New York CNN Business
Larry Summers, former Obama and Clinton official slammed President Joe Biden’s economic agenda this week as 'increasingly danger', saying that it could lead to higher prices for Americans.
'I am profoundly concerned by the doctrine of manufacturing-centered economic nationalism that is increasingly put forth as a general principle to guide policy,' Summers said on Tuesday while speaking virtually at an event held by the Peterson Institute for International Economics.
Summers criticized the administration for its trade policy, efforts to support US manufacturing, and antitrust crackdown. Summers argued that this approach might prove inflationary.
Summers stated that it is incorrect to assume that a manufacturing-based nationalist economic approach is the best way to increase incomes and improve living standards for middle class people.
Summers' criticism was not addressed by the White House. Summers had spoken out early in 2021, warning of the inflation threat.
Manufacturing is on the Rise
Biden's economic agenda has placed reviving American manufacture at the center of its priorities. Biden has signed legislation to encourage domestic manufacturing in areas such as clean energy, computer chip and others.
Biden has been credited by the White House with a boom in private investment into American manufacturing.
It used to be that you would find the cheapest markets in the world and send your job overseas. Then, you'd bring back the product. It's not on my watch. Biden stated that he was creating jobs and exporting American goods in Philadelphia during his speech on 'Bidenomics.'
Morgan Stanley economists attribute the US's stronger economic forecasts to a boom in manufacturing investment.
Summers stated that he agreed with the administration's actions in a "large part", including the Inflation Reduction Act as well as the CHIPS Act which aimed to boost the domestic semiconductor manufacturing.
Summers stated that he believed the two policies of Biden were appropriate.
Inflation concerns persist
The doctrine that underlies these policies is not acceptable to the renowned economist, former President Emeritus of Harvard University and former Secretary for the Treasury.
Summers stated that there is no shortage of jobs. The number of available jobs relative to the number of people seeking work remains high. We do have a cost problem.
Inflation has eroded the wages of workers. The real wages adjusted for inflation have fallen, making it more difficult for Americans to survive.
Summers claimed that the globalization of trade and the reduction in trade barriers has helped consumers, lowering inflation rates and ushering a period of low-interest rates.
He said: 'That's why I'm so concerned about the attitudes of the administration, or lack thereof, towards trade.'
Last week, the Biden administration issued new antitrust guidelines which signaled that officials will continue to take a strict approach to stop harmful mergers.
Merrick Garland, Attorney General of the United States, said in a recent statement that unchecked consolidation is dangerous to our free and fair market economy. These updated merger guidelines will allow the Justice Department's to protect the American public from anticompetitive mergers in a transparent and effective manner.
Summers, on the other hand, claimed that the new guidelines "dismiss" a longstanding focus of lowering consumer costs in antitrust actions.
Summers stated that we need to enforce antitrust laws more than in the past 30 years. Summers said that we should enforce the antitrust law more than in the last 30 years.