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Robert Reich: The Inflation Bogeyman – OpEd

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You’re hearing a lot about inflation these days. Don’t buy it. Every time the economy gets a bit of wind in its sails and workers get a little wage increase, conservatives scream about inflation and price increases.

In reality, there’s no inflation. The economy still has huge room to grow without pushing up prices. We’re still 7 million jobs short of where we were in January 2020. Retail and office space is empty. Factories aren’t near capacity. 

In addition, companies can easily outsource extra production they need. Meanwhile, unions are so weak as to negate the possibility of wage-price inflation. 

The price increases we’re witnessing now are because of supply bottlenecks, as supply catches up with pent-up demand. 

To the extent we need to worry about anything, it’s industrial concentration. Too many US industries are dominated by a handful of corporations, which have the ability to push prices higher. That requires antitrust enforcement. 

But inflation itself – structural, accelerating price increases – is a total mythology. 

Don’t fall for the scare-mongering.

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Robert Reich

Robert B. Reich is Chancellor's Professor of Public Policy at the University of California at Berkeley and Senior Fellow at the Blum Center for Developing Economies. He served as Secretary of Labor in the Clinton administration, for which Time Magazine named him one of the ten most effective cabinet secretaries of the twentieth century. He has written fifteen books, including the best sellers "Aftershock", "The Work of Nations," and"Beyond Outrage," and, his most recent, "The Common Good," which is available in bookstores now. He is also a founding editor of the American Prospect magazine, chairman of Common Cause, a member of the American Academy of Arts and Sciences, and co-creator of the award-winning documentary, "Inequality For All." He's co-creator of the Netflix original documentary "Saving Capitalism," which is streaming now.

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