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Antitrust: How Far Is Too Far?

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#Antitrust – At The Federalist Society, Mark Meador makes the case for enforcing the Robinson-Patman Act, a somewhat obscure piece of antitrust legislation designed to prevent predatory pricing behavior. Lina Khan’s FTC is interested in reviving this law, while free-market conservatives predictably fear enforcing it could raise prices for consumers. But this misses the point, argues Meador: “Setting aside for a moment the merits of the law, conservatives and others who believe in our constitutional order and the rule of law should be deeply troubled by the suggestion that federal law enforcers can decide not to enforce a law simply because they disagree with the policy or outcomes it advances.” He also defends the law on the merits: “critics should concede that not all RPA enforcement is harmful to consumers. The 1977 DOJ report criticizing RPA enforcement implicitly acknowledges this when discussing the ‘waterbed effect,’ the market distortion where offering a discount demanded by one buyer drives a seller to increase prices for or deny discounts to other buyers. The DOJ report observed that it made sense that the RPA was originally supported by grocers since the grocery sector is ‘traditionally characterized by high turnovers and low margins.'”

#Antitrust – Speaking of: the FTC voted to block brick-and-mortar mattress seller Mattress Firm’s merger with mattress maker Tempur Sealy. The FTC argues that the combined entity would have too much power–even though the merger is a hail-mary for the bankrupt Mattress Firm, and that the combined entity would have single digit marketshare in a fragmented market dominated by online retailers. We think conservatives should think seriously about antitrust but this feels like a conservative scare story about antitrust: pointless government intervention into a benign private market transaction that seems to harm absolutely no person or interest.

#Trade #Environment – “Amid fierce opposition from conservative activists and some oil and gas interests, a bipartisan contingent of House members is set to introduce legislation that could one day pave the way for carbon import tariffs.” More.

#TheEconomy – “Two-thirds of middle-income Americans say they are falling behind due to cost of living”: survey.

#AI – Goldman Sachs’ Jim Covello is a legend among equity analysts. And today he calls out what he believes is an AI bubble. Covello, writing alongside hallowed MIT economist Daron Acemoglu, points out that AI requires enormously expensive investment, and that generative AI models are not yet able to solve tasks complex enough to justify such investment. Link. Contrarianism is almost always helpful.

#Entrepreneurship – New NBER paper: An increase in household stock market wealth, driven by idiosyncratic variation in portfolio returns, increases entrepreneurship and firm profits by relaxing financial constraints. Score one for supply-siders. Looks like the wealth really does trickle down.

#Healthcare – A new Manhattan Institute report finds that most scholarship on social determinants of health is substandard and fails to disentangle causation from correlation, writes the Manhattan Institute’s excellent healthcare analyst Chris Pope.

#AmericanManufacturing – AEI’s Michael R. Strain makes the case: “America is a global manufacturing powerhouse

#FinReg – At National Review, Tyler Curtis makes the case against increasing federal deposit insurance. Since a bank’s financial security is less important to potential customers with federally insured deposits, he argues, banks likewise have less incentive to keep high safety and soundness standards if they have more federal insurance.

#Reg – Amidst the panic, AEI’s Kevin R. Kosar has to point out the obvious: the end of Chevron does not mean the end of regulation.

#Globalization – Cato’s “Defending Globalization Project” has published two fascinating essays: one by the famed jurist Ilya Somin making “the cosmopolitan case against one world government” (yes, he does explain why he believes that is an important case to make even though one world government is not likely any time soon); the other essay, by economist Vincent Geloso, argues that “had it not been for government-created barriers to trade, there are strong reasons to believe that the first age of globalization (1870–1914) could have happened a full century earlier.” Fascinating stuff.

Chart of the Day

This magnificent chart shows the evolution of what we know as the watermelon, which was created by humans through selective breeding, from its distant natural ancestors. Man has been modifying his environment forever and almost every vegetable we buy in the store has been heavily modified through selective breeding (if not directly genetically edited). Worth keeping in mind when discussing numerous topics related to environmentalism. (Via Simon Maeschling)

Meme of the Day

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