Massive corporations are currently wielding extraordinary power over the economy, damaging workers, small business owners and democracy. For forty years they did this with the approval of the Federal Trade Commission. That’s over. Why? Because there’s a new sheriff in town.
Last week, in a rare moment of bipartisanism, the Senate voted to confirm Lina Khan as commissioner for the Federal Trade Commission. Forty-eight Democrats and twenty-one republicans supported her confirmation. Shortly thereafter, President Biden appointed her chairman of the agency. That evening she was sworn in and began her term of office.
When was the last time 21 Republicans did something the progressives cheered? Your validation process, in our opinion, came as a surprise to some progressives who have begun to believe that it is impossible to work across party lines.
The confirmation showed two things: How much sincere anger there is on the basis of large monopoly corporations. Republicans and Democrats alike hear it from their working class voters, their small business owners, and their community leaders. It also showed how impressive Lina Khan is. It is steadfast, clear and does not get caught up in double speeches or excuses.
The appointment of Khan as chairman was good policy and good policy on Biden’s side. He doubles a popular candidate and puts one of the country’s most extraordinary leaders in a position where she can directly improve the economy.
But even when exuberant, most of the headlines got Khan’s appointment wrong. Most of the headlines were about big tech. The Financial Times, for example, exclaimed, “Lina Khan, the new antitrust boss to take on Big Tech!” Big tech is a big issue indeed, but the Federal Trade Commission has a much more important position.
Franklin D. Roosevelt and Ronald Reagan both used the FTC as an important tool in reshaping the economy – albeit in very different directions. When President Reagan came to power with a platform for concentration (his supporters would call it anti-cartel), changes in the Federal Trade Commission were at the center of his efforts to reorganize the economy from top to bottom. The FTC stopped antitrust proceedings, changed the office’s philosophy, and began promoting a new ideology – one that has dominated the agency ever since: that the purpose of antitrust law is to protect short-term low prices for consumers. The Reagan-Bush-Clinton-Bush-Obama ideology (largely the same, with only a few marginal differences of opinion) had very little say in changing this.
For example, in the FTC’s imagined economic system for the past forty years, rational corporations do not operate predatory pricing, and so the agency does not have to worry about it. Khan wrote about how Amazon Cross-subsidies themselves, but people are missing the mark in calling it anti-big-tech rather than anti-robbery pricing. The predatory pricing concerns she surfaced in her brilliant 2017 article crop up not only in tech, but in agriculture, pharmacy, and food and beverage companies as well.