A “new mindset is apparent”
President Joe Biden exceeds expectations. (He’s exceeded mine.) But in several non-flashy ways people may not have noticed. David Dayen notices that Uncle Joe is taking on corporate concentration and bringing the busting back to trust busting (American Prospect):
On July 9, 2021, President Joe Biden signed one of the most sweeping changes to domestic policy since FDR. It was not legislation: His signature climate and health law would take another year to gestate. This was a request that the government get into the business of fostering competition in the U.S. economy again.
Flanked by Cabinet officials and agency heads, Biden condemned Robert Bork’s pro-corporate legal revolution in the 1980s, which destroyed antitrust, leading to concentrated markets, raised prices, suppressed wages, stifled innovation, weakened growth, and robbing citizens of the liberty to pursue their talents. Competition policy, Biden said, “is how we ensure that our economy isn’t about people working for capitalism; it’s about capitalism working for people.”
Joe had me with that line. He gets it. I’ve used similar formulations for years. The root problem isn’t that the economy doesn’t work for people; it is that people work for the economy. People should be holding the corporation’s leash; instead it feels as if we’re wearing the collar.
I spent a career working inside small and large engineering companies with national and international clients. You probably have some of their products. I wouldn’t trust any farther than I could throw them.
But I digress.
Biden’s order proposed 72 different actions to take to “to revert government’s role back to that of the Progressive and New Deal eras,” Dayen writes. A new mindset has appeared in the agencies. There’s a new sheriff in town.
Bringing change to large bureaucracies is often likened to turning around a battleship. One way to get things moving is to have the captain inform every crew member of the intention to turn the battleship around, counseling them to take every action from now on with that battleship-turning goal in mind. The small team that envisioned and executed the competition order put the weight of the presidency behind it, delivering a loud message to return to the fight against concentrations of power. It’s alarming and maybe a little disconcerting that you have to use a high-level form of peer pressure to flip the ship of state. But that battleship is starting to change course.
Tim Wu, the brains behind the order, has since left government. Dayen describes the “collection of policymakers, journalists, lawyers, politicians, and experts, sometimes known as the New Brandeis movement,” (in which Wu is a player) that aggitates against economic concentration.
A new White House competition council oversees the executive order, Dayen writes. Biden himself has attended two or three meetings. This creates “a kind of show-and-tell dynamic” in which agencies want to show up with progress to present before the president. A “new mindset is apparent.”
“We wanted the president personally involved,” Wu said. “If you have an agency that feels all alone, their friends become industry. It’s about getting into the heads of agencies and making them feel supported to do things they might not like.”
The rest gets further into the policy weeds. A ban on noncompete agreements here. New merger guidelines there. Crushing the hearing aid cartel. Taking on Big Ag. A “government-wide initiative on so-called ‘junk fees’—unexplained and deceptive charges from hotels, cable companies, ticket brokers, banks, and more.” Industries like airlines and pharmaceuticals are slow to come to heel, but the administration’s actions are turning the battleship little by little without making headlines.
Just about everything on competition has been hard-fought. But there’s plenty of evidence of real movement. Agencies like the Department of the Interior, Department of Education, and the Small Business Administration, none of which are mentioned in the order, told the Prospect about their efforts to maximize competition in procurement and support small business. The lead agencies have gone beyond the order, reinvigorating dormant anti-monopoly laws like the Robinson-Patman Act (which prevents chain retail stores from gaining unfair advantage) or Section 8 of the Clayton Act (which bars directors and officers from sitting on the corporate boards of multiple competitors). Congress chipped in with the first new antitrust law in nearly a half-century, which gives state attorneys general a better chance to win antitrust cases.
Mergers and acquisitions slowed sharply in the second half of 2022, and while a lack of cheap money from the Federal Reserve is partially responsible, so is an enforcement team that is more undaunted than it’s been in decades. And aggressive antitrust agencies translate across government. For example, the FTC’s definition of unfair or deceptive acts and practices is used by other agencies; when the FTC tightens its guidelines, other agencies follow.
Corporate power won’t concede without a fight. And there are more hearts and minds to win inside the government. But once a course has been corrected, it’s hard to switch back. The engineers of this shift in competition policy have done more than change a policy; they’re changing the country’s direction.
Biden was “very clear,” as he likes to say:
Capitalism without competition isn’t capitalism; it’s exploitation. Without healthy competition, big players can change and charge whatever they want and treat you however they want. And for too many Americans, that means accepting a bad deal for things that can’t go — you can’t go without.
So, we know we’ve got a problem — a major problem. But we also have an incredible opportunity. We can bring back more competition to more of the country, helping entrepreneurs and small businesses get in the game, helping workers get a better deal, helping families save money every month. The good news is: We’ve done it before.
Yes, we have. Between the terms of two Roosevelts, Biden noted. Then the corporate empire struck back. The result has been a second Gilded Age, epic wealth inequality, decades of flat wage growth, and a hollowing out of a middle class that was once the envy of the world. People left behind, working for an economy that views them as servants, inputs.
We’re now 40 years into the experiment of letting giant corporations accumulate more and more power. And where- — what have we gotten from it? Less growth, weakened investment, fewer small businesses. Too many Americans who feel left behind. Too many people who are poorer than their parents.
I believe the experiment failed. We have to get back to an economy that grows from the bottom up and the middle out.
Maybe this guy should run for another term.