In July 2021, President Biden signed an executive order directing government agencies to rewrite policies to encourage competition in the U.S. economy. Returning guest David Dayen has compiled 18 months’ worth of actions resulting from this order. After more than four decades of unrestrained corporate power, Dayen explains, competition is finally returning to the economy—and that’s good news for everyone.

David Dayen is the executive editor of The American Prospect. His work has appeared in The Intercept, The New Republic, HuffPost, The Washington Post, the Los Angeles Times, and more. His most recent book is ‘Monopolized: Life in the Age of Corporate Power.’

Twitter: @ddayen

A Pitched Battle on Corporate Power https://prospect.org/economy/2023-01-25-pitched-battle-corporate-power 

The Transformation at the Heart of Biden’s Middle-Out Economic Agenda https://prospect.org/economy/2023-02-09-biden-middle-out-agenda

Website: https://pitchforkeconomics.com

Twitter: @PitchforkEcon

Instagram: @pitchforkeconomics

Nick’s twitter: @NickHanauer

David Dayen:

In this order, you see an approach from the Biden Administration across a whole host of issues. I mean, nominally, it’s about monopolies in the US economy, but it’s about so much more than that.

Nick Hanauer:

When we argue that the Biden administration is the most consequential of our lifetime, listeners are confused by that. But when you understand what they’re doing behind the scenes, you begin to see how big these changes will be across the economy.

Voiceover:

From the home offices of Civic Ventures in Downtown Seattle, this is Pitchfork Economics with Nick Hanauer, the best place to get the truth about who gets what and why.

Nick Hanauer:

I’m Nick Hanauer, founder of Civic Ventures.

David Goldstein:

I’m David Goldstein, senior fellow at Civic Ventures.

Nick Hanauer:

One of the most frustrating things in my life recently, Goldie, has been how few people appreciate how consequential the Biden administration has been on economic policy. It’s just driving me crazy. Although to be fair, it’s getting better and better and better as the days go by and as more people begin to recognize the size and nature of the legislative achievements. But what even fewer people appreciate is what’s going on behind the scenes in terms of executive orders around competition, because that is just as breathtaking, frankly, as the legislation.

David Goldstein:

You know what I think I compare this to, Nick, is, I’ll do a sports analogy for you, that everybody pays attention to the first round draft picks. They get a lot of acclaim for the stuff they do because it’s expected of them. But the late round draft picks or the undrafted free agents who come into a league, it takes years for people to realize the contributions they’re making and for them to get full credit for how good they really are when they succeed. I’d say that in terms of presidents, like when he was elected, you might have considered Biden more like a fourth or fifth round pick instead of a first round pick.

He wasn’t the most exciting candidate. Everybody, we were all so familiar with him, and so their expectations weren’t that high. I think a lot of his accomplishments have been underappreciated because they just weren’t expecting him to have that many accomplishments.

Nick Hanauer:

Maybe. Maybe.

David Goldstein:

And then you turn around and suddenly, he’s one of the most consequential presidents of my lifetime.

Nick Hanauer:

Yeah, absolutely. In July of 2021, he signed what has been called one of the most sweeping changes to domestic policy since FDR, and it was a set of executive orders designed to increase competition and to decrease corporate consolidation in the American economy. Friend of the pod. David Dayen, who’s the executive editor at The American Prospect, has written this fantastic defining piece detailing these executive orders. We’re just so lucky to have David on to take us through some of what’s coming and why it’s coming and what the origin story of all this stuff is.

David Goldstein:

And also why it’s so important just that they’re making the effort.

Nick Hanauer:

Yeah, absolutely. We’re doing this podcast on the day of the State of the Union Address. That speech will be given in just a few hours from when we’re recording. But the number one talking point in all of the material that has been published on the upcoming State of the Union is the middle out economics transformation. You can’t build the economy from the bottom up and the middle out if the economy is dominated by five giant companies. It doesn’t work, right? Markets work best when they are most competitive.

When you have the most diverse able competitors, they generate the most innovation, and they are the most dynamic. They’re the sort of structures in which workers are treated fairly and consumers are well-served and so on and so forth. Neoliberalism took us way, way, way, way, way away from that. This is really the first time in 40 years really that we’re turning back towards managing markets in a more intelligent way. It’s very exciting, and it’ll be super fun to talk to David about what he thinks.

