Not until they arrest and try corporate offenders
by Philip
Mattera, director of the Corporate
Research Project of Good Jobs First for the
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.
