Library of Congress
Woodrow WIlson, 1912.
Barry Lynn, the Executive Director of the Open Markets Institute, has done an important service to the future Biden administration. The bitter anti-monopoly advocate offers the new president a roadmap for a progressive and transformative presidency without the cooperation of Congress.
In his new article How Biden Can Change America, which appears online and in the next print edition of Washington Monthly (please subscribe), Lynn explains how existing antitrust laws can help Biden control healthcare costs, stimulate the economy, create jobs , Reinvigorate America, fight climate change and build stronger independent media capable of fighting disinformation.
As Lynn explains, it’s not just about combining good politics with good politics. It really is Biden’s only chance of success. This view is elaborated in his new book Liberty from All Masters: The New American Autocracy Against the Will of the People
The Democrats, of course, have a very slim majority in the House of Representatives, and Senate control depends on the outcome of those runoff elections in Georgia in January. Even if the Democrats win these races and get a 50:50 Senate majority (the Vice President casts votes in the Senate), they cannot end the legislative filibuster because of some of their own members like Joe Manchin of West Virginia. This means that the legislation requires the approval of at least 10 Republican senators operating under the direction of Senator Mitch McConnell of Kentucky.
Through no fault of his own, Biden’s legislative agenda is locked for at least the first two years of his presidency, and most likely for the entire duration of his first term. He can resign himself to being ineffective or he can use the antitrust tools at his disposal, and these tools are more powerful than everyone knows.
On the first day, President Biden will be able to strap himself into the cockpit of a government machine built during the Wilson and Roosevelt reigns and reinforced by Truman, Dwight Eisenhower, Lyndon Johnson and even Richard Nixon to break power and distribute opportunity, community building, security and citizen participation in constructive activities. This system includes agencies with large unused powers such as the FTC and the Department of Agriculture, which have far-reaching and long-neglected rule-making powers. And it includes strong antimonopoly powers in virtually every government agency, including the Federal Reserve, the Treasury Department, the Federal Communications Commission, the Securities and Exchange Commission, the Department of Defense, the Department of Transportation, and the Federal Energy Regulatory Commission, among many others.
These powers have been largely inactive since the Reagan administration, when traditional antitrust regulation was gutted in favor of supposedly promoting consumer interests. Rather than breaking monopolies to protect small business owners, farmers and entrepreneurs, they encouraged business concentration, believing this would lead to greater efficiency and lower prices. They did not repeal the antitrust laws or authorities, but enforced them differently or not at all.
This change was largely continued by the following five administrations, resulting in the massive corporate consolidation we see today. But Biden would not need Congressional permission to revert to the earlier antitrust enforcement practice that prevailed under Democratic and Republican presidents between Woodrow Wilson and Reagan.
A hidden advantage of this strategy is partly explained by understanding how Reagan got away with what Lynn describes as “the most dramatic ideological reversal in American history.” By the time Reagan took office, “antimonopoly enforcement had been so successfully routed in the early 1980s that few Americans gave it much thought.” Since the important changes did not take place in Congress, but in offices throughout the federal bureaucracy, the transformation was almost invisible to the public.
It didn’t hurt that Reagan had left ideological support:
This was also because influential “progressive” thinkers like John Kenneth Galbraith and Lester Thurow largely agreed with the underlying aim of Robert Bork and the other libertarian scholars who advised Reagan. They, too, advocated extreme concentration of corporate power, but in the Teddy Roosevelt tradition they intended that it should be under the daily direction of the executive.
Biden can benefit from a similar dynamic. While the public is focused on contentious and unproductive debates on Capitol Hill, he can work behind the scenes to destroy monopolies. On the right he finds sympathetic ears where concerns about market concentration are growing.
Just this week, Texas Republican Attorney General Ken Paxton filed an antitrust lawsuit against Google, owned by Alphabet Inc., accusing them of partnering with Facebook to manipulate online advertising exchanges in their favor. Bloomberg Business reports that Clinton-era independent attorney Kenneth Starr and his firm have been hired to pursue the case. Paxton is generally a ridiculous character. He faces allegations of bribery from his own top employees and brought a frivolous and threatening lawsuit to overthrow the presidential elections in four states that voted for Biden. The Supreme Court unanimously decided not to overturn these competitions. But Paxton has an interesting antitrust footprint. He helped and convinced Bill Barr’s Justice Department to bring a major antitrust lawsuit against Google in October. The DOJ case focuses on Google’s use of exclusive contracts to ensure search dominance in browsers and mobile devices.
On Thursday, Google’s monopoly search practices were challenged by over 30 states in an antitrust case led by the Democratic Attorney General of Colorado and the Republican Attorney General of Nebraska. Axios reports that it accuses Google of “hurting rival specialist search companies like Yelp or TripAdvisor by favoring its own results” and “using the same tactic to extend its search monopoly to new technologies like smart speakers”.
In addition to the scrutiny that Facebook faces for its role in Google’s ad sharing, the acquisitions of WhatsApp and Instagram on the social networking website are in the crosshairs of both the Federal Trade Commission and a coalition of attorney general led by New York City Letitia James . The suits were announced together on December 7th and can be combined. The FTC filing seeks nothing less than the dissolution of Facebook.
This sweeping and bipartisan drive to curtail the power of the social media giants gives Biden some momentum to advance a broader cartel strategy. While Republicans in Congress are certainly against toughening antitrust laws – largely because of the high cost GOP lawmakers pay in working with the enemy – it could be a tacit boon for stricter enforcement by populist-conservative neighborhoods outside the Beltway receive.
But it is important that he does not need your support. Well-established laws give him the strength he needs.
For Lynn, however, it’s important for Biden to consider the alternative for toughening monopoles:
In contrast, if Biden doesn’t take the initiative, he could be little more than a bad regent for Trump in his exile in Elba by the sea in Florida. And Democrats should be absolutely honest with what a defensive, cautious, backward-looking, turtle-like Biden government will accomplish in what could be something like the end of democracy in America and around the world.
If antimonopoly is not used to take the initiative, Trump’s Republican Party can use the same populist rhetoric to divide and disperse the Democratic Party in 2022 and 2024, while the Koch-funded neoliberal wing of the GOP re-enters the knees being forced to align on Trump’s national populist wing.
Trumpism arose in part from the devastation caused by four decades of lax antitrust enforcement and the loss of economic freedom, opportunity and growth. The best way to weaken Trump’s movement is to take over market concentration and revive the entrepreneurship and sense of freedom that has been stifled in so much of America.
If Biden Lynn does not take his advice and follow his roadmap, he will invite you to a Trump comeback in four years, and our republic cannot survive that.