David Dayen:

My name’s David Dayen. I’m the executive editor of The American Prospect. We publish everyday at prospect.org.

Nick Hanauer:

Today, David, we’re incredibly excited to talk to you about the recent piece that you wrote in The Prospect on competition and power in America. The piece was really, I think, extraordinary because it captured a lot of incredibly complicated and arcane things that are happening in the background due to Biden administration policy and the executive orders. Why don’t you just try to set the stage for our listeners about what the context is and why they did what they’re doing.

David Dayen:

Sure. I think this really goes back about five or six years or maybe even further. Since the 1980s, the Robert Bork style of thinking about competition in the economy has really prevailed. The Justice Department, the Federal Trade Commission, they were both really inter agencies in the face of rising corporate consolidation, which we’ve seen in sector after sector after sector.

Nick Hanauer:

It was basically neoliberalism, right?

David Dayen:

That’s true.

Nick Hanauer:

The operating theory was effectively the bigger the big got, the better off everyone would be.

David Dayen:

Right. All that mattered was consumer prices. As long as you could show that your monopoly was going to be efficient, then we’ll go forward with it.

Nick Hanauer:

Whatever that means.

David Dayen:

Yeah. I mean, hilariously, Bork said that all mergers are efficient. It was a completely circular set of reasoning that he put forward, but it did capture, and I think capture is the operative word, the judiciary and the dominant antitrust agencies. About four or five, six years ago, a group of thinkers, both think tanks, academics, people who work in competition policy, lawyers, attorneys, regulators maybe at the state level, all started to think about how wrong this idea was and that we needed a new paradigm to really attack this corporate consolidation, which was causing all of these distortions in the economy, not just on price, where it actually was rising prices, but also for workers, also for democracy, also for small business and innovation and all of these other issues.

These thinkers really, I think, captured a bit of a zeitgeist of a need to have a more aggressive stance against corporate concentration. Amazingly, a lot of them got into the government in very high positions of power in the Biden administration. There’s this group sometimes called Wu, Khan and Kanter. It stands for Tim Wu. It sounds like a law firm, but it’s who it stands for. Tim Wu, who was the White House competition policy czar essentially, the head of that office out of the National Economic Council, you have Khan, that’s Lina Khan, the chair of the Federal Trade Commission, and Jonathan Kanter, who became the head of the antitrust division at the Justice Department.

Now, all three of these people were really the renegades. They were on the outside of this system saying that this system needs to change and here are the ways that we can change it. All of a sudden, they get thrust into the center, into policymaking position. What do they do? Well, Tim Wu really came up with this idea of putting together an executive order. And in that executive order, putting together just dozens of policy ideas that he would encourage in a whole of government approach for every federal agency to adopt. There ended up being 72 discrete items in this executive order. It was signed in July of 2021.

We’re now about a year and a half out from that. I thought it would be good to take a look and see just a progress report of are these things getting done and how are they getting done and what are the challenges? It was really fascinating because in looking at this executive order, you really see how government works at a real micro level. That’s what was so interesting to me about this piece.

Nick Hanauer:

We’re going to get into the details of what was in this executive order. But when we on this podcast or in our tweets or whatever it is argue that the Biden administration is the most consequential of our lifetime, people or listeners are confused by that. When you understand at a detailed level what they’re doing behind the scenes, as it were, you begin to see how big these changes will be across the economy. This is just incredibly exciting.

David Dayen:

Yeah, absolutely. It shows in this order, which really, I mean, nominally it’s about monopolies in the US economy, right? But it’s about so much more than that. It’s about healthcare. It’s about education. It’s about our national defense. It’s about industrial policy. It’s about all of these different sectors and parts of our economy and our life as not just consumers solely, but as workers, as citizens, as participants in a democracy. In this order, you see just an approach from the Biden administration across a whole host of issues.

David Goldstein:

But before we get into the details, I just want to take a moment to talk about the symbolism of this. You can think of these as Tim Wu nailing his 72 thesis to the door. I don’t know what any of Luther’s thesis were, but I know that 95 thesis were important. How important was it just to do this regardless of the likelihood of success on any of these 72 individual actions?

