Pluralistic: Lina Khan's future is the future of the Democratic Party – and America (11 Oct 2024)


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Lina Khan's future is the future of the Democratic Party – and America (permalink)

On the one hand, the anti-monopoly movement has a future no matter who wins the 2024 election – that's true even if Kamala Harris wins but heeds the calls from billionaire donors to fire Lina Khan and her fellow trustbusters.

In part, that's because US antitrust laws have broad "private rights of action" that allow individuals and companies to sue one another for monopolistic conduct, even if top government officials are turning a blind eye. It's true that from the Reagan era to the Biden era, these private suits were few and far between, and the cases that were brought often died in a federal courtroom. But the past four years has seen a resurgence of antitrust rage that runs from left to right, and from individuals to the C-suites of big companies, driving a wave of private cases that are prevailing in the courts, upending the pro-monopoly precedents that billionaires procured by offering free "continuing education" antitrust training to 40% of the Federal judiciary:

https://pluralistic.net/2021/08/13/post-bork-era/#manne-down

It's amazing to see the DoJ racking up huge wins against Google's monopolistic conduct, sure, but first blood went to Epic, who won a historic victory over Google in federal court six months before the DoJ's win, which led to the court ordering Google to open up its app store:

https://www.theverge.com/policy/2024/10/7/24243316/epic-google-permanent-injunction-ruling-third-party-stores

Google's 30% App Tax is a giant drag on all kinds of sectors, as is its veto over which software Android users get to see, so Epic's win is going to dramatically alter the situation for all kinds of activities, from beleaguered indie game devs:

https://antiidlereborn.com/news/

To the entire news sector:

https://www.eff.org/deeplinks/2023/06/save-news-we-must-open-app-stores

Private antitrust cases have attracted some very surprising plaintiffs, like Michael Jordan, whose long policy of apoliticism crumbled once he bought a NASCAR team and lived through the monopoly abuses of sports leagues as an owner, not a player:

https://www.thebignewsletter.com/p/michael-jordan-anti-monopolist

A much weirder and more unlikely antitrust plaintiff than Michael Jordan is Google, the perennial antitrust defendant. Google has brought a complaint against Microsoft in the EU, based on Microsoft's extremely ugly monopolistic cloud business:

https://www.reuters.com/technology/google-files-complaint-eu-over-microsoft-cloud-practices-2024-09-25/

Google's choice of venue here highlights another reason to think that the antitrust surge will continue irrespective of US politics: antitrust is global. Antitrust fervor has seized governments from the UK to the EU to South Korea to Japan. All of those countries have extremely similar antitrust laws, because they all had their statute books overhauled by US technocrats as part of the Marshall Plan, so they have the same statutory tools as the American trustbusters who dismantled Standard Oil and AT&T, and who are making ready to shatter Google into several competing businesses:

https://www.theverge.com/2024/10/8/24265832/google-search-antitrust-remedies-framework-android-chrome-play

Antitrust fever has spread to Canada, Australia, and even China, where the Cyberspace Directive bans Chinese tech giants from breaking interoperability to freeze out Chinese startups. Anything that can't go on forever eventually stops, and the cost of 40 years of pro-monopoly can't be ignored. Monopolies make the whole world more brittle, even as the cost of that brittleness mounts. It's hard to pretend monopolies are fine when a single hurricane can wipe out the entire country's supply of IV fluid – again:

https://prospect.org/health/2024-10-11-cant-believe-im-writing-about-iv-fluid-again/

What's more, the conduct of global monopolists is the same in every country where they have taken hold, which means that trustbusters in the EU can use the UK Digital Markets Unit's report on the mobile app market as a roadmap for their enforcement actions against Apple:

https://assets.publishing.service.gov.uk/media/63f61bc0d3bf7f62e8c34a02/Mobile_Ecosystems_Final_Report_amended_2.pdf

And then the South Korean and Japanese trustbusters can translate the court documents from the EU's enforcement action and use them to score victories over Apple in their own courts:

https://pluralistic.net/2024/04/10/an-injury-to-one/#is-an-injury-to-all

So on the one hand, the trustbusting wave will continue erode the foundations of global monopolies, no matter what happens after this election. But on the other hand, if Harris wins and then fires Biden's top trustbusters to appease her billionaire donors, things are going to get ugly.

