Speaker 1: M This is Mesters in Business with Very Results on
Speaker 1: Bloomberg Radio. Here. I know I say it every week,
Speaker 1: but really this week I have an extra special guest
Speaker 1: straight from the White House. Brian Deese is the Director
Speaker 1: of the National Economic Council. He is essentially the chief
Speaker 1: economic advisor to the President of the United States, and
Speaker 1: we spent a lot of time discussing the President's new
Speaker 1: Council on Competition, which is a very, very big deal.
Speaker 1: It's going to be a big driver of policy from
Speaker 1: the executive branch over the next four years. And we
Speaker 1: really got deep into the weeds. We talked about everything
Speaker 1: from farmers to employee contracts, to net neutrality UH, to
Speaker 1: the right to repair your own um products that you buy,
Speaker 1: to you know everything, any trust enforcement. It really was
Speaker 1: a policy wonks delight. If you're remotely interested in economic competition,
Speaker 1: any trust enforcement, employee contracts, well you're gonna find this
Speaker 1: to be absolutely fascinating. With no further ado, my conversation
Speaker 1: with the National Economic Council's director, Brian Diese, this is
Speaker 1: Mesters in Business with Very Results on Bluebird Radio. This week,
Speaker 1: I have an extra special guest. His name is Brian
Speaker 1: dies He is the Director of the National Economic Council
Speaker 1: at the White House and essentially the chief economic advisor
Speaker 1: to President Biden. Previously, he was the global head of
Speaker 1: Sustainable Investing at black Rock, and he was President Obama's
Speaker 1: Senior advisor for Climate and energy policy. Brian Diese, welcome
Speaker 1: back the Master's in Business. Thanks Erry, It's great to
Speaker 1: be here. So, so let's start with your role in
Speaker 1: this new administration. You are the thirteenth director of the
Speaker 1: National Economic Council. I think most people are more familiar
Speaker 1: with the Council of Economic Advisors. Tell us a little
Speaker 1: bit about this group, what it does, and how it
Speaker 1: differs from the c e A. So the National Economic
Speaker 1: Council was created by executive order in the early nine
Speaker 1: nineties with the goal of having a White House entity
Speaker 1: that could coordinate economic policy on behalf of the president
Speaker 1: the Some people think about the c A, but I
Speaker 1: think that the more natural analog is the National Security Council.
Speaker 1: So the National Security Council existed in the White House
Speaker 1: as a way of coordinating policy on national security and
Speaker 1: foreign policy issues. The National Economic Council was modeled to
Speaker 1: do the same for UH for both domestic and international
Speaker 1: economic uh priorties. So if you go back and you
Speaker 1: read the executive order that was creating early the early
Speaker 1: it founds pretty true to today. So what does that mean?
Speaker 1: Number One, have an effective way to coordinate and aggregate
Speaker 1: the views of all of the key economic policy principles.
Speaker 1: The Secretary of the Treasury, the Chair of the Council
Speaker 1: of Economic Advisors are Commerce Secretary or Labor Secretary, and
Speaker 1: down the line, create a common table around which we
Speaker 1: can debate and discuss and provide the president clear policy
Speaker 1: recommendations and clear economic advice, and at the same time
Speaker 1: have a coordinated way to take the direction from the
Speaker 1: President about his views and his his direction on the
Speaker 1: economy and drive that across the broad inter agency of
Speaker 1: the executive branch. To your question about the Council of
Speaker 1: Economic Advisors, the Council of Economic Advisors is designed as
Speaker 1: a almost an internal think tank of economists and experts,
Speaker 1: many of whom came out of academia and spend one
Speaker 1: or two years at the Council and provide an analytical
Speaker 1: base and an economic base to think through issues, to
Speaker 1: provide analysis um and really be a kind of thoughts center.
Speaker 1: Nash Economic Council is really designed to coordinate bringing those
Speaker 1: views to the table, but also um connecting them to
Speaker 1: the legislative and political realities that we're operating in to
Speaker 1: try to get the best outcomes possible in service of
Speaker 1: the president schools. So, so let's talk a little bit
Speaker 1: about your boss, the President and some of his goals.
Speaker 1: Last week, he signed an executive order to quote, promote
Speaker 1: competition in the American economy. We've kind of become used
Speaker 1: to these sort of one page or photo ops for
Speaker 1: executive orders, but that was not what this was. It's
Speaker 1: a seven thousand word, seventy two bullet point document and
Speaker 1: and it's very serious policy initiative. Tell us what was
Speaker 1: the thinking behind rolling out this new policy this way? Well,
Speaker 1: I appreciate you counting words and actions, because we're we're
Speaker 1: certainly focused on that as well. But we're really excited
Speaker 1: about this executive order, and it's based on a kind
Speaker 1: of very simple but important intuition, which is that having
Speaker 1: fair and open competition is a fundable, fundamental ingredient of
Speaker 1: a healthy capitalist economy. It's what actually drives better outcomes,
Speaker 1: lower prices, higher wages, more innovation, more economic growth, and
Speaker 1: so the core goal of this executive order is to
Speaker 1: reset across the entire executive branch a focus on where
Speaker 1: and in what ways can we encourage healthy competition in
Speaker 1: service of achieving those outcomes lower prices, higher wages, more innovation.
Speaker 1: And what we've seen across time is that our economy
Speaker 1: has gotten less competitive. UM. We have a larger umber
Speaker 1: of our industries that are now more concentrated than they
Speaker 1: were twenty or thirty years ago. We've seen the rate
Speaker 1: of new business formation, particularly small business formation, fall by
Speaker 1: almost since the nineteen seventies. And if you look across industries,
Speaker 1: whether it's you know, in in me packing or in
Speaker 1: broadband internet, UM, consumers choices have been constrained and we
Speaker 1: haven't seen that kind of the follow through benefit that
Speaker 1: at least has been argued by folks who say, you know,
Speaker 1: more consolidation will actually generate lower prices for consumers. We
Speaker 1: haven't seen that either. In fact, if you aggregate up
Speaker 1: the impact of consolidation to an American household in terms
Speaker 1: of prices and wages and other attending costs, you know
Speaker 1: the best estimates so that it's costing about five thousand
Speaker 1: dollars a year for the typical household. So the goal
Speaker 1: of this executive Order is to say, how can we
Speaker 1: start to get at that? And fundamentally, this is this
Speaker 1: is it's it's this is not about being pro business
Speaker 1: or anti businesses about being pro competition. A lot of
Speaker 1: the ideas in this Executive Order are actually deregulatory in nature,
Speaker 1: trying to remove some barriers to entry that actually keep
Speaker 1: workers from more effectively moving and competing for jobs or
Speaker 1: new businesses to enter into new markets and grow and
Speaker 1: gain market share as a result. So that's the that's
Speaker 1: that's the at a high level, that's our goal. But
Speaker 1: you're right, um, we we wanted to take a really
Speaker 1: serious effort to go agency by agency and look where
Speaker 1: where the challenges, what are the tools that we have,
Speaker 1: and how could we advance the ball. It looks different
Speaker 1: in different agencies. There's a lot uh to unpack here,
Speaker 1: but that's the goal at the high level. And I
Speaker 1: have to tell you that's a shocking number. The lack
Speaker 1: of competition caused by industry consolidation and concentration plus the
Speaker 1: average American family five thousand dollars a year, that that's
Speaker 1: a giant number. Yeah, and you when you just strow
Speaker 1: it down. You know. That's that's a if you you know,
Speaker 1: but I also would say embedded in that is a
Speaker 1: big opportunity because if we can actually break down some
Speaker 1: of those barriers and we can encourage better competition, what
Speaker 1: that means is that we have a way of, um
Speaker 1: actually boosting economic outcomes for the typical family in a
Speaker 1: significant way. But that sounds pretty esoteric, but you break
Speaker 1: it down into very practical things. Um, something like hearing.