David Dayen:

Well, I think you hit on something that’s very important, and it was the breadth of this and the signal of this that was as important as the details themselves. The idea that the President of the United States was saying, “We are taking this set of policies in a new direction, and I’m going to put together a competition council that’s going to follow this through for the duration of my presidency, and we’re going to hold meetings every few months. I, the president, I’m going to show up to those meetings, and you, the heads of the various agencies, better have something to say to me when I say how are you doing on this whole of government order to promote competition in the economy,” that is very impactful.

In fact, I think it’s the reason it’s been successful to the degree that it has is that they got the power of the presidency behind it in a way that I think a lot of other initiatives that presidents engage in, they don’t take the time to build the architecture behind the directive, right?

Nick Hanauer:

That’s right.

David Dayen:

I think it was really, really important.

Nick Hanauer:

Today, some of our team were briefed by the White House on the upcoming State of the Union. What really came through and what’s so exciting and gratifying is their claim and their insistence that the Biden economic agenda is radical and transformational. Anita Dunn basically said, most of you are too young to know this, but we are transforming how the United States of America does economic policy. These executive orders are absolutely central to that effectively a reversal. It’s more than a transformation.

It’s a reversal from believing that the richer the rich get, the better off everyone else will be, to believing that a thriving middle class creates economic growth. It’s just so remarkable what has been accomplished in so little time, but I think the broader context is a deliberate effort to transform how we do economic policies.

David Dayen:

Let me give you an illustrative example of that. It’s something that Tim Wu told me, and I talked to him for several hours, frankly, for this piece. He said he would go around to the various agencies and talk essentially not just to the political appointees, but to the bureaucrats who are responsible for this policy or that. He’d ask them, “Why don’t you try this approach? Why don’t you take on this particular policy?” They would say something like, “Well, that’s a landmine.”

The connotation is that that’s something that industry’s going to get mad at us. Somebody’s going to get mad at us. The Hill’s going to get mad at us, and it’s going to become a big political football, and we just don’t want to take that on. What Tim said was that their idea was, let’s step on all the landmines at once. Let’s step on it all.

Nick Hanauer:

That is beautiful.

David Goldstein:

That’s one way to clear the minefield.

David Dayen:

Right. You step on them all at once. If your industry says, “Hey, what the heck are you doing? Why are you doing this? They’re complaining about it,” you can say, “Go talk to the White House. Get in line. We’re doing this all at once.” That is radical. That is different than the approach that I think a lot of other and certainly a lot of other democratic presidencies have taken.

Nick Hanauer:

That’s actual leadership. That’s Just amazing. One of the canonical examples of this transformation has been the recent FTC ruling on non-competes. Talk about that.

David Dayen:

Yes. Yeah, absolutely. We have seen an epidemic really of these non-competes, which many of them started among executives. We don’t want to give trade secrets within the industry from one executive to another. If you’re an executive with a particular business, you have to wait X amount of years, or you can’t go to a competitor of ours because you’ll take your sales contacts, you’ll take your business, things like that.

But we’ve seen this expand so that now about one in five Americans are covered by one of these non-compete agreements, and it’s in industries where there’s just no rationale economically for a non-compete other than we want to suppress your wages and limit your choices as a worker.

Nick Hanauer:

Exactly. The woman who cuts my hair was forced to sign a non-compete.

David Dayen:

Yeah, a perfect example.

Nick Hanauer:

It’s just nuts.

David Dayen:

We’ve seen it in janitorial services. We’ve seen it in fast food. We’ve seen it in dog groomers. You just go down the line and you’ve seen that.

Nick Hanauer:

That’s right. Jimmy John’s was forcing people to sign non-competes against making sandwiches.

David Goldstein:

Or Burger King had the non-compete where you weren’t allowed to go work for another Burger King.

Nick Hanauer:

Right.

