Why President Barack Obama’s Executive Order On Competition Is Anti-Competitive

When you see a headline like “Obama to Sign Executive Order to Ignite Corporate Competition” you have to scratch your head at the premise, the idea that government is the source of competition, let alone the blindness to the self-inflicted regulatory state undermining growth in the U.S.

The Executive Order (“Steps to Increase Competition and Better Inform Consumers and Workers to Support Continued Growth of the American Economy”) and the accompanying explanatory matter (“Thinking Outside the Cable Box : How More Competition Gets You a Better Deal,”) have little to do with promoting competition; the reverse is true.

We have here tall tales about competition to deflect blame that should apply to the regulatory state and the executive branch’s own overreach with the “pen and phone.” We are told:

"Across our economy, too many consumers are dealing with inferior or overpriced products, too many workers aren’t getting the wage increases they deserve, too many entrepreneurs and small businesses are getting squeezed out unfairly by their bigger competitors, and overall we are not seeing the level of innovative growth we would like to see. And a big piece of why that happens is anti-competitive behavior—companies stacking the deck against their competitors and their workers. We’ve got to fix that, by doing everything we can to make sure that consumers, middle-class and working families, and entrepreneurs are getting a fair deal."

Now for some perspective. The Federal Register today, the day of Obama’s announcement, stands at 22, 472 pages. In 2015 it ended the year at 80,260 the third highest ever. Obama has brought us six of the seven highest ever page counts, yet now he wants to tell corporations how they can be competitive.

The federal government is a taxing and regulating entity. It doesn’t produce, it applies force. It needs step aside to leave alone those who do produce, however, which doesn’t involve an executive order asking for action items from agencies in 60 days.

And those actions will be big trouble. A “Benefits of Competition” Issue Brief from the Council of Economic Advisers linked in the White House news releases is spun as a deregulatory document, but clicking brings one to “Potential Harms from Market Power” right there on page one, so we can see where all this is going. It’s a charade; another veiled attack on the market process and aggressive push for still more government intervention, packaged as economic liberalization.

In fact the largest element of the package is a call for additional antitrust regulation; the Issue Brief rehashed supposed “abusive” practices long since shown to be benign and transitory (mergers, “anticompetitive” conduct, “collusion”), especially compared to government picking winners and losers.

Antirust regulation is protectionist pure and simple, like the green energy crony programs popular in the administration. Antitrust regulation itself is coercive monopoly power, whereby government, often teaming up with a favored plaintiff firm, protects if from a rival. That denies consumers the competition that would have ensued otherwise from ordinary, now derailed, economic activity.

Dig deeper in the accompanying Issue Brief and you see critiques of free labor markets, and uncover the administration’s intent to regulatw tech and other firms’ data collection, and to regulate pricing and the way firms present pricing.

The announcement tries to be cute in talking about freeing up cable set-top boxes, noting the overpriced black phone our parents used to rent from the phone company. Nice try; the federal government created both the Federal Communication’s monopoly over spectrum that still derails evolution in communications technologies, and the onetime government-protected AT&T monopoly itself. No intervention is needed for cable infrastructure to sort itself out given all the options available and forthcoming to consumers.

One gathers that by “efforts to detect abuses such as price fixing, anti-competitive behavior in labor and other input markets,” the president is not talking about the harm to young workers of raising the minimum wage (see Bastiat’s What Is Seen and What Is Not Seen) and government unions, that actually fit the definition.

There are no natural monopolies, but plenty unnatural ones—including protectionism and favoritism this bad-news executive order will produce.

One gathers that by “efforts to detect abuses such as price fixing, anticompetitive behavior in labor and other input markets,” the president is not talking about the harm to young workers of raising the minimum wage (see Bastiat’s What Is Seen and What Is Not Seen) or of coercive government unions, that actually fit the definition.

Broadly, Obama’s order attempts to repackage several existing and upcoming anti-competitive interventions as pro-competition. His net neutrality program freezes growth in competitive infrastructure; one must seek “Advisory Opinions” from government to act (don’t take my word for it, see page 106 of the 400 page order).

His “manufacturing hubs” invite cronyism and corporate welfare, temporal distortion of technology advancements (you need propellers that work before the plane will fly) and confusion over intellectual property status. Federal infrastructure banks will rob you. Crackdowns on supposed “conflicts of interest in retirement advice” will backfire.

The best bit is when the president’s Executive Order does ask agencies to “eliminat[e] regulations that create barriers to or limit competition”

That’s great, but so far in “retrospective reviews” of regulations, the agencies have used the directive to reduce costs to instead add new burdens, as the American Action Forum describes.

We already have the “eliminate regulation” recommendation from Obama’s prior “regulatory reform” executive orders, which have done little, so this element is redundant.

Teeth could be given to such a directive though, by working with Congress to pass law actually reforming the regulatory process and freeing up producers. But president Obama has promised to veto the major regulatory reform initiatives such as the Regulatory Accountability Act and the Regulations from the Executive in Need of Scrutiny Act (or, REINS).

All said, this new executive order on “competition” advocates the opposite – intervention and cronyism.

Originally posted to Forbes.