Give Biden, officials a break on their antitrust crusade

Inflation has become a big issue for the U.S. economy and, of course, a big political headache for the Biden administration. But while many people have been urging President Joe Biden to “focus” on inflation, there have been many fewer suggestions about what he might actually do.

For the most part, controlling inflation is now a matter for monetary policy, and the main thing Biden can do is let the technocrats who control money do their job — which means not engaging in Trump-style haranguing of the Federal Reserve.

One thing the Biden administration has been doing, however, is trying to toughen up antitrust policy, arguing that highly concentrated ownership in many industries — largely a result of decades of lax regulation — is helping keep prices high and possibly contributing to recent inflation.

I’d describe this initiative as controversial, except there’s hardly any controversy, at least in the media: Biden’s linkage of monopoly power to inflation is facing vehement, almost hysterical, criticism from all sides, including many progressive commentators. And I find that vehemence puzzling; I think it says more about the commentators than the administration.

Let’s stipulate that monopolies aren’t the reason inflation shot up in 2021 — because there was already plenty of monopoly power in America back in 2020.

True, profit margins, as measured by the share of profits in gross domestic product, have increased quite a lot recently.

Most of that rise, however, probably reflects big returns to companies, like shippers, that happen to own crucial assets at a time of supply chain bottlenecks. It’s possible, as Sen. Elizabeth Warren has suggested, that some companies are using general inflation as an excuse to jack up prices, abusing their monopoly power in ways that might have provoked a backlash in normal times; that’s certainly not a crazy argument, and making it doesn’t make Warren the second coming of Hugo Chavez. Still, such behavior can’t explain more than a fraction of current inflation.

But as far as I can see, the Biden administration and its allies aren’t claiming otherwise. They’re simply emphasizing monopoly power because it’s one thing they might be able to do something about.

And where is the policy harm? On one side, toughening up antitrust enforce- ment in sectors like meatpacking is something the U.S. government should be doing in any case. On the other side, there’s no hint that the administration’s anti-monopoly rhetoric will lead to irresponsible policies elsewhere.

As I said, all indications are that Biden and company will leave the Fed alone as it raises interest rates in an effort to cool demand. And I haven’t seen any important Democrats calling for Richard Nixon-style price controls. The most interventionist policy that seems remotely possible would be something like John F. Kennedy’s jawboning of the steel industry after an obviously coordinated jump in steel prices — and it’s hard to imagine Biden sounding nearly as critical of big business as Kennedy did.

So why the barrage of criticism? I don’t really know, but I have a few suspicions.

Here’s my suggestion: Give Biden and his people a break on their antitrust crusade. It won’t get in the way of the big stuff, which is mostly outside Biden’s control. At worst, officials will be using inflation as an excuse to do what they should. And they might even have a marginal impact on inflation itself.