Columbia Business School Professor Bruce Greenwald joins 'Influencers with Andy Serwer' to discuss the health of the U.S. econonomy and COVID recovery.
ANDY SERWER: Is inflation a threat now?
BRUCE GREENWALD: I think in the short run, it's going to be brutal. And again, I come back to the fact that we are now an economy that is increasingly 70% oligopolies and local monopolies. And there are also situations where the service firms who are dominant are always trading off present returns, which is high present prices against future growth in attracting customers. I think when the government scares these firms, they're just not interested in investing in the future.
And I think the government has scared the crap out of them, and they're going to protect themselves by using the pricing power that they have, which is why you saw this extraordinary spike this year in even core inflation. Yeah, and I think the event was actually not monetary and fiscal policy. I think it was the vacating of the vaccine patents. And I think businesses are going to look at that and say, holy [BLEEP], these guys are not my friends. I got to protect myself. And the easiest way to do that is to raise your prices. And when all the other local businesses raise their prices, too, you don't even lose that much business.