US gov't makes 'big mistake' in stopping tying inflation to corporate power: The Guardian

LONDON, Feb. 22 (Xinhua) -- It is a "big mistake" that the White House has decided to stop linking corporate power to inflation, Robert Reich, former U.S. secretary of labor, has said in an article in The Guardian.

Customers shop for clothes at a store in New York, the United States, Jan. 12, 2022.(Xinhua/Wang Ying)

Contesting the White House decision, Reich, also professor of public policy at the University of California at Berkeley, said in the opinion piece released Sunday that though profitable companies "could easily absorb the cost increases," they did not.

"While most of the price increases now affecting the US and global economies have been the result of global supply chain problems, this doesn't explain why big and hugely profitable corporations are passing these cost increases on to their customers in the form of higher prices," he said.

Showing the connections between corporate power and inflation is not business-bashing, but is "holding powerful corporations accountable," he added.

If Washington fails to stop hugely profitable monopolistic corporations from raising their prices, responsibility for controlling inflation would fall solely on the country's central bank to increase interest rates, Reich noted.

However, the rate spikes "will slow the economy and likely cause millions of lower-wage workers to lose their jobs and forfeit long-overdue wage increases," he added.