Speaker 1: It's today, you need to get a prescription. You need
Speaker 1: to go to a doctor and get a prescription. You
Speaker 1: can't buy hearing it's over the counter. There's almost fifty
Speaker 1: million people in the country who have some form of
Speaker 1: hearing loss. Um. A lot of those are older, but
Speaker 1: a lot of younger people as well. UM. And that
Speaker 1: requirement operates, you know, as economists say, as a barrier
Speaker 1: to entry. And so what that means is that it
Speaker 1: just costs a lot more. It's also a hassle, but
Speaker 1: it costs a lot more to get hearing. It's so
Speaker 1: one of the things that this executive order directs is
Speaker 1: to plement a rule to allow hearing aids to be
Speaker 1: bought over the counter. What that's gonna do is it's
Speaker 1: going to make it easier for those fifty million people
Speaker 1: to get hearing aids more cheaply. But we also hope
Speaker 1: it will spur innovation by reducing that barrier to entry. Now,
Speaker 1: new companies, new market entrance, can come in and innovate
Speaker 1: in providing hearing aid products at a lower price point,
Speaker 1: and so that that that's just one example. Could you
Speaker 1: think about how that five thousand dollars aggregates up. That's
Speaker 1: one very practical example, but HiT's a lot of people
Speaker 1: in their daily life not only can you not only
Speaker 1: can you you know you have a little less hassle
Speaker 1: that you can just go to the pharmacy and buy
Speaker 1: a pair of hearing aids. But overwhelmingly we know that
Speaker 1: room removing a barrier like that will make it cheaper
Speaker 1: and hopefully we'll generate more innovation and more opportunity for
Speaker 1: new business entrance to you know, succeeded. That's really interesting.
Speaker 1: Let's let's talk a little bit about part of this
Speaker 1: executive order, which is the formation of the President's Council
Speaker 1: on Competitiveness, beginning with the Council membership. This is this
Speaker 1: is quite a list. It's the Secretary of Treasury, the
Speaker 1: Secretary of Defense, the Attorney General, Chair of the FTC,
Speaker 1: Chair of the Consumer Financial Protection Board FCC, Agriculture, Commerce,
Speaker 1: on and on. It's practically the full cabinet. Why so
Speaker 1: broad a membership? What what's the thinking behind that? While
Speaker 1: you're making me realize, I'm gonna have to get a
Speaker 1: bigger office to get everybody around the table, particularly now
Speaker 1: that we can um start to do these convenings in person. Look,
Speaker 1: the idea of this was pretty simple, which is over
Speaker 1: the last several months, where we have done is we've
Speaker 1: run a process of going out to agencies and understanding
Speaker 1: from the agencies where the where their authority exists in
Speaker 1: terms of competition policy or antitrust um and how they
Speaker 1: think it could be better deployed in service of encouraging
Speaker 1: competition that will be good for consumers and families. And
Speaker 1: what we found in that process is there's the breadth
Speaker 1: of acts and the breath breath of tools and authorities
Speaker 1: really runs across um often climes. This conversation starts and
Speaker 1: centers around the core antitrust statutes UH and the core
Speaker 1: antitrust enforcement agencies, the Department of Justice and the FTC.
Speaker 1: Their role is critical and they operate into independently when
Speaker 1: it comes to enforcement matters, but in fact the actual
Speaker 1: tools and authorities are much broader. So in U s
Speaker 1: d A, for example, we just had the UM hundred
Speaker 1: year anniversary of the Packers and Stockyards Act, which is
Speaker 1: the antitrust statute that that applies to UM to food UH,
Speaker 1: food and agricultural commodities meat packing in others UM we
Speaker 1: have at the Department of Transportation authorities to look at
Speaker 1: competition in the airline industry, in the railroad industry, in
Speaker 1: the shipping industry UM and across the board. So what
Speaker 1: we realized in putting this executive work together is that
Speaker 1: the actual coordination across these different parts of our government
Speaker 1: is really important for two reasons. One because it's important
Speaker 1: for the agencies to understand how when they're taking action
Speaker 1: to encourage competition in a particular segment of the market,
Speaker 1: like when HHS finalizes this rule to make hearing aids
Speaker 1: available over the counter, how does that fit into a
Speaker 1: broader economic strategy to encourage competition in UH, in the
Speaker 1: railroad industry, or in the shipping industry. And the second
Speaker 1: is to make sure that we are we are effectively
Speaker 1: coordinating and not getting across purposes. So if if if
Speaker 1: one agency is moving out in a certain way, and
Speaker 1: try to make sure that it's consistent and that the
Speaker 1: and that businesses and other stakeholders that are actually having
Speaker 1: to operate within these rules of the road have as
Speaker 1: clear as possible guidance from the executive branch um on
Speaker 1: on what our policies and what our intentions are. So
Speaker 1: that's the goal of the Council. It's been a long time,
Speaker 1: uh in American economic policy that we've really priority tized
Speaker 1: competition policy in this way, and we're going to need
Speaker 1: a structure to have that ongoing focus across time and
Speaker 1: where we hope that this Council will serve that purpose.
Speaker 1: So let's stay with that structure a little bit. I
Speaker 1: mentioned all the members of this council. I didn't mention
Speaker 1: the chairperson that would happen to be you. How big
Speaker 1: of a job is this going to be relative to
Speaker 1: your role as as director of the National Economic Council.
Speaker 1: How large of a priority is this and what do
Speaker 1: you hope to accomplish with it? Well, I think you
Speaker 1: saw from the President's speech and announcement last week. The
Speaker 1: priority that he and that we and as administration are
Speaker 1: putting on this effort, which is very high. UM. That
Speaker 1: we are obviously very focused on the immediate economic challenges UM,
Speaker 1: the rescue plan and the impact that has had on
Speaker 1: the economy over the last couple of months. The effort
Speaker 1: we have a Congress right now working on an infrastructure
Speaker 1: pack it and on a human infrastructure element as well. UM.
Speaker 1: But but but equally in that category is this effort
Speaker 1: to try to lower prices for consumers, increased wages, generate
Speaker 1: more innovation by encouraging competition. So I would say that, look,
Speaker 1: it's a big priority and part of why we wanted
Speaker 1: to move out early. UM. This is relatively early in
Speaker 1: administration to put on an executive order that is this
Speaker 1: this broad in terms of directives to different agencies. Was
Speaker 1: to make sure that we were getting going because some
Speaker 1: of these things, UM, appropriately will take some time. The
Speaker 1: rulemaking process, uh, you know explicitly builds in time for
Speaker 1: notice and comment and engagement. UM. So we know that
Speaker 1: these things will take some time. But we wanted to
Speaker 1: get the ball rolling and as a result, our focus
Speaker 1: on this council and my role in in in trying
Speaker 1: to lead and coordinate that will be a big piece
Speaker 1: of business. But we're really excited about being out of
Speaker 1: the game um early and uh and and aggressively here.
Speaker 1: And I think what you're gonna see, hopefully is that
Speaker 1: for a lot of end uh end recipients, typical families, businesses,
Speaker 1: this is going to be a real welcome uh, real
Speaker 1: welcome opportunity because whether you're a small family farmer who
Speaker 1: has been struggling under the sense that you know, costs
Speaker 1: keep going up and your choices are are going down
Speaker 1: because you keep seeing consolidation in the market, or you're
Speaker 1: just you know, somebody who is looking for the best
Speaker 1: job possible and realizing that there are restrictions on you know,
Speaker 1: moving from job to job that you didn't even know existed.