David Dayen:

Internally it was an issue. That was limiting the wage increases you could get and also your mobility. Maybe that’s more convenient for you. The FTC has power that they haven’t really used a lot in recent years, and it’s under Section Five of the FTC Act, and they can say that something is an unfair method of competition and write a rule that rather than doing this case by case and going like this one business is engaging in this unfair method, et cetera, can write a rule that says, no, these are banned. You cannot engage in these non-competes anymore. That is the rule that was proposed back in January.

Since then, they’ve offered public comment. It’s really interesting to go through these public comments. You don’t see this a lot. There are over 10,000, I believe, public comments, and the vast majority of them are from workers. I mean, most of the time you see these public comments, they’re from industry lobbies and things like that, interest groups. These are workers who say, “This is what happened to me when I was dealt with a non-compete in my industry and how it hurt me, how it hurt, in some cases, my patients, a lot of healthcare staff is involved in this, how it hurt my family, and why you need to carry forward with this agreement.”

You’ve seen this grassroots real involvement at this level. Almost as important as the non-competes itself is using this Section Five authority and writing rules that layout unfair methods of competition and police them and enforce them. The FTC just hasn’t been in the business of doing that in a while, and this is the first salvo in how they’re getting back in that business.

Nick Hanauer:

Tell us about three other initiatives within this executive order framework.

David Dayen:

One of the big ones in the competition order was on hearing aids. Previously, you needed a prescription to get a hearing aid, and this allowed a cartel of hearing aid manufacturers to work with audiologists and the prescription fillers to raise prices to tremendous amounts, thousands of dollars for a hearing aid.

Nick Hanauer:

That cost like, what, 15 bucks to make or something like that these days?

David Dayen:

Exactly. Years ago, Senator Warren and actually with Chuck Grassley passed a law to put hearing aids on the over-the-counter market, but the Food and Drug Administration, sort of the implementation of policy, they never wrote the rules and established the market. One of the things in the Biden order was get off your duff and write these rules so that people can get cheaper hearing aids. And they did. Now you can get a really high quality hearing aid in the hundreds of dollars rather than in the thousands of dollars. That’s a real savings for people, and it really helps their lives. That’s a really good example of one.

I mean, one of the big ones that you’re going to see happen in the next few months is the release of what are called the merger guidelines. Since 1982, those merger guidelines have largely been hands off. They basically dictate when the government will step in to try to block a merger. The new merger guidelines are going to show just a tremendous sea change in how the government thinks about merger policy and who they’re going to go after in the event of a merger announcement. One of the big wins that the government has had, the Justice Department had this win, in a challenge to the a merger between Simon & Schuster and Penguin Random House.

There are five major publishers right now. That would’ve narrowed it to four. The way in which the Justice Department went about this case is they said, the problem is that authors would have fewer bidders for their work. In other words, workers yes would have lower amounts of compensation if this merger went through. That is not the way that mergers are usually thought about under the Borkian paradigm of consumer welfare. This was about workers, and they won the case and set a really powerful precedent. I think in the merger guidelines you’re going to see that laid out even more explicitly.

Those are a few examples, but there are just… I mean, this goes across so many agencies, Department of Labor, Department of Health and Human Services, Department of Transportation, Department of Agriculture, all over the country and all kinds of different initiatives, many of which are being done, some of which are meeting resistance in the bureaucracy. But I think that overall, the ship is being steered in a pretty good direction.

David Goldstein:

To set the moment, we’re recording this on February 7th, about five hours before the President’s State of the Union Address, and the White House has released briefings on it, including that he will be talking about many of these issues that you talked about in your piece on promoting competition. Competition policy, it’s not just happening behind the scenes at these agencies, it’s something that President Biden is putting right out in his State of the Union Address, which, again, I think speaks to the symbolism of this moment.

David Dayen:

I think that’s part of the strategy. I mean, Biden in particular on non-competes has been talking about that since he gave a speech at Brookings in 2018. He’s been pretty attuned to that issue. He likes this issue in terms of what it means for workers and what it means for consumers and what it means for the overall health of our economy and our democracy. I think he really sees it as an important way to advance his goals. I’m not surprised. I mean, it’s obviously interesting that he’s using this platform of the State of the Union, but that’s been how they’ve gone about this order all along is by putting the president out front, making sure that every agency is updating on what they’re getting accomplished.

