Although the 118th Congress just began, lawmakers are already busy investigating and scrutinizing scores of proposed mergers across the American economy.
Without question, the alarming accumulation of corporate power in key U.S. industries over the past five years, particularly with respect to
Big Tech
and Big Pharma, has given the government every reason to take a more activist approach to enforcing U.S. antitrust laws. That said, will some of the proposed initiatives and legislative efforts do more harm than good?
A SORRY SET OF ANNIVERSARIES THAT WILL COST AMERICANS
Many modern-day “trust busters” credit former President Teddy Roosevelt as the inspiration for their cause. In fact, members of Congress named an
antitrust bill
filed just days ago after Roosevelt. But as the president of a center-right organization that uses his Bull Moose Party as its namesake, I take umbrage with many of their characterizations of Roosevelt, and I believe their misinterpretations of his policy prescriptions may do irreparable harm to the U.S. capitalist system.
Many believe that Roosevelt was a foe of all mergers and acquisitions, but this simplistic view is not accurate. As Ohio State University’s “
1912: Competing Visions for America
” exhibition put it, “Roosevelt believed that when a business grew big it was not necessarily bad …Having superior efficiencies, prices, and service might well require bigness.”
Indeed. In fact, some of the most demonized companies during the Progressive Era reduced consumer costs by upwards of
50%
. Roosevelt understood this. That’s why he didn’t seek to break up every entity which grew larger; instead, he targeted bad actors that he knew would raise prices or stifle growth and innovation.
But instead of making thoughtful individual determinations as Roosevelt did, some members of
Congress
are seeking to use America’s anti-trust laws to reflexively stop all mergers, including the ones that will lower costs and increase efficiency. They are attempting to supplant Roosevelt’s apolitical progressivism with socialist progressivism, and they must be stopped.
JetBlue’s recent proposed merger with Spirit Airlines is the perfect example of this problem. Anyone who flies regularly knows that JetBlue, which has lowered overall flight costs for consumers tremendously, is far better than Spirit in every way. The merger will bring more JetBlue flights into dozens of regions in the country, increasing convenience and lowering costs for the public.
That said, Sen.
Elizabeth Warren
(D-MA) isn’t too happy with the merger. She
claims
it will be bad for the public welfare and is asking the Department of Justice to block it. But why?
By every metric, JetBlue’s ascent into the industry has lowered airline costs — and by every metric, allowing Spirit to go bankrupt will allow the monopolistic Big Four airlines that have
increased
flight costs to become even bigger. Blocking this merger will benefit Wall Street, not Main Street, and that’s the antithesis of the Roosevelt approach to anti-trust. Allowing the merger to go forward would create a real competitor to the Big Four, spurring real competition, which is what Roosevelt favored.
Warren doesn’t
appear
to be a fan of today’s media mergers either, seemingly because hedge funds and other large companies are often the ones acquiring America’s struggling papers and broadcast stations. But the Massachusetts senator seems to forget that the alternative is wide swathes of the public having no local newspaper at all.
According
to Northwestern University, 70 million Americans — 20% of the country — are already living in an area that doesn’t have, or is at risk of losing, its local news outlet. Mergers and acquisitions are saving many of these community papers from going bankrupt, but Democrats like Warren would seemingly prefer the New York Times and Jeff Bezos’ Washington Post to become many consumers’ only marketplace options. Somewhere in Oyster Bay Cove, Teddy Roosevelt is rolling over in his grave.
While it’s encouraging that Democrats and Republicans have taken such an aggressively ambitious pro-consumer spirit in the opening weeks of the 118th Congress, they need to be careful not to put their ideological blinders on.
As Roosevelt
said
in a 1910 Sorbonne, Paris speech, “It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again.”
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Big or small, American innovators — the risk-takers who lower our costs and boost our standard of living — deserve our admiration. And while we may need to carry a stick to occasionally keep their power in check, we should speak softly while doing so, because many U.S. companies aren’t like Big Pharma or Big Tech. Many have our needs and interests at heart, and believing in them should always be our default position. The future of America’s free enterprise system depends on it.
Aiden Buzzetti is president of the Bull Moose Project.