Speaker 1: These are kinds of things that could help people in
Speaker 1: their daily lives. But if we're going to get to
Speaker 1: helping in at that end point, we really got to
Speaker 1: be organized and coordinated as a federal government. So we
Speaker 1: gotta you know, it's gonna be a big piece of business,
Speaker 1: but one that we're very excited about. So we're going
Speaker 1: to drill down into some of the specifics on a
Speaker 1: sector by sector basis. But before we get that, Granu Lare,
Speaker 1: I want to just discuss briefly the genesis of this.
Speaker 1: Your White House colleague Tim Woo, along with a bunch
Speaker 1: of others, published a large research paper back in November,
Speaker 1: right right after the election, and their analysis identified that
Speaker 1: pretty much since the Microsoft anti trust case in the
Speaker 1: ninety nineties, the US has kind of given up on
Speaker 1: um anti trust enforcement and the result has been huge
Speaker 1: industry consolidation, reduction of competition, increase pricing power, and higher
Speaker 1: costs two consumers. So that leads to the question what
Speaker 1: happened to anti trust enforcement in the United States. Yeah,
Speaker 1: it's it's an important question and and also one that
Speaker 1: I think is helpful to put in historic context, because
Speaker 1: if you look at the arc of competition policy and
Speaker 1: any trust enforcement in the U s. It really you
Speaker 1: do see ebbs and flows, you know, going back as
Speaker 1: far as the passage of the Sherman Anti Trust Act
Speaker 1: in the eighteen nineties, right, that was a reaction to
Speaker 1: thee both the political corruption but also the sort of
Speaker 1: behavior that of monopolies in the in the in the
Speaker 1: Gilded Age, and laid the groundwork for of course, you know, UH,
Speaker 1: President Teddy Roosevelt becoming famous in in trust busting and
Speaker 1: UH and and the activities in the early nineteen hundreds UM.
Speaker 1: And then you saw another acceleration on the back end
Speaker 1: of the UM in the in the nineteen thirties, on
Speaker 1: the back end of the First World War UM, and
Speaker 1: then coming out of the Second World War with with
Speaker 1: FDR UM reflecting that as well, you then saw a
Speaker 1: different a different approach that emerged in the nineteen seventies
Speaker 1: and a new school of thought that was very was
Speaker 1: was very narrowing of the view of competition policy UM,
Speaker 1: and that led to a multi decade approach, as you say,
Speaker 1: limiting enforcement of antitrust and a view that kind of
Speaker 1: all things equal, UH, letting consolidation occur would generate economic
Speaker 1: benefits and so therefore at the margin we should be
Speaker 1: sort of accommodating of consolidation unless there was radically clear
Speaker 1: that it was bad for bad for UH consumers, or
Speaker 1: bad for prices. And so we've seen the implications of that,
Speaker 1: and to your point, we've seen over the last couple
Speaker 1: of decades the number of annual mergers has increased by
Speaker 1: five or six folds UM, and we have seen in industry.
Speaker 1: The measure of industry consolidation has increased significantly over the
Speaker 1: last twenty years, and we haven't seen the attendant benefit
Speaker 1: in terms of lower prices um or or more innovation
Speaker 1: in the economy. And so over the last five years
Speaker 1: or so, there's been a growing body of economic research
Speaker 1: to try to identify the fact the harms that have
Speaker 1: come from this consolidation UH, and that work started. Some
Speaker 1: of that work started and was really put on the
Speaker 1: map at the end of the Obama administration UM, including
Speaker 1: by UM Tim Woo who you mentioned, Jason Furman, others
Speaker 1: of my former colleagues, who really started to pinpoint this
Speaker 1: decline in any trust enforcement and the decline and focus
Speaker 1: on competition policy as one thing that has added to
Speaker 1: the stagnancy a small business formation, the inequality that we
Speaker 1: have seen UM, and in the academic realm, we've seen
Speaker 1: that that work only accelerate over the course the last
Speaker 1: five years. And so certainly the executive order here and
Speaker 1: the actions and the work that is embedded here is
Speaker 1: really building on that framework and building on the findings
Speaker 1: that have come out over that and we certainly we
Speaker 1: do view it in historic perspective of now trying to
Speaker 1: really shift back to a focus on prioritizing UM. The
Speaker 1: enforcements of anti trust statutes focus on competition and a
Speaker 1: focus on the end outcome and the end benefit to
Speaker 1: the end consumer and worker. And and for those people
Speaker 1: who may not be familiar with Tim Woo, not only
Speaker 1: is he the person who coined the phrase net neutrality,
Speaker 1: he is the author of a couple of books, The
Speaker 1: Curse of Bigness, Anti Trust in the New Gilded Age
Speaker 1: as well as The Master Switch, where he describes how
Speaker 1: eventually these information systems they become consolidated, they become closed
Speaker 1: and less and less competitive until some disruptive innovation comes along.
Speaker 1: And my sense is this council is trying to encourage
Speaker 1: less of that concentration and more of the disruptive innovation. Yeah,
Speaker 1: that's exactly right. And uh and Kim as Kim works
Speaker 1: for Obvious here at the NBC and has been a
Speaker 1: thought leader on these issues for some time. And you characterize,
Speaker 1: you know, accurately, the one of the key objectives of
Speaker 1: this council is to try to get toward how we
Speaker 1: can encourage that type of innovation. UM. And one thing
Speaker 1: I would say is that This really is something that
Speaker 1: I think we've increasingly seen cuts across traditional um lines
Speaker 1: or dividing lines in economic thought, and it cuts across
Speaker 1: to traditional political dividing lines to I mean, some of
Speaker 1: the things we're talking about here are really about getting
Speaker 1: rid of regulations that stand in the way of that
Speaker 1: kind of innovation. You know, one of the examples that's
Speaker 1: in the Executive Order is around is in them is
Speaker 1: in uh fear and line the the the the alcohol market,
Speaker 1: and you've got some incumbent rules on bottle size and
Speaker 1: bottle labeling that when you really unpack them and say,
Speaker 1: what why is it that you know, to operate in
Speaker 1: a market you have to meet certain bottle size requirements
Speaker 1: because maybe you've got an idea to ring a product
Speaker 1: to market that just looks different and that's going to
Speaker 1: be your you know, that's going to be your branding edge. Well,
Speaker 1: you know, when you unpack and and look at the
Speaker 1: reason why those regulations exist, you know some of them
Speaker 1: are because they're just protecting incumbents. Uh and uh. You
Speaker 1: know the similar to a number of these occupational licensing
Speaker 1: requirements where you have requirements to get a license to
Speaker 1: be um to braid hair or to cut hair um
Speaker 1: or you know, to do all manner of jobs, particularly
Speaker 1: at the m in different states where you know, if
Speaker 1: you if you're moving from one state to another, you've
Speaker 1: got to go through a whole process of getting a
Speaker 1: new license. UM. And you know, look, having licensing requirements
Speaker 1: for uh, you know, for jobs that require you know
Speaker 1: that are that where they're safety or there's other things
Speaker 1: involved obviously make a lot of sense. But in a
Speaker 1: lot of cases, when you unpack it, rules like that
Speaker 1: are have been put in place to favor incumbents and
Speaker 1: make it harder for new entrance to get into the market.
Speaker 1: And so we're really you know, we we think this
Speaker 1: real opportunity both to be disruptive in terms of the
Speaker 1: economic slock, but also disruptive in terms of some of
Speaker 1: the embedded political realities of this we've had. You know,
Speaker 1: a lot of these items have strange bedfellows in terms
Speaker 1: of the support behind them, and that's part of what's
Speaker 1: exciting about it for us as well. Right, clear clearly
Speaker 1: a lot of these licensing rules are anti competitive. UM.