A new, excellent long-form Bloomberg article by Josh Eidelson and Max Chafkin gives a sense of the battle raging just below the surface of the Democratic Power, built around a superb interview with Khan herself:

https://www.bloomberg.com/news/features/2024-10-09/lina-khan-on-a-second-ftc-term-ai-price-gouging-data-privacy

The article begins with a litany of tech billionaires who've gone an all-out, public assault on Khan's leadership – billionaires who stand to personally lose hundreds of millions of dollars from her agency's principled, vital antitrust work, but who cloak their objection to Khan in rhetoric about defending the American economy. In public, some of these billionaires are icily polite, but many of them degenerate into frothing, toddler-grade name-calling, like IAB's Barry Diller, who called her a "dope" and Musk lickspittle Jason Calacanis, who called her an all-caps COMMUNIST and a LUNATIC.

The overall vibe from these wreckers? "How dare the FTC do things?!"

And you know, they have a point. For decades, the FTC was – in the quoted words of Tim Wu – "a very hardworking agency that did nothing." This was the period when the FTC targeted low-level scammers while turning a blind eye to the monsters that were devouring the US economy. In part, that was because the FTC had been starved of budget, trapping them in a cycle of racking up easy, largely pointless "wins" against penny-ante grifters to justify their existence, but never to the extent that Congress would apportion them the funds to tackle the really serious cases (if this sounds familiar, it's also the what happened during the long period when the IRS chased middle class taxpayers over minor filing errors, while ignoring the billionaires and giant corporations that engaged in 7- and 8-figure tax scams).

But the FTC wasn't merely underfunded: it was timid. The FTC has extremely broad enforcement and rulemaking powers, which most sat dormant during the neoliberal era:

https://pluralistic.net/2023/01/10/the-courage-to-govern/#whos-in-charge

The Biden administration didn't merely increase the FTC's funding: in choosing Khan to helm the organization, they brought onboard a skilled technician, who was both well-versed in the extensive but unused powers of the agency and determined to use them:

https://pluralistic.net/2022/10/18/administrative-competence/#i-know-stuff

But Khan's didn't just rely on technical chops and resources to begin the de-olicharchification of the US economy: she built a three-legged stool, whose third leg is narrative. Khan's signature is her in-person and remote "listening tours," where workers who've been harmed by corporate power get to tell their stories. Bloomberg recounts the story of Deborah Brantley, who was sexually harassed and threatened by her bosses at Kavasutra North Palm Beach. Brantley's bosses touched her inappropriately and "joked" about drugging her and raping her so she "won’t be such a bitch and then maybe people would like you more."

When Brantley finally quit and took a job bartending at a different business, Kavasutra sued her over her noncompete clause, alleging an "irreparable injury" sustained by having one of their former employees working at another business, seeking damages and fees.

The vast majority of the 30 million American workers who labor under noncompetes are like Brantley, low-waged service workers, especially at fast-food restaurants (so Wendy's franchisees can stop minimum wage cashiers from earning $0.25/hour more flipping burgers at a nearby McDonald's). The donor-class indenturers who defend noncompetes claim that noncompetes are necessary to protect "innovative" businesses from losing their "IP." But of course, the one state where no workers are subject to noncompetes is California, which bans them outright – the state that is also home to Silicon Valley, an IP-heave industry that the same billionaires laud for its innovations.

