WASHINGTON—The Communications Workers, the National Consumers League, and Public Citizen are leading the cheers for President Joe Biden’s sweeping executive order to federal agencies telling them to crack down on corporate greed and monopolistic practices that drive down workers’ wages and drive up prices.
Biden’s sweeping 72-page order tells the Justice Department, the Federal Trade Commission, the Federal Aviation Administration, and other agencies to create and use all tools at their disposal to pursue and punish greed and price-fixing in industries ranging from airlines and agriculture to hearing aids and Internet platforms.
The order, a fact sheet and Biden’s statement are all at www.whitehouse.gov.
There’s no question a new crackdown is necessary. A handful of firms dominate various industries, quashing competition either by underselling smaller competitors and driving them out of business or buying them out, he said.
But while Biden announced many and varied fixes for corporate capitalism, he didn’t tackle the underlying imbalance and exploitation of the system itself—and he admits it.
“Now, look, I’m a proud capitalist,” he said. “ I spent most of my (Senate) career representing the corporate state of Delaware,” which is the technical “home” of most U.S. businesses. The state’s corporate charter laws give company chieftains and boards virtually unlimited power and ability to disregard investors and dismiss workers.
“But let me be very clear: Capitalism without competition isn’t capitalism, it’s exploitation,” Biden declared. “ Without healthy competition, big players can change and charge whatever they want and treat you however they want. And for too many Americans, that means accepting a bad deal for things you can’t go without.
“So, we know we’ve got a problem, a major problem. But we also have an incredible opportunity. We can bring back more competition to more of the country,” including “helping workers get a better deal, helping families save money every month.”
The CPUSA, which has yet to comment on Biden’s actions, places the ultimate blame for the problem on the capitalist system itself. It’s rotten to the core and while reform can help save some of its victims now, the system itself must ultimately be replaced.
In just one recent independent analysis, posted on the party’s website, Joel Wendland-Liu wrote, “Capitalism has been failing for some time, and larger numbers of Americans are coming around to see it.” It’s stayed in power, he added, through “ability to effectively manage the world system through imperialism, and its military might.”
“In fact, the U.S. appears unable to manage a necessary response to worsening economic problems,” he later adds. “The mythological unending economic improvement of U.S. life has proven false. Rates of profit and capital value depend more on bookkeeping tricks like stock buybacks, financial speculation, deeper rates of exploitation, and the gutting of social services driven by tax privileges for the rich.”
By contrast, Biden said corporate capitalists have the power to engage in price-fixing on everything from Internet service to cable television to airline tickets and associated fees for meals, checking bags, and more, for example. He wants to curb and end that exploitation.
Seeing less competition and more concentration
“What we’ve seen over the past few decades is less competition and more concentration that holds our economy back. We see it in big agriculture, in big tech, in big pharma. The list goes on,” the president said when he issued the order on July 9.
“Rather than competing for consumers, they are consuming their competitors. Rather than competing for workers, they’re finding ways to gain the upper hand on labor. And too often, the government has actually made it harder for new companies to break in and compete.” Biden wants agencies to make it easier for competition to arise.
Lack of competition particularly hurts workers in lower wages and higher prices, Biden explained.
“In many communities, there are only a handful of employers left competing for workers. Think of company towns across Appalachia and other parts of the country where one big corporation runs the show.”
“When corporations have that kind of leverage over workers, it pushes down wages by up to 17%. And as competition decreases, businesses don’t feel the pressure to innovate or invest in their workforce. That hurts working families and it hurts our economy,” Biden said.
“All told, between rising prices and lowering wages, lack of competition costs the median American household $5,000 a year.”
It’s not just Appalachia, though. As the president obliquely said, one big firm can also dominate a medium-sized city or a big-city neighborhood. Elimination of its jobs can mean economic life and death for area residents, union or not.
Residents of Chicago’s South Side and Fair Lawn, N.J., know about that, for example. They took the economic hit when the multinational food conglomerate Mondelez moved snack production lines from those communities to low-wage non-union no-rules Monterrey, Mexico.