Speaker 1: Before we dig down and get granular into the individual sectors,
Speaker 1: I have one last broad overview question and it's on
Speaker 1: anti trust enforcement. There has been a deeply embedded sort
Speaker 1: of less a fair doctrine at both the Department of
Speaker 1: Justice and the FTC. Obviously, Lena Khan and Marrick Garland
Speaker 1: represent a break from that philosophy. But how do you
Speaker 1: turn around two decades of I was gonna say lacks enforcement,
Speaker 1: but it's really a skepticism about anti trust law. How
Speaker 1: do you reverse that? Well, I think you start by
Speaker 1: doing what we did in the Executive Order, which is
Speaker 1: to articulate that it is the policy of the executive
Speaker 1: branch to vigorously enforce our antitrust laws, and more than that,
Speaker 1: UM to enforce them in the context of a um
Speaker 1: UH an economic policy that views increasing competition as a
Speaker 1: key way of improving lives and economic outcomes for the
Speaker 1: American people. So part of it is you start by
Speaker 1: articulating a clear economic strategy and economic crossoity behind why
Speaker 1: it is that we need greater UM and more vigorous
Speaker 1: enforcement of our antitrust statutes. And you know some of
Speaker 1: the some of the work that UH in the nineteen
Speaker 1: seventies and early eighties that led to this kind of
Speaker 1: multi decade effort to try to undermine it. For orsman
Speaker 1: of antitrust started from articulating a similarly articulating a philosophy,
Speaker 1: but a philosophy to very different ends. So that's you know,
Speaker 1: one important step is I think what we're trying to
Speaker 1: do is to articulate clearly the policy of the government.
Speaker 1: A second I do want to be clear is that
Speaker 1: the actual enforcement appropriately and necessarily operates independently, independently at
Speaker 1: the Department of Justice and the FTC. But I think
Speaker 1: getting high quality personnel in that will do that effectively.
Speaker 1: UM is a is a second important step, and so
Speaker 1: we're you know, we're moving on that front as well.
Speaker 1: And then you know, we we do you know, we
Speaker 1: do have an issue, which is that ultimately these things,
Speaker 1: the antitrust doctrine gets UM gets developed in the context
Speaker 1: of the judicial branch and and and challenges to decisions.
Speaker 1: And we've seen that obviously over the course of decades
Speaker 1: as and so you know, there are also some places
Speaker 1: where we may need to change the law, We may
Speaker 1: need to clarify or strengthen uh, the UM the antitrust authorities,
Speaker 1: and there's bipartisan work in Congress that's going on on
Speaker 1: that front right now. Particularly it relates to the tech industry,
Speaker 1: and so that's something that we are engaged on as well.
Speaker 1: But we we feel quite good about the fact that
Speaker 1: even within the existing authorities that we have across the
Speaker 1: federal government, we can make a lot of progress. And
Speaker 1: that's where we're focused for the time being. All Right,
Speaker 1: So let's dive into some of these sectors and and
Speaker 1: really this executive order covers everything from healthcare to financial
Speaker 1: products to net neutrality, data farmers labeling. Let's start with
Speaker 1: labor and employee contracts. I recall a couple of years ago, UM,
Speaker 1: a bunch of reports sort of surfaced about various tech
Speaker 1: companies Google, Apple, Facebook that had these anti poaching agreements
Speaker 1: they wouldn't hire each other's senior personnel. Obviously illegal and
Speaker 1: a restrictive um comminence amongst them. But but less obvious
Speaker 1: are some of the basic restrictive contracts, non competes, non disclosures,
Speaker 1: other onerous clauses uh that are common in Silicon Valley
Speaker 1: but have spread out to the rest of the country.
Speaker 1: What can this council do to allow greater competition for uh,
Speaker 1: those sort of employees who want to switch jobs. Yeah,
Speaker 1: so this is an incredibly important issue. You know, our
Speaker 1: our our labor market will work more effectively when workers
Speaker 1: are competing for jobs, but also employers are competing for workers.
Speaker 1: And when we have you know, fewer frictions and better
Speaker 1: matching between the workers and the jobs that they will
Speaker 1: be most successful in, we have better you know, outcomes
Speaker 1: over um. But to your point, we've got some real
Speaker 1: frictions and we have real opportunities to address them. So
Speaker 1: this executive order and the work through the Council, we're
Speaker 1: gonna go at three of those. The first is which
Speaker 1: you refer to as non compete agreements, and it's striking today,
Speaker 1: about one in three employers require that an employee will
Speaker 1: sign a noncompete agreement. So you're talking about about sixty
Speaker 1: million people in the workforce. UM. And it's not just
Speaker 1: as you say in Silicon Valley, and it's not just
Speaker 1: in uh, those circumstances where there's an obvious uh or
Speaker 1: or clear um competitive reason why you need it. So,
Speaker 1: you know, the President joking, not jokingly, but you know,
Speaker 1: illustratively pointed out to the fact that you know, you're
Speaker 1: if you're the scientist who owns the secret recipe for coke. Um.
Speaker 1: You know you may need to sign a noncompete to
Speaker 1: not just go to PEPSI and give away that trade secret,
Speaker 1: right um, when the um and so so clearly these
Speaker 1: these noncompete operate as a as a as a legitimate tool.
Speaker 1: But when you got to sixty million people and one
Speaker 1: of free employers, this goes much broader. Construction workers, hotel workers, um.
Speaker 1: You know you work in a restaurant and hospitality, fast
Speaker 1: food um. And also for the for low wage jobs,
Speaker 1: entry level jobs, not just more senior jobs where you'd
Speaker 1: be access to more sensitive information. And so you know this,
Speaker 1: the executive order is operating from a pretty basic principle
Speaker 1: that if particularly if you're operating in those sectors and
Speaker 1: someone offers you a better job, you should be able
Speaker 1: to take it. And if your existing employer wants you
Speaker 1: to stay, they should compete for your talent. Um. And
Speaker 1: so the order uh UM is is directing the FTC
Speaker 1: to look at either modifying or banning non compete clauses.
Speaker 1: So that's number one. The second is what I mentioned earlier,
Speaker 1: which is about the licenses required to operate in a job.
Speaker 1: So again about one in three jobs, about jobs in
Speaker 1: the us also require a license, and so that spans
Speaker 1: the uh you know that that spans the horizon. Obviously,
Speaker 1: you know you need a pilot's license to be to
Speaker 1: to operate an aircraft, but you also need a license
Speaker 1: to be on accountant, and interior decorator, a hairdresser, and
Speaker 1: importantly one in free today need that. That was five
Speaker 1: in the nineteen fifties. So we've seen a significant increase
Speaker 1: in the number of jobs that require a license, and
Speaker 1: so likewise disorder goes out. Saying in those cases where
Speaker 1: unnecessary licensing is actually reducing mobility, um that we should
Speaker 1: put limits or restrictions on them. At one point, I was,
Speaker 1: how light here is? You know some some people really
Speaker 1: need to be mobile. Uh that you know, it's part
Speaker 1: of how our economy works. You take military families, for example,
Speaker 1: you have to move every couple of years in order
Speaker 1: to do your job. Well, if you're a spouse of
Speaker 1: if you have a you know a one one one
Speaker 1: member of a partnership is in the military and moving.
Speaker 1: The other person works in a job where state by
Speaker 1: state you have different licensing requirements. Then you know, every
Speaker 1: time they move, that could be free six months of
Speaker 1: friction in terms of getting into the labor market and
Speaker 1: finding a job. The last thing we're focused on here
Speaker 1: is about wage data. And one of the things that
Speaker 1: that is true today is that employers can share detailed
Speaker 1: wage data between employers without having to share it to employees.