After that listening tour, Khan's FTC banned noncompetes nationwide:

https://pluralistic.net/2024/04/25/capri-v-tapestry/#aiming-at-dollars-not-men

Only to have a federal judge in Texas throw out their ban, a move that will see $300b/year transfered from workers to shareholders, and block the formation of 8,500 new US businesses every year:

https://www.npr.org/2024/08/21/g-s1-18376/federal-judge-tosses-ftc-noncompetes-ban

Notwithstanding court victories like Epic v Google and DoJ v Google, America's oligarchs have the courts on their side, thanks to decades of court-packing planned by the Federalist Society and executed by Senate Republicans and Reagan, Bush I, Bush II, and Trump. Khan understands this; she told Bloomberg that she's a "close student" of the tactics Reagan used to transform American society, admiring his effectiveness while hating his results. Like other transformative presidents, good and bad, Reagan had to fight the judiciary and entrenched institutions (as did FDR and Lincoln). Erasing Reagan's legacy is a long-term project, a battle of inches that will involve mustering broad political support for the cause of a freer, more equal America.

Neither Biden nor Khan are responsible for the groundswell of US – and global – movement to euthanize our rentier overlords. This is a moment whose time has come; a fact demonstrated by the tens of thousands of working Americans who filled the FTC's noncompete docket with outraged comments. People understand that corporate looters – not "the economy" or "the forces of history" – are the reason that the businesses where they worked and shopped were destroyed by private equity goons who amassed intergenerational, dynastic fortunes by strip-mining the real economy and leaving behind rubble.

Like the billionaires publicly demanding that Harris fire Khan, private equity bosses can't stop making tone-deaf, guillotine-conjuring pronouncements about their own virtue and the righteousness of their businesses. They don't just want to destroy the world – they want to be praised for it:

  • "Private equity’s been a great thing for America" -Stephen Pagliuca, co-chairman of Bain Capital;

  • "We are taught to judge the success of a society by how it deals with the least able, most vulnerable members of that society. Shouldn’t we judge a society by how they treat the most successful? Do we vilify, tax, expropriate and condemn those who have succeeded, or do we celebrate economic success as the engine that propels our society toward greater collective well-being?" -Marc Rowan, CEO of Apollo

  • "Achieve life-changing money and power," -Sachin Khajuria, former partner at Apollo

Meanwhile, the "buy, strip and flip" model continues to chew its way through America. When PE buys up all the treatment centers for kids with behavioral problems, they hack away at staffing and oversight, turning them into nightmares where kids are routinely abused, raped and murdered:

https://www.nbcnews.com/news/us-news/they-told-me-it-was-going-be-good-place-allega-tions-n987176

When PE buys up nursing homes, the same thing happens, with elderly residents left to sit in their own excrement and then die:

https://www.politico.com/news/magazine/2023/12/24/nursing-homes-private-equity-fraud-00132001

Writing in The Guardian, Alex Blasdel lays out the case for private equity as a kind of virus that infects economies, parasitically draining them of not just the capacity to provide goods and services, but also of the ability to govern themselves, as politicians and regulators are captured by the unfathomable sums that PE flushes into the political process:

https://www.theguardian.com/business/2024/oct/10/slash-and-burn-is-private-equity-out-of-control

Now, the average worker who's just lost their job may not understand "divi recaps" or "2-and-20" or "carried interest tax loopholes," but they do understand that something is deeply rotten in the world today.

What happens to that understanding is a matter of politics. The Republicans – firmly affiliated with, and beloved of, the wreckers – have chosen an easy path to capitalizing on the rising rage. All they need to do is convince the public that the system is irredeemably corrupt and that the government can't possibly fix anything (hence Reagan's asinine "joke": "the nine most terrifying words in the English language are: 'I'm from the Government, and I'm here to help'").

This is a very canny strategy. If you are the party of "governments are intrinsically corrupt and incompetent," then governing corruptly and incompetently proves your point. The GOP strategy is to create a nation of enraged nihilists who don't even imagine that the government could do something to hold their bosses to account – not for labor abuses, not for pollution, not for wage theft or bribery.

The fact that successive neoliberal governments – including Democratic administrations – acted time and again to bear out this hypothesis makes it easy for this kind of nihilism to take hold.