Nick Hanauer:

It’s just so awesome and amazing. David, just a personal aside, are you as surprised as we are about how effective these folks have been?

David Dayen:

Well, I’ll say it two ways. I’m not surprised that people like Tim Wu and Lina Khan and Jonathan Kanter are effective. I mean they, they’re really, really good.

Nick Hanauer:

But it takes somebody different to put those people in charge, obviously.

David Goldstein:

Are you surprised that Joe Biden turned out to be the most transformational president since, well, since Ronald Reagan in the other direction?

David Dayen:

Where I was going with that is that I am surprised that they were put in the position that they were put in to succeed, and that’s really a testament to the Biden administration understanding this issue, understanding where the real problems in our economy have been over the last several decades and what it would take to turn that around. Yes, these are people who have thought deeply about this and had solutions ready, but the fact that they are able to implement them is really you tip your cap to Joe Biden.

Nick Hanauer:

If this is what too old looks like, give me more of it. Goldie and I often joke around that Joe Biden is so old, he missed neoliberalism. He’s so old, he’s new.

David Dayen:

I mean, let’s not completely lose sight that he was in the middle of some of these things in the past.

Nick Hanauer:

For sure.

David Dayen:

I mean, I think what Biden has always been is he’s tried to put himself in the center of the Democratic Party, wherever that center ends up being. In the 1990s, the center of the Democratic Party was in a much more neoliberal direction, and he put himself in the center of that, right? And now we are in a moment where there’s more economic populism that has taken hold in the Democratic Party, and Biden has thrust himself right into the center of that conversation. I think it’s to his credit.

Nick Hanauer:

Just briefly, what needs more attention? Where are these executive orders getting resistance and falling down? In your piece, you outlined that it can’t be all perfect, so there’s lots of work to do.

David Dayen:

There’s definitely a lot of work to do there. I highlighted a few agencies. One is the USDA, Department of Agriculture, which has Tom Vilsack at the head, who was Biden’s agricultural secretary as well. They have been good in some places in investments on small meat processors and things like that, they’ve been okay, but they’re going very slow on the real anti-monopoly rules that govern agriculture, which are the packers and stockyards. Those rules have not necessarily been up to snuff. There’s an interesting contrast between how they’re looking at things and how the DOJ, for example, is looking at things.

The DOJ in as a condition of a merger, yet another merger in the agriculture sector by one of the large poultry firms, essentially banned what is known as the tournament system, which is a system for how farmers are really mistreated by agricultural processors. They’re pitted against one another. They grow a certain amount of chickens. The processors only take the winners, and they take that cut out of the losers paychecks. They give a bonus to the winners and they take it away from the losers. It not only is economically damaging, but it really changes rural America. It pits everybody against one another.

Everybody’s your competitor and your enemy. They banned that system. That ban is for the particular organizations that were involved in that merger, right? The Cargill and Sanderson Farms. USDA has the opportunity to ban the entire system, but their rule on the tournament system just added transparency so that farmers don’t know they’re getting screwed, but there won’t be much that they can do about it. That’s an example of where I think the various agencies need to be more aligned. Another good one is the transportation department. We’ve heard a lot about the debacle that the airlines have been foisting upon America with mass cancellations for flights that they can’t service.

We’re seeing some interesting possible turnarounds in that. Lina Khan’s former chief of staff Jen Howard actually just went to the transportation department to run competition policy. We might see better outcomes there. They just announced an investigation into Southwest where they said they would look at cancellations of flights that obviously couldn’t be staffed as an unfair competition practice. We might see some better outcomes there. But so far, DOT has been a little bit weak in how they’ve been handling this situation. There are some others, but those are a couple of the big ones.

Nick Hanauer:

Obviously, these agencies need to effectively relearn how to do this, right?

David Dayen:

It’s also there are political appointees and there’s the bureaucracy, and sometimes the bureaucracy feels like they’re the government. They’re the ones that have been doing this, and they get a little resistant to change. They get a little set in their ways. Even if it’s the president who’s saying, “This is my directive. This is what I want you to do,” they say things like, “Well, that would be a real departure for us. I don’t know if we can move forward on that.” That’s what was so fascinating about digging into this was just seeing how to affect agencies, how to persuade agencies to do things even though it’s a presidential directive.

