Against this backdrop of increasingly alarmist merger claims, this paper analyzes whether previous doomsday merger scenarios have materialized, or whether the critics’ claims missed the mark. Our retrospective analysis shows that many of the alarmist predictions of the past were completely untethered from prevailing market realities, as well as far removed from the outcomes that emerged after the mergers.
And here’s more from Brian Albrecht on his paper with Auer, Fruits, and Manne. A slice:
Unfortunately, some of the most vocal merger critics are no longer at the fringes of the antitrust debate, but core members of the Biden administration. Back in 2017, for example, Lina Khan was a legal fellow at the Open Markets Institute (OMI). Despite making strange arguments suggesting that the purchase of Whole Foods would expand Amazon’s “fief” — which is to say that, in Khan’s worldview, Amazon is the equivalent of a feudal lord — today she is chair of the Federal Trade Commission (FTC), one of two federal agencies charged with challenging merger cases.
Meanwhile, Tim Wu — who served until recently as President Joe Biden’s so-called competition czar — warned in a now-deleted tweet that the Amazon–Whole Foods merger would create a “super-monopoly.” His implication was clear: Whole Foods, a grocery monopoly, should not be allowed to combine with Amazon, a retail monopoly. Barry Lynn, OMI’s executive director and Khan’s boss at the time, also got in on the action. He charged Amazon with “monopolizing commerce in the United States.”
As it turns out, Khan and company were wrong. Since the acquisition, many large retailers have grown faster in market valuation than Amazon. Meanwhile, Whole Foods’ market share has barely budged. While Khan predicted in 2017 that the deal “would allow Amazon to potentially thwart future innovations,” in reality the grocery industry has experienced a boom in innovation over the past five years. Indeed, other grocers had to match Amazon’s model of easy online shopping with quick delivery. Competition can do that.
Scott Lincicome busts some myths about industrial policy in Germany and South Korea. A slice:
Both cases provide some broader lessons about using government policy to tilt the economic scales toward preferred sectors or industries:
First, using industrial policy to pick “strategic” winners and losers isn’t just a problem when the government picks the wrong sector, industry, or product (though that certainly is a problem). It can also bite when the government actually picks a winner, for example by creating an economy that’s too economically (and politically) reliant on the winning companies and ends up losing even bigger when, for whatever reason, the national champions face tough times. In Korea’s case, it may have seemed smart in, say, 2019 to funnel so many finite resources toward electronics, but that “success” also sowed the seeds for future problems when global demand for those products collapsed and an entirely different set of “unfavored” goods or services was suddenly in high demand. It also raises the question of the policies’ opportunity cost: Would Korea actually have been better off today if all those government-directed resources had been deployed differently and the economy wasn’t so “overexposed”?
In this regard, consider the more diversified—and, up until very recently, less industrial policy-inclined—United States. We might have looked like an economic laggard last decade but sure look better (and more “resilient”) these days, with world-class production of suddenly important goods like vaccines and petroleum products (which, by the way, have been exported to Korea), new innovations like generative artificial intelligence (e.g., ChatGPT), and a still-growing services-based economy. The collapse of one important sector or industry will still hurt (see, e.g., banking today), but—barring some sort of major contagion—probably won’t collapse the economy because lots of other sectors will keep humming along. And as long as overall productive capacity is high (spoiler: it is) and the economy remains open, market actors—consumers, producers, investors, etc.—will adjust to whatever comes our way
GMU Econ alum Liya Palagashvili wisely endorses the abundance agenda.
Mr. Crow is clearly uncomfortable talking to the press. He says he agreed to speak because a few influential people are saying terrible things about him in an attempt to hurt Justice Thomas. “I’m collateral damage, I realize that,” he says.
Mr. Crow takes me for a walk around the campus. He shows me innumerable paintings, statues, artifacts and stone-engraved quotations: a statue of Harriet Tubman, a framed letter from Thomas Jefferson, a lapidary quotation by Tocqueville, a commissioned painting of Martin Luther King Jr., a painting of the Wright Brothers—and so, dizzyingly, on.
Not ideal material on which to base an allegation of crypto-fascism, one would have thought.
Notably absent from Monday’s speech was any promise about balancing the budget in 10 years, something that had been part of the House GOP’s earlier list of demands for the debt ceiling negotiations. As Reason has previously noted, it’s pretty much impossible to make the budget balance in a decade without making serious alternations to entitlement programs including Social Security and Medicare, and McCarthy has promised not to touch those as part of the debt ceiling package.
Richard Rahn tells the history of “destructive capital gains taxes and inflation.”
Where did your tax dollars go?
Given the fact that resources (money, time, knowledge, attention, information…) are limited, public health embrace of divisive, low-yield outcomes like masks, mandates, school closures led to many avoidable deaths. Focused protection of the vulnerable would have been smarter.
