Biden’s Protectionist Trade Agenda Will Increase Prices. In Fact, It Already Has.
With annual inflation running higher than it has in 40 years, President Joe Biden announced during Tuesday night’s State of the Union address that “my top priority is getting prices under control.”
In Biden’s telling, rising prices are the result of monopolies and near-monopolies in the economy taking advantage of consumers by jacking up prices. “Capitalism without competition isn’t capitalism. It’s exploitation—and it drives up prices,” he said during Tuesday’s address. Later, he promised a “crackdown on these companies overcharging American businesses and consumers.”
There’s not a lot of evidence to support that diagnosis, but let’s just go with it for a moment. If concentration in the marketplace was somehow to blame for rising prices, then it would make sense to attack that problem by expanding competition. Give consumers more choices and they will naturally flock to lower-priced alternatives, putting pressure on other sellers to keep prices down.
The problem, for Biden, is that so much of his economic agenda is pointed in exactly the opposite direction. In one breath, he complains about the lack of consumer choice driving up prices. With the next, he proposes to further restrict consumer choice.
“We will buy American to make sure everything from the deck of an aircraft carrier to the steel on highway guardrails are made in America,” Biden said, before promising that his administration would make some of the “biggest investments in manufacturing in American history” to bring about “the revitalization of American manufacturing.”
So much for his supposed “top priority.”
Even Larry Summers, a top economic adviser in former President Barack Obama’s administration, called out Biden for trying to pass off this economically illiterate attempt to combat inflation.
“Shifting demand to American producers with ‘Buy America’ polices [sic] that stop firms and consumers from buying at the lowest cost, no matter how politically attractive, are inflationary. This is something all economists should agree on,” Summers tweeted. “Blaming inflation on corporate greed or holding out the prospect that capacity can be expanded rapidly is at best diversionary.”
Biden’s “Buy American” policies—which, in fairness, have governed federal purchasing deals for years, though his administration has tightened loopholes and talked up those policies for political gain—are perhaps the best example of how the current White House is fighting its own policies as it tries to combat inflation.
But that’s h
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