How Kamala intends to bring prices down

Not with price controls but with more competition

Friends,

I don’t want to alarm you, but the Labor Department today revised downward its monthly payroll numbers over the past year by about 818,000 jobs: Employers added roughly 174,000 jobs per month instead of the previously reported 242,000 — or about 28 percent fewer than thought.

I do want to alarm Jerome Powell and the Fed that they’ve been keeping interests rates too high. (Fed officials are set to convene in Jackson Hole, Wyoming, for their annual meeting on Friday.)

Instead of lowering them by a quarter of a point in September, the Fed should lower them by half a percentage point.

A good rule of thumb is that the economy should produce around 200,000 net new jobs a month. If it’s been producing 174,000 jobs instead, the Fed has been putting too much foot on the brake.

Never forget that the first people drafted into the fight against inflation have the most tenuous hold on jobs. Their incomes and education tend to be lower than those of other workers. When job growth slows, they’re the first sacrificial victims.

Meanwhile, the administration should be using the threat of antitrust enforcement to force corporations in concentrated industries to lower their prices.

Biden’s trust-busters — Lina Khan at the FTC and Jonathan Kanter at the Antitrust Division of the Justice Department — have been doing excellent work, but they need to do more targeting and threatening. This is the direction Kamala Harris wants to go.

Since the 1980s, after the federal government all but abandoned antitrust, two-thirds of all American industries have consolidated into a handful of giant corporations.

When four or fewer firms dominate an industry, it’s easy for them to coordinate price increases and prevent price cuts — which is exactly what’s been happening.

Last week, Kamala Harris announced she would go after corporate price gouging. Trump promptly accused her of seeking price controls. Much of the economic establishment — which justifiably believes price controls don’t work — went berserk.

But Harris is not advocating price controls. She’s advocating just the opposite (see my interview, below).

The entities now controlling prices are big corporations. She wants to prevent them from keeping prices high by restoring competition. She’s exactly right.

Trump said, “Kamala is proposing communist price controls. They don’t work.” My response: She’s proposing “the opposite of price controls.”