Throughout his second term, Donald Trump has struggled to find an effective message on the issue of inflation. For a time, he tried to deny the problem existed, choosing to depict the affordability crisis as an invention of the Democrats.
Then he concocted far-fetched claims such as the idea that “illegal aliens” were to blame. After his attack on Iran caused fuel and other prices to shoot up, Trump insisted the increase would last only a short time.
Now, at long last, Trump seems to be acknowledging that inflation is real and the government needs to do something about it. Yet, of course, he wants to give the impression he can solve the problem with what amounts to a wave of a magic wand. He just tried that by taking credit for some selective grocery price reductions announced by Walmart, only to end up with egg on his face when the retailer disclosed that the cuts were scheduled well before Trump stepped in.
Apart from Trump’s antics, some parts of the administration are taking a more serious approach by focusing on one of the more significant causes of high prices: collusion among producers.
Earlier this month, the Justice Department’s Antitrust Division and the Federal Trade Commission put out a statement saying they are taking a close look at anti-competitive practices in the gasoline industry while also urging state attorneys general to conduct investigations and bring appropriate enforcement actions.
Around the same time, the DOJ and state AGs announced that they had been working together to investigate actions by the country’s largest egg producers to inflate prices by manipulating an industry benchmark rate. Companies such as Cal-Maine agreed to settle the case by paying the states $3.3 million in cash and donating over 50 million eggs to food banks and community organizations.
Earlier, there were reports that the DOJ was investigating the big meatpacking companies to determine whether they are manipulating the price of beef. This came after Trump made some fleeting social media comments about collusion in the industry.
These moves by DOJ and the FTC stand in contrast to the lackluster approach to antitrust that has marked Trump 2.0, especially when it comes to criminal price fixing cases. Yet it is unclear how seriously they should be taken. They may be little more than another facet of the administration’s current effort to give the impression it is getting tougher on price manipulation–to placate angry voters until after the midterms–while not much may actually change.
The emphasis on the state AGs in the DOJ-FTC statement may be setting the stage for passing the blame when little comes of the initiative.
If the administration were serious about addressing price manipulation, the place to look would be the realm of private litigation. Class action lawsuits have been filed alleging price fixing abuses in industries ranging from pork products to PVC piping. Tens of millions of dollars in settlements have been reached.
Back in the 1960s the country was riveted by a case in which managers at more than two dozen electrical equipment manufacturers, including General Electric and Westinghouse, were charged with price-fixing and bid-rigging for heavy-duty utility equipment. Some of the defendants ended up serving prison time.
Until we see corporate executives being led away in handcuffs and put on trial, the Trump administration’s campaign against price-fixing cannot be taken too seriously.
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