Speaker 1: And again this is just what the concern that is
Speaker 1: raised is that if you know, if employers can share
Speaker 1: wage data without sharing it to employees, that it makes
Speaker 1: it easier for them to um to you know, either
Speaker 1: explicitly colluded or just implicitly reduce uh, you know, competition
Speaker 1: and not have to compete as vigorously on on on
Speaker 1: wages and so and you could end up, you know,
Speaker 1: putting downward pressure on wages. So it all three of
Speaker 1: those days. We think we can make some progress by
Speaker 1: either eliminating or restricting um uh non competes, licensing, uh,
Speaker 1: you know, wage data sharing, and so that's that's our
Speaker 1: real focus on the labor market, and we think if
Speaker 1: we can make some progress on all free, what you
Speaker 1: end up with again is a more competitive labor market,
Speaker 1: actually reducing regulation and making it easier for people to
Speaker 1: move from job to job. So so I get the
Speaker 1: idea of leveling the playing fields, increasing mobility. It would
Speaker 1: be great if states had reciprocity on various licensing UM.
Speaker 1: But a lot of these non competes and a lot
Speaker 1: of these employee contracts are governed by state law. What
Speaker 1: is the authority for the FDC or or the federal
Speaker 1: government to come in and say, hey, this, UH, this
Speaker 1: very weak permissive state statute allowing these restrictive employee agreements
Speaker 1: is going to be bypassed by the federal government. From
Speaker 1: whence does that authority come? So in a lot of
Speaker 1: these cases, UH, these are lawyer contracts or they are
Speaker 1: employer agreements. UH. And even in cases where U states
Speaker 1: have UM, the states have authorities UH the employers are
Speaker 1: making UH contracts where there is a a federal nexus,
Speaker 1: and and that that extends to FTC authorities to UH
Speaker 1: to limit or ban UH anti competitive practices. So the
Speaker 1: FTC does have UM pretty broad authority in these areas,
Speaker 1: even in cases where the you know, the the a
Speaker 1: state rule or a state requirement UM is comes into play.
Speaker 1: So we're gonna gonna we're gonna do it we can
Speaker 1: at the federal level, we think we have UM some
Speaker 1: real scope here. Obviously, the FTC will sort through that
Speaker 1: UM and and make its determinations ultimate determinations on how
Speaker 1: to use that authority independently. But also, you know, part
Speaker 1: of what we're doing and part of what we're trying
Speaker 1: to encourage here is a consideration of this at the
Speaker 1: state level as well. So one of the things we
Speaker 1: will be doing is reaching out and engaging with um
Speaker 1: UH state and UH municipal actors as well, because you know,
Speaker 1: one of the things that we found is that there's
Speaker 1: appetite to try to address this at the state level too.
Speaker 1: So you know, where where the ultimate authority actually is
Speaker 1: not a federal authority, we also have a certain ability
Speaker 1: to convene and use the bully pulpit to encourage action
Speaker 1: of the state as well. So let's switch over to
Speaker 1: real estate. UH. Many people may not be aware that
Speaker 1: the United States has a much higher real estate Transaction
Speaker 1: Commission than many other countries. The prior administration had cut
Speaker 1: a bit of a sweetheart deal with the National Association
Speaker 1: of Realtors. You guys, this administration put the n a
Speaker 1: R unnoticed that that deal was off the table, and
Speaker 1: you want to do something about how they're maintaining high
Speaker 1: real estate prices. Tell us about what the Competitive Council
Speaker 1: can do about excessive real estate commissions. Well, look, I
Speaker 1: think it's a very you know, it's it's it's a
Speaker 1: it's a very similar uh dynamic. But again, you know,
Speaker 1: operating in a different industry, which is, you know, can
Speaker 1: we bring more transparency uh and can we also bring
Speaker 1: more more competition into into a market with the with
Speaker 1: the goal of trying to ultimately identify what's good for
Speaker 1: the uh, you know, for the for the for the
Speaker 1: end consumer. So you know, the the the Justice Department
Speaker 1: UH did um uh did take take action independently to
Speaker 1: try to um uh to try to take another look
Speaker 1: at this question. UM and you know, the a real
Speaker 1: question at issue here is whether this sort of the
Speaker 1: structure of commissions is going to advance competition, encourage more
Speaker 1: competition with better outcomes for uh, for consumers. And this
Speaker 1: question of whether you have very high and also uniform
Speaker 1: commissions across an industry, what is is the question of
Speaker 1: whether that's actually you know, that's that is the result
Speaker 1: of a competitive outcome, or whether that is the result
Speaker 1: of a lack of competition. So ultimately, you know, this
Speaker 1: is a this falls in the category of an enforcement
Speaker 1: action that the Department of Justice will operate independently. But
Speaker 1: I think lifting up what you see is again an
Speaker 1: important question being asked, right, which is that um, if
Speaker 1: you if you have it, if you have history, if
Speaker 1: you have if you have high commissions UM and UNI
Speaker 1: warm commissions UM. It is you know, it's appropriate to
Speaker 1: ask that question of is that the result of a
Speaker 1: competitive outcome or is that the result of lack of competition?
Speaker 1: And you know, I anticipate that that's what will that's
Speaker 1: what we'll see and hopefully that's that's the outcome that
Speaker 1: we will uh that will will arrive will arrive at.
Speaker 1: But ultimately the Department of Justice full will independently navigate
Speaker 1: that m consistent with their enforcement role. And let's stay
Speaker 1: with real estate a minute. One of the things that
Speaker 1: I was shocked by in the Executive Order and surprised
Speaker 1: to learn very often landlords of rental buildings or even
Speaker 1: condos sell exclusive rights to the building to a cable company,
Speaker 1: meaning no competition between fiber optic cable satellite for customers.
Speaker 1: I had no idea this existed. I can't imagine it's legal.
Speaker 1: It has to be anti competitive and make things so
Speaker 1: much more expensive for consumers, tell us a little bit
Speaker 1: about what you want to do with that. I'm glad
Speaker 1: you picked up on that. And it goes to a
Speaker 1: broader issue, which is, how do we actually achieve the
Speaker 1: goal of affordable high speed internet access for all Americans?
Speaker 1: UM And that's a big goal, um and there's big
Speaker 1: challenges for us as a country to get to there.
Speaker 1: But part of getting there is actually not only creating
Speaker 1: UM access. You know, people in rural America live in
Speaker 1: a jurisdiction where there isn't even access to high speed internet,
Speaker 1: but also creating competition where the fiber has been laid
Speaker 1: and the um uh and the the access is there,
Speaker 1: but it's unaffordable and unaffordable in part because there isn't
Speaker 1: sufficient competition. So, you know, a a really strikingly high
Speaker 1: share of Americans live in jurisdictions where there is only
Speaker 1: one uh one reliable broadband provider. And this gets to
Speaker 1: your point. Many people live in circumstance is where they
Speaker 1: are themselves restricted to only accessing one uh one internet
Speaker 1: provider UM and and yeah it's um, it's not it's
Speaker 1: not as well known, but it is the case that
Speaker 1: in some cases you have these agreements these landlord provider
Speaker 1: agreements where UM, just by dint of deciding to live
Speaker 1: in a particular building you you then lose access to
Speaker 1: a competitive market for for broadband services. I would say,
Speaker 1: you know, anecdotally, one of the things that I think
Speaker 1: you hear a lot is that I mean is that
Speaker 1: people can't really understand what it is, why what they're
Speaker 1: paying for, and why they're paying with respect to UM
Speaker 1: internet providers UM. And I think that you know, the
Speaker 1: opportunity here is to say, if we can create more competition,
Speaker 1: this is a place where ultimately consumers will end up
Speaker 1: with with with more options and that I could drive
Speaker 1: lower prices and better and better outcomes as well. So
Speaker 1: that particular issue of landlords and tenants is a particularly
Speaker 1: evocative example of the challenge, as you've noted, But the
Speaker 1: challenge is actually much broader than that, which is at
Speaker 1: the end of the day, every American you know, high
Speaker 1: speed internet today is like electricity was a hundred years ago.
