SOME OF AMERICA’S MOST AGGRESSIVE regulatory experts, now in key roles in the Biden Administration, are itching to take on big corporations. With antitrust reform legislation unlikely to survive a Republican filibuster in the Senate, the spotlight will shift to these regulators, who are about to push the limits on curbing business concentration.
THE FIRST SIGNAL OF A REGULATORY BRAWL comes this morning as the Wall Street Journal, Reuters and other news outlets are reporting that Biden will attempt to crack down on companies via executive orders. This will begin a lengthy period of litigation and a souring of relations between Washington and big business.
THE THEME WILL BE GREATER COMPETITION, as all federal agencies are directed to crack down on concentration and predatory practices. Obviously, a major target will be the U.S. tech sector.
A HANDFUL OF NEW REGULATORS rejects traditional antitrust tactics like denying mergers or breaking up highly concentrated industries; the latter could take years to resolve in the courts. This thinking is led by new FTC Chair Lina Kahn and Tim Wu, a longtime advocate for tougher antitrust enforcement who is now an official at the White House National Economic Council; Wu is in charge of technology and competition.
THESE ACTIVISTS WANT TO ENACT regulations that would attack relationships within and among big industries their use their supply networks to crush competition and stifle innovation, these regulators believe.
WE EXPECT AN IMMEDIATE LEGAL PUSH-BACK from business groups. A sweeping Biden proposal in the next few weeks, giving regulators new powers, won’t have an immediate effect on corporate earnings — but the long-term impact will be headline risk at the least and at the most a lack of certainty for companies that may have to make long-range plans amid an adversarial relationship with Washington.
DO AS I SAY, NOT AS I DO: Reports of a massive voting screw-up in the June 22 New York City Democratic mayoral primary will give Donald Trump and his supporters a reason to gloat. They still argue, baselessly, that there were huge voting irregularities in the November election, and now they can point to New York, which faces a humiliating focus on its vote fiasco.
THE PUSH-BACK FROM THE LEFT will be that the solution is a new voting reform law, but that bill is hopelessly stalled in Congress. The right wing will continue to claim that elections are subject to manipulation — even in liberal locations like New York.
THIS IS IMPORTANT because over half of all Republicans in America believe Joe Biden did not win the presidency. That sentiment will be reinforced by what apparently happened in New York, which gives Trump fresh arguments in his bitter battle with Manhattan prosecutors. A healing process, and a return to a more traditional two-party arrangement, is not imminent; America’s fractured politics just got even more divisive.
Related: The Fed Grapples With a Game-Changer
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