South Michigan News

Donald Trump has been reelected and the stock market is surging. This is no coincidence: expect Trump to be better for Michigan businesses and consumers than the Biden-Harris administration. Forty-year high inflation to rising interest rates resulted in significant hardship to voters. Polls indicate that these issues were decisive in Trump’s victory.

Antitrust is an issue most Americans think little about but that can cause major headaches. President Biden has dramatically increased U.S. antitrust enforcement. For example, one commentator recently wrote that, “In the Michigan business community, one longstanding criticism of the Biden-Harris administration was that its Department of Justice and Federal Trade Commission continue breaking up companies at a record pace.” However, he went on to state that, “This is not the fault of President Biden or Vice President Harris. The DOJ and FTC operate independently. They don’t have control over their agendas.”

This is disingenuous. The president appoints the head of the DOJ and FTC and can fire them or their staff at any time. Biden-Harris did not because they presumably agreed with what they were doing. They sat idly by as their antitrust enforcers rolled back the consumer welfare standard, a crucial piece of antitrust law. It held that if the government was going to penalize a company for supposedly being too big, then it first had to demonstrate that the consolidation would cause harm to consumers, usually by reducing choice or increasing prices. If such harm couldn’t be shown, the feds couldn’t intervene.

This is basic common sense: the government ought to act only when it’s in the public interest to do so. But the consumer welfare standard also acted as a check on the government and by eliminating it, the Department of Justice and Federal Trade Commission were unleashed on American businesses. One recent analysis found that 40 percent of the firms under the S&P market cap are currently under investigation by the DOJ.

Biden’s FTC and DOJ have set a record for the number of mergers they’ve tried to block—and even that doesn’t tell the whole story. The Biden administration has also been bending companies to its will just by threatening to use its merger review power—even in cases where a proposed merger is found not to violate antitrust laws.

The threat of an antitrust lawsuit scuttled a merger between JetBlue and Sprit Airlines, which then forced Spirit into bankruptcy. As a low-cost carrier, Spirit offered air travel to consumers who otherwise could not afford it. Pushing this airline into bankruptcy harms low-income consumers who might not otherwise be able to travel.

Also consider the FTC’s lawsuit against Visa, which claims the credit card company “maintains a monopoly” over debit payments because “more than 60% of debit transactions in the United States run on Visa’s debit network.” This ignores the fact that 40% of debit card transactions do not run on Visa’s network. And consumers always have the option of paying cash or using alternative payment technologies.

The Trump administration is likely to signal a return to the pre-Biden era that lets innovation on the free market blossom. His FTC and DOJ are expected to dial back hostility to mergers.

Trump has also announced plans to replace Lina Khan, Biden’s FTC chief. A recent congressional report found that Khan has abused her authority to push an antibusiness agenda than a public servant.

We cannot be certain what will happen with any incoming president. But so far Donald Trump’s win in November looks like a win for Michigan businesses and consumers, which should be free to grow and thrive without Washington regulators getting in the way.

Christopher Douglas is a professor of economics at the University of Michigan-Flint. The views expressed here are his own.