U.S. Inflation is hot. Many economists and analysts are anticipating that America will have more economic difficulties as politicians and the Biden government blame corporations. This perspective on rising inflation has led finance authors like Isabella Weber to believe that price controls could ease America’s economic burdens.
Biden Administration Blames Inclusive Corporate Greed and Monopolistic Behavior for Inflation
America has been experiencing the most severe inflation for over 40 years. Furthermore, a few congressional leaders want to stifle online ecommerce giants like Amazon with proposals like Senator Amy Klobuchar’s (D-Minn.) American Innovation and Online Competition Act. Senator Tom Cotton’s (R-Ark.) Platform Competition and Opportunity Act is another bill that aims to improve anti-trust laws.
Monopolistic behaviour is the reason that America’s purchasing power has declined. The White House released data last month that showed four corporations in the meat processing industry were fueling inflation. NYU professor Marion Nestle told the New York Times in an interview that “their goal is to control the market so that they can control the price.” Despite the opinion from Biden’s administration, the North American Meat Institute says the claims are false.
Economist Believes It’s Time to Consider Price Controls
This has led to a raging debate and just recently finance author Isabella Weber published an opinion editorial via the Guardian that says “we have a powerful weapon to fight inflation: price controls. It’s time we consider it.” Weber’s editorial says that during World War II, U.S. economists “recommended strategic price controls.” Essentially, price controls restrict free market activity as mandated prices and restrictions are set in place and enforced by governments. The manufacturer cannot set the prices of goods and services; the government is in full control.
Weber ideas not very popularKrugman was a Nobel laureate and an economist who slammed the idea. Krugman blasted the concept in a deleted tweet wrote: “I am not a free-market zealot. But this is truly stupid.” However, the following day, Krugman apologized to Weber and said he deleted the tweet. Krugman said:
My tweet regarding Isabella Weber’s price control protest was deleted. We have no excuses. It’s always wrong to use that tone against anyone arguing in good faith, no matter how much you disagree — especially when there’s so much bad faith out there.
Price Control Concept Mocked, Harvard Economist Insists There’s ‘No Basis Whatsoever Thinking That Monopoly Power Has Increased’
A second person ridiculed the idea of price controls. said: “We’ve gone from ‘inflation is temporary’ to ‘f***, we need price controls’ in the space of a quarter.” “Anyone calling themselves an economist who is also a proponent of price controls deserves to be mocked, shamed, and spoken down to,” the Twitter account dubbed Hazlitt tweeted. The host of the “Smart People Sh*t” podcast Dennis Porter said:
Prices controls are what every government does to prevent the entire thing from collapsing.
Larry Summers is a senior Obama Administration official and economist for Democrats. He insists that boosting antitrust laws will do nothing to help the U.S. Economy. A tweetstorm, Summers said: “The emerging claim that antitrust can combat inflation reflects ‘science denial.’ There are many areas like transitory inflation where serious economists differ. Antitrust as an anti-inflation strategy is not one of them.” Lastly, the Harvard economist stressed that monopolistic behavior has not accelerated like inflation.
“There is no basis whatsoever thinking that monopoly power has increased during the past year in which inflation has greatly accelerated,” Summers tweeted.
You think the U.S. is experiencing rising inflation and that the White House has blamed monopolistic behaviour. How do you feel about the idea of price control leveraging? Please comment below to let us know your thoughts on this topic.
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