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WaPo: White House economists push back against pressure to blame corporations for inflation

Morrison71

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Nov 10, 2006
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When the prepared congressional testimony of a senior administration official was circulated inside the White House in recent weeks, it included a passage tying inflation to corporate consolidation and monopoly power.

That language was eventually taken out of the remarks before they were delivered. Members of the White House Council of Economic Advisers had raised objections to the idea that a spike in prices was due to corporate power, according to two people aware of the matter who spoke on the condition of anonymity due to fears of professional reprisals.

The alteration of the testimony highlights the tensions within the administration over whether the White House should blame corporate consolidation and monopoly power for price hikes. Some officials in the White House National Economic Council believe the administration could more aggressively advance that argument, and Democratic pollsters have told the White House that a populist economic message on corporate greed and prices broadly resonates with voters.
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But economists inside the administration, particularly at the CEA, are uncomfortable with the push. “It’s been the war of the ‘track changes’ inside the administration over how much the White House can lean in on the extent to which competition and greed are driving inflation,” said one person briefed on the internal dynamics, who spoke on the condition of anonymity due to fear of professional reprisals.

The phrase “track change” can refer to the practice of editing a shared computer document to suggest additions or deletions.

Prices rose 7.5 percent in January compared to one year earlier, the biggest spike in 40 years. White House officials early last year said these price increases would likely just be temporary. But they were wrong, and the increases have persisted amid labor shortages, supply chain issues and robust consumer demand. These higher prices have eaten into wage increases and become one of the most dominant economic issues facing voters, putting the White House on the defensive as its attempts to curb inflation come up short.

CEA chair Cecilia Rouse and NEC deputy director Bharat Ramamurti said they were unaware of any incident in which an administration official’s testimony was altered to take out references to corporate consolidation’s role in inflation. Rouse and Ramamurti also said the president’s economic advisers have worked closely together on the administration’s broader competition agenda for months, downplaying any friction as part of the natural policymaking process.

“The policy debate within the economic team is totally normal. It’s malpractice for there not to be debate because that would suggest we are working in an echo chamber and the president is not getting the benefit of critical thinking of diverse opinions,” Rouse said. Ramamurti added, “We have discussions about what the evidence shows.”
 
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