Economics: The Real Purpose Of The New Antitrust

(Drivebycuriosity) - There is a new antitrust in the US. The old antitrust politics aimed to protect consumers, especially against unjustified price hikes and other wrongful corporation behavior. The new trustbusters, called Neo-Brandeisians (after Supreme Court Justice Louis Brandeis, 1916-1939) don`t care about consumers, they want a fundamental change of America´s economic structure (ftc.gov  pbwt.com). 

The sea-change is led by Lina Kahn, Chair of the powerful Federal Trade Commission (FTC), America´s antitrust authority, Jonathan Kanter, head of the antitrust division of the department Justice (Justice ATR) & Tim Wu, Special Assistant to the President for Technology and Competition Policy. The powerful Neo-Brandeisians are supported by Senator Amy Klobuchar & other Senators who drafted altogether five antitrust bills (!) which are working their ways through Senate & Congress. The new antitrust movement, also known as hipster antitrust, has the blessing of President Biden, who issued an executive order to empower the antitrust enforcers across different agencies.

The new trust busters have to two goals: (1) an official and (2) a hidden.

 

 

 

 

 

1. Antitrust Counterrevolution

 

FTC Chair Khan and her fellow Neo-Brandeisian activists try to expand significantly the government’s role in the U.S. economy (  dailyjournal promarket). Kahn announced an "Antitrust Counterrevolution" and Barry Lynn, Kahn´s Coauthor & Mentor, compared the previous antitrust enforcers with Vladimir Putin and Xi Jinping and claimed they ignored outsized influence of tech companies, environmental problems and wealth inequality (newyorker  theinformation ). 

The new trustbusters loathe consumer welfare, meaning protecting the consumer (which is still the logo of the FTC). Sandeep Vaheesan, another Kahn Co-author, declared consumer welfare as "nonsense" ( law.columbia). Instead they want to fix issues like underemployment, income disparity, political power, and wealth accumulation (thehill ). FTC commissioner Rebecca Slaughter demands that “antitrust should be used to accomplish political and social goals” ( thecentersquare). 

The Neo-Brandeisian activists view large companies as evil and they prefer that the government, rather than the private sector, orchestrates the functioning of the economy" writes ( .ftc.gov). Biden adviser Tim Wu claims that, "efficiencies (caused by size), productivity, declining costs, and cheapening of commodities" are bad. Some activists regard consume as vulgar and bad for the planet ( vox.com). The rhetoric of the Neo-Brandesians is close to the Marxist ideology which aims for a socialist society, where the means of production is controlled by the state, and planning will substitute for competition as the economy’s steering mechanism ( ftc.gov).

Biden protege Lina Khan has an explicit beef with Amazon and has stated publicly, absent any formal hearing, that the company is guilty of antitrust violations and should be broken up." (yalejreg.com wsj.com). Instead of fighting against price hikes Lina Khan and other Brandeisian Big Tech crusaders fight against low prices (yalelawjournal reason). They claim that low prices destroy competition, hurt workers and ruin the environment (vox ).

 

 

2. Control & Power

 

The Neo-Brandeisians - like all politicians & bureaucrats - want to profile themselves, foster their careers and boost their power. "Nothing stops politicians looking to make names for themselves" says Patrick Hedger ( insidesources).   

There is already a cult around Lina Khan. New York Times, The New Yorker and the Twitter crowd celebrate her like a rock star. Khan became famous when she - then still a law school student -  published an anti-Amazon paper (claiming that Amazon`s prices are too low which are destroying competition, ignoring Walmart and the rise of Shopify and myriad other onlineshops), which was celebrated by New York Times and other Amazon haters. Short after his inauguration President Biden announced Kahn as Chair of the FTC. 

Khan has swiftly consolidated her power and undermined the Congressionally-mandated Commission structure. She claims that she has the "authority to decide what is & isn't unfair competitive conduct" ( twitter). By a command-and-control style approach Khan fundamentally changed the FTC and how America approaches competition policy" (insidesources politico truthonthemarket twitter twitter). Khan`s harsh regiment already caused turmoil in the FTC and influenced many talents to leave (marginalrevolution).

Like Kahn are opportunistic senators & representatives like David Cicilline, Josh Hawley, Ken Buck, Pramila Jayapal and others building their careers on Big Tech bashing. And former star high school basketball player Karl Racine, Attorney General of the District of Columbia, is collecting headlines in the media by harassing Amazon with lawsuits ( twitter).

