WEBVTT - Brian Deese on Unleashing Competition (Podcast) 0:00:00.080 --> 0:00:06.080 M This is Mesters in Business with Very Results on 0:00:06.240 --> 0:00:10.959 Bloomberg Radio. Here. I know I say it every week, 0:00:11.200 --> 0:00:15.080 but really this week I have an extra special guest 0:00:15.640 --> 0:00:19.320 straight from the White House. Brian Deese is the Director 0:00:19.480 --> 0:00:23.720 of the National Economic Council. He is essentially the chief 0:00:23.840 --> 0:00:29.040 economic advisor to the President of the United States, and 0:00:29.120 --> 0:00:32.760 we spent a lot of time discussing the President's new 0:00:32.880 --> 0:00:37.880 Council on Competition, which is a very, very big deal. 0:00:38.120 --> 0:00:41.560 It's going to be a big driver of policy from 0:00:41.600 --> 0:00:45.040 the executive branch over the next four years. And we 0:00:45.159 --> 0:00:48.680 really got deep into the weeds. We talked about everything 0:00:48.800 --> 0:00:53.840 from farmers to employee contracts, to net neutrality UH, to 0:00:54.000 --> 0:00:58.760 the right to repair your own um products that you buy, 0:00:58.920 --> 0:01:03.720 to you know everything, any trust enforcement. It really was 0:01:03.800 --> 0:01:09.200 a policy wonks delight. If you're remotely interested in economic competition, 0:01:09.760 --> 0:01:14.080 any trust enforcement, employee contracts, well you're gonna find this 0:01:14.200 --> 0:01:18.880 to be absolutely fascinating. With no further ado, my conversation 0:01:19.000 --> 0:01:26.280 with the National Economic Council's director, Brian Diese, this is 0:01:26.440 --> 0:01:34.360 Mesters in Business with Very Results on Bluebird Radio. This week, 0:01:34.680 --> 0:01:37.880 I have an extra special guest. His name is Brian 0:01:37.959 --> 0:01:41.840 dies He is the Director of the National Economic Council 0:01:42.240 --> 0:01:46.319 at the White House and essentially the chief economic advisor 0:01:46.800 --> 0:01:50.360 to President Biden. Previously, he was the global head of 0:01:50.360 --> 0:01:54.240 Sustainable Investing at black Rock, and he was President Obama's 0:01:54.280 --> 0:01:59.160 Senior advisor for Climate and energy policy. Brian Diese, welcome 0:01:59.280 --> 0:02:03.480 back the Master's in Business. Thanks Erry, It's great to 0:02:03.520 --> 0:02:06.520 be here. So, so let's start with your role in 0:02:06.560 --> 0:02:10.600 this new administration. You are the thirteenth director of the 0:02:10.680 --> 0:02:14.640 National Economic Council. I think most people are more familiar 0:02:14.680 --> 0:02:17.520 with the Council of Economic Advisors. Tell us a little 0:02:17.520 --> 0:02:19.960 bit about this group, what it does, and how it 0:02:20.040 --> 0:02:25.760 differs from the c e A. So the National Economic 0:02:25.760 --> 0:02:28.359 Council was created by executive order in the early nine 0:02:28.639 --> 0:02:33.760 nineties with the goal of having a White House entity 0:02:33.919 --> 0:02:38.000 that could coordinate economic policy on behalf of the president 0:02:38.680 --> 0:02:41.360 the Some people think about the c A, but I 0:02:41.360 --> 0:02:44.840 think that the more natural analog is the National Security Council. 0:02:44.960 --> 0:02:47.920 So the National Security Council existed in the White House 0:02:48.000 --> 0:02:51.079 as a way of coordinating policy on national security and 0:02:51.120 --> 0:02:54.600 foreign policy issues. The National Economic Council was modeled to 0:02:54.639 --> 0:02:58.040 do the same for UH for both domestic and international 0:02:58.120 --> 0:03:01.520 economic uh priorties. So if you go back and you 0:03:01.520 --> 0:03:03.600 read the executive order that was creating early the early 0:03:04.360 --> 0:03:07.240 it founds pretty true to today. So what does that mean? 0:03:07.320 --> 0:03:11.600 Number One, have an effective way to coordinate and aggregate 0:03:11.680 --> 0:03:15.800 the views of all of the key economic policy principles. 