by Jerry Cayford
Biden matters because he is taking on the real problems that are wrecking America, the deep structural problems, created over decades, that benefit powerful people who will do anything to prevent change (the way fossil fuel companies do anything to block climate solutions that hurt profits). He is the first president since LBJ to take on problems that big.
“How can that be?” you ask. “Joe Biden hasn’t transformed the Middle East into peaceful democracies like George W. Bush did. Nor has he ended racial and partisan animosity in America like Barack Obama did, or drained the swamp like Donald Trump did. What has Biden done?” He has taken on a challenge as big as his three predecessors’ ambitions: breaking corporate monopoly power and restoring healthy competition.
“Competition policy” is the innocuous name for this program. It’s big because it seeks to cure the root malady ailing America. Obviously, I was being sarcastic about the successes of Biden’s predecessors: they got nowhere on their signature ambitions, because they did not even try. Bush’s program for the Iraq transition was an arrogant experiment in free-market fantasy, uninterested in democracy. Obama announced in an apology letter to supporters after winning the nomination that he was not going to change our corrupt and toxic politics. (I wrote a Daily Kos piece about it in July 2008.) And Trump, as the very embodiment of the swamp, would no more drain the swamp than a bullfrog would. But Biden is serious.
Look at the ambitiousness of Biden’s people. “She was put in this role to shake things up” is a profile of Lina Khan, chair of the Federal Trade Commission. She is one of a group of Biden appointees to key offices, including Jonathan Kanter (DOJ Antitrust), Gary Gensler (SEC), and Rohit Chopra (CFPB). Their task is to promote competition (the source of all capitalism’s benefits), mainly by breaking monopolies. The people Biden chose for this task are not timid, half-ass compromisers (unlike every other political appointee of the last fifty-five years who got put anywhere near the real problems). As the Khan profile puts it, they are people “who think excessive corporate power lies at the root of most social ills,” and they are absolutely correct.
The effects of excessive corporate power spill everywhere, and Biden is aligning the whole government with his July 2021 Executive Order on Promoting Competition in the American Economy: “The Order includes 72 initiatives by more than a dozen federal agencies.” Party leaders (and big donors) are resisting this radical new direction (or return to basics) for the Democratic Party. But from net neutrality to stopping meatpackers’ domination of farmers, from the right to repair to the uses of personal data, Biden is challenging monopoly power. If you want to know why American health care is bizarrely expensive yet also incompetent, why baby formula can stay out of stock for three desperate months due to a single plant having troubles, why we can’t meet our own semiconductor needs, why we can’t build electric vehicle charging stations at anything like a reasonable pace, why college costs so much, why the Pentagon’s contractors can’t build new weapons systems that are completed before they’re obsolete, why labor unions in America got crushed and wages for most of us have stagnated for fifty years, why rents are exorbitant, why a computer glitch in one airline can practically shut down air travel for a day, if you wonder about these and a thousand other small (and large) constant hits to the quality of our daily lives, the answer to your question is monopoly power. Even the headline-grabbing disasters—wars, environmental catastrophes, refugee migrations—are always partly, and often mostly, driven by excessive corporate power.
Too Big to Fail
Saying Biden has taken on this fundamental problem doesn’t mean he is solving it. But he is, slowly. Progress is difficult because the forces arrayed in support of monopoly power are entrenched in every institution of our society, and they have controlled government policy (and government appointments) for as long as anyone can remember. Reagan blessed the Chicago School’s “big is good, big is efficient” mantra, pretty much ending antitrust enforcement for forty years. Corporate concentration exploded. Now, every senior official, every manager, every judge, in every large business and institution in our country has spent their entire career in a culture that took unchecked corporate power as a simple fact of life, the iron law of our economy. And all of this was tacit, complex, and hidden from the American public. Until the Great Recession. The 2008 meltdown brought the concept of “too big to fail” into the public’s consciousness, as big banks stole six trillion dollars of middle-class home equity and not a single executive (or even flunky) was prosecuted. But now we know.
“Too big to fail” started the slow burn among citizens that finally allowed the anti-monopoly movement (crying in the wilderness for decades) to get some traction. The movement now has real power because Biden supports it. The FTC has begun blocking mergers and the DOJ is prosecuting anticompetitive behavior. The formerly unchallenged lords of the universe were caught flat-footed, because they always before had a veto on those dweeby, goody-two-shoes anti-monopolists getting into office. And they are furious. As the Khan profile notes, the Wall Street Journal has published 80 articles attacking Lina Khan. The Economist has been similarly relentless. The courts, too, initially resisted change, and Khan’s FTC lost its prosecutions of illegal monopolies for two years. But big, game-changing wins for the FTC started in late 2023 (against Google and big pharma), and 2024 looks likely to see more.
The anti-monopoly movement—known as the New Brandeis movement or neo-Brandeisians after the legendary pre–New Deal Supreme Court Justice Louis Brandeis—has its own quasi-newspaper, the Substack blog BIG, run by Matt Stoller (research director at the American Economic Liberties Project, former colleague of Khan, and a driving force of the movement). A glance at BIG’s list of posts shows the enormous scope of the movement’s challenges and its accomplishments under Biden. On the biggest story of the last few years, inflation—for which Biden has taken a lot of heat—the anti-monopolists spotted the real culprit, now dubbed “greedflation.” The primary cause of inflation, it turns out, was not supply chain problems from Covid, high government spending, the Ukraine war, or excessive demand from all the money those spoiled working people got handed by Biden and Trump during the pandemic. No, it was corporations using those excuses to jack up prices because they could. The talking heads sneered at this idea, but the anti-monopolists under Biden had enough clout to force a serious examination of it; in time, mainstream economists came around to admitting that more than half of pandemic-related inflation was caused by corporate monopolies grabbing the money as soon as a cover story was available.