The Neo-Brandeisians and their crusade against Big Companies get a lot media attention which might attract potential voters and impress political leaders (including the President). Biden already expanded the budgets of the FTC & Justice ATR. Senator Klobuchar´s antitrust bill aims to expand the budgets of the antitrust authorities even further. It seems that Klobuchar wants to follow Biden as President and is using her famous antitrust Senate Bill 2992, the “American Innovation and Choice Online Act,” to gain the reputation she needs to leap to the front of the pack running for president the next time the Democratic presidential nomination is up for grabs, writes Peter Roff (noozhawk ). 

"All of this is coupled with an oversized federal presence for enforcement, from greater congressional oversight to enhancing the powers of both the Department of Justice and the Federal Trade Commission through expanded budgets, more onerous reporting requirements, and an invigorated use of merger retrospectives" writes Wayne T. Brough (aier.org ). More regulation also encourages corruption because powerful politicians & bureaucrats can blackmail corporations by threatening them to regulate them more (ssrn).

 

 

Conclusion:

The Neo-Brandeisian activists are a threat to the US economy (nationalaffairs ). They want to turn antitrust law upside down so that it may be weaponized to shape and plan all sectors of the economy and they want to shape. FTC & the Justice ATR already hold - unlike private businesses - a legal monopoly on the right to use or authorize the use of force (truthonthemarket ). The hipster antitrust crowd wants to turn these agencies into Big Brother overseeing the whole economy. 

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PS:

In this post I explain why Kahn`s critique of Amazon is unjustified:

Antitrust - Do Low Prices Really Harm The Consumers? 

https://drivebycuriosity.blogspot.com/2022/03/economics-antitrust-do-low-prices.html

Here I elaborate that Big Tech companies ain`t monopolies and there is plenty of competition

Are Big Tech Corporations Really Monopolies?

https://drivebycuriosity.blogspot.com/2022/02/economics-are-big-tech-corporations.html

 

 And I show here: Why The New Antitrust Movement Is Unjustified And Harmful

https://drivebycuriosity.blogspot.com/2022/01/economics-why-new-antitrust-movement-is.html

 

Stay tuned

Contemporary Art: Kyle Staver`s Tout Court @ Half Gallery New York

(Drivebycuriosity) - Manhattan´s East Village is a cluster of dives and fast food places, but there is at least one art gallery which has frequently interesting exhibitions. Recently I reported about a show with works by Emma Stern, called "Booty!" @ Half Gallery ( driveby). Now they display paintings by Kyle Staver. The exhibition has the name "Tout Court" ( halfgallery).

 

It seems that the artist was inspired by Brothers Grimm`s collection and other medieval fairy tales. But let the images speak for themselves.

 

 

To be continued

 

 

Contemporary Art: Kira Scerbin`s Operating Model & More @ King´s Leap Gallery New York

 (Drivebycuriosity) - New York´s gentrification never sleeps. Manhattan`s Lower East Side is slowly degenerating into a party district with a legion of fast food places & other dives. They are pushing many of the fine tiny art galleries out which can not afford the climbing rents anymore. But it seems that neighboring Chinatown is benefiting. I spot there many new art dealers which take advantage from still reasonable rents. 

 

 

 

 

This week I saw an exhibition with interesting surreal paintings by Kira Scerbin (b. 1991) @ King´s Leap Fine Art Gallery on Henry Street ( kingsleap). On top of this post you can see "Angel" (2022, oil on linen, artist metal frame, 32 x 18 1/2 inches, 81.3 x 47 cm) followed by "Operating Model" (2022, oil on linen, artist wooden frame, 29½ x 31½ inches, 74.9 x 80 cm); "New Cicada" (2022, oil on canvas, artist metal frame, 34½ x 24¼ inches, 87.6 x 61.6 cm); "Meat Reviver" (2022, oil on linen, artist metal frame, 30½ x 36½ inches, 77.5 x 92.7 cm) & "Biter in a Very Rich Hour" (2022, oil on canvas, artist wooden frame, 18 x 14 1/2 inches, 45.7 x 36.8 cm).

 

Above follow "Bullet Pie" (2022, oil on canvas, artist wooden frame, 31 1/2 x 25 1/2 inches, 80 x 64.8 cm) & "Dock" (2022, oil on linen, artist wooden frame, 36½ x 30½ inches, 92.7 x 77.5 cm).
 

