Former Treasury Secretary Larry Summers defended the Biden administration Monday during its spat with Amazon founder Jeff Bezos – who has warred with the White House on Twitter after arguing that the president’s policies contributed to inflation.
Summers, who has been critical of the administration’s handling of the inflation crisis on multiple occasions, nevertheless argued that Bezos was incorrect to dismiss Biden’s claim that raising corporate taxes would lower inflation.
“I think @JeffBezos is mostly wrong in his recent attack on the @JoeBiden Admin,” Summers tweeted. “It is perfectly reasonable to believe, as I do and @POTUS asserts, that we should raise taxes to reduce demand to contain inflation and that the increases should be as progressive as possible.”
“I say this even though I have argued vigorously that excessively expansionary macro policy from the @federalreserve and the government have contributed to inflation,” Summers added. “I have rejected rhetoric about inflation caused by corporate gouging as preposterous.”
Inflation remained near four-decade highs in April, surging to 8.3% even after the Federal Reserve began implementing its plan to cool the economy through interest rate hikes.
The alarming data increased criticism of Biden from those who argue his vast social spending proposals would make the problem worse.
Bezos, one of the world’s wealthiest individuals, launched a broadside at Biden last Friday, accusing the administration of “misdirection” after the president’s official account tweeted that making “the wealthiest corporations pay their fair share” would bring down inflation.
The Amazon founder expanded on his criticism while responding to a tweet in which Biden claimed to have lowered the federal deficit – an assertion that drew critical responses from fact checkers.
“In fact, the administration tried hard to inject even more stimulus into an already over-heated, inflationary economy and only Manchin saved them from themselves,” Bezos tweeted. “Inflation is a regressive tax that most hurts the least affluent. Misdirection doesn’t help the country.”
The White House fired back in a statement, asserting “it doesn’t require a huge leap to figure out why” Bezos opposes Biden’s plan to raise taxes on corporations and wealthy Americans.
That response drew another sharp rebuke from Bezos, who accused the White House of more misdirection on the topic of inflation.
“Look, a squirrel! This is the White House’s statement about my recent tweets. They understandably want to muddy the topic,” Bezos said.
They know inflation hurts the neediest the most. But unions aren’t causing inflation and neither are wealthy people. Remember the Administration tried their best to add another $3.5 TRILLION to federal spending. They failed, but if they had succeeded, inflation would be even higher than it is today, and inflation today is at a 40 year high,” Bezos added.
Summers, who was head of the National Economic Council during the Obama administration, defended the White House despite asserting last November that Biden was “behind the curve” in combating inflation.
Summers has also argued that a Biden-backed plan to lower inflation by cracking down on antitrust violations could cause the crisis to worsen rather than improve.
[Written in collaboration with other media outlets with information from the following sources]
