Most political observers would say there is little difference between Massachusetts Senator Elizabeth Warren and her predecessor, the late Edward Kennedy. Like Senator Kennedy, Senator Warren is a leader of the progressive wing of the Democratic party, and as such plays a major role in setting the legislative agenda for progressives both in Congress and in the larger policy community. However, Senator Kennedy was willing to rethink progressive assumptions about the benefits of government regulations if the facts demonstrated that government intervention harmed workers, consumers, and small businesses while benefiting big corporations. In contrast, Senator Warren has shown no willingness to rethink the benefits of government intervention in the marketplace, even when the intervention in question harms her constituents.
During the Carter Administration, Senator Kennedy was part of a group of leading progressives who realized that federal transportation regulations served the interests of big business by cartelizing the industry, thus limiting competition, keeping prices high and consumer options limited. For example, the New Deal-era Civil Aeronautics Board (CAB) supposedly benefited consumers by setting prices, as well as establishing airline routes and flight schedules. This system was supposed to protect consumers by ensuring affordable fares and available flights. However, in practice, the CAB allowed ten airlines to monopolize the market and make air travel unaffordable to the average American.
Kennedy, with the assistance of his aide future Supreme Court Justice Stephen Breyer, helped pass the Airline Deregulation Act. The result was an increase in competition, which gave consumers more choices for air travel at affordable prices. The benefits can be seen in the following statistic: in 1976 less than 30% of Americans had taken a commercial flight, but by the turn of the century 60% of Americans took at least one round trip flight per year.
Kennedy also helped Jimmy Carter deregulate the trucking and railroad industries with similar results. Allowing train and truck shippers to compete by offering lower prices provided short term benefits to consumers, while strengthening the transportation industry. A study by the American Consumer Institute on trucking deregulation found that “from 1980 to 2020, taking account of inflation, the industry’s productivity has increased 159%, shipping volumes have increased 57%, revenues have dropped 13%, and prices have plummeted 44%.” In contrast to Senator Kennedy, Senator Warren clings to the “government knows best” philosophy, even in the face of evidence demonstrating that is not the case.
For example, Warren supported government action blocking Amazon’s proposed purchase of iRobot, maker of the popular electronic vacuum Roomba. Warren was the lead in a letter to Federal Trade Commission (FTC) head Lina Khan, objecting to the merger on the grounds that big companies like Amazon should not be allowed to “buy their way out of competition.” This ignores the fact that Amazon did not decide to try to purchase iRobot until Amazon’s own robot vacuum failed to compete with Roomba.
More significantly Warren does not understand how the modern tech industry works. Many investors invest money in startups in the hope that once the company’s products become successful, one of the big tech companies will seek to acquire them, giving the investors a huge payday. If Warren (and her fellow progressives like Khan) had their way, it would be harder for start-up tech companies to attract capital. So, Warren’s policies would mean fewer tech startups, less innovation, and fewer jobs.
Warren’s (and the FTC’s) biggest concern with Amazon’s purchase of iRobot is that Amazon will promote iRobot’s products via “preferencing.” This is where tech platforms manipulate search results to ensure their products are listed first. The case against preferencing relies on several questionable assumptions. First, it assumes consumers looking for a “name” brand product are too lazy or stupid to scroll through more than one page of search results. Preferencing also assumes that consumers will only search for products on one platform, say Amazon, instead of looking at multiple sites, such as Wal-Mart or Target.
Amazon withdrew its offer to buy iRobot in late January. Amazon backed out of the deal because it was clear the deal would never be approved by European Union regulators (the EU regulators have admitted they “consulted” with the FTC regarding the Amazon-iRobot deal). Following the deal’s collapse, iRobot announced it was laying off a third of its workforce. Since iRobot is based in Massachusetts many, if not most of those laid off are Senator Warren’s constituents. Those ex-iRobot employees no doubt agree that, when it comes to willingness to oppose government interference in the market that harms consumers, workers, and small businesses — Elizabeth Warren is no Ted Kennedy.