0:03:15.800 --> 0:03:17.760 The Secretary of the Treasury, the Chair of the Council 0:03:17.760 --> 0:03:22.400 of Economic Advisors are Commerce Secretary or Labor Secretary, and 0:03:22.480 --> 0:03:25.160 down the line, create a common table around which we 0:03:25.280 --> 0:03:30.120 can debate and discuss and provide the president clear policy 0:03:30.160 --> 0:03:33.799 recommendations and clear economic advice, and at the same time 0:03:33.840 --> 0:03:36.680 have a coordinated way to take the direction from the 0:03:36.720 --> 0:03:40.240 President about his views and his his direction on the 0:03:40.280 --> 0:03:44.760 economy and drive that across the broad inter agency of 0:03:44.800 --> 0:03:47.880 the executive branch. To your question about the Council of 0:03:47.880 --> 0:03:51.640 Economic Advisors, the Council of Economic Advisors is designed as 0:03:51.720 --> 0:03:58.000 a almost an internal think tank of economists and experts, 0:03:58.480 --> 0:04:02.240 many of whom came out of academia and spend one 0:04:02.360 --> 0:04:06.839 or two years at the Council and provide an analytical 0:04:06.920 --> 0:04:10.280 base and an economic base to think through issues, to 0:04:10.320 --> 0:04:14.680 provide analysis um and really be a kind of thoughts center. 0:04:15.200 --> 0:04:18.599 Nash Economic Council is really designed to coordinate bringing those 0:04:18.680 --> 0:04:22.039 views to the table, but also um connecting them to 0:04:22.800 --> 0:04:25.800 the legislative and political realities that we're operating in to 0:04:25.839 --> 0:04:28.360 try to get the best outcomes possible in service of 0:04:28.400 --> 0:04:30.839 the president schools. So, so let's talk a little bit 0:04:30.880 --> 0:04:34.400 about your boss, the President and some of his goals. 0:04:34.520 --> 0:04:38.360 Last week, he signed an executive order to quote, promote 0:04:38.360 --> 0:04:42.760 competition in the American economy. We've kind of become used 0:04:42.800 --> 0:04:46.080 to these sort of one page or photo ops for 0:04:46.120 --> 0:04:49.520 executive orders, but that was not what this was. It's 0:04:49.560 --> 0:04:54.200 a seven thousand word, seventy two bullet point document and 0:04:54.200 --> 0:04:57.880 and it's very serious policy initiative. Tell us what was 0:04:57.960 --> 0:05:03.440 the thinking behind rolling out this new policy this way? Well, 0:05:03.440 --> 0:05:06.960 I appreciate you counting words and actions, because we're we're 0:05:06.960 --> 0:05:11.920 certainly focused on that as well. But we're really excited 0:05:11.920 --> 0:05:14.600 about this executive order, and it's based on a kind 0:05:14.600 --> 0:05:19.239 of very simple but important intuition, which is that having 0:05:19.279 --> 0:05:23.440 fair and open competition is a fundable, fundamental ingredient of 0:05:23.560 --> 0:05:28.039 a healthy capitalist economy. It's what actually drives better outcomes, 0:05:28.080 --> 0:05:33.000 lower prices, higher wages, more innovation, more economic growth, and 0:05:33.080 --> 0:05:36.160 so the core goal of this executive order is to 0:05:36.880 --> 0:05:41.000 reset across the entire executive branch a focus on where 0:05:41.080 --> 0:05:45.000 and in what ways can we encourage healthy competition in 0:05:45.160 --> 0:05:49.960 service of achieving those outcomes lower prices, higher wages, more innovation. 0:05:50.440 --> 0:05:54.840 And what we've seen across time is that our economy 0:05:54.960 --> 0:06:00.240 has gotten less competitive. UM. We have a larger umber 0:06:00.240 --> 0:06:03.480 of our industries that are now more concentrated than they 0:06:03.480 --> 0:06:07.039 were twenty or thirty years ago. We've seen the rate 0:06:07.080 --> 0:06:11.000 of new business formation, particularly small business formation, fall by 0:06:11.040 --> 0:06:16.359 almost since the nineteen seventies. And if you look across industries, 0:06:16.400 --> 0:06:19.279 whether it's you know, in in me packing or in 0:06:19.480 --> 0:06:25.080 broadband internet, UM, consumers choices have been constrained and we 0:06:25.160 --> 0:06:29.080 haven't seen that kind of the follow through benefit that 0:06:29.200 --> 0:06:32.000 at least has been argued by folks who say, you know, 0:06:32.320 --> 0:06:35.479 more consolidation will actually generate lower prices for consumers. We 0:06:35.480 --> 0:06:38.240 haven't seen that either. In fact, if you aggregate up 