Speaker 1: It is the power by which you interact with the
Speaker 1: twenty one century economy. And if you don't have access
Speaker 1: to high speed internet, you really can't be a full
Speaker 1: participant in the nation's economy today. UM, and we need
Speaker 1: to make sure that everybody has that access. Some of
Speaker 1: that is, you know, about building out more fiber and
Speaker 1: building out more actual access, but encouraging healthy competition in
Speaker 1: this sector is a big part of this as well.
Speaker 1: And something else I found in the Executive Order that
Speaker 1: I never heard of and kind of blew my minds
Speaker 1: paid a delay big Farmer paying Janet eric drug companies
Speaker 1: to not make cheaper generics. How on earth could that
Speaker 1: be allowed? Well, look, you know, UH, there is a
Speaker 1: we we have a uh, we have a set of
Speaker 1: challenges in the market for prescription drugs UM and UH
Speaker 1: and and that I think is is is well known. UM.
Speaker 1: And you know, there's a there's a obviously, there is
Speaker 1: a legitimate issue here about UM, the upfront investment needed
Speaker 1: to innovate and identify prescription and and the the um
Speaker 1: innovations that go into prescription drugs and making sure that
Speaker 1: companies can recoup those. But there's a lot of elements
Speaker 1: of how that market operates that go well beyond that
Speaker 1: and actually end up just driving up prices for consumers. UM.
Speaker 1: And you're you're raising one of them, which is you know,
Speaker 1: there's one of the one of the strategies that manufacturers
Speaker 1: have used in the past is if you're the UM,
Speaker 1: if you're the brand name drug manufacturer, you encourage generic
Speaker 1: manufacturers to to stay out of the market by providing
Speaker 1: them UH incentive payments and UH and that you know,
Speaker 1: at the end of the day, there's no there's a
Speaker 1: there's to two negative impacts the economy. One is less
Speaker 1: innovation UM, but the other is higher prices for and consumers.
Speaker 1: And we see in the evidence of these pay for
Speaker 1: delay UH schemes that it produces both of those outcomes,
Speaker 1: less innovation and higher prices. So that's the kind of
Speaker 1: thing that we want to work to try to reduce
Speaker 1: or eliminate and also just encourage more competition in the
Speaker 1: market for generics as well. So the other, you know,
Speaker 1: another element that UM that the Executive Order directs is
Speaker 1: for the FDA to work with states to allow them
Speaker 1: to import prescription drugs from UH Canada UM consistent with
Speaker 1: safety standards. And this is again something that a number
Speaker 1: of states have expressed an interest in doing because it
Speaker 1: would create more competition and lower prices for their UM
Speaker 1: there for consumers in their states. And the federal government
Speaker 1: has been operated traditionally as a barrier to that, and
Speaker 1: we want to change that. We want to have a
Speaker 1: federal government again consistent with safety standards, encouraging that kind
Speaker 1: of UH state action to increase competition UM in the
Speaker 1: In the prescription drug market as well, It's always seemed
Speaker 1: weird to me that US consumers are the one subsidizing
Speaker 1: drugs for the rest of the world than U S
Speaker 1: consumers were paying so much more. It's not just Canada,
Speaker 1: but it's throughout Europe and in the UK. It just
Speaker 1: seems so weird to me that Americans pay a much
Speaker 1: higher price for the same exact drug, including those made
Speaker 1: by American drug companies. Yeah, look at striking right, if
Speaker 1: you're a U S consumer, you are likely to pay
Speaker 1: two and a half times as much for the same
Speaker 1: prescription drug than your international counterpart. Obviously it's varies from
Speaker 1: country to country, but on average, that's uh, that's the reality.
Speaker 1: And we think that there's a lot that could be done,
Speaker 1: common sense things that could be done, you know, banning
Speaker 1: a pay for delay arrangement that reduces innovation drives the prices,
Speaker 1: lighting states imports safely from Canada. There's also some steps
Speaker 1: we're gonna need to work with Congress to do as well, though,
Speaker 1: and that's one of the things that we're working on
Speaker 1: right now, in fact, is to try to finally give
Speaker 1: Medicare the ability to negotiate UM as the largest bulk
Speaker 1: purchase of prescription drugs in the market, UM, give Medicare
Speaker 1: the ability to use that market position to actually negotiate
Speaker 1: for lower prices, which would not only increase reduced prices
Speaker 1: for UM the end participants in Medicare, but also it
Speaker 1: would have a downward pressure on prices across the industry
Speaker 1: because Medicare is the sort of the the benchmark rate
Speaker 1: UH in in many cases, So you know, we just
Speaker 1: you're right, it's the kind of thing that it's also
Speaker 1: the kind of thing that so many Americans know and
Speaker 1: uh understand and actually feel on their daily lives, and
Speaker 1: they know that it just doesn't make a lot of sense.
Speaker 1: Why is it that we're paying so much UM. But
Speaker 1: at the same time, it's hard to pinpoint, well, how
Speaker 1: can we fix that. We're trying to break that down
Speaker 1: and say there's some really concrete, practical things we could
Speaker 1: do and we and in doing so, where this is
Speaker 1: this is about government eliminating rules, eliminating regulations that just
Speaker 1: don't make a lot of sense um, using market power
Speaker 1: to actually bargain for better prices. These are the kinds
Speaker 1: of things that we think make a lot of sense
Speaker 1: and kind of make intuitive sense to the American people
Speaker 1: as well. I want to talk about big tech and
Speaker 1: net neutrality, but before I moved to that space, which
Speaker 1: I know is going to take a lot of time,
Speaker 1: I have to talk about farmers a little bit first.
Speaker 1: Why can't farmers repair their own tractors? This is the
Speaker 1: most insane thing I can imagine as someone who likes
Speaker 1: to tinker and do some of my own repairs. If
Speaker 1: you're if you're a farmer, why can't you take your
Speaker 1: John dear tractor and fix it yourself when it breaks? Well,
Speaker 1: you know, look, it's you're you're you're keying in on
Speaker 1: a lot of these pragmatic things that we're very focused
Speaker 1: on as well. It's hard to it's hard to prosecute
Speaker 1: an argument why that makes a lot of sense um.
Speaker 1: And part of the reason why we are where we
Speaker 1: are is because of a set of rules that have
Speaker 1: been in place that end up favoring the incumbent. Right
Speaker 1: If you are the incumbent, and you sell contractor and
Speaker 1: you restrict uh the where somebody can get it fixed,
Speaker 1: then it you know, makes it easier for you to
Speaker 1: keep you know, to maintain control of the customer base. UM.
