As if Dodd-Frank hasn’t inflicted enough damage on the economy through its stringent and unnecessary securities rules, the president and his regulatory cronies are at it again, but this time, your cable box is on the hit list.
“Competition is good for consumers,” President Obama told Yahoo Finance’s Nicole Sinclair in an interview on April 13. “And ultimately it’s good for business. That’s the way the free market works. The more competition we have, the more products, services, innovation takes place.”
Given that a lecture from Barack Obama on the merits of competition and the free economy is akin to a lecture from Vladimir Putin or Raul Castro on political freedom or human rights, his rhetoric is pure nonsense. Time and again, the president has shown unrelenting zeal to regulate almost every aspect of the marketplace and has repeatedly blamed the 2008 recession on a lack of government oversight.
Now, the president is touting the merits of competition, but such “competition,” he believes, must be sparked by regulation in the form of an executive order. I guess that’s how the free market works to someone who has never cut a paycheck or had to innovate to make a business successful.
Rather than using his “pen and phone” to inflict greater harm on the American economy under the utterly false pretext of “competition,” the President Obama should abandon his futile effort to micromanage the economy and genuinely look to the free market for answers. He must let businesses, both large and small, decide for themselves how they are going to compete. Adding layers of new regulations and bureaucracy is not the solution; rather, it is the very source of the economic stagnation that has defined his administration from day one.
The idea that President Obama will sign an executive order for the purpose of igniting corporate competition is comical on many levels.
Obama’s faith in government and the state’s ability to tax and regulate has mutated into the belief that corporations can be told how to be competitive through an executive order.
First, it is incomprehensible that this president is blind to the fact that the burgeoning regulatory state, one that grows each day under his care, has hampered long term economic growth and stifled innovation. Obama’s faith in government and the state’s ability to tax and regulate has mutated into the belief that corporations can be told how to be competitive through an executive order. The anemic growth of the last seven years, which has seen an unprecedented spike in federal regulations, speaks for itself. More interference from the White House will only exacerbate an already wounded economy.
Second, President Obama’s claims regarding the virtues of the free market are little more than a pretense. Exhibit A: the “Benefits of Competition” issue brief issued on April 15th by the White House Council of Economic Advisors, which, on the very first page, includes the heading titled “Potential Harms from Market Power.” Under the veneer of a defense of free market economics, the White House attacks the underpinnings of liberal political-economy through the insistence of further government intervention and control. While spinning President Obama as an advocate of competition, the underlying arguments set forth in the White House issue brief reinforce the hyper-regulatory zeal that has characterized much of the administration’s approach to economic policy.
The issue brief is intellectually dishonest on key issues. It argues that your television’s cable box is similar to the black phones each household had to rent from AT&T before the 1990s. What the issue brief neglects to mention is that AT&T was itself a government-protected monopoly and that the Federal Communication Commission’s monopoly over spectrum, among other items, continues to inhibit the growth of communication technologies to this very day. Apparently, the administration likes monopolies so long as the president and his political allies can choose the beneficiaries and dole out the spoils.
While the administration attempts to manufacture the appearance of a monopoly by cable providers, it ignores the monopoly it will arbitrarily create through its executive order. However, if there is one thing more unpalatable than a natural monopoly, it is one in which the government can choose its favorites and enrich those who ingratiate themselves in the Washington establishment. The administration points its finger at so-called “greedy” businesses while failing to see its own cronyism and propensity to lend protection to its donors and friends.
If the president is truly concerned about maintaining a free marketplace and eliminating unfair competition, he should keep the federal government and its coercive powers out of the process.
The president’s latest executive order in which he directs every federal agency to identify stumbling blocks to competition and to identify new means of increasing competition throughout the economy, once again demonstrates his blindness with regard to how the free market works. The president wants a nominally free market while still maintaining strict government controls and bureaucratic oversight. The resemblance to the Chinese economy is uncanny.
The issue brief further expresses concern for small businesses, employee wages, and barriers to innovation. These issues are important to the overall economic health of our nation, but the President’s approach is paternalistic and counterproductive. To the president, they are talking points meant to soften the public image of his aggressive regulatory inclinations.
If the president is truly concerned about maintaining a free marketplace and eliminating unfair competition, he should keep the federal government and its coercive powers out of the process. Monopolies are bad for economies – and particularly so when they are designed by the government and its private sector patrons (i.e. financial donors, including unions).
While a truly humane, successful economy cannot exist without a certain degree of reasonable regulation, the United States is quickly becoming an administrative, managerial state in which the ability of businesses to innovate and flourish is under attack. With only eight months left to his term, President Obama has made it clear that “we’ll be doing everything we can across government” to continue on this track.
The president’s resolve is impressive, but his arrogance is astonishing.
Glen A. Sproviero is a commercial litigator in New York. Read his previous columns here.
(AP photo) 
