(Drivebycuriosity) - It seems that the US are slowly turning into a centrally planned economy. A powerful government administration, the American antitrust authority Federal Trade Commission (FTC), is gaining more and more control over the US economy. The FTC is lead by Lina Khan, a radical.
The FTC chair woman became famous when she - then still a law school student - published an anti-Amazon paper ((yalelawjournal reason ). The Khan claims that Amazon will become a monopoly because Amazon`s prices are "too low" (!) which will drive competitors out of business and will hinder potential competitors to emerge. The Khan ignores history and basic economics. She doesn`t take notice of Walmart`s fast growing online business, the rise of e-commerce platforms like Overstock, Shopify, Wayfair, Etsy & Ebay and the advance of myriads of other onlineshops - and the growing importance of foreign competitors like Alibaba & Mercado Libre.
In another article - for a Marxist paper - the Khan argued that antitrust must be reconfigured toward the redistribution of economic and political power and away from concerns regarding price (lpeproject realclearpolicy).
Command & Control
Nevertheless President Biden appointed the Khan as Chair of the FTC in July 2021. The Khan - supported by the political majority of the FTC commissioners - has swiftly consolidated her power and undermined the Congressionally-mandated Commission structure. With her command-and-control
style approach the Khan fundamentally changed the FTC
and how America approaches competition & industrial policy (insidesources politico truthonthemarket twitter marginalrevolution). 30 percent of the agency’s employees said that the “FTC’s senior leaders lacked honesty and integrity” (city-journal )
Political And Social Goals
FTC chair Khan & fellow FTC commissioner Rebecca Slaughter belong to the Neo-Brandeisian school. They try to expand significantly the government’s role in the U.S. economy ( dailyjournal promarket). The Neo-Brandeisians, who control the mighty FTC, loathe consumer welfare, meaning protecting the consumer (which is still the logo of the FTC). Kahn co-author & mentor Sandeep Vaheesan declared consumer welfare as "nonsense" ( law.columbia). Khan & Co. 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 including racial enquitiy” ( thecentersquare crowell).
The FTC ruled by Kahn views large companies as evil and prefers that the government, rather than the private sector, orchestrates the functioning of the economy" writes ( .ftc.gov). FTC-commissioner Christine S. Wilson writes that the Neo-Brandeisians, who control the FTC, represent a 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).
War On Entrepreneurs
Since taking over, the Khan has put more staffing toward the investigation of Amazon and the FTC already started harassing Amazon, her arch enemy, by issuing several subpoenas to founder Jeff Bezos, CEO Andy Jasso & other employees about a diversity of Amazon businesses ( theverge). The FTC is also inquiring Amazon’s acquisitions of MGM, iRobot & the health care provider One Medical, even though these companies are in different markets than Amazon and none of them is a monopoly ( protocol). And Bloomberg reports that FTC is probing Amazon’s subscription services, including Prime subscriptions ( bloomberg ).
The Khan also started a feud against Meta, the mother of Facebook, claiming that Facebook is a monopoly (bbc ). This claim is as ill fetched as the Amazon monopoly accusation. Facebook is losing users to TikTok & Snapchat and - being financed by advertisements - is competing against other media corporations like Apple, Twitter, Google, News Corp, Paramount etc.
Khan wants to block Meta´s planned purchase of Within Unlimited, a small virtual reality company that produces a fitness app called Supernatural, against her own staff's recommendations against pursuing such a fatally flawed and publicity motivated action (inc.com ). Again the Khan stupidly ignores the growing number of competitors in the Meta business. Inc.com writes: "The FTC declares war on Entrepreneurs" (inc.com ).
Notwithstanding the Khan gets empowered by President Biden, who signed an executive order to sharpen the regulatory controls and increased funding for the already mighty FTC. She also gets supported by powerful senators like Amy Klobuchar, Elizabeth Warren & Bernie Sanders and by Jonathan Kanter, head of the Antitrust Division of the Department of Justice (Justice ATR), who tries to criminalize business leaders just for doing their jobs ( truthonthemarket promarket).
Enormous Power Grab
Biden protege Khan, who´s position is based on a false premise (Amazon monopoly), wants to be in charge of the whole economy and she is trying "to make new law, invent bizarre market definitions and
limitations, and expand the reach of any government agency" (inc.com ). The Khan claims that she has the "Rule Making Authority" and that she can decide what is & isn't "unfair competitive conduct" ( ftc.gov twitter ). If one company cuts her prices, then competitors and the FTC could complain and denounce the price cut as "unfair". So the "Fairness rule" will lead to higher prices over time - less cost control and more waste.
It`s clear that the Khan wants to make the rules, or even clearer: She
- and her Neo-Brandeisans - want to rule. The market process of supply and demand would be replaced by a continuously regulated environment where market outcomes are constantly being reviewed by bureaucrats who don`t understand economics and ignore history as shown in the above mentioned cases of Amazon & Meta (truthonthemarket ).
Recently the Khan published her 5-years-plan, called "Strategic Plan for Fiscal Years 2022-2026" (ftc.gov ). Khan`s 5-years-plan is a remembrance of soviet area 5-years-plans, central planning and Lenin. It will be an enormous power grab - if she gets away with it.
Khan´s 5-years plan has several new goals which go beyond consumer interests and - to make it worse - are even against consumer interests. Objective 1.4 announces support equity for historically underserved communities, which include Black Americans, Latinos, members of religious minorities, lesbian, gay, bisexual, and persons adversely affected by persistent poverty or inequality. Apparently Khan`s antitrust focuses on race and income inequality, following Karin Slaugther`s ideas who promotes that antitrust is about equality (crowell ).
The neglect of consumer interests is also announced in Strategic Goal 2: "The FTC’s efforts to prevent and police unfair methods of competition focus on preventing anticompetitive mergers and business practices through enforcement". Apparently Khan & Co. want to protect competitors which leads to less competition and will harm the consumer.
Dictatorship By Bureaucrats
If Khan, Slaughter & Co get their will the US economy will be ruled by unelected bureaucrats who are economic illiterate and ignorant of history (indicated by their treatment of Amazon & Meta) - a system which reminds of Kafka`s novel "The Castle" ("Das Schloss") where anonymous mighty bureaucrats make the decisions.
Lina Khan - and supporters like Amy Klobuchar - are aiming for a
dictatorship of bureaucrats, which would punish merits, diligence, risk taking etc (calling merits "unfair"). The rise of Khan`s FTC is a step to central planning and would lead to a waste of resources what we could learn from the breakdown of Soviet era central planning systems & the decline of Cuba, Venezuela & North Korea. Central planning is dysfunctional - it never functioned in history.
No comments:
Post a Comment