Taking on monopolies has produced a string of accomplishments. The hearing aid monopoly was broken and prices plummeted. Insulin prices are capped at $35 a month. Pay-day lender interest rates are capped at somewhere around 40 percent, rather than the hundreds of percent interest these predators were charging (specifically, their loophole around state caps was closed). Non-compete clauses that block ordinary employees from changing jobs, or negotiating on fair terms with their bosses, are being outlawed. Mandatory arbitration that deprives employees of the right to take grievances to court are starting to head that way, too. Mergers and acquisitions have tanked. Private equity sharks are laying off staff. Those infuriating “junk fees” tacked onto bank accounts, tickets, hotels, and everything else are being exposed and curtailed.
Monopoly is so destructive that just beginning to challenge it produces a wealth of small benefits. But they are small, and they will be temporary, unless the system that enables monopolies is changed down deep.
Compare and Judge
Biden matters because, nice as these laundry lists of small victories are, he has kept his eye on the essential source of long-term success: competition and its powerful benefits. He has stuck to his plan. And it’s the right plan. Competition is more than sports teams or politicians or businesses competing. It’s not some narrow, formal, structured thing. It’s how evolution works or cream rises or traffic lights prioritize emergency vehicles or any sound decisions are made. When you compare two cereal boxes to see which has more riboflavin or less sugar, that’s competition. Compare and judge: what’s better will thrive.
Monopoly destroys competition at this fundamental level: by buying competitors so there is nothing to compare; by colluding with competitors so there is no difference to judge; by propaganda against labeling to hide essential information; by patent thickets to keep competitors off the market; by lobbying to block disclosure regulations and hide corporate actions; by pressuring politicians to keep out-of-state companies out; and many other tactics. Bigness is not the monopolist’s goal—they don’t want to be the biggest, baddest competitor in the market—their goal is to escape competition entirely, to be like the gambling house taking their cut off the top risk-free, or the fight promoter taking a chunk of the gate while other people slug it out in the ring. Monopolies would rather buy innovators than innovate. Big is not efficient. Competition is efficient. Big is just lazy and greedy.
Boeing is an object lesson. As the aerospace industry merged and concentrated, the once-great engineering firm of Boeing acquired McDonnell Douglas and took on the lesser company’s corporate culture: engineering brilliance out; profits-first and finance in. (BIG has several posts on Boeing.) Boeing’s decay is part of the vast transformation sometimes called the “financialization” of America. We all know the gist. We out-sourced manufacturing because financing other people’s work is more profitable. Financiers encouraged companies to build on credit and consumers to buy on credit. Debt exploded for everyone, and finance takes its cut off the top. This is the monopolists’ dream, and all of us are poorer for its success. We are only now starting to restore America’s ability to make things.
Rewind
If corporate concentration and antitrust law are the front lines, lots of related initiatives matter, too, in this all-of-government battle. (A wider summary of initiatives is here.) One I wrote about on 3 Quarks Daily is a corrupted version of cost-benefit analysis that systematically slants government regulations to favor corporate interests. On his first day in office, Biden mandated a revision—now underway—of the regulatory review process, a revision that is attempting to bring fairness into the distribution of burdens and benefits from policy and regulation.
Biden matters because, first, he understands that it is permissive antitrust and other government policies biased toward corporations that are driving our country to hell and, second, because he is trying to be truly transformative in a way no president has been since LBJ, if not FDR. Reagan, of course, was transformative, but “in a way” quite the opposite: Reagan successfully embedded a vast network of evil policies into our institutions (as I described above), policies that turn those institutions to the service of big money and that frustrate and oppress most people. The Democrats, frantic from their crushing 1984 loss, then rolled over and accepted the new iron rule: never cross big money. Until now. It is Biden’s huge task to undo all the damage done over forty years.
A particularly admirable quality in the neo-Brandeisian anti-monopoly movement is its recognition that all these wonkish issues full of technicalities and economics have gut-level human effects (which is in the spirit of Louis Brandeis). Here is a passage from a recent post on BIG:
One of the key ingredients to American success, and one that is lacking today, is optimism.… This collapse is not just about a fall in living standards (we are richer than we were 50 years ago), but about the pervasive unfairness of modern life. There’s a concept in psychology called “learned helplessness” that may begin to explain this modern malaise. Learned helplessness is the result of experiencing repeated traumatic events without the ability to do anything about them. It is a key ingredient in depression. It turns out that suffering is bearable if the sufferer has agency, but even small amounts of suffering become intolerable if the victim feels they can’t make any changes to their situation.… It’s harder than ever for Americans to assert their rights, to have any agency in the face of unfairness, and the result is a habitual acceptance of suffering. We are becoming a land of learned helplessness.
That bitter helplessness, I believe, is the source of the rage that dominates American society today, whether the rage on the right to tear the system down or the rage on the left to cancel those who claim complexity where they see black and white.
Biden matters because he has had the courage to go right to the root cause of American rage, decline, and incompetence. He has antagonized enormously powerful enemies, but has had the wisdom to turn the battle over to seriously capable and committed warriors. (Sabotaging reform with inadequate leaders is standard Washington operating procedure. A classic example was Obama handing health care reform to Max Baucus—the biggest medical industry money hog in Congress.) The war is just beginning, but Biden’s chosen leaders are doing extraordinary work to promote competition. Monopoly’s grip is starting to slip.
I have not hidden my opinions of other presidents, so this may sound like damning with faint praise, but it isn’t: Biden’s decisions to take on our deepest systemic problem, to weaken monopolies and strengthen competition, and to engage a team that is up to the task, those decisions alone make him the best president of my lifetime.