Biden’s Efforts to Stimulate Economic Competition
White House aides point to an academic estimate that has eroded competitive forces in an economy that costs the average family $5,000 a year. Even if their efforts eventually recoup this money, it will only come gradually in a time frame that extends beyond the Biden presidency.
“This is not going to change overnight,” noted Brian Daisy, who directs economic policy for the White House and chairs the newly created Competition Council. “The impact will be years, and in some cases later, into the future.”
The president who calls himself a “middle-class atmosphere” consciously invokes his predecessors Theodore and Franklin Roosevelt in his attempt to tame economic abuse. He launched it with a trademark: “Capitalism without competition is not capitalism – it is exploitation.”
The boost to competition has already produced significant discrete benefits for individual segments of society. iPhone owners, for example, now have the “right to have their device repaired” in places other than the Apple Store; The company offered this concession after management began pursuing this requirement.
Free-market theorists dismiss Biden’s bid for competition as a government-imposed class war that would stifle innovation and reduce economic output. But the praise from Republican and Democratic economists points to a widening concern that the way the US economy actually works does not serve Americans well enough for various reasons.
“That’s fine,” said Michael Strain, who directs economic policy studies at the conservative American Enterprise Institute. “We’ve been a bit lenient over the past few decades.”
The FDA’s pending hearing aid regulation results from the bipartisan law of 2017, promoted by Democratic Senator Elizabeth Warren and Republican Senator Charles Grassley, and signed into law by President Donald Trump. It would allow millions of Americans to save thousands of dollars each through cheaper, over-the-counter alternatives to over-the-counter hearing devices only by the companies that now dominate the industry.
The specific individuals who follow Biden’s agenda have sparked controversy. Lena Kahn, the Federal Trade Commission chairwoman who rose to prominence as a prickly critic of Big Tech, upset Republican colleagues and the industry with her boldness, and agency staff with her management.
However, Khan’s ally in the Justice Department, the head of the antitrust division, Jonathan Kanter, received public support from his predecessor in the Trump administration. Kanter’s scandalous statement: “The new era of strong and effective antitrust enforcement has begun.”
That new era seeks to look beyond the Reagan-era “consumer welfare standard”, which made impacts on prices the main variable in evaluating proposed corporate mergers. He adds looking at the impacts on workers, communities, and democracy itself — a growing concern as Silicon Valley giants play ever-increasing flows in compiling and disseminating information.
The result: Six active Justice Department lawsuits challenging proposed mergers in industries from airlines to book publishing. The antitrust department also has 19 pending criminal cases that include indictments of executives for conspiracy to suppress pay for home health workers and a contractor for bid rigging on military work.
“There is more recognition of the importance of our work than I have ever seen in my life,” Kanter said. “It’s intuitive and emotional – a real belief that competition produces opportunity.
Biden signed bipartisan legislation aimed at increasing transparency and limiting market abuses by three huge trade alliances that control shipping. Agricultural exporters and retail importers applauded.
Agriculture Secretary Tom Vilsack aims to increase market options for farmers and ranchers to sell their meat and poultry in a processing industry now dominated by corporate giants. The department launched the farmerfairness.gov website as part of what Vilsack calls “an attempt to balance the playing field.”
Vilsack doesn’t expect quick political benefits in red-leaved agricultural states like Iowa, where he previously served as governor. In fact, the White House drew immediate resistance even from some allies by partially blaming current inflation on “corporate greed” in industries such as meatpacking with limited competition.
“If you think corporate greed is playing a major role in current inflation, you need to rethink,” tweeted Harvard professor Jason Furman, who served alongside Biden as an economic advisor to President Barack Obama. Like most economists, he attributes today’s high prices to the collision of overheated demand with limited supply.
Nevertheless, he supports Biden’s bid to stimulate competition. “It’s a good-sized deal, especially if it grows over time,” Foreman said.