Far-right conspiracies about pharma bosses colluding with corrupt FDA officials to poison us with vaccines for profit owe their success to the lived experience of millions of Americans who lost loved ones to a conspiracy between pharma bosses and corrupt officials to poison us with opioids.

Unhinged beliefs that "they" caused the hurricanes tearing through Florida and Georgia and that Kamala Harris is capping compensation to people who lost their homes are only credible because of murderous Republican fumble during Katrina; and the larcenous collusion of Democrats to help banks steal Americans' homes during the foreclosure crisis, when Obama took Tim Geithner's advice to "foam the runway" with the mortgages of everyday Americans who'd been cheated by their banks:

https://www.salon.com/2014/05/14/this_man_made_millions_suffer_tim_geithners_sorry_legacy_on_housing/

If Harris gives in to billionaire donors and fires Khan and her fellow trustbusters, paving the way for more looting and scamming, the result will be more nihilism, which is to say, more electoral victories for the GOP. The "government can't do anything" party already exists. There are no votes to be gained by billing yourself as the "we also think governments can't do anything" party.

In other words, a world where Khan doesn't run the FTC is a world where antitrust continues to gain ground, but without taking Democrats with it. It's a world where nihilism wins.

There's factions of the Democratic Party who understand this. AOC warned party leaders that, "Anyone goes near Lina Khan and there will be an out and out brawl":

https://twitter.com/AOC/status/1844034727935988155

And Bernie Sanders called her "the best FTC Chair in modern history":

https://twitter.com/SenSanders/status/1843733298960576652

In other words: Lina Khan as a posse.

Hey look at this (permalink)


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This day in history (permalink)

#20yrsago Entertainment companies bent on wholesale slaughter of Betamax, puppies https://web.archive.org/web/20041010092552/https://www.eff.org/deeplinks/archives/001987.php

#15yrsago What’s wrong with Search Engine Optimization http://https://powazek.com/posts/2090

#15yrsago Gag order blocks Guardian from reporting on Parliament https://www.theguardian.com/media/2009/oct/12/guardian-gagged-from-reporting-parliament

#15yrsago Copyright vs. folk music https://web.archive.org/web/20091016014623/https://freemusicarchive.org/member/stevenarntson/blog/The_Absent_Second_An_Explanation

#15yrsago xkcd: volume 0 https://memex.craphound.com/2009/10/12/xkcd-volume-0/

#10yrsago Chinese Supreme Court makes service providers liable for “human flesh search engine” https://archive.shine.cn/national/Rules-to-protect-personal-rights-online/shdaily.shtml

#10yrsago NSA agents may have infiltrated the global communications industry https://web.archive.org/web/20141011080630/https://firstlook.org/theintercept/2014/10/10/core-secrets/

#10yrsago Librarians on the vanguard of the anti-surveillance movement https://www.washingtonpost.com/news/the-switch/wp/2014/10/03/librarians-wont-stay-quiet-about-government-surveillance/

#5yrsago AT&T hikes business customers’ bills by up to 7%, charging them to recoup its own property taxes https://arstechnica.com/tech-policy/2019/10/att-raises-prices-7-by-making-its-customers-pay-atts-property-taxes/

#5yrsago Google continues to funnel vast sums to notorious climate deniers https://www.theguardian.com/environment/2019/oct/11/google-contributions-climate-change-deniers

#5yrsago Mayor accused of failing to fullfil road maintenance promises is dragged through the streets by angry voters https://www.bbc.com/news/world-latin-america-49984987

#5yrsago CBC sues Canada’s Conservative Party for using short debate clips in campaign materials https://www.michaelgeist.ca/2019/10/cbc-sues-the-conservative-party-of-canada-for-copyright-infringement-citing-campaign-video-posting-debate-excerpts-on-twitter/

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Colophon (permalink)

Today's top sources: Naked Capitalism (https://www.nakedcapitalism.com/).

Currently writing:

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