too much power is invested in a radically shrunk/shrinking number of corporations controlling prices.
Yes, in general supply/demand works, but when it comes to supply provided by mega corporations that can deliberately shrink supply seeking to get even richer off of desperate consumers thinking they can't live without the same amount of XYZ to which they have become accustomed.
Monopolies, or rather, NEAR monopolies ALWAYS mess up the supply/demand explanation for prices.
In order to secure more stability, we need to break up those monopolies so there is more competition among producers/providers.
Reaganomics did this. Unfortunately even a lot of Democrats -- like Clinton -- bought into deregulation as a means of providing, supposedly, more competitive markets. When in fact it produced exactly the opposite.
Take the example of airline deregulation. At first it seemed the theory was being proven. We had a whole lot of new airlines getting into the mix. THEN many of those airlines began to fail and were bought up by larger airline companies. And on and on and on and on.
Of course COVID had a seriously dampening effect on travel. But airlines had been failing and consolidating for several decades before COVID, giving the surviving larger airlines an even bigger share of the market than they had pre-Reagan.
Bottomline, business needs to accept the reality that thoughtful regulation of them benefits them all.
That is exactly what happened with the radio companies in the late teens and early 20s of the 20th century because the technology at the time meant that unfettered competition over airwaves produced absolute chaos. Those new companies actually BEGGED the government for regulation! Thus a whole new agency dedicated to regulation of the airwaves came into existence. in the 1930s.
Supply/demand these days is NOWHERE NEAR as simple as it was when Adam Smith wrote Wealth of Nations. Yet we still have many economists hanging onto the idea that regulation is by its very nature bad for capitalism.