0:06:38.360 --> 0:06:42.920 the impact of consolidation to an American household in terms 0:06:43.000 --> 0:06:46.280 of prices and wages and other attending costs, you know 0:06:46.320 --> 0:06:48.960 the best estimates so that it's costing about five thousand 0:06:48.960 --> 0:06:52.039 dollars a year for the typical household. So the goal 0:06:52.080 --> 0:06:53.880 of this executive Order is to say, how can we 0:06:53.920 --> 0:06:57.080 start to get at that? And fundamentally, this is this 0:06:57.200 --> 0:07:00.559 is it's it's this is not about being pro business 0:07:00.640 --> 0:07:03.839 or anti businesses about being pro competition. A lot of 0:07:03.839 --> 0:07:08.480 the ideas in this Executive Order are actually deregulatory in nature, 0:07:08.520 --> 0:07:13.120 trying to remove some barriers to entry that actually keep 0:07:14.000 --> 0:07:17.600 workers from more effectively moving and competing for jobs or 0:07:17.840 --> 0:07:21.680 new businesses to enter into new markets and grow and 0:07:21.720 --> 0:07:24.800 gain market share as a result. So that's the that's 0:07:24.880 --> 0:07:27.280 that's the at a high level, that's our goal. But 0:07:27.400 --> 0:07:29.840 you're right, um, we we wanted to take a really 0:07:29.880 --> 0:07:33.440 serious effort to go agency by agency and look where 0:07:33.440 --> 0:07:35.800 where the challenges, what are the tools that we have, 0:07:36.280 --> 0:07:38.679 and how could we advance the ball. It looks different 0:07:38.680 --> 0:07:42.200 in different agencies. There's a lot uh to unpack here, 0:07:42.240 --> 0:07:44.240 but that's the goal at the high level. And I 0:07:44.280 --> 0:07:47.280 have to tell you that's a shocking number. The lack 0:07:47.320 --> 0:07:54.080 of competition caused by industry consolidation and concentration plus the 0:07:54.160 --> 0:07:57.560 average American family five thousand dollars a year, that that's 0:07:57.600 --> 0:08:00.760 a giant number. Yeah, and you when you just strow 0:08:00.760 --> 0:08:03.440 it down. You know. That's that's a if you you know, 0:08:03.480 --> 0:08:05.480 but I also would say embedded in that is a 0:08:05.480 --> 0:08:08.720 big opportunity because if we can actually break down some 0:08:08.760 --> 0:08:11.320 of those barriers and we can encourage better competition, what 0:08:11.400 --> 0:08:14.280 that means is that we have a way of, um 0:08:14.320 --> 0:08:20.360 actually boosting economic outcomes for the typical family in a 0:08:20.400 --> 0:08:23.480 significant way. But that sounds pretty esoteric, but you break 0:08:23.480 --> 0:08:27.160 it down into very practical things. Um, something like hearing. 0:08:27.280 --> 0:08:30.200 It's today, you need to get a prescription. You need 0:08:30.240 --> 0:08:32.480 to go to a doctor and get a prescription. You 0:08:32.520 --> 0:08:35.520 can't buy hearing it's over the counter. There's almost fifty 0:08:35.559 --> 0:08:38.160 million people in the country who have some form of 0:08:38.200 --> 0:08:40.760 hearing loss. Um. A lot of those are older, but 0:08:40.840 --> 0:08:44.520 a lot of younger people as well. UM. And that 0:08:44.880 --> 0:08:48.840 requirement operates, you know, as economists say, as a barrier 0:08:48.880 --> 0:08:50.960 to entry. And so what that means is that it 0:08:51.040 --> 0:08:53.760 just costs a lot more. It's also a hassle, but 0:08:53.840 --> 0:08:56.560 it costs a lot more to get hearing. It's so 0:08:56.600 --> 0:08:59.520 one of the things that this executive order directs is 0:08:59.600 --> 0:09:02.200 to plement a rule to allow hearing aids to be 0:09:02.280 --> 0:09:04.920 bought over the counter. What that's gonna do is it's 0:09:04.920 --> 0:09:07.000 going to make it easier for those fifty million people 0:09:07.040 --> 0:09:09.959 to get hearing aids more cheaply. But we also hope 0:09:10.000 --> 0:09:12.920 it will spur innovation by reducing that barrier to entry. Now, 0:09:13.040 --> 0:09:16.800 new companies, new market entrance, can come in and innovate 0:09:16.840 --> 0:09:20.040 in providing hearing aid products at a lower price point, 0:09:20.520 --> 0:09:23.360 and so that that that's just one example. Could you 0:09:23.360 --> 0:09:26.920 