To be continued

Contemporary Art: Heaven Is A Place In The Mind @ Richard Taittinger Gallery New York

 

 (Drivebycuriosity) - Manhattan`s Lower East Side is slowly degenerating into a party district with a legion of fast food places & other dives. But there are still art galleries which offer amazing art exhibitions. Gallery Taittinger on Grand Street belongs to the stalwarts. Recently I saw an exhibition with works by Cubanian artist Raúl Cordero, called "Heaven is a place in the mind".

 

On top of this post you can see "Untitled (It Is Just a Matter of Priorities)" followed by "Reality is the new spam" (II).

 

 

above follow "The Grand Scheme of Things" & "The Future was now"

 

 

 

 

above "Heaven is a place in Mind"; "Color Poem Two (The Blend of Luck and Desire)"; "Color Poem I (A Mixture of Chance and Luck)"; "Reality is the New Spam (I)" & "Reality is the New Spam (V)"

 

To be continued

Books: Bangkok Tattoo

(Drivebycuriosity) -  I just finished "Bangkok Tattoo" by John Burdett, the second volume in a series following Thai Police Detective Sonchai Jitpleecheep (amazon ). This time he investigates a murder case in Bangkok´s red light district. The victim is an American, a CIA agent, the suspect is a prostitute, a friend of Jitpleecheep (this is a spoiler freeblog).

The complex plot - told in first person by Jitpleecheep - touches many issues: Prostitution in Thailand & Southern US, Buddhism, differences between Western & Thai culture, radical Islamists, drug trafficking, tattoo culture, corruption and many more.

I found the plot a bit tedious because there were too many topics employed for my taste but I enjoyed the witty musings of the narrator. The leading character is a smart and philosophical guy, the son of a Thai prostitute and of one of her "Johns", an anonymous American. He grew up in company of his mothers international clientele which gave him a well diversified world view blended with Buddhist thinking. 

I found the frequent funny references to karma & reincarnation entertaining even though they are full of clichés and remind to "Buddhism for Dummies". The recurring sexual innuendos are the icing on the cake. But this volume satisfied my appetite for Jitpleecheep´s tales and I will not continue this series. 

 

 

Stock Market: Happy Easter 2022

(Drivebycuriosity) - It`s Easter again. Many countries in the Western world celebrate Easter in some way or another. In Germany for example most people have 4 days off, including Good Friday (called "Karfreitag", a Catholic term) and Easter Monday. Even Wall Street was closed on Good Friday.

Easter also stands for the begin of spring. The German literature has a lot of Easter poems which are referring to the seasonal issue. The most popular German Easter riddle is "Der Osterspaziergang" (the Easter walk  osterspaziergang) by Johann Wolfgang von Goethe. It starts with the line "Vom Eise befreit sind Strom und Bäche" ("freed from the ice are rivers and creeks").

This time the US stock market is in correction mood. The war in Ukraine is spoiling the sentiment and the red hot inflation (prices up 8.5% annually) forces the Federal Reserve to hike interest rates swiftly which might cause a recession.

  

 

 (source )

Anyway, I believe that this correction will be short-lived - like so many corrections before. The stock market is in a long term upward trend lead by continuously climbing company earnings. Company proftis are climbing faster than the GDPs because corporations are getting more productive over time - thanks to learning processes and technological progress. The stock market gains since 2009 are fueled by the accelerating technological revolution which got boosted by the Covid-19 crisis. It seems that the pandemic started a new Roaring Twenties, comparable to the boom phase which happened during the 1920s years after the Spanish Flu.

Covid-19 changed behavior and accelerated the fundamental trends that have been shaping economy & society in the recent decade. During the pandemic the rise of the Internet gained even more speed and turned into a great leap. The pandemic reduced the resistance against technological progress. The crisis forced many people to work at home, to learn, shop, educate & entertain themselves from home. These trends are fostering digitization and raising efficiency & productivity of the economy.

The virus boosts the digitization process, which is fostering productivity across all industries, leading to more economic growth. Microsoft`s CEO Satya Nadella said "the pandemic has proven the PC’s central role in keeping people connected, productive, and secure ...What we are witnessing is the dawn of a second wave of digital transformation sweeping every company and every industry" (transcript ). Last year Nadella noticed that “two years of digital transformation took place in two months” ( microsoft ).

We are witnessing an accelerated shift toward digital technologies that are faster, less expensive, more productive and raise creativity. Companies are compelled to streamline operations and they are using more & more Internet & and other software applications to get more efficient, creative & productive. The pandemic forced them to get faster and make their products & services cheaper and more convenient. These changes are accelerating the ongoing digitization process, using Internet and other software applications more intensely. The CEO of Bill.com, an online service, said: "We believe the ongoing pandemic has accelerated the need for businesses to focus on digital transformation” (seekingalpha).

