Yesterday, the Biden White House launched a whole-of-government “strike force” against American free enterprise. The initiative, spearheaded by progressive ideologue Lael Brainard on the National Economic Council, bears the risk of undermining the economy.
Instead of rolling back burdensome regulations to allow businesses to cut costs, the Biden administration is doubling down on its progressive economic vision by blaming businesses for rising prices. In reality, businesses have been raising prices to cope with increasing inflation and sky-high labor costs, both of which are the result of various policies pursued by the Biden administration and progressives more broadly. The Wall Street Journal’s Heather Haddon and Ruth Simon wrote an excellent piece yesterday outlining how small restaurateurs in particular have been seriously harmed by increasing labor costs.
This “strike force” represents a significant intervention in markets, and it will lead to government overreach further stifling innovation, deterring competition and harming the very consumers President Biden seeks to help. Led by progressives from the Biden Department of Justice (DOJ) and Federal Trade Commission (FTC), both of whom have already lost several major court cases and cost Americans their jobs, this “strike force” is charged with kicking in the doors of American businesses. The objective is to target and penalize businesses for competing with one another in ways the Biden administration dislikes.
The multi-agency “strike force” will be looking at targeting credit card fees, enforcing new, problematic merger guidelines, and much more, capturing a wide array of sectors in the economy such as prescription drugs, healthcare, food and financial services. The White House has used vague, unclear language in how agencies will specifically carry out these new actions to “fight rip offs” over time, leaving businesses with little clarity on how they should react to this new regulatory threat.
This wide net underlines an expansive power grab that could inadvertently impede the natural economic forces that drive market efficiency, competition and consumer choice. Worse yet, it further empowers Biden’s DOJ and FTC to do the work, and we’ve already seen these agencies overextending their appropriate reach under this administration.
The approach taken by this “strike force” risks encroaching on the dynamics of open markets by potentially painting complex business practices with a broad brush of “illegality” without due consideration for the nuances of market competition and innovation. This is backed by the progressive idea that government knows better than consumers, when in reality, consumers are sending important signals to businesses about what they want and don’t want in the marketplace—including on prices.
Instead, the Biden “strike force” thinks it knows better than consumers, and it will choose which winners and losers the government prefers. Such actions would chill investment and innovation in sectors that are critical for economic growth and consumer welfare.
Addressing concerns related to pricing and competition should be done with a careful balance that respects the principles of free enterprise. Effective competition policy opens up opportunities to more businesses through pro-growth deregulation efforts, rather than resorting to heavy-handed government interventions like these actions that tend to have unintended, negative consequences that Americans are already feeling in the economy.
We at NetChoice believe in the power of consumer choice. It is thus crucial to maintain a clear regulatory environment that fosters innovation, supports economic growth and enhances consumer welfare. Biden’s move towards increased regulation will disadvantage consumers by expanding government control over the U.S. economy, inhibiting consumer power that drives down prices and spur innovation.