think about how that five thousand dollars aggregates up. That's 0:09:26.960 --> 0:09:29.200 one very practical example, but HiT's a lot of people 0:09:29.200 --> 0:09:32.000 in their daily life not only can you not only 0:09:32.040 --> 0:09:33.840 can you you know you have a little less hassle 0:09:33.920 --> 0:09:36.319 that you can just go to the pharmacy and buy 0:09:36.679 --> 0:09:39.599 a pair of hearing aids. But overwhelmingly we know that 0:09:39.679 --> 0:09:41.800 room removing a barrier like that will make it cheaper 0:09:42.120 --> 0:09:45.440 and hopefully we'll generate more innovation and more opportunity for 0:09:45.480 --> 0:09:50.080 new business entrance to you know, succeeded. That's really interesting. 0:09:50.480 --> 0:09:53.920 Let's let's talk a little bit about part of this 0:09:54.000 --> 0:09:58.600 executive order, which is the formation of the President's Council 0:09:58.679 --> 0:10:03.000 on Competitiveness, beginning with the Council membership. This is this 0:10:03.080 --> 0:10:05.559 is quite a list. It's the Secretary of Treasury, the 0:10:05.600 --> 0:10:08.520 Secretary of Defense, the Attorney General, Chair of the FTC, 0:10:09.080 --> 0:10:12.960 Chair of the Consumer Financial Protection Board FCC, Agriculture, Commerce, 0:10:13.240 --> 0:10:17.640 on and on. It's practically the full cabinet. Why so 0:10:17.800 --> 0:10:22.240 broad a membership? What what's the thinking behind that? While 0:10:22.280 --> 0:10:23.800 you're making me realize, I'm gonna have to get a 0:10:23.800 --> 0:10:26.959 bigger office to get everybody around the table, particularly now 0:10:26.960 --> 0:10:32.920 that we can um start to do these convenings in person. Look, 0:10:33.120 --> 0:10:35.360 the idea of this was pretty simple, which is over 0:10:35.360 --> 0:10:37.559 the last several months, where we have done is we've 0:10:37.640 --> 0:10:42.079 run a process of going out to agencies and understanding 0:10:42.120 --> 0:10:45.840 from the agencies where the where their authority exists in 0:10:45.920 --> 0:10:49.600 terms of competition policy or antitrust um and how they 0:10:49.640 --> 0:10:52.840 think it could be better deployed in service of encouraging 0:10:52.840 --> 0:10:55.480 competition that will be good for consumers and families. And 0:10:55.480 --> 0:10:58.920 what we found in that process is there's the breadth 0:10:59.200 --> 0:11:02.520 of acts and the breath breath of tools and authorities 0:11:02.920 --> 0:11:07.080 really runs across um often climes. This conversation starts and 0:11:07.120 --> 0:11:11.440 centers around the core antitrust statutes UH and the core 0:11:11.480 --> 0:11:14.720 antitrust enforcement agencies, the Department of Justice and the FTC. 0:11:15.200 --> 0:11:18.280 Their role is critical and they operate into independently when 0:11:18.280 --> 0:11:21.360 it comes to enforcement matters, but in fact the actual 0:11:21.480 --> 0:11:24.480 tools and authorities are much broader. So in U s 0:11:24.559 --> 0:11:27.480 d A, for example, we just had the UM hundred 0:11:27.559 --> 0:11:30.920 year anniversary of the Packers and Stockyards Act, which is 0:11:30.960 --> 0:11:36.800 the antitrust statute that that applies to UM to food UH, 0:11:36.840 --> 0:11:41.320 food and agricultural commodities meat packing in others UM we 0:11:41.400 --> 0:11:45.160 have at the Department of Transportation authorities to look at 0:11:45.200 --> 0:11:48.839 competition in the airline industry, in the railroad industry, in 0:11:48.880 --> 0:11:53.360 the shipping industry UM and across the board. So what 0:11:53.480 --> 0:11:56.400 we realized in putting this executive work together is that 0:11:56.760 --> 0:12:01.160 the actual coordination across these different parts of our government 0:12:01.960 --> 0:12:05.080 is really important for two reasons. One because it's important 0:12:05.120 --> 0:12:08.760 for the agencies to understand how when they're taking action 0:12:08.840 --> 0:12:11.640 to encourage competition in a particular segment of the market, 0:12:11.679 --> 0:12:15.520 like when HHS finalizes this rule to make hearing aids 0:12:15.559 --> 0:12:18.640 available over the counter, how does that fit into a 