Speaker 1: But the question that you're appropriately raising is what's the
Speaker 1: what's the broader consumer benefit and what's the broader rationale
Speaker 1: behind it? Um. And we think that that's the kind
Speaker 1: of thing that we need to uh, you know, we
Speaker 1: need to fundamentally rethink. You know. It's It's true across
Speaker 1: the across the economy, there are the sort of right
Speaker 1: to repair provisions that again are rules in place that
Speaker 1: we need to take a hard look at to make
Speaker 1: sure that if they're in place, they are actually serving
Speaker 1: some important safety benefits, safety rationale or otherwise and not
Speaker 1: just there to uh to favor or or keep out
Speaker 1: new entrance into a market. In that particular case, we're
Speaker 1: quite excited about the idea that you know, if you
Speaker 1: open up uh and give um. And that's why I've
Speaker 1: encouraged the FTC to look at saying give you give
Speaker 1: farmers the right to repair their own equipment how they
Speaker 1: like without having to rely on any particular expensive manufacturer,
Speaker 1: and in doing so that will also you know again
Speaker 1: it's the same thing you know that should make life
Speaker 1: easier for farmers, UH, it should make it should bring
Speaker 1: prices down, but also encourage innovation because if you're you know,
Speaker 1: a if you're a pair shop, an independent repair shop
Speaker 1: that works on some other you know small um, small
Speaker 1: mechanical issues, and that you open this up, well, then
Speaker 1: you have a market to enter into. You can learn
Speaker 1: how to fix tractors UH efficiently and cheaply, and then
Speaker 1: you can grow grow as a result. UM. And I
Speaker 1: think that that's the point I would I would emphasize
Speaker 1: if this is not a bad out keeping businesses in
Speaker 1: the US from growing, gaining market share UM and doing
Speaker 1: what businesses need to do to be successful, which is
Speaker 1: internew markets, innovate, grow and as a result get bigger.
Speaker 1: That's part of the goal of effective UH capitalism. This
Speaker 1: is not about stifling that. It's more about looking at
Speaker 1: those areas where a rule actually keeps incumbents from being
Speaker 1: able to enter into the market and really ask the
Speaker 1: hard question of is there a legitimate economic rational to
Speaker 1: that other than rents or other than stifling competition. And
Speaker 1: it's not just factors. It's it's cell phones. My my
Speaker 1: Apple iPhone is dying, and I can either swap the
Speaker 1: battery out and then cause all sorts of problems because
Speaker 1: I'm not allowed to change a battery, or i could
Speaker 1: go buy a brand new phone. Um. But before again,
Speaker 1: before we get to technology, let me stay with farmers.
Speaker 1: There are some pretty surprising restrictions on seeds, including liability
Speaker 1: for some farmers for seeds they never even used. What's
Speaker 1: going on in that area. I've read some pretty horrible
Speaker 1: stories about farmers being sued by by big agg For
Speaker 1: lack of a better phrase, what can be done to
Speaker 1: allow farmers to take more control of their own crops,
Speaker 1: of their own planting and their own harvesting. Well, this
Speaker 1: is a really good example of when you see consolidation
Speaker 1: in the market, that should raise a question, a legitimate
Speaker 1: question of is that consolidation um UH encouraging healthy competition
Speaker 1: or consistent with healthy competition, or is it actually um
Speaker 1: stifling that competition. So, if you look at the market
Speaker 1: for agricultural inputs UM, seeds, feed, fertilizer, we've seen significant
Speaker 1: consolidation over the last few decades. To your point on seeds, UM,
Speaker 1: you know uh to you know, to a first approximation
Speaker 1: about for companies control most of the world market at
Speaker 1: this point, and we've seen prices go up very significantly
Speaker 1: across time. And so what that does, what we've seen
Speaker 1: in that market is that the increase in price and
Speaker 1: the reduction and competition also puts those providers in a
Speaker 1: position where they can put increased demands because the the
Speaker 1: end farmer, the small farmer just doesn't have choice to
Speaker 1: get there, uh, to source their seeds from any other producer,
Speaker 1: so they can limit options, they can you know, they
Speaker 1: can require the use of those in certain ways that
Speaker 1: then can create liability for um the end producer. What
Speaker 1: it also does is it means that the end farmer
Speaker 1: ends up getting less and less of the total aggregate
Speaker 1: benefit of the output that they grow. So, you know,
Speaker 1: when you're using a seed to wrote a food commodity,
Speaker 1: at the end of the day, the farmers, as we've
Speaker 1: seen this consolidation consolidation increase, they've gotten less and less
Speaker 1: of the total aggregate economic benefit of um of of
Speaker 1: of that output. And so you've got you know, more
Speaker 1: consolidation prices increasing and less of the benefit of each
Speaker 1: dollar being uh garnered for that end output food product
Speaker 1: declining for for decades. And I think this is an
Speaker 1: interesting place with respect to this executive order where the UM,
Speaker 1: we've gotten an enormous amount of outpouring from agricultural constituencies,
Speaker 1: those small farmers organizations in states. UH, we've seen you know,
Speaker 1: everybody from from Senator Kester in Montana to Senator Grassley
Speaker 1: in Iowa saying, UM, this is what we need to
Speaker 1: try to take on consolidation and incourage get better competition,
Speaker 1: Get competition back into markets. Four seed into mark it's
Speaker 1: her feet into markets for fertilizer, to give the smaller
Speaker 1: farmers a real fighting chance, um, and to give them
Speaker 1: more of the share of the economic output of the
Speaker 1: product the producer. And ultimately, if there's more competition, not
Speaker 1: only does the benefit farmers I have to assume in
Speaker 1: this current inflation concerned environment, this can help drive food
Speaker 1: prices down over the long haul. I think it's a
Speaker 1: way to to create a stable UH and and better
Speaker 1: price outcomes over over the longer term. Yeah, because you see,
Speaker 1: you know that prices when prices for input goods are
Speaker 1: going up. That was true in in agriculture markets prior
Speaker 1: to the pandemic UM and certainly it remains a concern.
Speaker 1: Now this is this These types of steps we hope
Speaker 1: will actually put downward pressure on on those markets over
Speaker 1: the longer term. Alright, so let's talk about everybody's favorite segment,
Speaker 1: big Tech. I read n y U Professor Scott Galloway's
Speaker 1: book The Four I think it came out in seventeen
Speaker 1: UH and the basic premises the biggest companies in technology
Speaker 1: have become very large, very powerful. They buy up nascent
Speaker 1: competitors before they're even out of the womb, and they
Speaker 1: just have incredible market power. What can be done about
Speaker 1: this concentrated UH strength of these giant trillion dollar technology companies. Well,
Speaker 1: I would start by saying, look, the UM our technology
Speaker 1: sector and our tech companies are a reflection of the
Speaker 1: unparalleled innovation of the American economy. UM and reflect um
Speaker 1: and and and drive and have generated a lot of
Speaker 1: the innovation and benefits that Americans across the board, you
Speaker 1: and I benefit from on a daily basis. And so
Speaker 1: um that's that's that's that's important and important at the
Speaker 1: starting point. And at the same time, there are really
Speaker 1: significant problems with concentration and with any competitive behavior in
Speaker 1: uh in the tech sector. And that's what we're really
Speaker 1: trying to focus on in this executive order h and
Speaker 1: across across the board, and it's it's not you know,
Speaker 1: this conversation can often be sort of very um, yeah,
Speaker 1: can drive to sort of in co Wait, there's just
Speaker 1: something there's something inherently wrong with big tech, right, and
Speaker 1: we're trying to break that down and say, let's try
Speaker 1: to identify those areas where we have real questions about
Speaker 1: dominant you know, uh tech platforms and where they may
Speaker 1: be under commining competition or uh um, you know, reducing competition.
Speaker 1: So that's that's that's that's our focus. So you know,
Speaker 1: for example, where you know, the the the executive orders
Speaker 1: encouraging the FTC too, but not new rules on how
Speaker 1: tech platforms can gather and collect data and use that
Speaker 1: data in places like retail marketplaces on their own platforms,
Speaker 1: um uh And and that's you know, that's that's a
Speaker 1: that's a more concrete example, but one that I think
Speaker 1: that you know a lot of end consumers have um
Speaker 1: have observed or have interacted with in their in their
Speaker 1: daily life. That's clearly a place where we need to
Speaker 1: take a very hard look and apply scrutiny. Another is
Speaker 1: with respect to mergers, right, and this is a place
Speaker 1: where clearly, UM, we we need to increase the focus
Speaker 1: again the antitrust. The actual enforcement UH, we will leave
Speaker 1: to the Department of Justice and will leave to the FTC.
