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Too bad if something were to happen to it.
You can tell how badly Trump’s McDonalds coup worried Democrats by the fact that they immediately threatened the fast food chain. Senators Ron Wyden, Bob Case, and Elizabeth Warren sent this letter to McDonalds CEO Chris Kempczinski:
letter_to_mcdonalds_ceo_remenupriceincreasesandstockbuybacks1
I won’t go through it line by line, but here are some observations. The left-wing senators write:
We write with concern regarding increases in fast food prices over the last several years and seeking information regarding McDonald’s pricing decisions.
Prices of every commodity and service have risen sharply over the last few years. It is called Bidenflation, and it was caused by the absurdly-named “Inflation Reduction Act” and other government deficit spending. Government’s greed for endless spending has devastated Americans’ budgets. McDonalds’ management had nothing to do with it.
Since the COVID-19 pandemic, fast food prices have consistently outpaced inflation, squeezing consumers who for decades were able to rely on restaurants like McDonald’s for a meal at a fair price. However, Americans are now leaving fast food establishments and are increasingly choosing to spend their food dollars on at-home consumption.
I will hazard a wild guess that McDonalds management is aware of this trend and is doing everything possible to keep prices down.
Earlier this year, McDonald’s USA President Joe Erlinger tried to blame the company’s menu price increases on inflationary pressures and input costs, but the data tells another story. A recent analysis found that McDonald’s markup (i.e. the difference between the prices consumers pay and the cost of production) was 85% in 2023. McDonald’s operating profit margins were 52% in the same year, the highest of the ten largest publicly traded fast food companies.
These claims are footnoted to this paper by a couple of left-wing activists, the title of which is “Fast-Food Industry Profiteering: Why California Businesses Can Absorb a Higher Minimum Wage.” Author Alí R. Bustamante is described as the “deputy director of the Worker Power and Economic Security program at the Roosevelt Institute.” I can’t find any mainstream source that comes anywhere close to the numbers that these activists assert. In any event, the fast food market is extraordinarily competitive, and any net profit, let alone an above-average one, is a sign of efficient operation.
We welcome the results of a forensic examination of your pricing, but note that at the same time that McDonald’s was raising prices, McDonald’s has paid out almost $4 billion in stock buybacks in 2022 and over $3 billion in 2023.
As if that were somehow contradictory. A company buys its own stock when it thinks the stock is undervalued in the market. The selling shareholders get a price they wanted to take, while the shareholders who didn’t sell see increased value–assuming, of course, that the company’s management was right in the first place. These Democratic senators should not be allowed anywhere near decisions that have economic impact.
Corporate profits must not come at the expense of people’s ability to put food on the table.
Utter stupidity. What makes this not just dumb, but evil, is that people were doing much better at putting food on their families’ tables before Joe Biden and Kamala Harris took over in 2021 and drove inflation through the roof. It is government’s lust for money and power that has caused American families to suffer. That shouldn’t be a surprise, since governments are the greediest institutions in our society, and Senators Wyden, Casey and Warren are perfect exemplars of that greed for both power and money.