It is one thing for government to regulate business. But it is the height of chutzpah for career politicians and bureaucrats to lecture America’s dynamic, innovative, risk-taking private sector on what business competition is, as the Biden Administration’s Competition Council is doing.
The Council was launched on July 9, 2021 by an Executive Order to “establish a whole-of-government effort to promote competition in the American economy.” It touts an array of mandates and proposals for numerous industries: transportation, agriculture, banking, technology and more. The Executive Order also promises Nirvana: higher wages, lower prices, economic growth, and technology innovation.
But is that not already the story of America?
It is indeed, and competition and innovation has never been as fierce as it is now. For an Administration that is largely staffed by academics and career government employees, this might be news.
The Administration should also look at a 2019 World Economic Forum study which found that out of 141 countries, the United States had the second most competitive economy in the world, next to Singapore.
Competition is especially fierce among technology companies, whom the Biden Administration has demonized. Yet, technology companies continue to make the innovations that reverberate across the U.S. economy and profoundly change other industries.
A recent report from Deloitte said, “The tech sector is extending its reach into other industries, using digital advancements to support innovation and transformation. Tech companies are also seeking to improve efficiency and spur innovation in other areas that are ripe for transformation, including real estate, manufacturing, and retail.”
One of the best sources for no-spin information about the intensity of competition that companies face is their annual 10-K filings with the U.S. Securities and Exchange Commission. 10-Ks review financial and operational challenges.
Alphabet, the parent of Google, says, “Our business is characterized by rapid change as well as new and disruptive technologies. We face formidable competition in every aspect of our business.” Alphabet then highlights competition from other search engines; online advertising platforms and networks; and enterprise cloud services.
Meta, the parent company of Facebook, is also kept on its toes by rivals. It says, “Our business is highly competitive. Competition presents an ongoing threat to the success of our business. We compete with companies providing connection, sharing, discovery, and communication products and services to users online, as well as companies that sell advertising to businesses looking to reach consumers and/or develop tools and systems for managing and optimizing advertising campaigns.”
For Amazon, the competition is similarly intense. “Our businesses are rapidly evolving and intensely competitive, and we have many competitors across geographies, including cross-border competition, and in different industries, including physical, e-commerce, and omnichannel retail, e-commerce services, web and infrastructure computing services, electronic devices, digital content, advertising, grocery, and transportation and logistics services.”
The good news is that the Competition Council largely appears to be a public relations vehicle. The Council is a Who’s Who of cabinet secretaries and Biden Administration economic advisers. It has met just four times in nearly two years. And it seems largely oblivious that business competition today is typically international in nature.
After its fourth meeting on February 1, 2023 the Council highlighted that it was asking Congress to “crack down on excessive online concert, sporting event, and other entertainment fees” and to “ban surprise resort and destination fees.” Hard working Americans in manufacturing and other sectors, fearing competition from China and elsewhere, can be excused for sneering at the Council’s priorities.
The U.S. Chamber of Commerce has been appropriately critical in its assessment of the Council. Regarding the February 1 meeting, the Chamber said, “Today’s meeting of the ‘Competition Council’ would be more accurately described as the ‘Washington Micromanaging the Economy Council.’”
The Competition Council, though, is doing real damage. It is an intriguing vehicle for amplifying the Administration’s business-bashing rhetoric, inferring that America lacks dynamic opportunities for those who want to seize upon them. Left unchecked, this can dampen the American spirit of hard work and innovation.
The Competition Council is one more important reason to push back hard on the Biden Administration’s anti-business, tech-bashing, woe is us rhetoric and policy.
