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Biden’s Political Need for an Antitrust Orgy

When JP Morgan CEO Jamie Dimon said in a recent Wall Street Journal podcast that that “the consumer is in pretty good shape” because “housing prices are up, stock prices are up, jobs are plentiful,” he inherited the digital whirlwind.

“I’m sorry, what?” replied TikTok influencer Anna @CreativeChronicles. “The stimulus checks? The ones that went out in 2020 and 2021, we’re still ‘spending it down’? Who is he talking about? People are not doing well. The country is literally unaffordable. Childcare, groceries, you’ve got Kellogg’s out there telling us to eat cereal for dinner.”

Anna’s retort went viral at light speed because consumers are feeling palpable pain from unaffordable food, housing, and energy prices. The current inflation rate has jumped up to 3.5 percent, adding fresh pain on top of several years of price increases.

Inflation is the likely reason the Conference Board’s consumer confidence index deteriorated for the third straight month in April, falling to levels not seen since the pandemic.

Likely voters tell pollsters that inflation is the red-hot issue. They remember low inflation and big pre-COVID wage gains under Donald Trump. It is for this reason that Joe Biden’s effort to celebrate the fruits of “Bidenomics” fell as flat as Dimon’s interview. To have any chance of re-election, President Biden needs a scapegoat for inflation he can hang around Trump’s neck. So the president kicked off the election season with the most political State of the Union address in history, blaming business for padding profits with high prices and “shrinkflation.” The words “10 percent fewer Snickers” may not compete with “the last best hope of earth,” but it set Biden’s theme for the 2024 presidential campaign.

Blaming business for inflation leaves unexplained why inflation had been low from the mid-1980s to the 2020s. What is the likelihood that evil corporations waited for more than 40 years before conspiring against the American consumer? Or is there a likelier explanation for inflation than government spending that is now exceeding the previous all-time high debt-to-GDP ratio of 100 percent at the end of World War Two?

As a result of this overspending, the national budget today devotes more to paying interest on the national debt than is spent on the Department of Defense, almost $1 trillion a year. Fiscal probity would make sense as a campaign theme. But President Biden, the spender-in-chief, can’t go there. To make his case, Biden must turn to his executive branch regulatory enforcers in unprecedented ways to support his campaign.

Biden is thus using the Justice Department’s Antitrust Division and the Federal Trade Commission the way airports once dispatched crews to hose down runways with fire-suppression foam for crippled planes about to make a belly landing. These regulators are hosing the business world with poorly supported antitrust cases. But Biden’s regulators are giving him what he needs—almost daily headlines on how his antitrust regulators are humbling greedy businesses for raising prices.

Consider the antitrust case against the proposed Kroger-Albertsons merger. From Reagan to Trump, food price increases were modest—about 2.5 percent a year. After the supply chain disruption of COVID and Biden initiatives like the risibly named Inflation Reduction Act, food prices jumped. And boy, did they jump—17 percent through 2022 and 2023. So now regulators are trying to soften Air Force One’s belly landing by prosecuting “Big Grocery” for “greedflation.”

Big Tech remains another favorite whipping boy. The FTC is suing Meta for creating a monopoly in a peculiarly defined “personal social networking” segment of the market, while Facebook continues to face stiff market competition to retain younger users. The Justice Department is suing Google for “monopolizing” a search market that consumers can access at zero cost and switch services with a few clicks. They’re also suing Apple for creating well-designed, luxury products that consumers love while facing stiff competition from Samsung and Google in the smartphone market. Amazon is being sued for driving price increases, while the government complaint also targets Amazon’s policies of discounting against the rest of the market.

Expect most of these nonsensical cases to fade out in the courts. But they are doing what they are designed to do. These cases are meant to appeal to the court of public opinion. Just as President Biden transformed the State of the Union Address with an explicitly partisan speech without a hint of reaching across the aisle, so too is he transforming his antitrust regulators into the policy equivalent of campaign speechwriters whose briefs are the stuff of headlines.

It is a desperate move—the political equivalent of cereal for dinner. It is unlikely to buy forgiveness from voters savaged by inflation. Until the election is over, however, businesses should expect to continue to be the administration’s antitrust piñata.

 

 

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About Robert Bork, Jr.

Robert H. Bork, Jr. is president of the Antitrust Education Project.

Photo: The ‘cost of living crisis’ refers to the fall in ‘real’ disposable incomes (that is, adjusted for inflation and after taxes and benefits) that the UK has experienced since late 2021. It is being caused predominantly by high inflation outstripping wage and benefit increases and has been further exacerbated by recent tax increases.