President Joe Biden speaks in the Rose Garden of the White House in Washington, Friday, May 13, 2022.
Larry Summers called the energy price-gouging bill ‘dangerous nonsense,’ per Bloomberg.
Democrats are set to vote on a bill next week targeting price-gouging at gas pumps.
Summers said inflation could be slowed by restarting student loan repayments.
Former US Treasury secretary Larry Summers has branded a Democratic bill designed to stop price-gouging at gas pumps “dangerous nonsense,” comparing it to Donald Trump’s suggestionthat bleach injections could fight Covid-19.
A veteran of the Clinton and Obama administrations, Summers made the comments on Friday, while speaking on Bloomberg’s Wall Street Walk. Democratics are set to vote on a bill targeting ‘price-gouging’ at fuel outlets next week, as average gas prices exceed $4.45.
“The price-gouging stuff is to economic science what President Trump’s remarks about disinfectant in your veins was to medical science,” Summers said, referring to Trump’s spurious claim from 2020. “It is dangerous nonsense.”
He added: “There is no material prospect that in any enduring way gouging legislation can have any substantial effect on inflationary pressure.”
Instead, Summers said, such legislation could contrive “all kinds of shortages”, and inhibit supply responses which he argued was the best way to overcome current issues, calling gouging talk a “diversionary confusion.”
The best response, Summers argued, would be to reduce tariffs, let more immigrants into the country, reduce regulatory burdens, and limit demand by restarting paused student debt repayments.
House Speaker Nancy Pelosi previously told reporters Thursday that “price gouging needs to stop.” She said: “While families are struggling to pay higher prices at the pump, oil and gas companies are recording record profits.
“This is a major exploitation of the consumer, because this is a product the consumer must have.”
Summers indicated inflation, which hit 8.3% last month, was likely to persist at a much higher level over this decade than the previous one, due to labor shortages and more protectionism.
“I’d be surprised if the average inflation rate during the 2020s wasn’t materially higher than the average inflation rate during the decade of the teens,” he said.
Politics, Economy, Weekend BI UK, Biden, Inflation, Gas Prices, Trump, Economics
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