From my perspective, other than the president and vice-president, the most important member of the Biden administration isn’t the Secretary of State or Secretary of Defense but Lina Khan, the head of the Federal Trade Commission. You can tell how influential she is by her enemies. Ryan Grim notes that she’s in the crosshairs of LinkedIn billionaire Reid Hoffman who is a major donor to the Harris campaign. She was recently called “a dope” by the chairman of IAC, Barry Diller during an appearance on CNN. Then there’s CNBC anchor and stock pimp Jim Cramer who, “has been fixated on insulting and disparaging her enforcement record on live TV” since the moment she took office.
What’s their problem with Khan? She’s the first FTC commissioner to take antitrust seriously in decades. She goes after monopolies and monopoly power, and this is making certain business executives and their paid for on-air help howl like scalded cats. On the other hand, as Grim notes, others are quite pleased.
Khan and Rohit Chopra, director of the Consumer Financial Protection Bureau, have been the bane of large companies who profit by exploiting market share to jack up prices on consumers and implement obscure fees, while they have also produced some of the policy wins most trumpeted by both the Biden administration and the Harris campaign. Harris has recently celebrated moves made by Chopra on medical debt and Khan on non-compete agreements.
While monopolists have dubbed Khan “anti-business,” her skeptical approach to corporate consolidation has coincided with a booming stock market and finds a broad base of support among companies looking to compete against Goliaths, or firms tired of being ripped off by them due to a lack of competition.
The Wall Street Journal editorial board has criticized J.D. Vance for praising Khan who they dub “Biden’s most lawless regulator.”
At a Bloomberg technology forum in February, Mr. Vance called Ms. Khan “one of the few people in the Biden administration that I think is doing a pretty good job.” At what? Breaking the law and losing in court?
The FTC Chair has been the most ambitious Biden regulator, stretching the law at every opportunity to impose her policy views on antitrust and other matters.
The WSJ board goes on to knock Vance for endorsing Khan’s “policy of jettisoning the consumer-welfare antitrust standard that has prevailed for 40 years. But this is the key to her importance. Will Norris of the Washington Monthly explains:
Trump’s regulators, like all administrations of the past 40 years before Biden, argued cases mainly on the narrow basis of harms to consumers. But Khan and other reformers argue for reestablishing an interpretation of antitrust law that’s more expansive than this “consumer welfare standard.” Under Biden, regulators have rewritten the government’s lax merger guidelines and have often focused their legal strategy on the harms done to producers as well as consumers.
The thing to note is that monopolies are not just a problem for consumers who pay higher prices, have less choice, and often have no recourse if they don’t like their products or services. The reason we have hollowed out downtowns and shuttered malls is because massive corporate consolidation has made it impossible for small businesses and even medium-sized corporations to compete. That’s what’s driving so much right-wing populist resentment, and one thing you can say in favor of J.D. Vance is that he understands and cares about this more than Reid Hoffman, Barry Diller and the editorial board at the Wall Street Journal.
The number one thing the federal government can do to help the hillbillies Vance pretends to represent is to make it possible for people to have small bore entrepreneurial success again in this country. And the best way to do that is to reverse the trend of market share consolidation. So, yes, it’s important to protect consumers from junk fees and predatory loans, which the Biden administration and Khan have done with real determination, but it’s also important to return to the original way of doing antitrust enforcement that prevailed from FDR’s time until the Carter administration blew it up and went over to a strictly consumer-driven focus.
Some of the worst monopolists in the country hail from Silicon Valley, and while that crowd is split in its support of Trump and Harris, they appear united in wanting Khan’s head on a pike. And they hope that if Harris is elected in November, as a fellow Bay Area Californian, she will fulfill their wish. That’s certainly Jim Cramer’s expectation:
Vice President Kamala Harris would get rid of Federal Trade Commission head Lina Khan if she were to defeat former President Donald Trump in the November election and succeed President Joe Biden, according to CNBC commentator Jim Cramer.
“I don’t have to go into Lina Khan anymore [because] everyone knows my views and there’s no need to reiterate,” Cramer, who once referred to her an “empty suit” and “one-woman wrecking crew for your stock portfolio,” said during Monday morning’s broadcast.
Cramer also predicted that if Harris ascends to the presidency following Biden’s decision to drop out of the 2024 race, she would also dismiss Jonathan Kanter, the assistant attorney general with the Department of Justice’s Antitrust Division.
To get an idea of what’s at stake, I am going to quote Will Norris at length:
Biden was not at the vanguard of this [antitrust] movement in his party, but his campaign’s policy papers included promises to confront monopolies. Then, after he won the election, Biden committed to the cause like no other president had in modern times. He appointed one of the movement’s brightest and most aggressive reformers, Lina Khan, to run the FTC, as well as other fierce critics of corporate concentration in key posts, including Jonathan Kanter, who took over the antitrust division of the DOJ, and Tim Wu, who became a key economic adviser inside the White House. Six months after taking office, Biden issued a whole-of-government executive order that called on 17 different government agencies to take 72 actions to foster competition and protect consumers against monopolies. As a result, agencies like the FTC, the Consumer Financial Protection Bureau, and the Food and Drug Administration have cracked down on public scourges like price gouging, noncompete contracts, and banking-related junk fees, and created new rules to make consolidated industries like the hearing aid market more competitive.
Under Kanter and Khan, the DOJ and FTC have also filed far more ambitious antitrust investigations than any administration in decades. Last summer, an investigation into several food production conglomerates over wage suppression and collusion resulted in an $85 million settlement, one of several successful DOJ investigations into no-poach and wage-fixing schemes across the economy. In December, the FTC successfully blocked the medical data firm IQVIA’s attempt to monopolize the business of advertising to doctors through the purchase of an ad tech company called DeepIntent. And in January, a judge sided with the DOJ in its suit against a JetBlue-Spirit merger, the first successful prosecution of an airline merger in 40 years.
The effect of a more aggressive posture from regulators goes beyond favorable court rulings: Under the threat of litigation, Amazon, Lockheed Martin, Berkshire Hathaway, and the chipmaker Nvidia were some of the companies to back off multibillion-dollar acquisitions of smaller firms. Biden’s regulators filed a record 50 antitrust enforcement actions last year, and mergers dropped to a 10-year low.
The truth is, as outstanding as this record is, it is only a beginning. In order to really be felt and to transform the economy and Make America Great Again for small businesses and small towns, this shift needs to be sustained. It took 40 years to destroy the American Dream, and it could take just as long to restore it.
As for Harris, she’s been touting some of Khan’s accomplishments like her work to ban non-compete agreements, but it’s uncertain whether she would retain Khan in the face of such vociferous opposition from major donors like LinkedIn’s Hoffman. I’m pretty sure if Vance had his way, he might support Khan’s shift on consumer welfare even if he chose someone else to run the FTC, but I know for certain that Trump will listen to the monopolists and can not only Khan and Kanter but the whole antitrust project.
Which is ironic, because this is the single best policy for helping the people who predominate at his MAGA rallies.
What we need is a President Harris who honors what Biden started rather than whatever her monopolist donors ask for in return for the massive donations..
