In the face of rising inflation, the Biden administration has moved to use antitrust powers to combat corporate price hikes. This has led to pushback from prominent macroeconomists, including the disgruntled tweeting of former Treasury Secretary Larry Summers.
“The emerging claim that antitrust can combat inflation reflects ‘science denial,'” tweeted Summers last month. “There are many areas like transitory inflation where serious economists differ. Antitrust as an anti-inflation strategy is not one of them.”
Antitrust policy would not have been an option to tackle the high inflation of the 1970s, which was driven largely by oil shortages during the height of the Organization for Petroleum Exporting Countries’ power. OPEC acted as a global oil trust, but not one that the U.S. had jurisdiction to bust. That historical “stagflation,” and the interest rate hikes that the late Paul Volcker used to end it, drove a lot of the thinking about inflation for Summers’ generation of economists. And it is true that inflation can result from, and be reined in by, monetary policy. When you hear about inflation, it is usually the result of a country’s central bank printing more money to allow for spending in the
— source commondreams.org | Dylan Gyauch-Lewis | Jan 24, 2022