0:12:18.800 --> 0:12:23.960 broader economic strategy to encourage competition in UH, in the 0:12:24.040 --> 0:12:26.920 railroad industry, or in the shipping industry. And the second 0:12:27.080 --> 0:12:31.040 is to make sure that we are we are effectively 0:12:31.120 --> 0:12:34.400 coordinating and not getting across purposes. So if if if 0:12:34.400 --> 0:12:36.160 one agency is moving out in a certain way, and 0:12:36.240 --> 0:12:39.320 try to make sure that it's consistent and that the 0:12:39.440 --> 0:12:42.440 and that businesses and other stakeholders that are actually having 0:12:42.440 --> 0:12:45.600 to operate within these rules of the road have as 0:12:45.600 --> 0:12:50.199 clear as possible guidance from the executive branch um on 0:12:50.559 --> 0:12:52.839 on what our policies and what our intentions are. So 0:12:53.320 --> 0:12:55.960 that's the goal of the Council. It's been a long time, 0:12:56.440 --> 0:13:00.439 uh in American economic policy that we've really priority tized 0:13:00.480 --> 0:13:03.640 competition policy in this way, and we're going to need 0:13:03.679 --> 0:13:07.480 a structure to have that ongoing focus across time and 0:13:07.520 --> 0:13:10.240 where we hope that this Council will serve that purpose. 0:13:10.400 --> 0:13:12.840 So let's stay with that structure a little bit. I 0:13:12.880 --> 0:13:17.040 mentioned all the members of this council. I didn't mention 0:13:17.120 --> 0:13:21.840 the chairperson that would happen to be you. How big 0:13:22.040 --> 0:13:24.840 of a job is this going to be relative to 0:13:24.920 --> 0:13:28.800 your role as as director of the National Economic Council. 0:13:29.040 --> 0:13:31.160 How large of a priority is this and what do 0:13:31.160 --> 0:13:34.240 you hope to accomplish with it? Well, I think you 0:13:34.320 --> 0:13:38.160 saw from the President's speech and announcement last week. The 0:13:38.240 --> 0:13:41.760 priority that he and that we and as administration are 0:13:41.800 --> 0:13:45.800 putting on this effort, which is very high. UM. That 0:13:45.920 --> 0:13:51.160 we are obviously very focused on the immediate economic challenges UM, 0:13:51.679 --> 0:13:54.240 the rescue plan and the impact that has had on 0:13:54.280 --> 0:13:56.920 the economy over the last couple of months. The effort 0:13:56.920 --> 0:13:59.640 we have a Congress right now working on an infrastructure 0:13:59.640 --> 0:14:04.760 pack it and on a human infrastructure element as well. UM. 0:14:04.880 --> 0:14:10.440 But but but equally in that category is this effort 0:14:10.480 --> 0:14:14.960 to try to lower prices for consumers, increased wages, generate 0:14:15.000 --> 0:14:19.000 more innovation by encouraging competition. So I would say that, look, 0:14:19.000 --> 0:14:22.080 it's a big priority and part of why we wanted 0:14:22.120 --> 0:14:25.240 to move out early. UM. This is relatively early in 0:14:25.320 --> 0:14:28.760 administration to put on an executive order that is this 0:14:28.760 --> 0:14:31.880 this broad in terms of directives to different agencies. Was 0:14:31.920 --> 0:14:34.000 to make sure that we were getting going because some 0:14:34.080 --> 0:14:37.960 of these things, UM, appropriately will take some time. The 0:14:38.040 --> 0:14:42.440 rulemaking process, uh, you know explicitly builds in time for 0:14:42.560 --> 0:14:45.760 notice and comment and engagement. UM. So we know that 0:14:45.840 --> 0:14:48.120 these things will take some time. But we wanted to 0:14:48.160 --> 0:14:51.800 get the ball rolling and as a result, our focus 0:14:51.840 --> 0:14:54.600 on this council and my role in in in trying 0:14:54.600 --> 0:14:56.560 to lead and coordinate that will be a big piece 0:14:56.560 --> 0:14:59.640 of business. But we're really excited about being out of 0:14:59.640 --> 0:15:03.640 the game um early and uh and and aggressively here. 0:15:04.200 --> 0:15:07.040 And I think what you're gonna see, hopefully is that 0:15:07.600 --> 0:15:13.160 for a lot of end uh end recipients, typical families, businesses, 0:15:13.640 --> 0:15:16.000 this is going to be a real welcome uh, real 0:15:16.080 --> 0:15:19.320 welcome opportunity because whether you're a small family farmer who 0:15:19.320 --> 0:15:22.680 has been struggling under the sense that you know, costs 0:15:22.720 --> 0:15:25.160 keep going up and your choices are are going down 0:15:25.200 --> 0:15:28.320 because you keep seeing consolidation in the market, or you're 0:15:28.360 --> 0:15:32.840 just you know, somebody who is looking for the best 0:15:32.920 --> 0:15:36.400 job possible and realizing that there are restrictions on you know, 0:15:36.640 --> 0:15:38.960 moving from job to job that you didn't even know existed. 