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As soon as Sen. J.D. Vance (R-OH) accepted former President Donald Trump’s vice presidential invitation, the media began digging through his digital history for politically embarrassing episodes. Among the ephemeral cat-lady blips and dressing-in-drag bloops, they unearthed at least one concerning thing of substance: a statement that Vance believed President Joe Biden’s Federal Trade Commission, which is under the leadership of Chairwoman Lina Khan, a former staffer at the left-wing New America, is doing a “pretty good job.”
By running headlines based on these now half-year-old comments from the Ohio senator, these media outlets sought to paint the Trump-Vance ticket as either hypocritical for criticizing Biden’s economic policies or just an endorser of the status quo. Both of these framings are improbable, given how sharply the Trump FTC’s record and enforcement priorities under former Chairs Maureen Ohlhausen and Joseph Simons contrast with those of the Biden FTC under Khan. Nevertheless, now seems to be as good of a time as any to recount just how destructive Khan’s lawless agenda has been to the economy.
For years, the FTC used what’s known as the “consumer welfare standard” to limit its regulatory footprint. This standard, popularized by Robert Bork in his 1978 book The Antitrust Paradox, ensured that the FTC only acts when business activity harms consumers by increasing prices or reducing quality and innovation.
Basing regulatory decisions on what’s in consumers’ interests shouldn’t present even a semblance of controversy. Most Democrats and Republicans alike agree that the federal government should not intercede in private businesses’ affairs if their existence correlates positively with the public welfare. After all, the benefits of innovation do not only go to “millionaires and billionaires,” as Sen. Bernie Sanders (I-VT) would argue formulation, but also to consumers.
Khan, however, subscribes to the “Neo-Brandeisian” view — as in Louis Brandeis, who made his name as a social justice crusader before former President Woodrow Wilson controversially appointed him to the Supreme Court — that a company’s having a big market share is inherently a bad thing, regardless of whether consumers get lower prices or better quality.
For 50 years, both Democratic and Republican-led FTCs used the consumer welfare standard as the lodestar for their decision-making. But Khan publicly rescinded it shortly after being confirmed. Although Khan has yet to win a single antitrust case in court, and recently suffered a high-profile loss regarding her attempt to ban noncompete agreements, she has bragged about how many companies have abandoned their proposed merger-and-acquisition deals out of fear for her agency’s action.
Yes, the FTC can contest the use of monopoly power in malicious ways, but it should also respect one of Trump and Vance’s most used campaign refrains: law and order. Khan’s FTC has not. The chairwoman has gone so far as to tell her staff to challenge mergers even if there doesn’t appear to be any antitrust argument for doing so.
Now, as a business mogul, Trump knows that not every corporate merger is inherently anticompetitive. Some are essential to preventing bankruptcies and facilitating economic growth. Yale University professor Jeffrey Sonnenfeld, a self-professed “Bidenomics” supporter but Khan critic, provided the example of the FTC-blocked merger of JetBlue and Spirit Airlines. That action put the survival of Spirit Airlines, an airline that’s losing more than $100 million a quarter, at risk, pushing the stock of both companies down by 50%.
More recently, a federal judge slapped down Khan’s aggressive posturing with respect to worker noncompete agreements. In Sonnenfeld’s words, Khan’s “antitrust overreach is hurting companies, employees, and consumers.”
Indeed, the lack of priority Khan places on adhering to consumer welfare standards is making it harder, not easier, for the FTC to challenge actual marketplace abuses.
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The Supreme Court, sensing the lawlessness coming out of this agency and others, is chipping away at their power and enforcement capabilities. For example, it recently stripped away the deference the courts once gave agencies like the FTC to interpret the law and has made it more difficult for these agencies to use in-house administrative law judges to resolve agency matters.
If Trump and Vance believe in a strong FTC, then it’s in their interest to ensure that the commission’s investigations, suits, and statements of interest remain grounded in reality. Instead of aligning itself with Biden appointees with activist worldviews, the Republican nominees ticket should pledge to bring back the consumer welfare standard and restore law and order to the FTC. It’s the only way to ensure that current and future commissioners don’t impede economic growth based on “human flourishing,” “climate justice,” “social justice,” and any other number of ideological concerns that Khan and her possible successors could conjure.
Ilya Shapiro is the director of constitutional studies at the Manhattan Institute and author of Supreme Disorder: Judicial Nominations and the Politics of America’s Highest Courtand the forthcoming Lawless: The Miseducation of America’s Elites. He also writes the Shapiro’s Gavelnewsletter on Substack.
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