ALSO IN THIS ISSUE
Why Being Able to Place (Legal) Bets on the Big Game Is a Big Deal .................5It’s Time to Shed Light on “Dark Matter” Cryptocurrency Regulation at the SEC .....7Green New Deal Will be All Pain and No Gain .................................8What’s Next for V2X Spectrum? .........10CEI Events Update ....................12The Good, the Bad, and the Ugly ........14Media Mentions ......................15End Notes ...........................16
COMPETITIVE ENTERPRISE INSTITUTE VOL. 32, NO. 2 | SPRING 2019
FEATURED ARTICLES
BY DANIEL PRESS
Payday Loan Regulations Rollback Is Win for Business, Consumers
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Consumers Stand to Lose as Both Major Parties Push Antitrust Rules as a 2020 Issue
BY RYAN YOUNG .
A
fter a two-decade lull following the Microsoft case, big antitrust enforcement cases are back in vogue. Both major politi-cal parties are making antitrust regulation a 2020 campaign issue. Regulators, politi-cians, and voters have reasonable concerns about concentrated corporate power. But few policies are easier for big companies to game than antitrust regulation. Reformers should favor having fewer regulations for special interests to capture. Antitrust regula-tions are supposed to bolster competition in the market, but often have the opposite effect, and are prone to abuse. Their whole-sale repeal is long overdue.Antitrust regulation is often used for political purposes. President Trump has threatened antitrust actions against Facebook, Google, and Amazon, reportedly due in part to unfavorable media coverage appearing in Facebook feeds and Google searches, as well as the fact that Amazon founder Jeff Bezos owns
The Washington Post,
which often features coverage critical of the president. Trump’s Justice Department already tried, unsuccessfully, to block the AT&T/Time Warner merger. The company owns CNN, an even bigger Trump nemesis.Meanwhile, Sen. Elizabeth Warren (D-Mass.) has put forward a comprehensive antitrust policy as a signature part of her presidential campaign platform. Her proposal would break up the same tech companies Trump is targeting. It would also undermine the sanctity of contracts by pledging to “appoint regulators who are committed to using existing tools to unwind anti-competitive mergers” that have already been completed. Other politicians are taking similar stances, from Bernie Sanders to Beto O’Rourke, who advocates “stronger antitrust regulations that break up monopolies.”Antitrust enthusiasts are right to be worried about corporate favor-seeking and government corruption by powerful interests. The trouble is that antitrust regulation would make the problem worse. It takes government to keep competitors from competing. Cartels and monopolies do not last long without government’s help, as airlines learned after the federal government deregulated their industry in the late 1970s. Airlines that were not able to adapt to a lower-price business model, such as Pan-Am, went out of business, while upstarts such as Southwest
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BY ANGELA LOGOMASINI
Banning Plastic Bags Will Hurt Businesses and Consumers
(continued on page 3)
9
BY IAIN MURRAY
On Trade, Conservatives Need to Stick to the Knitting
The Dinner Is Coming
by Kent Lassman
I
n the most recent issue of
The Planet
, I began with the typical ratio of new regulations issued by agencies compared to laws passed by Congress. We call this the “Unconstitutionality Index” and it is one of the many useful facts compiled every year in Wayne Crews’s annual report,
Ten Thousand Commandments
, which aims to tally the costs of federal regulation. For the past decade, that ratio has averaged 28 to one. That’s nearly 30 regulations for every law. If there’s any doubt that Congress has delegated away too much of its power, that figure should put such doubts to rest.However, the latest edition
Ten Thousand Commandments
demonstrates that our work is paying off. The Unconstitutionality Index has fallen to 11 to one. The total number of new regulations ticked slightly upward last year from a record low in 2017, but we have held the line against big, new, costly regulatory burdens.It has been 35 years since Fred Smith founded CEI at his kitchen table. There have been decades of successes that have led to CEI’s presence today as a leading source of new ideas, policy proposals, and principled arguments to protect liberty and push back against the progressive impulse to plan every aspect of our lives from Washington. On June 20, we’ll celebrate that humble begin-ning and the tremendous policy successes that make up CEI’s history at an annual gala dinner. With Pulitzer Prize-winning author and humorist Dave Barry as the keynote speaker, we are look-ing forward to big evening. Upward of 850 people will gather for the event, where we will present CEI’s highest honor, the Julian L. Simon Memorial Award, to Johan Norberg. Katherine Mangu-Ward, editor in chief of
Reason
Magazine, will serve as master of ceremonies. As in year’s past, the evening will have a theme that we expect will surely engage our guests—the cultural phenomenon Game of Thrones.This issue of
