Biden’s Economic Agenda Faces Criticism from Former Official

New York – CNN Business

Larry Summers, the former Obama and Clinton official, expressed concerns about certain aspects of President Joe Biden’s economic agenda. Summers believes that these policies could have a detrimental effect on Americans, potentially leading to higher prices.

A Critique of Economic Nationalism

Summers voiced his concerns during a virtual event held by the Peterson Institute for International Economics. He specifically criticized the administration’s trade stance, efforts to prop up US manufacturing, and its antitrust crackdown. According to Summers, this approach could contribute to inflationary pressures.

The Fallacy of Manufacturing-Based Economic Nationalism

Summers argued that the belief that manufacturing-centered economic nationalism can lead to higher incomes or better standards of living for the middle class is incorrect. He believes that this doctrine is misguided and could have unintended consequences.

White House Response

The White House has not responded to Summers’ criticism. However, it is worth noting that Summers was one of the first to raise concerns about inflation in 2021.

Biden’s Focus on American Manufacturing

Reviving American manufacturing has been a central part of President Biden’s economic agenda. He has signed legislation to incentivize domestic manufacturing in areas such as clean energy and computer chips. The White House has celebrated the increase in private investment in American manufacturing under Biden’s administration.

A Shift in Approach

Summers acknowledged that he agrees with some of the administration’s policies, such as the passage of the Inflation Reduction Act and the CHIPS Act. These initiatives aimed to boost domestic semiconductor manufacturing. However, Summers takes issue with the underlying doctrine behind these policies.

The Problem of Costs

Summers argued that the US does not have a problem of a shortfall of jobs but rather a problem of costs. High inflation has eroded real wages, making it more challenging for Americans to make ends meet.

The Role of Globalization and Trade

Summers emphasized the positive impact of globalization and reduced trade barriers on consumer prices and interest rates. He expressed concern about the administration’s attitudes towards trade, suggesting that they may have unintended consequences.

Antitrust and Mergers

The Biden administration recently released new guidelines signaling a tough approach to antitrust actions and harmful mergers. Summers, however, criticized these guidelines for deviating from the focus on lowering consumer costs.

Enforcing Antitrust Law

While Summers supports stricter enforcement of antitrust laws, he believes that it should be done in service of a doctrine that prioritizes higher incomes through lower costs for consumers.

Read More of this Story at www.cnn.com – 2023-07-26 18:02:00

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