David Goldstein:

I wanted to stop on that point for a moment, because in your piece, you liken changing a bureaucracy to turning a battleship around, which is a very slow… There’s a lot of mass there. It’s very slow and difficult process. It can take a long time. It takes a lot of people working together and willing to work together on it. But the flip side to that is once you turn that battleship around, it’s hard to turn it back in the other direction. The bureaucracy works two ways. Once we get that bureaucracy turned in the direction we want, it’s going to keep moving in that direction long after Biden is out of the White House.

David Dayen:

Here’s what’s so interesting about that is that you’re starting to see agencies that weren’t mentioned in the executive order come up with pro-competition solutions on policy. I’ll give you a perfect example because it’s so interesting to me. You wouldn’t think of the US Forest Service as an anti-monopoly organization, right? But for decades, they something manned called the qualified product list. What that is, is it guides what federal, state, local government agencies can purchase when, particularly in this case, suppression of wildfires, things like fire retardant. For 22 years, there was only one company on that qualified product list.

There was only one product that state, federal, local government agencies were allowed to buy, and it’s a company called Perimeter Solutions, and they had 100% monopoly on fire retardant, that gooey red material that’s thrown onto wildfires from airplanes. Just this year or just actually a couple months ago in December, the US Forest Service changed their QPL, their qualified product list, to add a competitor named Fortress, which is the first new entry into this market and potential competitor to Perimeter in 22 years.

Nick Hanauer:

That’s unbelievable.

David Dayen:

It really is unbelievable. The USDA, when I asked them about this, they almost were like, “Oh, yeah, we also did that.” It was not even their main thrust. It’s just as an aside, we also stopped a monopoly that’s been operating with impunity for 22 years. Really fascinating that you’re starting to see this outside of the agencies that were targeted in the executive order.

David Goldstein:

I’m wondering, what is the opposition’s pushback to all this, that somehow competition is bad for the economy? What’s the anti-competitive line?

David Dayen:

It’s different in different industries. If you’re talking about the banking sector, they’ll say, “Well, you’re ruining access to credits for all these people.” In the tech sector, they say, “Well, competition is just a click away. We have many, many competitors, and there’s no reason to harm consumers who get this product for free.” Of course, not saying that they are the product, right, in many cases. It changes. What we certainly know is that power isn’t going to concede without a fight. I mean, these things are going to be taken on.

I would not be surprised at all if you see the non-compete order go to court, and potentially the Supreme Court, over the FTC’s authorities in that area. You’re going to see a lot of pushback both from the business sector and their allies in Congress. But the fact that they’re doing this and moving on all of these different fronts I think helps cement that this is a position that the government is going to take and the direction they’re going to move in. You can fight it and you’re even going to win sometimes, but industry isn’t going to stop this direction from happening.

Nick Hanauer:

That’s right. The beautiful thing about this is that the politics is fantastic, because industry is going to try to stop this stuff, but it is unambiguously true that these things benefit ordinary Americans. They’re going to get pissed if their representatives are not on the right side of this stuff eventually. This is what the Democratic Party should stand for and let the Republican Party stand against it. I love that fight. I love that fight.

David Goldstein:

In tonight’s State of the Union Address, President Biden is going to brag about saving people $3,000 per person on hearing aids. I want to see the Republicans sit on their hands on that one.

David Dayen:

Who’s going to be the person that says, “The hearing aid companies need more money to take the American people for inferior products.” That’s going to be the stand that I take. The politics are excellent, and to the extent that Biden can make the public aware of this fight I think is only going to be to his benefit.

Nick Hanauer:

Absolutely. Well, one final question, David, why do you do this work?

David Dayen:

I mean, as a journalist, it’s fascinating to really unlock how Washington really works, how policy gets made. And that was one thing that was so fascinating about this story. As a citizen, I think the idea that there’s this real change in government that needs to be broadcast is something that I feel is super important to me, and I feel like more people need to know about it. Sometimes I like to say that I don’t want to write, I have to. I have to tell these stories and get them out there. That’s what I do.

David Goldstein:

I don’t want to write either, but Nick makes me.