The Planet
provides a sample of poli-cies where CEI experts have been focused in past few months. On the following pages you will find Ryan Young’s take on why leaders from both major par-ties have taken up the regulatory cudgel of antitrust policy. Fortunately, he and Wayne Crews provide an antidote to this zealotry in the recent CEI study, “The Case Against Antitrust Law.”Senior fellow Angela Logomasini gives us the facts about those annoying bans on plastic bags, while Myron Ebell provides essential reading on the envi-ronmental left’s latest grand plan to save the world, The Green New Deal. I can give you the shorthand: Nothing in it is new, and it certainly is no deal.If you have been wondering about all the fuss about cryptocurrency, we have you covered. John Berlau has studied the SEC’s regulatory impulse regarding this new technology and offers a help-ful overview of the issue. Also on the finance front, Daniel Press breaks down why payday loans regula-tions would hurt the consumers they aim to protect. Iain Murray reminds conservatives of the impor-tance of free trade. Senior Fellow Marc Scribner comments on the future of vehicle-to-everything communications, technologies that could enable safety-enhancing innovations like hazard warn-ings to drivers and pedestrians and high-speed automated road trains. And Senior Fellow Michelle Minton looks ahead at the future of sports gambling. CEI was a leading voice in the fight to legalize a widely accepted and popular activity that millions of American have engaged in for years. I hope you can join us on June 20 as we celebrate CEI’s first 35 years fighting for liberty. If Washington is anything like Kings Landing in the Game of Thrones’ fictional Westeros, a capital city full of power seek-ers, the CEI dinner is where you can count on finding a Night’s Watch against overzealous regulators.
F R O M T H E P R E S I D E N T
Publisher
Kent Lassman
Editor
Ivan Osorio
Associate Editor
Richard MorrisonThe CEI Planet is produced by the Competitive Enterprise Institute, a pro-market public interest group dedicated to free enterprise and limited government.
CEI is a non-partisan, non-profit organization incorporated in the District of Columbia and is classified by the IRS as a 501 (c)(3) charity. CEI relies upon contributions from foundations, corporations, and individuals for its support. Articles may be reprinted provided they are attributed to CEI.
Ph (202) 331-1010Fax (202) 331-0640info@cei.orgISSN#: 1086-3036
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CEI.ORG COMPETITIVE ENTERPRISE INSTITUTE
prospered. Moreover, absent laws and regulations that artificially prop up them up, cartels tend to fall apart, as the temptation to cheat on agreed-upon output restrictions or undercut rivals is too great. Worse, established firms often game antitrust regulation to hobble would-be rivals. In sectors from newspaper advertising to dentistry, many antitrust lawsuits are brought privately, usually by one company suing a competitor. This is playing the influence game in Washington rather than competing in the marketplace. Big tech companies, even seemingly dominant firms such as Amazon and Google, are, in fact, highly vulnerable to competition—enough for them to spend more than $22 billion and $16 billion, respectively, on research and development last year. Today’s Facebook could easily become tomorrow’s MySpace. It has to adapt to what consumers want. For now, consumers hold the cards—unless Washington grants the company the government regulatory protection it seeks.Too many in Washington fall for what Duke University economist Michael Munger termed “the unicorn fallacy,” which consists of comparing real-world market outcomes with hypothetical perfect scenarios designed and enforced by government. A better approach is to compare the functioning of real-world markets to the results of real-world government policies. Taking that approach, the case for aggressive antitrust policy greatly weakens, regardless of which party is in charge.The current Republican administration’s antitrust threats are a useful reminder of the danger of putting too much power in the executive branch. The Democrats’ push to revive antitrust policies that have proven ineffective or counterproductive is a reminder that good intentions do not equal good results. Rather than squabble over which approach to take to a failed policy, it would be better to be rid of antitrust regulations altogether.
Ryan Young (Ryan.Young@cei.org) is a Senior Fellow at CEI, and co-author, with CEI Vice President for Policy Wayne Crews, of the recent CEI study, “The Case against Antitrust Law: Ten Areas Where Antitrust Policy Can Move on from the Smokestack Era.” A version of this article was originally published at the
Washington Examiner
.
Antitrust Rules,
continued
Traders of the Lost Ark
Rediscovering a Moral and Economic Case for Free Trade
BY IAIN MURRAY AND RYAN YOUNG
https://cei.org/content/traders-lost-ark
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Antitrust regulation is often used for political purposes.