And consumers pay through the nose, the president said, for prescription drugs because “just a handful of companies control the market for many vital medicines, giving them leverage over everyone else to charge whatever they want. As a result, Americans pay two and a half times more for prescription drugs than in any other leading country. And nearly one in four Americans struggles to afford their medication.”
One potential solution in his executive order: Make it easier for U.S. consumers to import drugs from Canada, which has the same health and efficiency standards as the U.S., but strong price controls on Big Pharma—part of its single-payer government-run health care system, though Biden didn’t say so.
Sen. Bernie Sanders, Ind-Vt., has led busloads of his border state’s citizens into Quebec to order and buy prescription drugs there, saving each of them thousands of dollars.
Live with only one Internet provider
“Another example: Internet services,” said Biden. “There are more than 65 million Americans who live in a place with only one high-speed Internet provider.” The president explained that in such cases, customers pay up to five times as much as when consumers have choices. “That’s what a lack of competition does: it raises the prices you pay.”
Needless to say, the corporate class was not happy, vowing to challenge Biden’s changes in court, if necessary. But CWA, the Consumers League, and their allies rejoiced.
The union noted “the White House fact sheet notes that a lack of competitiveness in labor markets can drive down wages. And it lauded Biden’s reiterated demand Congress pass the Protecting the Right to Organize (PRO) Act because ‘unions are critical to empowering workers to bargain with their employers for better jobs and to creating an economy that works for everyone.’”
CWA also praised Biden’s command to the FTC to limit non-compete agreements, which bar workers from switching from employer to employer within the same occupation. Studies reveal more than 20% of non-union employers—from fast-food eateries to Facebook—force their workers to sign such non-competes. Those pacts bar workers from getting the best wages for their skills.
And CWA praised Biden’s aim at the Internet giants, on consumer choice grounds. NCL did so about his aim at the airlines. There, three big unionized carriers—United, Southwest, and American—split up most of the U.S. market with aggressively anti-union Delta, headquartered in Georgia. Only Delta’s pilots are unionized.
“Action by the Department of Transportation on many of the consumer protection rulemakings Congress required in prior Federal Aviation Administration (FAA) reauthorization bills is long overdue,” said John Breyault, NCL’s vice president of Public Policy, Telecommunications and Fraud.
“The DOT must ensure that at the end of the day, consumers benefit from these new rules and resist efforts by the bailed-out airline industry to water them down.”
Public Citizen’s competition specialist, Alex Harman, praised Biden’s order, too—but emphasized that executive orders are temporary while a congressional rewrite of antitrust law to modernize it for the current century would be much more permanent.
“Big companies have far too much power over our economy and politics. Corporate monopolists are ripping off consumers, unfairly stomping on competitors, cheating workers, undermining innovation, and more,” Harman declared.
“Biden’s order takes straight aim at this problem and directs federal agencies to crack down on corporate concentration. It’s the most significant executive action against corporate monopolies in generations.
“As far-reaching as the EO is, it cannot address some of the deficiencies in the law that have limited the ability of enforcers to stop harmful concentration. For that, we need Congress to act now to strengthen the antitrust laws.
“This EO sends a clear and unambiguous message that corporate concentration throughout our economy is a crisis-level problem. That clarion call has been absent for decades, as administrations of both parties have let antitrust and antimonopoly enforcement fall into disrepair and decay.”
Non-compete deals banned
Besides the details the groups praised, other key sections of Biden’s order include banning non-compete agreements, selling hearing aids over the counter, and “Make it easier and cheaper to repair items you own by limiting manufacturers from barring self-repairs or third-party repairs of their products.”
Biden also ordered the Justice Department and the Federal Trade Commission, the two top anti-trust agencies, to vigorously and creatively expand and enforce anti-trust laws. The two must recognize anti-trust law lets them challenge bad mergers, which prior administrations of both parties did not, he said.
They’re also supposed to focus on labor markets, agricultural markets, Big Pharma, health insurers and their practices—such as high co-pays, deductibles, and refusals to pay for care and other health care markets—and high tech.
And Biden told the agencies to reverse a Trump regime policy that let corporations trade pay data with each other about their workers while banning workers from doing so. Sens. Elizabeth Warren, D-Mass., and Cory Booker, D-N.J., raised the issue three years ago.
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