The Biden Economy--Past and Yet to Come
Inflation threatens the president's political and economic agenda.
Let’s do a thought experiment: try to imagine any major country in the world hosting a summit with American government officials focused on how Americans can fine, tax, sue or extort money from the country’s crown jewel and largest companies.
Sounds pretty preposterous. Surely, you’d think, no government would do something so harmful to its own companies or so advantageous to foreign competitors – especially not in partnership with another country.
Except, incredibly, that’s exactly what’s happening in the bizarro world of today’s Federal Trade Commission (FTC).
President Biden speaks at the House Democratic Caucus issues conference In Baltimore. (Drew Angerer/Getty Images)
In February, the Wall Street Journal reported that FTC officials are collaborating with European counterparts to foil U.S. health care company Illumina’s acquisition of Grail, a startup focused on early cancer detection. Emails recovered through a U.S. Chamber of Commerce FOIA request show the FTC secretly coordinating with European officials to scuttle the deal.
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It's perhaps not surprising that the FTC is seeking foreign assistance, given its recent run of losses in American courts. In fact, this may represent another tactic in the FTC’s playbook for discouraging and dissuading even those deals that meet legal muster.
It’s no stretch of the imagination to believe the FTC wanted EU regulators to halt the Illumina deal because agency officials knew U.S. courts – which typically defer to the prevailing consumer welfare standard – would likely green light the acquisition. More, the FTC’s secrecy about the Illumina case raises a deeply disturbing question: how often has the FTC skirted American laws by asking foreign counterparts to do the dirty work of stopping mergers?
Lina Khan, chair of the Federal Trade Commission (FTC), speaks during a House Appropriation Subcommittee hearing in Washington, D.C., on May 18, 2022.
The transatlantic alliance against U.S. business popped into public view again last week, when top EU regulator Margrethe Vestager tweeted a picture following a meeting with FTC Chair Lina Khan and Jonathan Kanter, the Department of Justice (DOJ) assistant attorney general for antitrust, at a Brussels competition policy conference.
In the tweet, Vestager targeted a major U.S. company, noting that EU and U.S. regulars had "similar concerns" about the company’s market share and competition issues. Did any European companies come under the microscope during that meeting? While there’s no way to know for sure, I think it’s unlikely.
The chummy photo op made it clear U.S. and EU regulators believe they are all on the same team. In most circumstances, collaboration with a close ally and partner would be something to applaud. But in this case, Khan, Kanter and Vestager all appear to be playing against the U.S., weakening American businesses to the benefit of foreign competitors.
President Joe Biden delivers his State of the Union address at the U.S. Capitol on Feb. 7, 2023. (Jacquelyn Martin/AP/Bloomberg via Getty Images)
Of course, this is not the administration's first foray into self-harming attacks on American companies.
In a January op-ed, President Biden called on congressional Democrats and Republicans to unite with him in an attack on leading U.S. tech firms. The proposal surely prompted some glee in China, which is midway through a multibillion-dollar campaign to help favored companies "catch and surpass" American tech leaders.
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Thankfully, Congress has largely declined President Biden’s invitation. Instead, our leaders have embarked on a far more productive effort to bolster America’s economic competitiveness. While hobbled by extraneous mandates, the Inflation Reduction Act will likely accomplish at least some of the administration’s goals of boosting domestic manufacturing. At the same time, the bipartisan Select Committee on China has held thoughtful hearings on disincentivizing Chinese bad behavior and giving American companies the tools they need to win.
Unfortunately, the FTC is moving in the opposite direction and undoing Congress’ pro-competitiveness efforts. When American government officials are working with foreign governments to harm our crown jewel companies, the system has gone off the tracks.
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Combined with the FTC’s documented mismanagement and woeful string of judicial rebukes, the message is clear: it is time for Congress to step in. Congress can start by denying the FTC’s proposed 400 percent budget increase, which would be a bizarre reward for management that has made morale plummet and top staffers flee.
Only robust legislative oversight can restore the FTC to its long-standing role as a bipartisan organization that provides clarity for U.S. businesses and protects the welfare of our consumers. Congress, the time is now.
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