0:15:39.160 --> 0:15:40.880 These are kinds of things that could help people in 0:15:40.880 --> 0:15:43.320 their daily lives. But if we're going to get to 0:15:43.440 --> 0:15:46.400 helping in at that end point, we really got to 0:15:46.400 --> 0:15:49.840 be organized and coordinated as a federal government. So we 0:15:49.960 --> 0:15:51.800 gotta you know, it's gonna be a big piece of business, 0:15:51.800 --> 0:15:53.800 but one that we're very excited about. So we're going 0:15:53.840 --> 0:15:56.360 to drill down into some of the specifics on a 0:15:56.440 --> 0:16:00.200 sector by sector basis. But before we get that, Granu Lare, 0:16:00.600 --> 0:16:03.680 I want to just discuss briefly the genesis of this. 0:16:04.280 --> 0:16:07.160 Your White House colleague Tim Woo, along with a bunch 0:16:07.200 --> 0:16:11.520 of others, published a large research paper back in November, 0:16:12.000 --> 0:16:17.400 right right after the election, and their analysis identified that 0:16:17.560 --> 0:16:20.840 pretty much since the Microsoft anti trust case in the 0:16:20.920 --> 0:16:24.760 ninety nineties, the US has kind of given up on 0:16:25.600 --> 0:16:29.960 um anti trust enforcement and the result has been huge 0:16:30.120 --> 0:16:36.040 industry consolidation, reduction of competition, increase pricing power, and higher 0:16:36.040 --> 0:16:41.160 costs two consumers. So that leads to the question what 0:16:41.360 --> 0:16:48.040 happened to anti trust enforcement in the United States. Yeah, 0:16:48.040 --> 0:16:50.480 it's it's an important question and and also one that 0:16:50.520 --> 0:16:55.040 I think is helpful to put in historic context, because 0:16:55.040 --> 0:16:58.480 if you look at the arc of competition policy and 0:16:58.520 --> 0:17:01.440 any trust enforcement in the U s. It really you 0:17:01.520 --> 0:17:04.760 do see ebbs and flows, you know, going back as 0:17:04.800 --> 0:17:07.360 far as the passage of the Sherman Anti Trust Act 0:17:07.400 --> 0:17:10.119 in the eighteen nineties, right, that was a reaction to 0:17:11.080 --> 0:17:14.760 thee both the political corruption but also the sort of 0:17:14.840 --> 0:17:17.960 behavior that of monopolies in the in the in the 0:17:18.000 --> 0:17:21.760 Gilded Age, and laid the groundwork for of course, you know, UH, 0:17:22.119 --> 0:17:26.000 President Teddy Roosevelt becoming famous in in trust busting and 0:17:26.280 --> 0:17:29.760 UH and and the activities in the early nineteen hundreds UM. 0:17:29.800 --> 0:17:32.560 And then you saw another acceleration on the back end 0:17:32.720 --> 0:17:35.359 of the UM in the in the nineteen thirties, on 0:17:35.400 --> 0:17:37.919 the back end of the First World War UM, and 0:17:37.960 --> 0:17:40.120 then coming out of the Second World War with with 0:17:40.320 --> 0:17:45.520 FDR UM reflecting that as well, you then saw a 0:17:45.600 --> 0:17:49.919 different a different approach that emerged in the nineteen seventies 0:17:49.960 --> 0:17:53.000 and a new school of thought that was very was 0:17:53.000 --> 0:17:57.240 was very narrowing of the view of competition policy UM, 0:17:57.320 --> 0:18:02.720 and that led to a multi decade approach, as you say, 0:18:02.800 --> 0:18:07.040 limiting enforcement of antitrust and a view that kind of 0:18:07.080 --> 0:18:14.960 all things equal, UH, letting consolidation occur would generate economic 0:18:15.040 --> 0:18:17.720 benefits and so therefore at the margin we should be 0:18:17.840 --> 0:18:23.840 sort of accommodating of consolidation unless there was radically clear 0:18:23.880 --> 0:18:28.000 that it was bad for bad for UH consumers, or 0:18:28.040 --> 0:18:31.000 bad for prices. And so we've seen the implications of that, 0:18:31.040 --> 0:18:33.240 and to your point, we've seen over the last couple 0:18:33.240 --> 0:18:36.760 of decades the number of annual mergers has increased by 0:18:36.880 --> 0:18:42.840 five or six folds UM, and we have seen in industry. 