Lots of monopoly-related news this week, as usual, from a private equity bailout via our retirement accounts to an ugly acquisition of nursing homes by KKR to Zohran Mamdani giving Lina Khan a shout-out. Oh, and Apple CEO presented the President with a 24k gold and glass statue, in the White House, at a press conference, as Trump offered his company concessions on tariffs. I mean come on.

As usual, I try to focus on one specific story, and then lay out the rest of the news. For today, I was going to write something on the death throes of the once-mighty Intel, but I think it’s more timely to note that there’s a trend of viral videos on price hikes during back-to-school shopping season. So for you, dear reader, I went down a TikTok rabbit hole. But as I did so, I noticed more angry chatter not just about higher prices, but about the end of price tags and the rise of dynamic pricing. The morality of prices is returning to our political debates in ways we haven’t experienced in our lifetimes.

Let’s with the question of whether there is actually inflation right now for parents who are soon to send their kids back to school. To be honest, I can’t find much evidence in the latest Consumer Price Index. Boys and girls apparel, shoes, sporting equipment, and educational supplies are up modestly but not outlandishly so, though the price of daycare is up by 5.5% over the past year, which is a lot. That said, government stats are a few months out of date, and that’s a meaningful lag for reasons I’ll get into.

I think something real is going on, as there is financial stress among parents.

Roughly 20% of back-to-school shoppers said buying supplies for the new year is straining their budgets, according to a new report by Bankrate, which polled more than 2,600 adults in June.

A separate report, by Intuit Credit Karma, found that 39% of parents said they can’t afford back-to-school shopping this year. Meanwhile, 44% said they plan to take on debt to cover the cost of school supplies, up from 34% in 2024.

People on TikTok are noting that stores like Target and Walmart are clumsily raising prices on in-store items, tearing off labels and putting up new big signs indicating much higher prices. Dollar Tree got caught hiking prices across stores, increasing its base price to $1.50, even though its name is Dollar Tree.

Here are a few videos I came across. In this one, a Mom buying a certain kind of school supply for her kid notices the ripped tags and higher prices. I also included a much shorter one indicating the same trend right after.

This next one is clearly political in nature, pointing at Trump for failing to bring down prices. While I’m less inclined to believe partisans, there is polling support here as well, with six out of ten Americans fingering Trump for the high cost of living. That’s natural. They blamed Biden, now they are blaming the new guy in charge.

The most interesting trend is how some of these videos are discussing the end of price tags and the rise of “dynamic pricing.” That’s when stores can change prices electronically, which means they can do all sorts of new things like ‘surge pricing,’ or even personalizing prices for the individual doing the shopping.

People seem to see dynamic pricing as extractive and as hindering the ability to plan, since there are no more public prices, and no one can actually see what anything costs. Also, scanning stuff with your phone is super annoying. Here are few videos along these lines, notice how they combine complaints about higher prices with anger at dynamic pricing.

So there we go. Now, the easy story is to blame these pricing changes on tariffs, which kicked in on August 1st. That is, incidentally, why government CPI data in June doesn’t mean that much.

But pricing is complex, and the main cost for most goods and services is marketing and distribution, not the underlying imported wholesale price upon which the tariff is based. Now, I’m inclined to believe that smaller stores and companies are responding to tariffs, because they have less wiggle room and fewer MBAs making decisions. But big companies? I’m less convinced. And whatever you might think of tariffs, they are certainly not the reason for the end of price tags. In fact, tariffs may simply be an excuse for corporations like Target and Walmart to raise prices and change pricing strategies in general.

But don’t take my word for it, take the word of Wharton marketing professor Z. John Zhang.

“A lot of companies take advantage of what’s going on with tariffs and raise their prices,” Zhang said. “The reason is when tariffs go up, we as consumers tend to be more tolerant of price increases simply because we know that firms are struggling [with higher costs]. Their costs have increased, and therefore we probably cut them some slack. And firms know that.”

It’s not just price hikes. Firms are also using this moment to move away from posted prices entirely. Here’s Zhang:

“They probably have more of an incentive in this environment to raise prices. [For firms that] have always been thinking about doing dynamic pricing, this might be their chance to use it.”

The executives themselves doing the price hikes are upfront about their goals. Some were featured in a recent Wall Street Journal story on the Fed.

Are those price increases for tariff-related costs or are his businesses using “tariff noise” as “air cover to raise prices”? “It’s both,” said Datin. “And I feel a little guilty saying that.” A regional banker chimed in: Some of his customers were reporting the same thing.

It’s likely that tariffs are having some effect, depending on the sector. But what is more likely happening now is an attempt to normalize higher prices, the $16 non-alcoholic beverage at a bar or the new 4% surcharge at restaurants, or the incessant demand for tips from all sorts of non-food service establishments. If everyone in every industry sees new fees and new costs, then it just becomes the thing to do, and consumers have to eat it. Tariffs are just an excuse.

The consulting and financial world very much want dynamic pricing, everywhere. Here’s the worst paragraph I’ve ever read, written by a salesperson for a dynamic pricing product for airlines, Fetcherr: "Let's be honest: passenger expectations are only going to increase. They're already experiencing sophisticated AI-driven pricing in their daily lives (think Amazon or Uber), and they'll expect the same level of sophistication from airlines."

Of course, this kind of extractive behavior is making people mad, and they are going to take it out on someone. We saw the rage when a large number of people expressed no sympathy as a UnitedHealth Care executive was murdered, and something similar more recently when a Blackstone Real Estate Trust executive was gunned down. That kind of anger is terrifying, and hard to even discuss. But it’s there.

The most direct landing place for the rage is politics. Just as Joe Biden’s flabby disinterest in the lived experience of ordinary people became obvious over time, bleeding away support from the Democratic Party writ large, that same thing will happen to Trump and the GOP if they don’t get a handle on the situation. Trump is more inclined to be assertive towards big business, he’s willing to tell Walmart to keep prices low, or attack car companies who announce high prices. But he also wants the stock market to go up, and that means supporting extractive models of business.

There are things he can do. In fact, during the pandemic, the Federal Trade Commission was not prepared to act because they hadn’t done the groundwork on how to address all sorts of new pricing games and supply chain problems. But Chair Lina Khan set up the FTC to act, launching suits on price discrimination against Pepsi and Southern Glazer. Unfortunately, the Trump FTC Chair Andrew Ferguson dropped the Pepsi suit.

Khan also had a study on new surveillance pricing games in the works, and it hasn’t been released yet.

Ferguson could just finish that and start using the findings to address new unfair tactics that the public hates. There were actions in other parts of government, like the USDA and HHS, that had some studies in motion. I doubt much will happen from the Federal government, it’s Democrats like Greg Casar and state legislators in California trying to act on surveillance pricing, and candidates like Zohran Mamdani in New York City talking up the cost of living problem.

If Trump doesn’t significantly shift to attack these new pricing games, the increasingly deep reservoir of anger will only deepen, with a political reaction to match.

And now, I’ll go through the rest of the monopoly news of the week, after the paywall. Some really fun and disturbing stories, including: (1) Iowa Senate candidate J.D. Scholten has a real anti-monopoly plan for rural America, including a ‘strategic fertilizer reserve.’ (2) Illinois banned AI chatbot therapists. (3) Trump did something that might be cool and potentially allow supersonic flight. (4) The scholar cited by more courts in antitrust decisions than anyone else, a libertarian named Herb Hovenkamp, compared Uber’s lawbreaking to the civil disobedience of Rosa Parks and Ghandi. Plus, private antitrust lawsuits are moving forward against Google, Adobe, Eli Lilly, Pepsi, and more.

All after the paywall…...