POLITICO West Wing Playbook: Biden’s hack gap on inflation

February 11, 2022 Media

There is widespread consensus that President JOE BIDEN has few good options to resolve the inflation crisis hampering his presidency and crippling his party’s chances in the midterms.

But there is one play that could, at a minimum, prove politically potent. And there is a bit of confoundment in Democratic circles as to why he’s not more aggressively playing it.

Biden has adopted a relatively modest approach to attacking corporate consolidation as a contributing factor to the current, historic levels of inflation. He’s taken steps to address monopoly power writ large, including by targeting the “Big Four” meat packing companies for price-fixing. He also does regularly mention monopoly power as a negative force in the modern economy.

“If you talk to economists who don’t study how markets work there is kind of a hand waving away that there are political components to inflation and that concentrated markets do provide cover for tacit cost collusion, which is absolutely driving some inflation,” said SARAH MILLER, executive director of the American Economic Liberties Project.

For Miller, the evidence is all around us. The mega manufacturer 3M has seen significant sales and better-than-expected (though somewhat flat) profit, but still chose to raise prices. Tyson Foods’ sales and profiles have both risen, and it’s still raised meat prices. Procter & Gamble had sales go up in its most recent quarter, and raised prices too, as have grocery giants like Kroger. Rather than merely point to these stories as part of the problem, she said, the White House would be wise to portray them as a root cause, and then use the bully pulpit more aggressively to change things.

“I would give it a try because I don’t think they’re in a good position now and some nasty tweets from Larry Summers aren’t going to impact the politics at a moment in which a significant share of Americans think this is happening and they’re not wrong about it,” Miller added. “I think they’re overweighting the opinion of the economist both on the policy and absolutely on the politics.”