Economic stories you may have missed in this week’s freneticism, plus our initial reaction to Biden’s big speech.
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As Lenin once said, “There are decades where nothing happens; and there are weeks where decades happen.”
Between the Supreme Court’s Trump v. Anderson ruling, Super Tuesday, and last night’s State of the Union address (somehow, George Santos returned), it’s been a decade of a week. So we thought we’d first catch you up on some wonky economic stories you may have missed:
- Price Strike Force: On Tuesday, President Biden assembled an inter-agency “strike force” to carry out the mission of his 2021 Executive Order on Competition and “end corporate rip-offs and other unfair practices that keep prices high.” These Regulatory Avengers will be co-chaired by two of the administration’s greatest populist heroes: Federal Trade Commission (FTC) Chair Lina Khan and Department of Justice Antitrust Division (DOJ-ATR) head Jonathan Kanter. Our Jeff Hauser applauded this new Anti-Greed League, saying the announcement “sends a clear message that the White House prioritizes American consumers over Wall Street shareholders – a stark contrast with his predecessor”.
- CFPB, Credit Cards, and The Chamber of Commerce: As part of Tuesday’s Strike Force announcement, the Consumer Financial Protection Bureau (CFPB) unveiled a new rule to ban excessive credit card late fees, closing a major loophole in the 2009 CARD Act. This rule is a huge deal for everyday Americans: it will lower a typical fee from $32 to $8 and save families more than $10 billion in “junk fees” annually. Naturally, Big Business is not happy about it. The banking lobby and the Chamber of Commerce (whose members include major credit card issuers AmEx, Bank of America, and Wells Fargo) sued to block the rule yesterday. Longtime RDP readers will be familiar with the Chamber’s decade-plus war against the Bureau to safeguard the ill-gotten spoils that Wall Street hoards. We’ll be watching this latest attack on the CFPB (and the looming SCOTUS decision on its funding structure) as it develops. In the meantime, check out this new corporate lawsuit tracker from our friends at the American Economic Liberties Project (AELP)
- Aborted Takeoff: After a federal judge blocked the deal in January, JetBlue Airways and Spirit Airlines announced Monday that they were scuttling their anti-competitive $3.8 billion mega-merger. According to AELP’s William McGee, this consumer victory couldn’t have happened without DOJ-ATR’s Jonathan Kanter (aka “The Man Corporate America Is Most Afraid Of”), who sued to block the merger exactly one year ago. Kudos as well to Transportation Secretary Pete Buttigieg, who has taken a much more aggressive stance against mergers since hiring Lina Khan’s former chief of staff last year (we’ve said it before and we’ll say it again: personnel is policy!). And though the JetBlue-Spirit deal is over, the fight against airline consolidation isn’t: as my colleague Dylan has written, Secretary Pete can continue his winning streak by going after the Alaska-Hawaiian deal next.
- Don’t Defund The Antitrust Police: Despite the runaway success of Biden’s antitrust enforcers, the administration has barely put up a fight as appropriators on Capitol Hill (including Democratic Senator Jeanne Shaheen) have sought to kneecap DOJ-ATR’s budget. Adding to the hurdles faced by Biden’s trustbusters are pro-corporate members of the administration (chiefly former BigLaw partner Lisa Monaco and longtime corporate lobbyist Anita Dunn), whose revolving-doors into the Biden administration have undermined the President’s populist messaging. As my colleague Andrea puts it in The American Prospect this morning, “even star enforcers can only get so far with public perception when segments of the rest of the administration lean corporate”.
- And Don’t Rubber-Stamp The Next Big Merger: To round out this antitrust round-up, my colleague Dylan has a terrific op-ed in The Sling this week about the $35.3 billion Capital One-Discover mega-merger – and why the alphabet soup of federal regulators who will oversee it should block it. As she lays out in meticulous detail, the merger’s harms go beyond what’s in your wallet; it will have devastating ripple effects for the broader banking and consumer finance markets. Not even Jennifer Coolidge could sell us on this deal.
- Ma’am, This Is A Wendy’s: You may have heard about the Wendy’s surge-pricing saga, and the Frosty reception it garnered from both customers and Congress. One pundit who didn’t have beef with the chain’s initial plan was The Washington Post’s Catherine Rampell, who complained about the public’s “populist grandstanding” over dynamic pricing. My colleague Dylan skewered Rampell’s corporate apologia (a common theme in her punditry) on our blog, which Rampell did not seem to enjoy. RDP Senior Fellow Max Moran has now made Dylan’s Rampell rebuttal a Double Combo: check out his Tuesday Sling piece on Catherine’s Baconator blow-up.
- RealPage Has Real Problems: Just since we published last week’s Hack Watch about the scandal-plagued tech company and its now-former chief economist Jay Parsons, RealPage’s legal woes have only gotten worse. North Carolina Attorney General (and Democratic nominee for Governor) Josh Stein has announced that his office has opened an investigation into RealPage, while the FTC and DOJ have issued a joint legal brief stating that “price fixing through an algorithm is still price fixing […] there is no AI exemption from the antitrust laws.” With Biden’s pledging last night to “crack down on big landlords who break antitrust laws by price-fixing,” it’s now a question of when – not if – other RealPage execs will follow Parsons in making a hasty exit.
And since it’s become something of an RDP tradition, let’s circle back to last night’s State of the Union for some quick takeaways. Let’s start with the bad. Biden’s Gaza policy, which he showed no signs of meaningfully changing during last night’s speech (you can read more on this from The Column’s Adam Johnson), remains morally-repugnant.
On the domestic front, Biden excelled at the populist economic tone that TNR’s Michael Tomasky and our own Max Moran had hoped for. With a rousing declaration that “Wall Street didn’t build this country, the middle class [and] unions did,” Biden made the case for a fairer tax system and a robust social safety net. The President touted his administration’s victories over Big Pharma, predatory student loan servicers, and junk fee-loving corporations. He embraced Isabella Weber’s once-vilified, now-vindicated sellers’ inflation theory, correctly identifying corporate greed as a continued driver of inflation “from food to health care to housing”. And though the speech’s (brief) housing section was overly-focused on supply-side solutions (at the expense of rent and tenant protections within Biden’s power to enact), the President putting RealPage on notice and condemning rent-gouging was a testament to the power of tenant organizers.
As new polling released this morning confirms, it is precisely that populist passion and conflict with specific corporate villains that Biden must embrace moving forward. As Max puts it, “Actual “brawlers-in-chief” let public anger guide them to know which bridges to burn and which scars to earn for the sake of a greater good. If the president and his team are unwilling to leave it all on the field for democracy, they have guaranteed that they will fail.”
Image Credit: “President Biden standing at a podium with Vice President Harris in the background.” by the Executive Office of the President of The United States [3/7/24].