Larry Summers Links Antitrust Crusade Against Inflation to “Science Denial”

May 15, 2022

Former Treasury Secretary Larry Summers is a liberal no one should mistake for a Chicago-School economic conservative. When he was at Treasury, Summers presided over a golden economy, a remarkable period of growth, balanced budgets, and low inflation. So when Summers raises alarms about the likely bad outcomes of Biden Administration economic policy, attention must be paid.
 
In 2021, when the U.S. economy was clocking in at 6 percent annual growth, Summers warned that no stimulus was needed. In fact, he predicted that runaway government spending would result in inflation. The United States today is in greater debt to itself than in anytime in our history. And inflation is close to 9 percent.
 
Now Summers is warning about the dangers of progressive antitrust to economic growth and as a potential driver of inflation. While Summers speaks in favor for more antitrust enforcement under current laws, he warned that jettisoning the consumer welfare standard in favor of a “generalized feeling of hostility and outrage” against business is dangerous.
 
Summers says that hipster antitrust is “badly misguided and potentially dangerous to our economic future.” He told Bloomberg Television: “It’s very important that we have antitrust policy based on facts, based on economic science, based on consumers – not on a kind of generalized feeling of hostility and outrage towards business.”
 
Summers also recently tweeted: “Policies that attack bigness can easily be inflationary if they prevent the exploitation of economies of scale or limit superstar firms.” He also tweeted: “The emerging claim that antitrust can combat inflation reflects ‘science denial’ There are many areas like transitory inflation where serious economists differ. Antitrust as an anti-inflation strategy is not one of them.”
 
Summers shows that one can be impeccably liberal and still see that populist antitrust is an inflationary threat to consumers and the economic growth that supports jobs and working families.