(Drivebycuriosity) - It seems there is a war against efficiency. America`s mighty agencies, the antitrust authority Federal Trade Commission (FTC) and the Antitrust Division of the Department of Justice (Justice ATR), are harassing corporations like Walmart, Kroger, Target, Amazon and many others with law suits, subpoenas and expensive investigations. Amy Klobuchar and other senators started several bills which all intend to curb Big Business. Apparently the Biden administration dislikes big corporations.
The anti-business warriors ignore that these behemoths became big because they are efficient; more efficient than their competitors. Efficiency leads to low costs which allows to charge low prices. Consumers love Walmart, Kroger, Target, Amazon, the Biden administration doesn`t.
Lina Khan, chair of the powerful FTC, started a crusade against big and efficient companies. The Khan became the Jeanne d'Arc of the antitrust crowd when she, still a law student, published an anti-Amazon paper. She complained about Amazon`s efficiency which leads to low prices ( yalelawjournal). The Khan claimed that Amazon will become a monopoly because the firm is too efficient and therefore "too cheap" which is hurting less efficient competitors. In 2021 President Biden made the Khan the chair over FTC - the leading role in America´s antitrust policy.
The new FTC chair denounces efficiency for irrelevant and declared in an interview: “The word efficiency doesn’t appear anywhere in the antitrust statutes.... It’s not that any business practice that increases welfare or increases efficiency is fine" (promarket. ).
Alvaro Bedoya, the newest member of the FTC board, wants to punish stores for providing the lowest possible prices to consumers (CarlSzabo ). Bedoya also claims that efficiency is unfair because efficient companies hurt inefficient competitors (ftc.gov ).
Jonathan Kanter, another Biden protege and head of the Antitrust Division of the Department of Justice (Justice ATR), intends to stop mergers even if they would raise efficiency and reduce costs (truthonthemarket ). He started
to sue corporation mergers, even those which are intended to raise
efficiency by saving costs. After a row of defeats (apparently
courts care about efficiency) Kanter won his case against the planed
merger of the publishing houses Penguin Random House and Simon &
Schuster. Judge Florence Y. Pan, who was freshly appointed by President
Biden this September (!), took the side of Kanter and blocked the merger because it might curb payments to star authors like Stephen King. The defendends had claimed that the merger would lead to efficiencies and cost savings, but the court declared that these efficiencies are not verifiable ( google lw.com).
Apparently Khan & Co. want to protect competitors, even those which are inefficient ( ftc.gov). The war against efficiency will not only reduce competition, it also will lead to waste, corruption and nepotism. If the Biden administration punishes corporations for being efficient and for keeping costs low, it will slow economic growth, raise price level and reduce living standards of low income households who depend on purchasing cheap goods.
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