0:18:43.200 --> 0:18:49.480 The measure of industry consolidation has increased significantly over the 0:18:49.560 --> 0:18:53.480 last twenty years, and we haven't seen the attendant benefit 0:18:53.560 --> 0:18:57.679 in terms of lower prices um or or more innovation 0:18:57.840 --> 0:19:01.080 in the economy. And so over the last five years 0:19:01.160 --> 0:19:05.080 or so, there's been a growing body of economic research 0:19:05.200 --> 0:19:08.840 to try to identify the fact the harms that have 0:19:08.920 --> 0:19:14.000 come from this consolidation UH, and that work started. Some 0:19:14.080 --> 0:19:16.320 of that work started and was really put on the 0:19:16.359 --> 0:19:20.159 map at the end of the Obama administration UM, including 0:19:20.280 --> 0:19:24.480 by UM Tim Woo who you mentioned, Jason Furman, others 0:19:24.480 --> 0:19:28.800 of my former colleagues, who really started to pinpoint this 0:19:29.359 --> 0:19:32.040 decline in any trust enforcement and the decline and focus 0:19:32.080 --> 0:19:34.560 on competition policy as one thing that has added to 0:19:35.520 --> 0:19:38.919 the stagnancy a small business formation, the inequality that we 0:19:38.960 --> 0:19:42.880 have seen UM, and in the academic realm, we've seen 0:19:42.920 --> 0:19:45.680 that that work only accelerate over the course the last 0:19:45.720 --> 0:19:48.119 five years. And so certainly the executive order here and 0:19:48.160 --> 0:19:50.560 the actions and the work that is embedded here is 0:19:50.600 --> 0:19:53.400 really building on that framework and building on the findings 0:19:53.400 --> 0:19:56.320 that have come out over that and we certainly we 0:19:56.560 --> 0:19:59.119 do view it in historic perspective of now trying to 0:19:59.200 --> 0:20:03.480 really shift back to a focus on prioritizing UM. The 0:20:03.600 --> 0:20:07.920 enforcements of anti trust statutes focus on competition and a 0:20:08.000 --> 0:20:11.440 focus on the end outcome and the end benefit to 0:20:11.480 --> 0:20:14.359 the end consumer and worker. And and for those people 0:20:14.400 --> 0:20:16.800 who may not be familiar with Tim Woo, not only 0:20:16.880 --> 0:20:20.160 is he the person who coined the phrase net neutrality, 0:20:20.400 --> 0:20:22.840 he is the author of a couple of books, The 0:20:22.880 --> 0:20:25.720 Curse of Bigness, Anti Trust in the New Gilded Age 0:20:26.200 --> 0:20:30.000 as well as The Master Switch, where he describes how 0:20:30.040 --> 0:20:34.520 eventually these information systems they become consolidated, they become closed 0:20:34.520 --> 0:20:39.040 and less and less competitive until some disruptive innovation comes along. 0:20:39.560 --> 0:20:44.000 And my sense is this council is trying to encourage 0:20:44.680 --> 0:20:50.520 less of that concentration and more of the disruptive innovation. Yeah, 0:20:50.600 --> 0:20:53.320 that's exactly right. And uh and Kim as Kim works 0:20:53.320 --> 0:20:55.639 for Obvious here at the NBC and has been a 0:20:55.640 --> 0:20:59.959 thought leader on these issues for some time. And you characterize, 0:21:00.680 --> 0:21:03.800 you know, accurately, the one of the key objectives of 0:21:03.840 --> 0:21:07.719 this council is to try to get toward how we 0:21:07.760 --> 0:21:10.840 can encourage that type of innovation. UM. And one thing 0:21:10.880 --> 0:21:14.480 I would say is that This really is something that 0:21:14.520 --> 0:21:20.240 I think we've increasingly seen cuts across traditional um lines 0:21:20.320 --> 0:21:23.200 or dividing lines in economic thought, and it cuts across 0:21:23.240 --> 0:21:25.879 to traditional political dividing lines to I mean, some of 0:21:25.880 --> 0:21:29.000 the things we're talking about here are really about getting 0:21:29.119 --> 0:21:31.439 rid of regulations that stand in the way of that 0:21:31.520 --> 0:21:33.960 kind of innovation. You know, one of the examples that's 0:21:34.000 --> 0:21:38.040 in the Executive Order is around is in them is 0:21:38.080 --> 0:21:42.720 in uh fear and line the the the the alcohol market, 0:21:43.600 --> 0:21:48.800 and you've got some incumbent rules on bottle size and 0:21:48.880 --> 0:21:51.400 bottle labeling that when you really unpack them and say, 0:21:51.720 --> 0:21:54.040 what why is it that you know, to operate in 0:21:54.040 --> 0:21:57.840 a market you have to meet certain bottle size requirements 0:21:58.280 --> 0:22:00.560 because maybe you've got an idea to ring a product 0:22:00.600 --> 0:22:02.440 to market that just looks different and that's going to 0:22:02.520 --> 0:22:05.280 be your you know, that's going to be your branding edge. Well, 0:22:05.359 --> 0:22:07.520 you know, when you unpack and and look at the 0:22:07.560 --> 0:22:10.840 reason why those regulations exist, you know some of them 0:22:10.880 --> 0:22:15.040 are because they're just protecting incumbents. Uh and uh. You 0:22:15.080 --> 0:22:18.800 know the similar to a number of these occupational licensing 0:22:18.840 --> 0:22:23.119 requirements where you have requirements to get a license to 0:22:23.200 --> 0:22:27.280 be um to braid hair or to cut hair um 0:22:27.440 --> 0:22:31.040 or you know, to do all manner of jobs, particularly 0:22:31.080 --> 0:22:34.199 at the m in different states where you know, if 0:22:34.240 --> 0:22:37.080 you if you're moving from one state to another, you've 0:22:37.080 --> 0:22:38.840 got to go through a whole process of getting a 0:22:38.880 --> 0:22:43.400 new license. UM. And you know, look, having licensing requirements 0:22:43.440 --> 0:22:46.480 for uh, you know, for jobs that require you know 0:22:46.560 --> 0:22:48.680 that are that where they're safety or there's other things 0:22:48.720 --> 0:22:51.000 involved obviously make a lot of sense. But in a 0:22:51.040 --> 0:22:53.480 lot of cases, when you unpack it, rules like that 0:22:54.000 --> 0:22:57.800 are have been put in place to favor incumbents and 0:22:57.840 --> 0:23:00.719 make it harder for new entrance to get into the market. 0:23:01.160 --> 0:23:03.399 And so we're really you know, we we think this 0:23:03.560 --> 0:23:06.720 real opportunity both to be disruptive in terms of the 0:23:06.760 --> 0:23:09.480 economic slock, but also disruptive in terms of some of 0:23:09.480 --> 0:23:12.760 the embedded political realities of this we've had. You know, 0:23:12.880 --> 0:23:16.120 a lot of these items have strange bedfellows in terms 0:23:16.200 --> 0:23:19.000 of the support behind them, and that's part of what's 0:23:19.040 --> 0:23:21.439 exciting about it for us as well. Right, clear clearly 0:23:21.480 --> 0:23:25.520 a lot of these licensing rules are anti competitive. UM. 0:23:25.560 --> 0:23:29.960 Before we dig down and get granular into the individual sectors, 0:23:30.000 --> 0:23:34.679 I have one last broad overview question and it's on 0:23:34.880 --> 0:23:39.600 anti trust enforcement. There has been a deeply embedded sort 0:23:39.640 --> 0:23:44.000 of less a fair doctrine at both the Department of 0:23:44.040 --> 0:23:48.440 Justice and the FTC. Obviously, Lena Khan and Marrick Garland 0:23:48.480 --> 0:23:53.080 represent a break from that philosophy. But how do you 0:23:53.160 --> 0:23:56.960 turn around two decades of I was gonna say lacks enforcement, 0:23:57.400 --> 0:24:01.440 but it's really a skepticism about anti trust law. How 0:24:01.440 --> 0:24:07.200 do you reverse that? Well, I think you start by 0:24:07.320 --> 0:24:10.280 doing what we did in the Executive Order, which is 0:24:10.320 --> 0:24:13.719 to articulate that it is the policy of the executive 0:24:13.720 --> 0:24:20.879 branch to vigorously enforce our antitrust laws, and more than that, 0:24:21.320 --> 0:24:24.720 UM to enforce them in the context of a um 0:24:25.000 --> 0:24:30.560 UH an economic policy that views increasing competition as a 0:24:30.680 --> 0:24:34.159 key way of improving lives and economic outcomes for the 0:24:34.200 --> 0:24:36.840 American people. So part of it is you start by 0:24:37.119 --> 0:24:42.280 articulating a clear economic strategy and economic crossoity behind why 0:24:42.320 --> 0:24:46.320