The government should use a firehose better aimed at the conflagration, which won’t so badly burden the bottom 80%.
For starters, impose a temporary windfall profits tax on big oil, on giant sellers of consumer staples and on big ag. This would reduce their incentive to engage in price gouging.
Bolder antitrust enforcement – even the threat to block mergers and break up giant companies – could also reduce their ardor to raise prices.
If Congress refuses to allow the government to use its bargaining power to reduce the prices of pharmaceuticals, big pharma is a good candidate for temporary price controls. (FDR controlled prices via executive order.)
Finally, higher taxes on the wealthy – such as Democrats seem finally ready to enact – will help dampen total demand, thereby dousing some of the inflation fire.
The Fed’s single tool for fire-fighting – interest-rate increases – is aimed in the wrong direction. It’s hitting working people rather than corporations responsible for most price increases (over and above the rising costs of global supplies).
We need to fight rising prices, not working people.
Because that set of policies to fight inflation – not that it would – would cock the economy for the long term. Whereas an independent central bank raising interest rates will calm inflation and not cock the economy long term.