The outcome of this and other major cases will show if we’re moving toward a “competitor welfare” policy as opposed to a consumer welfare policy. This would more closely resemble the European Union’s competition policy system, an example which many modern antitrust advocates hope the U.S. will follow. In the EU, many more investigations into unilateral conduct are opened, typically at the instigation of the defendant’s rivals or firms it transacts with. A relevant example is the recent 1.8 billion-euro fine levied against Apple by the European Commission at the conclusion of an investigation that was launched after an initial complaint by Spotify.
A strand of the industrial organization economics literature in the latter half of the 20th century explored how antitrust law could be used by firms to gain an advantage over rivals, i.e. to subvert competition rather than protect it. During this time, the consumer welfare standard took its place as the lodestar of antitrust enforcement alongside of the “end of history” where liberal open markets and democracy were seen as the new hegemony.
However, antitrust has not been immune to the rise of populism in recent times, as demonstrated by the Biden administration enforcers zeal for targeting consolidation (“big is bad”). However, it seems that their cases against big tech, contrary to what they’ve stated before, attempt to make the case for harm to consumers and innovation. It remains to be seen whether they can successfully make that case in court.
Domestic manufacturers and unions accuse other countries of “dumping” whenever they face increased foreign competition. This case is no different. The Senators write that tariffs are needed to protect 12,000 mattress workers—never mind that many more Americans would be harmed by higher prices after already getting smacked by an earlier round of tariffs.
Commerce in May 2021 imposed steep tariffs on imports from Turkey (20.03%), Thailand (37.48%), Malaysia (42.92%), Cambodia (52.41%), Serbia (112.11%) and Vietnam (668.38%). Mattress prices subsequently surged. A TikTok video recently went viral of a mattress shopper kvetching that prices had increased by 40% in a little over two years.
Yet domestic manufacturers want the Administration to extend tariffs to more countries. Commerce in February proposed antidumping duties on a dozen countries including Mexico (41.29%), Bosnia and Herzegovina (217.38%), Italy (257.06%), Poland (330.71%), Philippines (538.23%), Taiwan (624.50%), and Slovenia (744.81%).
As usual, Washington protectionists put special interests over the common good. Americans who feel pocketbook pain when shopping for a new mattress should know whom to blame.
If he [Biden] goes ahead with his reported protectionist plans, Trump 2.0 would be, in this area, more Trumpian than Trump 1.0. As I argued in a recent post, protection against environmental goodies is especially farcical: see “The Farce of Clean Energy Dumping,” Econlog, April 1, 2024. But it is no more economically absurd and dangerous than Trump’s nationalism.
Underlying all this are phenomena that the economics of politics has accustomed economists to see: the politicians’ power greed before organized interests and the logic of interventionism begetting interventionism.
Here’s the Wall Street Journal‘s Editorial Board on the Biden economy. A slice:
Democrats searching for a silver lining might point to the 5.1% average under Ronald Reagan, who won re-election in a landslide in 1984. But what matters in that case is inflation compared to what it had been. The Gipper campaigned against the Carter inflation, promised to do something about it, and with the help of the Paul Volcker Federal Reserve, he did. The average inflation rate fell by half in his first four years, and voters could feel it and rewarded him for it.
Mr. Biden’s inflation performance is the opposite. Voters became inured over six Presidencies, from Reagan to Donald Trump, to falling or low inflation. Then, all of a sudden under Mr. Biden, inflation surged, hitting a peak of 9.1% on an annual basis in June 2022.
Also unhappy with the Biden economy is Scott Lincicome. A slice:
Though grocery inflation has moderated in recent months, Bloomberg recently reported that food prices remain at the top of Americans’ inflation concerns. Unsurprisingly, this issue has become a major theme of the 2024 presidential election, with Joe Biden and Donald Trump—and Democrats and Republicans in Congress—pointing fingers at each other and making their case before American voters.
Yet, as I wrote in my column this week at The Dispatch, few people in Washington actually seem interested in lowering grocery prices—instead, some have been actively trying to increase them in recent cases by using protectionist trade policies to restrict available supply of products, such as beef, frozen shrimp, and fresh tomatoes. These recent actions (which are described in greater detail in my column) are moreover just the latest examples of long‐standing US food protectionism.
Emma Camp reports that “nearly half of all masters degrees aren’t worth getting.”
Arnold Kling continues to discuss his and Nick Schultz’s book, Invisible Wealth. A slice:
In textbook economics, the entrepreneur is the fellow who decides how much to produce. But in the real world, the entrepreneur is trying to innovate. It could be a small innovation, such as starting an ethnic restaurant, or it could be a dramatic innovation. Either way, the entrepreneur must persuade people to adopt something new.
[DBx: Industrial policyists take note: Because industrial policy is a government plan for the allocation of resources, it necessarily obstructs entrepreneurship, for adopting something new disrupts the government’s plan.]
