Energy and food inflation concerns loom large for voters heading into the second half of 2022 and the midterm elections. Meanwhile the odds of recession are rising and expected growth is falling, according to economic forecasters surveyed by the National Association of Business Economists.
With these bread-and-butter issues on the table, is this the right time for Senate Democrats to spend time debating and voting on Senator Amy Klobuchar’s tech antitrust bill? Voters are not going to feel inflation relief from the bill. Remember that the tech sector is not the source of surging inflation, no matter how you look at it. For example, e-commerce, like every other industry, has been affected by rising fuel prices and supply chain disruptions. But BLS data shows that ecommerce margins — the difference between the acquisition price of goods and the sale prices — narrowed by 3% over the past year, benefitting consumers. By comparison, margins for the entire retail sector widened by 12%, giving an extra jolt to inflation.
And Senate Democrats won’t be able to point to the tech antitrust bill as a source of new jobs in case of a recession. Indeed, the timing is precisely wrong. The big tech companies showed their willingness to keep investing and hiring during 2020 and 2021, helping keep the U.S. economy afloat. Moreover, real wages are rising in the tech/ecommerce sector. That job and investment performance is unlikely to be repeated even if the Klobuchar legislation works exactly as proponents expect, since the bill is intended to restrain growth by the big tech companies and smaller rivals are not going to expand during a recession.
Whether or not you think that tech antitrust is a good idea in theory, this is the wrong time.