Covid-19 made the companies fitter and more efficient than before which translates into climbing profits. I believe that this learning process will continue and will fuel a long term trend of rising company profits & stock markets.

 

Contemporary Art: Elena Redmond`s She’s A Cow @ Tchotchke Gallery New York

(Drivebycuriosity) - Contemporary artist ain`t prudes.  Tchotchke, a young gallery, on Manhattan´s Suffolk Street (Lower East Side) has a show with funny & sexy paintings by Elena Redmond. The exhibition is called "She`s a Cow" ( tchotchkegallery).

 

 

On top of this post you can see "Enemies closer" (2022, Oil on canvas, 40 x 40 inches) followed by "Home on the Range" (2022, Oil on canvas, 38 x 28 inches) & "Publicly nude" (2022, Oil on canvas, 48 x 40 inches).

 

 

 

 

Above follow "Two birds, one tiger" (2022, Acrylic and oil on canvas, 48 x 40 inches); "Clapping with questions and there's lightning" (2022, Oil on canvas, 34 x 34 inches) & "Belly button nose" (2022, Oil on canvas,14 x 14 inches)

To be continued

Economics: Will The Biden Inflation Lead To A Biden Recession?

 (Drivebycuriosity) - Inflation in the US is red hot. In March consumer prices jumped 8.5% annually - the highest rise since 1981. Economists at the Federal Reserve Bank of San Francisco noticed that the US inflation rate is higher than in Europe & Asia ( reason). They refer to the massive stimulus program which is fighting the economic fallout of the Covid-19 pandemic. 

The Biden administration borrowed trillions of dollars from the Federal Reserve and pumped them into the economy and they send $1,200 stimulus checks to everyone. So trillions of dollars went immediately to  consumers & businesses. The spring flood of money induced a massive wave of spending and raised the money supply abruptly. Biden´s stimulus programs worked like showering the economy with money via helicopters (Milton Friedman`s famous helicopter money).

Unfortunately the demand push, caused by the explosive money growth & massive government stimulus programs, meets a restrained supply of goods & services because the pandemic interrupts many supply chains. As a result the demand for goods & services rises much faster than the supply which is getting compensated by rising prices.

The jump of the inflation rate is supported by sharply rising prices for oil & gas, partly caused by anti fossil energy politics which discourage oil & gas production.  "The Biden administration exacerbated the inflation of gas prices by both restricting the supply of oil and pressuring banks and asset managers to divest from traditional energy projects" writes The Hill. The magazines adds: "The rise in prices can be attributed to political pressure from the administration to reel back oil and gas production. Christopher Wood, Global Head of Equity Strategy at Jeffries, claims that the “political attack” on oil and gas “has removed the incentive for investment in the sector despite its lingering importance” ( cnbc  realclearmarkets). 

The Fed must stop the accelerating inflation before it gets out of control. Therefore the monetary authority has to hike interest rates significantly to break the inflation expectations. Sharply rising interest rates may create a shock and could slow down consumer spending & investments considerably. A restrictive Federal Reserve policy (interest rate hikes) has been historically the main cause for a recession - next to oil price hikes. In 1980 the Federal Reserve hiked her interest rate (federal funds rate) to a high of 20% to combat a double-digit inflation which caused the "double-dip" recessions of 1980 & 1981/82 ( wikipedia). 

Unfortunately the Biden administration started an antitrust crusade against Amazon and other companies which have been curbing the inflation by being very efficient and are offering low prices. The crusade is throwing sand into the gear of the economy and could make a recession even worse (driveby ).

 

 

 

Contemporary Art: Chris Jones` Wonderful Collages @ Marc Straus Gallery New York

 (Drivebycuriosity) - Manhattan`s Lower East Side is slowly degenerating into a party district with a legion of fast food places & other dives. But there are still art galleries which offer amazing art exhibitions. Gallery Marc Strauss on Grand Street belongs to the stalwarts. The other day I saw a show with wonderful collages by British sculptor Chris Jones.

 

 

 

According to the press release the artist "creates intricate and alluring sculptures from image fragments, sourced from magazines, encyclopedias, books, and other printed material (chris-jones ). Unfortunately these images cannot give a full impression of the 3-dimensional nature of these collages.

 

 

 

 

 

To be continued