David Dayen:

Well, that’s a little different.

Nick Hanauer:

Well, listen, thank you for being with us. We’re going to put your article, A Pitched Battle on Corporate Power, in the show notes. It’s long and it’s complicated, but it really does give a sense for just what’s going on and why it’s so consequential.

David Dayen:

Well, thank you for having me.

Nick Hanauer:

That was a fantastic interview. We could have talked to David for two hours about all the stuff that’s going on, but I think what I really loved from his piece that I think really sums up that middle out approach that the Biden administration is taking is this quote, which is “competition policy is how we ensure that our economy isn’t about people working for capitalism, it’s about capitalism working for people.” I think that is just so much at the heart of what we’re trying to accomplish.

David Goldstein:

And to be clear, that’s a quote from President Biden. That’s the President of the United States. This brings me to my main takeaway from this conversation, and it’s not a new one. We’ve talked about it a little. It’s that the Reagan Revolution is over.

Nick Hanauer:

It is.

David Goldstein:

It’s so clear that we are going through now something similar to what we went through in the early mid 1980s, this transformation of how people think about the economy and the government and the government’s role in the economy.

Nick Hanauer:

Absolutely.

David Goldstein:

Nick, think about this, it’s so weird that somehow being pro-competition is considered a lefty, a progressive, right? The Republicans have always pitched themselves as the party of business and I mean always since the 1860s. They’ve been the pro-business party, but they are the anti-competition party. The Democrats are finally becoming the pro-competition party again. Somehow in a market system, there’s people making the argument that competition is bad. You shouldn’t interfere with the markets when the market wants to block competition.

Nick Hanauer:

Absolutely.

David Goldstein:

It’s so weird to me. It’s such a bizarre place you find yourself in.

Nick Hanauer:

I mean, one of the biggest tricks in trickle-down economics is conflating what’s good for capitalism generally versus what’s good for a few capitalists narrowly. The Republican Party is solidly on the side of their biggest donors. By the way, the Chamber of Commerce are not advocating for markets. They’re advocating for the bonuses and profits of the people who own the largest companies. And that has almost nothing to do with how well the economy does.

I mean, this has been the basic problem is conflating these two things, is believing that the more money the rich make, the better off the economy will be. It’s just nothing could be farther from the truth. I mean, don’t get me wrong, profits are an essential part of markets, but it’s not the point. Rising profits don’t generate broad economic growth. They make rich people richer. That’s it.

David Goldstein:

I think one of the other things that I find very exciting about this, that battleship we’re turning around is not just the bureaucracy, it is the whole dominant economic narrative, the frame within which we view the world. When you start to turn it around, a lot of the arguments on our side are… They’re not revolutionary. They’re not radical. They’re obvious. One of the examples is the law on economics movement, the Borkian argument on antitrust, on mergers and competition, all that matters is consumer welfare. Does it raise prices or lower prices?

Regardless of whether they’re honest about whether a merger will raise prices or lower prices, that is all the courts and all the regulatory agencies have looked at up until now for the past 40 years, what will be the impact on consumers? Well, you know what? This is part of what the new narrative says. These consumers, they’re workers too, right? If you have a merger that, oh, no, it’s not going to raise consumer prices, but it lowers wages, hey, that’s bad for consumers.

Nick Hanauer:

Or narrows choice or decrease innovation or any of the other bad things that happen when you allow for effectively unbridled corporate concentration.

David Goldstein:

These aren’t difficult arguments to make. These aren’t things that are above the heads of voters.

Nick Hanauer:

Well, anyway, we’re going to put David’s article in the show notes. We urge our listeners to read it. It’s absolutely fascinating and will give you a much bigger and broader perspective on what’s going on in the economy. Really, really fantastic.

Voiceover:

Pitchfork Economics is produced by Civic Ventures. If you liked the show, make sure to subscribe, rate, and review us wherever you get your podcasts. Find us on Twitter and Facebook @civicaction and @nickhanauer. Follow our writing on Medium @civicskunkworks, and peek behind the podcast scenes on Instagram @pitchforkeconomics. As always, from our team at Civic Ventures, thanks for listening. See you next week.