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Thursday, December 1, 2022

Biden has long-term inflation plan, but voter patience short

Washington – President Joe Biden came into office with a plan to fix inflation – just not the particular inflationary problem that the country now faces.

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.

“The dynamics of the modern American economy – the increased consolidation and lack of competition – has distorted market incentives in important ways,” said Brian Deese, director of the White House National Economic Council. “The president gave us the direction that he wanted us to come back and say what could we do to address this issue of consolidation across industries in a way that would be durable.”

But even administration officials acknowledge that the initiatives outlined by the president’s seven-month-old competition council aren’t designed to quickly stop the 7.5% inflation that’s frustrating Americans and damaging Biden’s popularity. Furthermore, business groups dispute the fundamental premise that competition has faded within the U.S. economy and they are prepared to challenge the administration’s new initiatives in court.

“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.”

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