Speaker 1: But it's a matter of policy. We have to focus
Speaker 1: in particular, in a particular focus on the acquisition of
Speaker 1: competitors and the impact of those in the tech sector
Speaker 1: on platforms that then are dominant enough that they can
Speaker 1: use mergers to just basically to squeeze out competition UM
Speaker 1: by competitors in the first place. And at the end
Speaker 1: of the day, you know, we want to create a
Speaker 1: circumstance where the next generation of great tech companies in
Speaker 1: the United States come from the innovative capacity of this
Speaker 1: economy which is unparalleled UM and continue to drive innovation.
Speaker 1: But we think that these types of UM reforms are
Speaker 1: actually necessary to do that, so that we don't end
Speaker 1: up stifling competition and and losing that kind of next
Speaker 1: generation of innovation. You mentioned encouraging the FTC to establish
Speaker 1: rules on surveillance UM. There are also some rules on
Speaker 1: accumulation of data. It seems that other countries like Europe
Speaker 1: or even the state of California have very robust data
Speaker 1: privacy laws. Does that require separate legislation or can that
Speaker 1: be done through this Council and through the FDC. Well,
Speaker 1: I think there was a lot that we can do.
Speaker 1: There's there's there's a lot that we can do, and
Speaker 1: the lots that that the UH, the FC in the
Speaker 1: Department of Justice can can do and can move on
Speaker 1: their own. And I think that, UM, we will see
Speaker 1: that with respect to I anticipate we'll see that with
Speaker 1: respect to data. UM, we'll see that with respect to
Speaker 1: UH scrutiny on mergers and also I think on some
Speaker 1: more specific behaviors and methods UH that UH that we've
Speaker 1: seen emerge in the industry and that we have um
Speaker 1: uh called out you know in the UM in the
Speaker 1: Executive Order, particularly around competing on your own platform, right
Speaker 1: that UM and so using the the platform dominance to
Speaker 1: then compete with others on your platform. That's a place
Speaker 1: where is sort of intuitively you really need to apply
Speaker 1: scrutiny to activities in that space. At the same time,
Speaker 1: you you are right that there's both at the state
Speaker 1: level UM and at the federal level as well. There's
Speaker 1: an active conversation about where UM additional authority will be necessary.
Speaker 1: And I mentioned earlier, you know there's a there's an active,
Speaker 1: robust conversation going on the US Congress on that front.
Speaker 1: Bipartisan in nature. Should anticipate that we're gonna see more
Speaker 1: activity on the legislative front, which reflects the fact that, UM,
Speaker 1: we probably are going to need more authority as well.
Speaker 1: Makes makes a lot of sense, and it's kind of
Speaker 1: an interesting coalition of people criticizing the market power of
Speaker 1: big tech. Conservatives are looking at it from one perspective,
Speaker 1: Progressives are looking at it from a very different perspective.
Speaker 1: Is there is there a coalition to be had to
Speaker 1: actually get some legislation passed on this? Well? I think
Speaker 1: that here's what I say. We've seen bipartisan activity principally
Speaker 1: over the last couple of weeks. We've seen that in
Speaker 1: the House, UH, and we're encouraged by that work because
Speaker 1: I think that it is it is raising appropriately UH
Speaker 1: the authorities necessary to go at UM some of these
Speaker 1: concerns that we've talked about, UM, they're similar work going
Speaker 1: on in the Senate, and I anticipate that that you know,
Speaker 1: will will progress. It's always one of the things I
Speaker 1: found in this job is it's both not a good
Speaker 1: idea UM and very difficult to really predict with accuracy
Speaker 1: exactly what the U. S. Congress is going to do. UM.
Speaker 1: So I won't I won't try to do that in
Speaker 1: this context, but I would say that if you look
Speaker 1: at the work that's going on, there's a lot of
Speaker 1: thought behind it. There's been a lot of energy building
Speaker 1: on this issue across time. It is bipartisan in nature,
Speaker 1: and so it's complicated. It's a complicated SEPs and issue,
Speaker 1: and it's complicated politically as well. But certainly we are
Speaker 1: encouraged by it because I think you know, at the
Speaker 1: end of the day, the President does believe that we
Speaker 1: we really need to focus on these sets of issues.
Speaker 1: We cannot just allow the status quo to continue. The
Speaker 1: actions that we are taking in the Executive Order are
Speaker 1: a big step in that direction. But we're going to
Speaker 1: keep working with Congress and hopefully we will will be
Speaker 1: able to progress on the legislator front as well. And
Speaker 1: I have to just quickly ask you about net neutrality
Speaker 1: that was undone by the last administration. What are the
Speaker 1: plans in this administration. Are we going to restore net
Speaker 1: neutrality so that certain consolidated companies they might own the
Speaker 1: pipes and the content, can't give their own materials preference
Speaker 1: over the rest of the Internet. So the Presidency on
Speaker 1: this is pretty clear. He's held it since the campaign
Speaker 1: that he believes that net neutrality rules are necessary and appropriate,
Speaker 1: that the steps that the prior administrator and UM took
Speaker 1: we're in the wrong direction. And then and in the
Speaker 1: Executive Order encourages the SEC to restore those rules. UM.
Speaker 1: And so that's where we are, UM, and we're with
Speaker 1: that's one of the key steps that was embedded in
Speaker 1: this Executive Order. UM. The FEC operates independently, but the
Speaker 1: President's got a clear view and is encouraging the FEC
Speaker 1: to take action on that front. And I see, I
Speaker 1: only have time for one more question, So let me
Speaker 1: make it a big one. Let's look back from four
Speaker 1: years in the future at at this council. How will
Speaker 1: you be able to tell if this council was successful
Speaker 1: or not. At the end of the day, this is
Speaker 1: about improving economic outcomes for people, whether that's in higher wages,
Speaker 1: lower prices, or the impact of more innovation in their
Speaker 1: lives and in the communities in which they operate. So
Speaker 1: at core, if we look back, success will be because
Speaker 1: across the economy, lots of people have been able to
Speaker 1: improve their economic prospects in practical ways. People will be
Speaker 1: able to go into a pharmacy and by hearing it's
Speaker 1: over the counter, cheaper, more innovative, better outcome. People will
Speaker 1: have more opportunity to go across the street to the
Speaker 1: employer that might want to offer them a better job,
Speaker 1: and get employers to compete for their talent rather than
Speaker 1: being locked into a non compete prescription. Drop prices will
Speaker 1: be lower than they otherwise, will be people who have
Speaker 1: more options to get high speed internet even if they
Speaker 1: live in an apartment building with a particular landlord. And
Speaker 1: you know, people will be able to do other things
Speaker 1: that we haven't touched on in this conversation, like move
Speaker 1: financial institutions shift their data from bank on to bank too,
Speaker 1: without having to go through a complicated process. All of
Speaker 1: these things just go to very practical frictions in a
Speaker 1: person's life. But at the end of the day, success
Speaker 1: will be we have made those frictions easier and gone
Speaker 1: at that five dollars in the aggregate that is dragging
Speaker 1: on the typical families economic outcomes and started to reverse that.
Speaker 1: So that's that's how we think about success um. It
Speaker 1: will require structure and process and a kind of focus
Speaker 1: on executing across these these seventy two executive actions. But
Speaker 1: that's our north star, Brian. This has just been absolutely enlightening.
Speaker 1: Thank you again for being so generous with your time.
Speaker 1: We have been speaking with Brian dec He is the
Speaker 1: director of the National Economic Council and the new chairperson
Speaker 1: of the President's Council on Economic Competitiveness. If you enjoy
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