President Biden came into office with a plan to fix inflation — just not the particular inflationary problem that the country now faces. From the Associated Press.
His belief is that a cluster of companies control too many industries, which reduces competition for both customers and workers. That leads to higher prices and lower wages in what the White House says is an average cost of $5,000 annually for U.S. families. Biden is now trying to remedy the situation with 72 distinct initiatives — everything from new rules for cell phone repairs to regulations on meatpacking to more merger reviews.
“It will strangle economic growth,” said Neil Bradley, executive vice president and chief policy officer of the U.S. Chamber of Commerce. “Ironically, what this will do is actually lead to more inflation.” New York University economist Thomas Philippon has welcomed the administration’s approach — while allowing it would do little to bring down prices. As the author of the 2019 book, “The Great Reversal: How America Gave Up on Free Markets,” Philippon is the source of the administration’s statement that market concentration places a $5,000 drag on an average family.
It cited studies that show how mergers led to higher prices for hospital services, health insurance, airline tickets and beer. It also documented a decline in government reviews of mergers and noted that the 2020 federal lawsuits against Google and, separately, Facebook were the first major monopolization cases in 22 years.
But many in the business sector dispute Biden’s core premise that the U.S. economy has become less competitive. They argue that mergers allow companies to operate more efficiently and the resulting gains in productivity benefit consumers.
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